<SEC-DOCUMENT>0001062993-11-000968.txt : 20110315
<SEC-HEADER>0001062993-11-000968.hdr.sgml : 20110315
<ACCEPTANCE-DATETIME>20110314213933
ACCESSION NUMBER:		0001062993-11-000968
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20110131
FILED AS OF DATE:		20110315
DATE AS OF CHANGE:		20110314

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LEXARIA CORP.
		CENTRAL INDEX KEY:			0001348362
		STANDARD INDUSTRIAL CLASSIFICATION:	METAL MINING [1000]
		IRS NUMBER:				202000871
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-52138
		FILM NUMBER:		11686982

	BUSINESS ADDRESS:	
		BUSINESS PHONE:		604-602-1675

	MAIL ADDRESS:	
		STREET 1:		SUITE 604 - 700 WEST PENDER STREET
		CITY:			VANCOUVER
		STATE:			A1
		ZIP:			V6C 1G8

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Lexaria Corp.
		DATE OF NAME CHANGE:	20051229
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>form10q.htm
<DESCRIPTION>FORM 10-Q
<TEXT>


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<HEAD>
   <TITLE>Lexaria Corp. - Form 10-Q - Filed by newsfilecorp.com</TITLE>

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<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
<A name=page_1></A>
<P align=center><B><FONT size=5>UNITED STATES </FONT></B><BR><B><FONT
size=5>SECURITIES AND EXCHANGE COMMISSION </FONT></B><BR>Washington, D.C. 20549
</P>
<P align=center><B><FONT size=5>FORM 10-Q </FONT></B></P>
<P align=center>(Mark One) </P>
<P align=center>[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 </P>
<P align=center>For the quarterly period ended <B><U>January 31, 2011</U></B><B>
</B><BR>or </P>
<P align=center>[&nbsp; &nbsp;] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 </P>
<P align=center>For the transition period from&nbsp; ______________________ to
______________________</P>
<P align=center>Commission File Number ______________________</P>
<P align=center><B><U><FONT size=5>LEXARIA CORPORATION</FONT></U></B><B>
</B><BR>(Exact name of registrant as specified in its charter) </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=center><B><U>Nevada </U></B></TD>
    <TD align=center width="50%"><B><U>20-2000871 </U></B></TD></TR>
  <TR vAlign=top>
    <TD align=center>(State or other jurisdiction of incorporation or
      organization) </TD>
    <TD align=center width="50%">(IRS Employer Identification No.) </TD></TR>
  <TR>
    <TD align=center >&nbsp;</TD>
    <TD align=center width="50%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center><B><U>950 - 1130 West Pender Street, Vancouver, BC
      </U></B></TD>
    <TD align=center width="50%"><B><U>V6E 4A4 </U></B></TD></TR>
  <TR vAlign=top>
    <TD align=center>(Address of principal executive offices) </TD>
    <TD align=center width="50%">(Zip Code) </TD></TR></TABLE>
<P align=center><B><U>604-602-1675</U></B><B> </B><BR>(Registrant&#146;s telephone
number, including area code) </P>
<P align=center><B><U>N/A</U></B><B> </B><BR>(Former name, former address and
former fiscal year, if changed since last report) </P>
<P align=justify>Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. <BR>[X] YES&nbsp;&nbsp;&nbsp;&nbsp;
[&nbsp; &nbsp;] NO</P>
<P align=justify>Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a small
reporting company. See the definitions of &#147;large accelerated filer&#148;,
&#147;accelerated filer&#148; and &#147;smaller reporting company&#148; in Rule 12b-2 of the
Exchange Act </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=center>Large accelerated filer [&nbsp;&nbsp; ]</TD>
    <TD align=center width="40%" >&nbsp; </TD>
    <TD align=center width="29%">Accelerated
      filer&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      [&nbsp;&nbsp; ] </TD></TR>
  <TR vAlign=top>
    <TD align=center>Non-accelerated filer&nbsp;&nbsp; [&nbsp;&nbsp; ]</TD>
    <TD align=center width="40%" >(Do not check if a smaller
      reporting company) </TD>
    <TD align=center width="29%">Smaller reporting company
[X]</TD></TR></TABLE></DIV>
<P align=justify>Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act <BR>[&nbsp; &nbsp;]
YES&nbsp;&nbsp;&nbsp; [X] NO </P>
<P align=center><B>APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
</B><BR>
  <B>PROCEEDINGS DURING THE PRECEDING FIVE YEARS </B></P>
<P align=justify>Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.<BR>[&nbsp;&nbsp; ]
YES&nbsp;&nbsp;&nbsp; &nbsp;[&nbsp; &nbsp;] NO </P>
<P align=center><B>APPLICABLE ONLY TO CORPORATE ISSUERS</B></P>
<P align=justify>Indicate the number of shares outstanding of each of the
issuer&#146;s classes of common stock, as of the latest practicable date. 13,033,409
common shares issued and outstanding as of January 31, 2011 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_2></A>
<P align=center><B>PART 1 &#150; FINANCIAL INFORMATION </B></P>
<P align=justify><B>Item 1. Financial Statements. </B></P>
<P align=justify>Our unaudited interim financial statements for the three month
period ended January 31, 2011 form part of this quarterly report. They are
stated in United States Dollars (US$) and are prepared in accordance with United
States generally accepted accounting principles. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_3></A>
<P align=center><B>LEXARIA CORP.</B><BR><B>BALANCE SHEETS</B><BR><B>(Expressed
in U.S. Dollars)</B><BR>
  <B>(Unaudited)</B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>January 31</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">October 31 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2011</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">2010
    </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%" >&nbsp;</TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%" >&nbsp;</TD>
    <TD align=center width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>ASSETS</B> </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Current</B> </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Cash and cash equivalents
    </TD>
    <TD vAlign=bottom align=left width="1%" ><B>$</B></TD>
    <TD vAlign=bottom align=right width="12%"><B>&nbsp;279,596</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >$</TD>
    <TD vAlign=bottom align=right width="12%">&nbsp;62,989 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Accounts
      receivable </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><B>175,863</B>
    </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>74,879 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Prepaid expenses and
      deposit </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%"><B>8,787</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">2,338 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Total Current Assets</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%"><B>464,246</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">140,207 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Capital assets, net</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%"><B>170</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">425 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Oil and gas properties (Note 5)</B> </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Proved property
    </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><B>3,233,033</B>
    </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>3,118,376 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Unproved properties </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%"><B>19,293</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">19,293 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%"><B>3,252,326</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">3,137,668 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>TOTAL ASSETS</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" ><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%"><B>&nbsp;3,716,742</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%">&nbsp;3,278,300 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>LIABILITIES AND STOCKHOLDERS' EQUITY</B> </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>LIABILITIES</B> </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Current</B> </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Accounts
      payable and accrued liabilities </TD>
    <TD vAlign=bottom align=left width="1%"
      bgColor=#e6efff><B>$</B></TD>
    <TD vAlign=bottom align=right width="12%"
      bgColor=#e6efff><B>&nbsp;167,080</B> </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp;137,436
</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Loan payable (Note 8) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"><B>803,951</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">910,441 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Due to a
      related party </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff><B>1,769</B> </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>1,769 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Total Current Liabilities</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff><B>972,800</B> </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>1,049,647 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Loan Payable (Note 7)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff><B>675,943</B> </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>75,000 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>TOTAL LIABILITIES</B> </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><B>1,648,743</B>
    </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><B>1,124,647</B>
    </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>STOCKHOLDERS' EQUITY</B> </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Share Capital</B> </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD
      align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Authorized:
      '200,000,000 common voting shares with a
      par&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;value
      of $0.001 per
      share&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issued
      and outstanding: 13,033,409 common shares at January
      31,&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2011
      (12,926,348 common shares at October 31, 2010) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"><B>13,033</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">12,926 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Additional paid-in capital</B> </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"><B>6,109,536</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">6,065,119 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Deficit</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%"><B>(4,054,569</B></TD>
    <TD vAlign=bottom align=left width="2%" ><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">(3,924,392</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD></TR>
  <TR>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Total Stockholders' Equity</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%"><B>2,068,000</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">2,153,653 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" ><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%"><B>&nbsp;3,716,742</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%">&nbsp;<B>3,278,300</B> </TD>
    <TD vAlign=bottom align=left width="2%"
>&nbsp;</TD></TR></TABLE>
<P align=center>The accompanying notes are an integral part of these financial
statements.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_4></A>
<P align=center><B>LEXARIA CORP.</B><BR><B>STATEMENTS OF STOCKHOLDERS'
EQUITY</B><BR><B>For Three Months Ended January 31, 2011</B><BR><B>(Expressed in
U.S. Dollars)</B><BR>
  <B>(Unaudited)</B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid">COMMON
      STOCK </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="11%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="11%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="11%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="11%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="11%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="11%">ADDITIONAL </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="11%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="11%">TOTAL </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="11%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="11%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="11%">PAID-IN </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="11%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="11%">STOCKHOLDERS' </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="11%">SHARES </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="11%">AMOUNT </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="11%">CAPITAL </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="11%">DEFICIT </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="11%">EQUITY </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD align=right width="11%">&nbsp;</TD>
    <TD align=right width="2%">&nbsp;</TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD align=right width="11%">&nbsp;</TD>
    <TD align=right width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="11%">&nbsp;</TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD align=right width="11%">&nbsp;</TD>
    <TD align=right width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="11%">&nbsp;</TD>
    <TD align=center width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Balance, October 31, 2009 </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>10,732,870 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;10,733 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;5,658,768
    </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="11%"
    bgColor=#e6efff>&nbsp;(3,371,930</TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;2,297,571
    </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Stock Options @ $0.20 Jan 10 </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>139,050 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>139,050 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Issuance of common stock per Subscription Agreement
      at $0.1143 per share </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>1,617,752 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>1,618 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>181,782 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>183,400 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Issuance of common stock per Settlement Agreement
      at $0.12 per share </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>499,893 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>500 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>59,487 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>59,987 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Stock Options @ $0.20 Aug. 16 </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>22,316 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>22,316 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Warrant conversion @$0.05 </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>75,833 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>76 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>3,716 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>3,792 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Comprehensive income (loss): </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss)
      for the year </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="11%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="11%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="11%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="11%">(552,462</TD>
    <TD vAlign=bottom align=left width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="11%">(552,462</TD>
    <TD vAlign=bottom align=left width="2%">) </TD>
  </TR>
  <TR>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Balance, October 31, 2010 </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">12,926,348 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">12,926 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">6,065,118 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">(3,924,392</TD>
    <TD vAlign=bottom align=left width="2%">) </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">2,153,653 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Warrant conversion @$0.22 </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">66,300 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">66 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">14,521 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">14,587 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Issuance of common stock for debt settlement </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">40,761 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">41 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">9,334 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">9,375 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Intrinsic value of beneficial conversion feature </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">20,563 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">20,563 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Comprehensive income (loss): </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="11%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="11%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="11%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="11%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="11%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;(Loss)
      for the period </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="11%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="11%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="11%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="11%" bgColor=#e6efff>(130,177</TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="11%" bgColor=#e6efff>(130,177</TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Balance, January 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="11%" bgColor=#e6efff>13,033,409 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="11%" bgColor=#e6efff>&nbsp;13,033 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="11%" bgColor=#e6efff>&nbsp;6,109,536 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="11%" bgColor=#e6efff>&nbsp;(4,054,569</TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="11%" bgColor=#e6efff>&nbsp;2,068,000 </TD>
    <TD vAlign=bottom align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>The accompanying notes are an integral part of these financial
statements.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_5></A>
<P align=center><B>LEXARIA CORP.</B><BR><B>STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS</B><BR><B>For three months ended January 31, 2011 and
2010</B><BR><B>(Expressed in U.S. Dollars)</B><BR>
  <B>(Unaudited)</B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center><B>Three Months Ended</B> </TD>
    <TD align=right width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center><B>January 31</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD vAlign=bottom align=left width="1%" >$</TD>
    <TD vAlign=bottom align=right width="12%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >$</TD>
    <TD vAlign=bottom align=right width="12%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Revenue</B> </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Natural gas and oil revenue </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%"><B>330,163</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">67,096 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Cost of revenue</B> </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Natural gas and
      oil operating costs </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><B>151,910</B> </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>29,872 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Depletion </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"><B>127,219</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">35,726 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Write down in carrying
      value of oil &amp; gas properties </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff><B>-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>1 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"><B>279,129</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">65,599 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Gross profit (loss)</B> </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"><B>51,034</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">1,497 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Expenses</B> </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Accounting and audit
    </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><B>17,973</B> </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>16,202 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Insurance </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"><B>2,338</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Advertising and
      promotions </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><B>620</B> </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Bank charges and exchange loss </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"><B>14,066</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">12,460 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Stock Based Compensation
    </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><B>-</B> </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>139,050 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Consulting (note 9) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"><B>48,115</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">43,185 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Depreciation </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><B>255</B> </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>255 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Fees and Dues </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"><B>6,488</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">5,581 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Interest expense
      from loan payable (note 7, 8) </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><B>56,864</B> </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>39,106 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Investor relation </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"><B>22,153</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Legal and professional
    </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><B>4,311</B> </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>21,142 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Office and miscellaneous </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"><B>1,421</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">378 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Rent </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><B>3,427</B> </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>3,789 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Telephone </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%"><B>1,395</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">538 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Training </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff><B>268</B> </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Travel </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%"><B>1,516</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">2,625 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%"><B>181,210</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">284,312 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Net (loss) and comprehensive (loss) for the period</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%"><B>(130,177</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" ><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%">(282,815</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" >) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Basic and diluted (loss) per share</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%"><B>(0.01</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" ><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%">(0.03</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" >) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Weighted average number of common shares outstanding</B>
    </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>- Basic and diluted</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%" bgColor=#e6efff><B>12,979,921</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>10,910,158 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>The accompanying notes are an integral part of these financial
statements.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_6></A>
<P align=center><B>LEXARIA CORP.</B><BR><B>STATEMENTS OF CASH
FLOWS</B><BR><B>For three months ended January 31, 2011 and
2010</B><BR><B>(Expressed in U.S. Dollars)</B><BR>
  <B>(Unaudited)</B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center><B>Three Months Ended</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center><B>January 31</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Cash flows used in operating activities</B>
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Net (loss) for the
      period </TD>
    <TD align=left width="1%"  bgColor=#e6efff><B>$</B></TD>
    <TD align=right width="12%" bgColor=#e6efff><B>&nbsp;(130,177</B></TD>
    <TD align=left width="2%"  bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff><B>$</B></TD>
    <TD align=right width="12%" bgColor=#e6efff><B>&nbsp;(282,815</B></TD>
    <TD align=left width="2%"  bgColor=#e6efff><B>)</B> </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustments
      to reconcile net loss to net cash used in operating activities: </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Consulting
      fee - debt settlement </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>9,375</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>139,050</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Depreciation </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>255</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>255</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Depletion
    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>127,219</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>35,726</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Write down in carrying value of oil and gas properties </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>-</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>1</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Foreign
      exchange gain / loss </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>-</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>9,783</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Accredited interest on loan payable </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>-</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>2,730</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Change in operating
      assets and liabilities: </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;(Increase)/Decrease
      in accounts receivable </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>(100,984</B></TD>
    <TD align=left width="2%" ><B>)</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>19,771</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;(Increase)/ Decrease in prepaid expenses and deposit </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>(6,449</B></TD>
    <TD align=left width="2%"  bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>(9,352</B></TD>
    <TD align=left width="2%"  bgColor=#e6efff><B>)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Increase
      in accounts payable </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>29,644</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>17,175</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Net cash used in operating activities</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>(71,117</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    ><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>(67,676</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    ><B>)</B> </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Cash flows used in investing activities</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Oil and gas property acquisition
      and exploration costs </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>(241,876</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    ><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Net cash used in investing activities</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>(241,876</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    ><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Cash flows from financing activities</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Payments of loan payable </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>(104,986</B></TD>
    <TD align=left width="2%" ><B>)</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>-</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Proceeds from convertible
      debenture </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>620,000</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>-</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Proceeds from private placement
    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>-</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>183,400</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Proceeds from exercising
      of warrants </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>14,586</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Net cash from financing Activities</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>529,600</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>183,400</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Increase (Decrease) in cash and cash equivalents</B>
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>216,607</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>115,724</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Cash and cash equivalents, beginning of
      period</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>62,989</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>330,167</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Cash and cash equivalents, end of period</B>
    </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff><B>&nbsp;279,596</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff><B>&nbsp;445,891</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>The accompanying notes are an integral part of these financial
statements.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_7></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD align=center><B>LEXARIA CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=center><B>NOTES TO THE FINANCIAL STATEMENTS</B> </TD></TR>
  <TR vAlign=bottom>
    <TD align=center><B>January 31, 2011</B> </TD></TR>
  <TR vAlign=bottom>
    <TD align=center><B>(Expressed in U.S. Dollars)</B> </TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=center><B>(Unaudited)</B> </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>1.</B> </TD>
    <TD>
      <P align=justify><B>Basis of Presentation</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The unaudited interim financial statements for the
      quarter ended January 31, 2011 included herein have been prepared pursuant
      to the rules and regulations of the Securities and Exchange Commission.
      Certain information and footnote disclosures normally included in annual
      financial statements prepared in accordance with United States generally
      accepted accounting principles have been condensed or omitted pursuant to
      such rules and regulations. In the opinion of management, all adjustments
      (consisting of normal recurring accruals) considered necessary for a fair
      presentation have been included. These unaudited interim financial
      statements should be read in conjunction with the October 31, 2010 audited
      annual financial statements and notes thereto.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>2.</B> </TD>
    <TD>
      <P align=justify><B>Organization and Business</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company was formed on December 9, 2004 under the laws
      of the State of Nevada and commenced operations on December 9, 2004. The
      Company is an independent natural gas and oil company engaged in the
      exploration, development and acquisition of oil and gas properties in the
      United States and Canada. The Company&#146;s entry into the oil and gas
      business began on February 3, 2005. The Company has offices in Vancouver
      and Kelowna, BC, Canada.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>These financial statements have been prepared in
      accordance with generally accepted accounting principles applicable to a
      going concern, which contemplates the realization of assets and the
      satisfaction of liabilities and commitments in the normal course of
      business. The Company has incurred an operating loss and required
      additional funds to maintain its operations. Management&#146;s plans in this
      regard are to raise equity and/or debt financing as required.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>These conditions raise substantial doubt about the
      Company&#146;s ability to continue as a going concern. These financial
      statements do not include any adjustment that might result from this
      uncertainty.</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>3.</B> </TD>
    <TD>
      <P align=justify><B>Business Risk and Liquidity</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company is subject to several categories of risk
      associated with its operating activities. Natural gas and oil exploration
      and production is a speculative business and involves a high degree of
      risk. Among the factors that have a direct bearing on the Company&#146;s
      prospects are uncertainties inherent in estimating natural gas and oil
      reserves, future hydrocarbon production and cash flows, particularly with
      respect to wells that have not been fully tested and with wells having
      limited production histories; access and cost of services and equipment;
      and the presence of competitors with greater financial resources and
      capacity.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>4.</B> </TD>
    <TD>
      <P align=justify><B>Significant Accounting
Policies</B></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify><B>a)&nbsp;&nbsp;
</B><B>&nbsp;</B><B>Principles of Accounting </B></P>
<P style="MARGIN-LEFT: 5%" align=justify>These financial statements are stated
in U.S. dollars and have been prepared in accordance with U.S. generally
accepted accounting principles. </P>
<P style="MARGIN-LEFT: 5%" align=justify><B>b)&nbsp;&nbsp;&nbsp; Convertible
Debentures </B></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_8></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company accounts for its convertible debt instruments
      that may be settled in cash upon conversion according to ASC 470-20-30-22
      which requires the proceeds from the issuance of such convertible debt
      instruments to be allocated between debt and equity components so that
      debt is discounted to reflect the Company&#146;s non-convertible debt borrowing
      rate. Further, the Company applies ASC 470-20-35-13 which requires the
      debt discount to be amortized over the period the convertible debt is
      expected to be outstanding as additional non-cash interest
  expense.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>c) New Accounting Pronouncements</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In January 2010, the FASB issued an update to the Fair
      Value topic. This update requires new disclosures for (1) transfers in and
      out of levels 1 and 2, and (2) activity in level 3, by requiring the
      reconciliation to present separate information about purchases, sales,
      issuance, and settlements. Also, this update clarifies the disclosures
      related to the fair value of each class of assets and liabilities and the
      input and valuation techniques for both recurring and nonrecurring fair
      value measurements in levels 2 and 3. the effective date for the
      disclosures and clarifications is for the interim and annual reporting
      periods beginning after December 15, 2009 except for the disclosures about
      purchases, sales, issuances and settlements, which is effective for fiscal
      years beginning after December 15, 2010. This update is not expected to
      have a material impact on the Company&#146;s financial statements.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In February 2010, the FASB issued ASC No. 2010-09,
      &#147;<I>Amendments to Certain Recognition and Disclosure Requirements</I>&#148;,
      which eliminates the requirement for SEC filers to disclose the date
      through which an entity has evaluated subsequent events. ASC No. 2010-09
      is effective for its fiscal quarter beginning after 15 December 2010. The
      adoption of ASC No. 2010-09 is not expected to have a material impact on
      the Company&#146;s financial statements.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On March 5, 2010, the FASB issued ASU No. 2010-11
      Derivatives and Hedging Topic 815 &#147;Scope Exception Related to Embedded
      Credit Derivatives.&#148; This ASU clarifies the guidance within the derivative
      literature that exempts certain credit related features from analysis as
      potential embedded derivatives requiring separate accounting. The ASU
      specifies that an embedded credit derivative feature related to the
      transfer of credit risk that is only in the form of subordination of one
      financial instrument to another is not subject to bifurcation from a host
      contract under ASC 815-15-25, &#147;Derivatives and Hedging &#151; Embedded
      Derivatives &#151; Recognition.&#148; All other embedded credit derivative features
      should be analyzed to determine whether their economic characteristics and
      risks are &#147;clearly and closely related&#148; to the economic characteristics
      and risks of the host contract and whether bifurcation is required. The
      adoption of this ASU did not have a material impact on the Company&#146;s
      financial statements.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In April 2010, the FASB issued ASU 2010-13,
      &#147;Compensation&#151;Stock Compensation (Topic 718): Effect of Denominating the
      Exercise Price of a Share-Based Payment Award in the Currency of the
      Market in Which the Underlying Equity Security Trades,&#148; or ASU 2010-13.
      This ASU provides amendments to Topic 718 to clarify that an employee
      share-based payment award with an exercise price denominated in currency
      of a market in which a substantial portion of the entity&#146;s equity
      securities trades should not be considered to contain a condition that is
      not a market, performance, or service condition. Therefore, an entity
      would not classify such an award as a liability if it otherwise qualifies
      as equity. The amendments in this ASU are effective for fiscal years, and
      interim periods within those fiscal years, beginning on or after December
      15, 2010. The Company does not expect the adoption of ASU 2010-13 to have
      a significant impact on its financial statements.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Other accounting standards that have been issued or
      proposed by the FASB or other standards-setting bodies that do not require
      adoption until a future date are not expected to have a material impact on
      the Company&#146;s financial statements upon adoption.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>5.</B> </TD>
    <TD>
      <P align=justify><B>Capital Stock</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Share Issuances</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_9></A>
<P style="MARGIN-LEFT: 5%" align=justify>On June 23, 2009, the Company amended
its Articles of Incorporation to undertake a one (1) for four (4) share
consolidation of its authorized and issued and outstanding common stock. As a
result, the Company&#146;s authorized capital decreased from 75,000,000 shares of
common stock with a par value of $0.001 to 18,750,000 shares of common stock
with a par value of $0.001 and its issued and outstanding shares decreased from
24,369,500 shares of common stock to 6,092,370 shares of common stock. </P>
<P style="MARGIN-LEFT: 5%" align=justify>On July 22, 2009, the Company completed
an equity financing and issued 4,545,000 unit at the price of $0.05 per unit and
each unit consists of one common shares and one share purchase warrant at $0.20
per share for a period of two years, so that effective July 22, 2009, the
Company had 10,637,370 shares of common stock issued and outstanding. All shares
and warrants issued were restricted under applicable securities rules. </P>
<P style="MARGIN-LEFT: 5%" align=justify>On October 21, 2009, 191,000 warrants
were exercised for 95,500 common shares for total proceeds of $4,775. </P>
<P style="MARGIN-LEFT: 5%" align=justify>On December 24, 2009, the Company
completed an equity financing and issued 1,617,752 units at the price of
CAD$0.12 per unit and each unit consists of one share purchase warrant which two
warrants entitle a holder to purchase one common share at CAD$0.20 per share for
a period of one year, so that effective December 24, 2009, the Company had
12,350,622 shares of common stock issued and outstanding. All shares and
warrants issued were restricted under applicable securities rules. </P>
<P style="MARGIN-LEFT: 5%" align=justify>On March 17, 2010, the Company had
increased its authorized share capital from 18,750,000 common shares to
200,000,000 common shares. </P>
<P style="MARGIN-LEFT: 5%" align=justify>On May 31, 2010, the Company issued
499,893 units at a price of $0.12 per unit for a Settlement Agreement valued at
$59,987. Each unit consists of one common share and one share purchase warrants
at $0.12 per share for a period of two years. All shares and warrants issued
were restricted under applicable securities rules. </P>
<P style="MARGIN-LEFT: 5%" align=justify>On October 21, 2010, the Company
settled a portion of the debt, namely US$1,625 with CAB Financial Services by
converting 65,000 warrants into 32,500 common shares of the Company as per
Purchase Agreement dated October 27, 2008 at a price of $0.05 per share. </P>
<P style="MARGIN-LEFT: 5%" align=justify>On October 21, 2010, the Company
settled a portion of the debt, namely US$2,166.65 with Christopher Bunka by
converting 86,667 warrants into 43,333 common shares of the Company as per
Purchase Agreement dated October 27, 2008 at a price of $0.05 per share. </P>
<P style="MARGIN-LEFT: 5%" align=justify>On November 16, 2010, the Company
settled the debt incurred as a result of that consulting agreement, being
US$9,375, to Mr. Tom Ihrke by issuing 40,761 restricted common shares of the
Company at a price of $0.23 per share.</P>
<P style="MARGIN-LEFT: 5%" align=justify>On January 4, 2011, 132,600 warrants
were exercised for 66,300 common shares of the Company at a price of CAD$0.22
for a total proceeds of CAD$14,586. 100,000 warrants of the 132,600 warrants
were exercised by a Director of the Company. </P>
<P style="MARGIN-LEFT: 5%" align=justify>As at January 31, 2011, Lexaria Corp.
has 13,033,409 shares issued and outstanding and 6,816,322 warrants issued and
outstanding. </P>
<P style="MARGIN-LEFT: 5%" align=justify>A summary of warrants as at January 31,
2011 is as follows: </P>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>
    <TR vAlign=top>
      <TD width="22%" align=center><B>2011</B> </TD>
      <TD align=center width="22%">&nbsp; &nbsp;<B>Number</B> </TD>
      <TD align=center>&nbsp; </TD>
      <TD align=center width="22%"><B>Exercise</B> </TD>
      <TD align=left width="22%">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B>Expiry</B>
      </TD>
    </TR>
  <TR vAlign=top>
      <TD width="22%" align=center style="BORDER-BOTTOM: #000000 1px solid"><B>Type</B>
      </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="22%"><B>Outstanding</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="22%"><B>Price</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="22%">&nbsp;
        &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B>Date</B> </TD>
    </TR>
  <TR>
      <TD width="22%" align=center>&nbsp; </TD>
      <TD align=center width="22%">&nbsp; </TD>
      <TD align=center>&nbsp; </TD>
      <TD align=center width="22%">&nbsp; </TD>
      <TD width="22%">&nbsp; </TD>
    </TR>
  <TR vAlign=top>
      <TD width="22%" align=center bgColor=#e6efff>Warrants </TD>
      <TD align=center width="22%" bgColor=#e6efff>499,893 </TD>
      <TD align=center bgColor=#e6efff>1 </TD>
      <TD align=center width="22%" bgColor=#e6efff>$0.20 </TD>
      <TD align=right width="22%" bgColor=#e6efff>May 31, 2012 </TD>
    </TR>
  <TR vAlign=top>
      <TD width="22%" align=center>&nbsp; </TD>
      <TD align=center width="22%">4,545,000 </TD>
      <TD align=center>1 </TD>
      <TD align=center width="22%">$0.20 </TD>
      <TD align=right width="22%">July 10, 2011 </TD>
    </TR>
  <TR vAlign=top>
      <TD width="22%" align=center
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=center width="22%"
    bgColor=#e6efff>1,771,429 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=center
    bgColor=#e6efff>1 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=center width="22%"
    bgColor=#e6efff>$0.40 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="22%"
    bgColor=#e6efff>November 30, 2012 </TD>
    </TR></TABLE></DIV>
<P style="MARGIN-LEFT: 5%" align=justify>1. Each warrant entitles a holder to
purchase one common share. <BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_10></A>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>6.</B> </TD>
    <TD>
      <P align=justify><B>Oil and Gas Properties</B></P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><B>(a)</B> </TD>
    <TD>
      <P align=justify><B>Proved properties</B></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 10%" align=justify><B>(1)&nbsp;
</B><B>&nbsp;</B><B>Palmetto Point Project </B></P>
<P style="MARGIN-LEFT: 10%" align=justify>On December 21, 2005, the Company
agreed to purchase a 20% working and revenue interest in a 10 well drilling
program in Mississippi owned by Griffin &amp; Griffin Exploration for $700,000.
Concurrent with signing the Company paid $220,000 and January 17, 2006 the
Company paid the remaining $480,000. The Company applied the full cost method to
account for its oil and gas properties, seven wells were found to be proved
wells, and three wells were found impaired. One of the wells was impaired due to
uneconomic life, and the other two wells were abandoned due to no apparent gas
or oil shows present. The costs of impaired properties were added to the
capitalized cost in determination of the depletion expense. </P>
<P style="MARGIN-LEFT: 10%" align=justify>On September 22, 2006, the Company
elected to participate in an additional two-well program in Mississippi owned by
Griffin &amp; Griffin Exploration and paid $140,000. The two wells were found to
be proved wells. </P>
<P style="MARGIN-LEFT: 10%" align=justify>On June 23, 2007, the Company acquired
an assignment of 10% gross working interest from a third party for $520,000
secured loan payable. The Company recognized $501,922 in the oil and gas
property.</P>
<P style="MARGIN-LEFT: 10%" align=justify>On October 4, 2007, the Company
elected to participate in the drilling of PP F-12-3 in Mississippi by Griffin
&amp; Griffin Exploration. The Company had 30% gross working interest and paid
$266,348. On July 31, 2008, the Company accrued and paid an additional cost of
$127,707 for the workovers of wells PP F-12 and PP F-12-3. PP F-12 has started
limited production from October 2007, and PP F-12-3 has started limited
production from November 2007.</P>
<P style="MARGIN-LEFT: 10%" align=justify>On April 3, 2009, the Company entered
into an Asset Purchase Agreement to acquire additional interests in its existing
core producing Mississippi oil and gas properties. The Company paid $40,073.39
to acquire additional 2% working interest in the proven Belmont Lake oil and gas
and an additional 10% working interest in potential nearby exploration wells.
Total working interest for Belmont Lake is 32%; and total working interest in
the exploration wells on approximately 140,000 acres surrounding Belmont Lake in
all directions is 60%. </P>
<P style="MARGIN-LEFT: 10%" align=justify>The Company had a short-lived
opportunity to acquire additional fractional interests in the upcoming Belmont
Lake 12-4 well which was expected to be a horizontal well. An unrelated third
party did not participate in its right to p<FONT color=#444444>a</FONT>rticipate
in the 12-4 well, and therefore a share of its interest (a &#147;non consent&#148;
interest) was made available to the other participating parties including
Lexaria. On August 28, 2009 and effective on September 1, 2009, to take best
advantage of this opportunity, the Company entered into four separate assignment
agreements, three of which were with people or companies with related
management. The Company received from these four parties proceeds of $371,608.57
to fund additional interests in this well. As a result, the Company has a 25.84%
perpetual gross interest in the well (18.0% net revenue interest); as well as a
5.2% net revenue interest in the non-consent interest. The non-consent interest
remains valid until such time as the well produces 500% of all costs and
expenses back to the participants in the form of revenue, at which time the
non-consent interest ends. Enertopia, a company with related management, has
acquired from Lexaria a 6.16% perpetual gross interest in the 12-4 well; David
DeMartini, a director of Lexaria, has acquired from Lexaria a 5% gross interest
in the non-consent interest in the 12-4 well; and 0743608 BC Ltd. a company
owned by the President of the Company, has acquired from Lexaria a 11.60% gross
interest in the non-consent interest in the 12-4 well. </P>
<P style="MARGIN-LEFT: 10%" align=justify>On May 31, 2010, the Company signed a
Settlement Agreement with Enertopia Corp., whereby the Company issued 499,893
units at $0.12 per unit and each unit consists of one restricted common share
and one share purchase warrant at $0.20 per share for a period of two years in
exchange for the working interest initially assigned on August 28, 2009. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_11></A>
<P style="MARGIN-LEFT: 10%" align=justify>On June 16, 2010, the Company signed a
Settlement Agreement with a third party, who had originally participated in the
August 28, 2009, opportunity in the non-consent interest for Belmont Lake 12-4.
The Company returned back $144,063.46 to the third party and cancelled its
participation. </P>
<P style="MARGIN-LEFT: 10%" align=justify>On July 29, 2010, the Company had
agreed with its Operators at Belmont Lake not to proceed to drill a horizontal
12-4 well. Rather, two of the three proposed vertical wells 12-2, 12-4, or 12-5
are proposed to be drilled in August 2010. To take best advantage of this
opportunity, the Company cancelled all previous agreements relating to August
28, 2009 with respect to Belmont Lake horizontal well 12-4 and entered into
three separate assignment agreements, of which all three were with people or
companies with related management. The Company received total proceeds of
$324,677.12 to fund additional interests in these wells. As a result, the
Company has a 32% perpetual gross interest in the wells (24.0% net revenue
interest); as well as a 8% gross interest (6% net revenue interest) in the
non-consent interest. The non-consent interest remains valid until such time as
the well produces 500% of all costs and expenses back to the participants in the
form of revenue, at which time the non-consent interest ends. Emerald Atlantic
LLC, a company owned by a director of Lexaria, has acquired from Lexaria a 8.74%
gross interest in the non-consent interest in two of the three vertical wells;
and 0743608 BC Ltd. a company owned by the President of the Company, has
acquired from Lexaria a 20.79% gross interest in the non-consent interest in the
two of the three vertical wells; an advisor to the Company has acquired from
Lexaria 2.46% gross interest in the non-consent interest in two of the three
vertical wells. </P>
<P style="MARGIN-LEFT: 10%" align=justify>On September 13, 2010, Lexaria Corp.
(the &#147;Company&#148;) entered into three separate assignment agreements with 0743608
BC Ltd, solely owned by Director/Officer of the Company; Emerald Atlantic LLC,
solely owned by a Director of the Company, and the Senior VP Business
Development. (the &#147;Assignees&#148;), whereby the Assignees have paid a fee of
US$408,116.48 to earn a 24% share of the Company&#146;s gross non-perpetual 32%
interest in the three oil wells being drilled in Wilkinson County, Mississippi.
This agreement replaces the one signed on August 28, 2009. A balance of
$83,439.36, which is outstanding, will be received by the Company in the month
of September. As a result of the three assignment agreements, Lexaria receives
at no cost to the company, a carried interest of 8% in these same rights and
benefits. The Company assigns, transfers and sets over to the Assignees, all
proportionate rights, interest and benefits in the Assigned Non Perpetual
Interest held by or granted to the Assignor in and to the Participation
Agreement between the Company and Griffin but limited to a gross 500% revenue
payout based on the total amount paid under the Initial Consideration and the
Subsequent Consideration after which all rights, interests and benefits cease.
</P>
<P style="MARGIN-LEFT: 10%" align=justify>As of January 31, 2011, there were
additional well interest changes or workovers pending of wells PP F-12, PP
F12-3, PP F12-4, PP F12-5 and PP F12-29.</P>
<P style="MARGIN-LEFT: 10%" align=justify><B>(2) Mississippi and Louisiana,
Frio-Wilcox Project </B></P>
<P style="MARGIN-LEFT: 10%" align=justify>In December 2006, the first well
CMR-US 39-14 was found to have sufficient hydrocarbons to become economic. USA
1-37 and BR F-33 had started intermittent production from November 2007. The
Company applied the full cost method to account for its oil and gas properties.
</P>
<P style="MARGIN-LEFT: 10%" align=justify>As at January 31, 2007, the Company
abandoned Dixon #1 due to no economic hydrocarbons being present and $162,420 of
drilling costs was added to the capitalized costs. The Dixon #1 was the only
Wilcox well the Company has drilled to date. Every other well it has
participated in located in Mississippi and Louisiana is a Frio well. </P>
<P style="MARGIN-LEFT: 10%" align=justify>On June 2, 2007, the Company abandoned
Randall #1 and $107,672 drilling costs was added to the capitalized costs in
determination of depletion expense. </P>
<P style="MARGIN-LEFT: 10%" align=justify>During August to October 2007, three
additional wells, PP F-90, PP F-100, and PP F-111 were drilled in the area.
These Frio wells were abandoned due to modest gas shows and a total of $306,562
drilling costs was added to the capitalized costs in determination of depletion
expense. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_12></A>
<P style="MARGIN-LEFT: 10%" align=justify>During December 2007, two additional
wells, PP F-6A and PP F-83, were drilled and were plugged and abandoned due to
non-economic gas shows. A total of $247,086 drilling costs was added to the
capitalized costs in determination of depletion expense.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD align=left><B>Properties </B></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>October 31, </B></TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>Addition </B></TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>Depletion </B></TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>January 31, </B></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2010 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2011 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff><B>U.S.A. &#150; Proved </B><B>property </B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff><B>&nbsp;3,118,376 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff><B>&nbsp;241,876 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff><B>&nbsp;(127,222</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff><B>&nbsp;3,233,030 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify><B>(b)</B><B>&nbsp;&nbsp;&nbsp;
</B><B>Unproved Properties </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left><B>Properties </B></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="12%"><B>October 31, </B></TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="12%"><B>Addition </B></TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="14%"><B>Cost added to </B></TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="12%"><B>January 31, </B></TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="12%"><B>2010 </B></TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="14%"><B>capitalized </B></TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="12%"><B>2011 </B></TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="14%"><B>cost/write down </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="14%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff><B>U.S.A.-Unproved properties </B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff><B>&nbsp;19,293 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff><B>&nbsp;- </B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="14%"
    bgColor=#e6efff><B>&nbsp;- </B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff><B>&nbsp;19,293 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><B>(1) </B></TD>
    <TD colSpan=3>
      <P align=justify><B>Strachan Leduc Reef, Alberta, Canada</B></P></TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD colSpan=3>
      <P align=justify>On September 23, 2005, the Company entered into an
      agreement to participate in the Strachan Leduc Reef Farm-In in Alberta,
      Canada. The Company made a payment of $218,739. (CDN $253,977) for a 4%
      participation in the costs of Strachan Leduc Reef Farm-In. In addition,
      the Company incurred $186,668 for required supplemental funds due to well
      hole problems. The Company will earn on completion, capped or abandoned
      with respect to the well to be drilled at 14 of 9-38-9-W5M the
      following:</P></TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(i) </TD>
    <TD colSpan=2>
      <P align=justify>In the Spacing Unit for the Earning Well:</P></TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">a. </TD>
    <TD>
      <P align=justify>A 2.000% interest in the petroleum and natural gas below
      the base of the Mannville excluding natural gas in the formation;
    and</P></TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">b. </TD>
    <TD>
      <P align=justify>A 4.000% interest in the natural gas in the Leduc
      formation before payout subject to payment of the Overriding Royalty which
      is convertible upon payout at royalty owners option to 50% of the Farmee&#146;s
      Interest;</P></TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(ii) </TD>
    <TD colSpan=2>
      <P align=justify>A 1.600% interest in the rights below the base of the
      Shunda formation in Section 10, Township 38, Range 9W5M; and</P></TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(iii) </TD>
    <TD colSpan=2>
      <P align=justify>A 1.289% interest in the rights below the base of the
      Shunda formation in Sections 15 and 16, Township 38, Range 9W5M down to
      the base as shown in the schedule attached to the agreement dated
      September 23, 2005.</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company wrote down the cost of the property to a
      nominal value of $1 as the future realization of the property is uncertain
      in the fiscal year 2008 and then written off in fiscal year 2010 due to
      the property has expired.</P></TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD vAlign=top width="5%"><B>(2) </B></TD>
    <TD>
      <P align=justify><B>Mississippi and Louisiana, USA</B></P></TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company entered into an Agreement to acquire a
      working interest in multiple zones of potential oil and gas production in
      Mississippi and Louisiana. This Agreement contemplates up to a 50 well
      drill program for Wilcox and Frio wells, at the Company&#146;s option, within
      the defined area of mutual interest (AMI). The AMI includes over 200,000
      gross acres located non-contiguously between Southwest Mississippi and
      North East Louisiana.</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_13></A>
<P style="MARGIN-LEFT: 15%" align=justify>The Company originally agreed to pay
40% of all prospect fees, mineral leases, surface leases, and drilling and
completion costs to earn a net 32% of all production from all producible zones
to the base of the Frio formation (Frio Targets); and, 30% of all production to
the base of the Wilcox formation (Wilcox Targets). All working interests are to
be registered in the name of Lexaria Corp. </P>
<P style="MARGIN-LEFT: 15%" align=justify>The Joint Participation Agreement and
Joint Lands Agreements are between Lexaria Corp. and Griffin &amp; Griffin
Exploration LLC (G&amp;G) of Jackson, Mississippi.</P>
<P style="MARGIN-LEFT: 15%" align=justify>On June 21, 2007, the Company acquired
an additional 10% from a third party for all rights, title and benefits
excluding the seven wells drilled under the AMI Agreement between August 3, 2006
and June 19, 2007, specifically wells CMR-USA-39-14, Dixon #1, Faust #1 TEC F-1,
CMR/BR F-14, RB F-1 Red Bug #2, BR F-33, and Randall #1 F-4, and any offset
wells that could be drilled to any of these specified wells.</P>
<P style="MARGIN-LEFT: 15%" align=justify>On July 26, 2007, the Company acquired
5% from a third party for all rights, title and benefits in the seven wells
drilled under the AMI Agreement between August 3, 2006 and June 19, 2007,
specifically wells CMR-USA-39-14, Dixon #1, Faust #1 TEC F-1, CMR/BR F-14, RB
F-1 Red Bug #2, BR F-33, and Randall #1 F-4, and any offset wells that could be
drilled to any of these specified wells.</P>
<P style="MARGIN-LEFT: 15%" align=justify>On April 3, 2009, the Company entered
into an Asset Purchase Agreement to acquire additional interests in its existing
core producing Mississippi oil and gas properties. The Company paid $40,073.39
to acquire an additional 2% working interest in the proven Belmont Lake oil and
gas field, and an additional 10% working interest in potential nearby
exploration wells. Further, the Company is required to pay $100 per month for a
period of 4 years from the closing. Total working interest for Belmont Lake as
of October 31, 2010 is 32%; and total working interest in the exploration wells
on approximately 140,000 acres surrounding Belmont Lake in all directions as of
October 31, 2010, is 60%. </P>
<P style="MARGIN-LEFT: 15%" align=justify>On December 16, 2010, the Company
entered into an assignment agreement with Emerald Atlantic LLC, solely owned by
a Director of the Company (the Assignee&#148;), whereby the Assignee has paid a fee
of US$30,075.95 to earn 18% of a 4.423% share of the Company&#146;s net revenue
interest after field operating expenses for a well to be drilled in Wilkinson
County. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>7.</B> </TD>
    <TD colSpan=2>
      <P align=justify><B>Loan Payable</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD>
      <P align=justify>On April 1, 2010, the Company entered into a purchase
      agreement with CAB Financial Services Ltd., a company controlled by Chris
      Bunka, our President, Chief Executive Officer and Director, (&#147;Purchaser&#148;)
      for a non-secured promissory note in the amount of US$75,000 (the
      &#147;Promissory Note&#148;). The Purchaser agreed to purchase a non-secured 18%
      interest bearing Promissory Note of our company subject to and upon the
      terms and conditions of the Purchase Agreement. The Promissory Note is due
      and payable on April 1, 2012 or, if mutually agreed to by all parties then
      April 1, 2011. The Promissory Note may be prepaid in whole or in part at
      any time prior to April 1, 2012 by payment of 108% of the outstanding
      principal amount including accrued and unpaid interest.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>As long as the Promissory Note is outstanding, the
      Purchaser may voluntarily convert the Promissory Note including accrued
      and unpaid interest to common shares of our company at the conversion
      price of $0.30 per common share.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company did not incur beneficiary conversion charges
      as the conversion price is great than the fair value of the Company&#146;s
      equity.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD>
      <P align=justify>On November 30, 2010, we closed the first tranche of a
      private placement offering of convertible debentures in the aggregate
      amount of US$450,000. The convertible debentures mature on November 30,
      2012, subject to forced conversion as set out in the convertible debenture
      certificate. The convertible debentures pay an interest rate of 12% per
      annum (on a simple basis) and are convertible at US$0.35 per unit. Each
      unit is comprised of one share of our common stock and one share purchase
      warrant. Each warrant entitles the holder thereof to
purchase one share at a price of US$0.40 per share from the earlier of the
maturity date of the convertible debenture or one year from conversion of the
convertible debenture. We also entered into a general security agreement with
the subscribers, whereby the obligations to repay the convertible debenture are
secured by certain of our assets. </P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_14></A>
<P style="MARGIN-LEFT: 10%" align=justify>On December 16, 2010, the Company
closed the second tranche of a private placement offering of convertible
debentures in the aggregate amount of US$170,000. The convertible debentures
mature on November 30, 2012, subject to forced conversion as set out in the
convertible debenture certificate. The convertible debentures pay an interest
rate of 12% per annum (on a simple basis) and are convertible at US$0.35 per
unit. Each unit is comprised of one share of our common stock and one share
purchase warrant. Each warrant entitles the holder thereof to purchase one share
at a price of US$0.40 per share from the earlier of the maturity date of the
convertible debenture or one year from conversion of the convertible debenture.
We also entered into a general security agreement with the subscribers, whereby
the obligations to repay the convertible debenture are secured by certain of our
assets. </P>
<P style="MARGIN-LEFT: 10%" align=justify>The aggregate principal value of the
above convertible debentures was US$620,000 and was allocated to the individual
components on a relative fair value basis. In addition, because the effective
conversion price of the convertible debentures was below the current trading
price of the Company&#146;s common shares at the date of issuance, the Company
recorded a beneficial conversion feature of approximately $20,000. The value of
the warrants and beneficial conversion feature has been recorded as additional
paid in capital.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>8.</B> </TD>
    <TD>
      <P align=justify><B>(a) Secured loan payable</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On October 27, 2008 the Company entered into a Purchase
      Agreement in the amount of CAD$900,000 of Notes being purchased by the
      President (CAD$400,000), the President&#146;s wholly-owned company
      (CAD$300,000) and a shareholder (CAD$200,000) of the Company
      (&#147;Purchasers&#148;). The Purchasers agreed to purchase an 18% interest bearing
      Promissory Note of the Company subject to and upon the terms and
      conditions of the Purchase Agreement. The Company&#146;s obligations to repay
      the Promissory Note will be secured by certain specified assets of the
      Company pursuant to a Security Agreement. As long as the Promissory Note
      is outstanding, the Purchasers may voluntarily convert the Promissory Note
      to Common Shares at the conversion price of $0.45 per share of Common
      Stock. The Promissory Note matures on October 27, 2010 or by mutual
      agreement by all parties on October 27, 2009.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In connection with the Purchase Agreement, the Company
      issued a total of 390,000 (1,560,000 pre- consolidation) warrants which
      two warrants entitle a holder to purchase a common share of the Company of
      which 195,000 (780,000 pre-consolidation) warrants are eligible at $0.05
      (adjusted price) and 195,000 (780,000 pre-consolidation) warrants are
      eligible at $0.05 (adjusted price) per share and expire October 27, 2009
      and October 27, 2010, respectively.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company did not incur beneficiary conversion charges
      as the conversion price is greater than the fair value of the Company&#146;s
      equity.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>As at the date of the issuance of the above noted
      Promissory Note, the Company allocated CAD$21,321 and CAD$683,559 to
      warrants (additional paid-in capital) and Promissory Note based on their
      relative fair value. On October 31, 2008, the allocated Promissory Note
      was revalued as $723,857 based on the effective interest rate of 18% per
      annum and related foreign exchange rate.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On July 10, 2009 the Purchasers converted $45,000 of the
      Promissory Note into equity at $0.05.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On October 27, 2009, 191,000 warrants were exercised for
      95,500 common shares. As at October 31, 2009 the Promissory Note is valued
      at $788,795 based on the effective interest rate of 18% per annum and
      related foreign exchange rate.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On October 21, 2010, the Company settled a portion of the
      debt, namely US$1,625 with CAB Financial Services by converting 65,000
      warrants into 32,500 common shares of the Company as per Purchase
      Agreement dated October 27, 2008 at a price of $0.05 per
  share.</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_15></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On October 21, 2010, the Company settled a portion of the
      debt, namely US$2,166.65 with Christopher Bunka by converting 86,667
      warrants into 43,333 common shares of the Company as per Purchase
      Agreement dated October 27, 2008 at a price of $0.05 per share.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On October 21, 2010, the Company entered into an
      amendment with loan holders to extend the loan to be on a month-to-month
      basis with the same terms and conditions as pursuant to the
    amendment.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>During the three months period ended January 31, 2011,
      the Company has paid down the debt by CAD$30,000.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>(b) Unsecured Loan Payable</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On September 13, 2010, we entered into a demand loan
      agreement and promissory note with CAB Financial Services Ltd. (the
      &#147;Lender&#148; or &#147;CAB&#148;), a company controlled by a director and officer of our
      company. The principal amount of the note is US$90,000. The loan agreement
      and promissory note provides that the debt be payable on demand. The note
      has an interest rate of 12% per annum.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On January 31, 2011, the Company had paid back the loan
      for the full amount of US$90,000 to CAB.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>9.</B> </TD>
    <TD>
      <P align=justify><B>Related Party
Transactions</B></P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>For the quarter ended January 31, 2011, the Company paid
      / accrued $26,880 to CAB (2010: $25,200), Tom Ihrke (an officer of the
      Company) $9,519 (2010: $Nil), and BKB Management Ltd. (&#147;BKB&#148;) CAD$16,240
      (2010: $17,785) for management, accounting, and consulting services. CAB
      is owned by the president of the Company and BKB is owned by the CFO of
      the Company.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The related party transactions are recorded at the
      exchange amount established and agreed to between the related
    parties.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>On October 27, 2008 the Company made a secured loan
      agreement in the amount of CAD$300,000 with CAB. (See Note 8a). On July
      10, 2009 $40,000 of the debt was converted to equity. On October 21, 2010,
      the Company settled a portion of the debt, namely US$1,625 with CAB by
      converting 65,000 warrants into 32,500 common shares of the Company as per
      Purchase Agreement dated October 27, 2008 at a price of $0.05 per share.
      For the quarter ended, January 31, 2011, the Company accrued and paid
      interest expenses of CAD$11,319.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD>
      <P align=justify>On October 27, 2008 the Company made a secured loan
      agreement in the amount of CAD$400,000 with Christopher Bunka. (See Note
      8a). On October 21, 2010, the Company settled a portion of the debt,
      namely US$2,166.65 with Christopher Bunka by converting 86,667 warrants
      into 43,333 common shares of the Company as per Purchase Agreement dated
      October 27, 2008 at a price of $0.05 per share. For the quarter ended,
      January 31, 2011, the Company accrued and paid interest expenses of
      CAD$17,901.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(d) </TD>
    <TD>
      <P align=justify>See Note 6, 7 and 8.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(e) </TD>
    <TD>
      <P align=justify>On April 1, 2010, the Company made a non-secured loan
      agreement in the amount of US$75,000 with CAB (See Note 7). For the
      quarter ended January 31, 2011, the Company accrued and paid interest
      expenses of US$5,625.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(f) </TD>
    <TD>
      <P align=justify>On September 13, 2010, the Company made a demand loan
      agreement in the amount of US$90,000 with CAB (See Note 8b). As at January
      31, 2011, the Company paid back the loan in full.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(g) </TD>
    <TD>
      <P align=justify>Included in accounts payable, $95,200 (October 31, 2010:
      $90,027) was payable to a company controlled by the president and a
      director of the Company.</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_16></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(h) </TD>
    <TD>
      <P align=justify>For the quarter ended January 31, 2011, the Company has
      paid/accrued $44,267 (2010: $Nil) to 0743608 BC Ltd., $18,608 (2010:$Nil)
      to Emerald Atlantic LLC, and $5,245 (2010: $Nil) for Non- consent Interest
      in Belmont Lake. 0743608 BC Ltd. is owned by the president of the Company
      and Emerald Atlantic LLC is owned by a Director of the
  Company.</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>10.</B> </TD>
    <TD>
      <P align=justify><B>Stock Options</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On July 8, 2009, the Company granted 75,000 stock options
      to directors and consultants of the Company with exercise price of $0.20,
      vested immediately, and re-priced 325,000 of the previously issued stock
      options to $0.20 that expire over 1.47 years.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On July 23, 2009, the Company had a 1 for 4 share
      consolidation. The 2,000,000 maximum granting of stock options was then
      reduced to 500,000 stock options.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On January 20, 2010, the Company approved a new 2010
      Equity Compensation plan and granted 975,000 stock options to directors
      and consultants of the Company with exercise prices of $0.20, vested
      immediately and expiring on January 20, 2015.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On August 16, 2010, the Company granted 150,000 stock
      options to a consultant of the Company with an exercise price of $0.20,
      vested 75,000 immediately and 75,000 on August 16, 2011 and expiring on
      August 16, 2015.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>For the three months period ended January 31, 2011, the
      Company recorded a total of $Nil (2010: $139,050) for stock based
      compensation expenses.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>A summary of the stock options for the quarter ended
      January 31, 2011 is presented below:</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid">Options
      Outstanding </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="17%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="17%">Weighted Average </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%">Number of Shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%">Exercise Price </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Balance, October 31, 2009 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>500,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&nbsp;0.53* </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >Granted </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">1,125,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">0.20 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Expired </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>(100,000</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>1.84 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >Balance, January 31, 2011 and October 31, 2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">1,525,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">&nbsp;0.20 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>*The exercise price is post re-priced.
</P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company has the following options
outstanding and exercisable.</P>
<DIV align=right>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="95%" border=0>
    <TR vAlign=top>
      <TD align=left>January 31, 2011 </TD>
      <TD align=left width="16%">&nbsp; </TD>
      <TD colspan="2" align=right>Options outstanding </TD>
      <TD colspan="2" align=right>Options exercisable </TD>
    </TR>
    <TR>
      <TD>&nbsp; </TD>
      <TD width="16%">&nbsp; </TD>
      <TD width="16%">&nbsp; </TD>
      <TD width="16%">&nbsp; </TD>
      <TD width="16%">&nbsp; </TD>
      <TD width="16%">&nbsp; </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp; </TD>
      <TD align=left width="16%">&nbsp; </TD>
      <TD align=right width="16%">Weighted </TD>
      <TD align=right width="16%">Weighted </TD>
      <TD align=left width="16%">&nbsp; </TD>
      <TD align=right width="16%">Weighted </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp; </TD>
      <TD align=left width="16%">&nbsp; </TD>
      <TD align=right width="16%">average </TD>
      <TD align=right width="16%">Average </TD>
      <TD align=left width="16%">&nbsp; </TD>
      <TD align=right width="16%">Average </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Range of </TD>
      <TD align=right width="16%">Number </TD>
      <TD align=right width="16%">remaining </TD>
      <TD align=right width="16%">Exercise </TD>
      <TD align=right width="16%">Number </TD>
      <TD align=right width="16%">Exercise </TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Exercise prices
      </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="16%">of
        shares </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="16%">contractual life </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="16%">Price
      </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="16%">of
        shares </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="16%">Price
      </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>$0.20 </TD>
      <TD align=right width="16%" bgColor=#e6efff>150,000 </TD>
      <TD align=right width="16%" bgColor=#e6efff>4.54 years </TD>
      <TD align=right width="16%" bgColor=#e6efff>$0.20 </TD>
      <TD align=right width="16%" bgColor=#e6efff>75,000 </TD>
      <TD align=right width="16%" bgColor=#e6efff>$0.20 </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>$0.20 </TD>
      <TD align=right width="16%">975,000 </TD>
      <TD align=right width="16%">3.97 years </TD>
      <TD align=right width="16%">$0.20 </TD>
      <TD align=right width="16%">975,000 </TD>
      <TD align=right width="16%">$0.20 </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>$0.20 </TD>
      <TD align=right width="16%" bgColor=#e6efff>75,000 </TD>
      <TD align=right width="16%" bgColor=#e6efff>0.47 years </TD>
      <TD align=right width="16%" bgColor=#e6efff>$0.20 </TD>
      <TD align=right width="16%" bgColor=#e6efff>75,000 </TD>
      <TD align=right width="16%" bgColor=#e6efff>$0.20 </TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>$0.20 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="16%">325,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="16%">0.39
        years </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="16%">$0.20
      </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="16%">325,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="16%">$0.20
      </TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
      bgColor=#e6efff>Total </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="16%"
    bgColor=#e6efff>1,525,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="16%"
    bgColor=#e6efff>3.09 years </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="16%"
    bgColor=#e6efff>$0.20 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="16%"
    bgColor=#e6efff>1,450,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="16%"
    bgColor=#e6efff>$0.20 </TD>
    </TR>
  </TABLE>
</DIV><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>11.</B> </TD>
    <TD>
      <P align=justify><B>Commitments and Significant Contracts</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On November 27, 2008, the Company entered into a
      Consulting Agreement with CAB Financial Services Ltd. for consulting
      services of CAB on a continuing basis for a consideration of US$8,000 per
      month plus GST.</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_17></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On May 12, 2009 the Company entered into a consulting
      agreement with BKB Management Ltd. to act as the Chief Financial Officer
      and a Director for a period of six months for a consideration of CAD
      $4,500 per month plus GST. This agreement replaces the September 1, 2008,
      Controller Agreement with CAB Financial Services Ltd. Subsequent to
      October 31, 2010, effective January 1, 2011, the consideration was
      increased to CAD$5,500 per month plus GST/HST.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On August 5, 2010 we entered into a three-month
      Management agreement with Tom Irkhe, whereby Mr. Irkhe will act as the
      Senior Vice-President, Business Development for the Company for
      consideration of US$3,125 per month. On December 2, 2010, the Company
      entered into a month to month management agreement with Tom Ihrke, where
      by Mr. Ihrke will continue to act as the Senior Vice-President Business
      Development for the Company. The Company will pay a monthly consulting fee
      of $3,125.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>See also Note 6(2), 7, and 8.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>12.</B> </TD>
    <TD>
      <P align=justify><B>Segmented Information</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company&#146;s business is considered as operating in one
      segment (United States) based upon the Company&#146;s organizational structure,
      the way in which the operation is managed and evaluated, the availability
      of separate financial results and materiality
  considerations.</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_18></A>
<P align=justify><B>Item 2. Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations </B></P>
<P align=justify><I>Forward-Looking Statements </I></P>
<P align=justify>This quarterly report contains forward-looking statements as
that term is defined in the Private Securities Litigation Reform Act of 1995.
These statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
"may", "should", "expects", "plans", "anticipates", "believes", "estimates",
"predicts", "potential" or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled "Risk Factors", that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results. </P>
<P align=justify>Our unaudited interim financial statements are stated in United
States Dollars (US$) and are prepared in accordance with United States Generally
Accepted Accounting Principles. The following discussion should be read in
conjunction with our financial statements and the related notes that appear
elsewhere in this quarterly report. The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in the forward
looking statements. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed below and elsewhere in this
quarterly report, particularly in the section entitled "Risk Factors" of this
quarterly report. </P>
<P align=justify>In this quarterly report, unless otherwise specified, all
dollar amounts are expressed in United States dollars. All references to "CDN$"
refer to Canadian dollars and all references to "common shares" refer to the
common shares in our capital stock. </P>
<P align=justify>As used in this quarterly report, the terms "we", "us", "our"
and "Company" mean Company and/or our subsidiaries, unless otherwise indicated.
</P>
<P align=justify><B>Overview </B></P>
<P align=justify>We were incorporated in the State of Nevada on December 9,
2004. We are an exploration and development oil and gas company currently
engaged in the exploration for and development of petroleum and natural gas in
North America. We maintain our registered agent's office and our<U><FONT
color=#0000ff> </FONT></U>U.S. business office at Nevada Agency and Transfer
Company, 50 West Liberty, Suite 880, Reno, Nevada 89501. Our telephone number is
(755) 322-0626. </P>
<P align=justify>The address of our principal executive office is Suite 950,
1130 West Pender Street, Vancouver, British Columbia V6E 4A4. Our telephone
number is (604) 602-1675. We have another office located in Kelowna. Our current
locations provide adequate office space for our purposes at this stage of our
development.</P>
<P align=justify>Our common stock is quoted on the OTC Bulletin Board under the
symbol "LXRP" and on the Canadian National Stock Exchange under the symbol &#147;LXX&#148;
</P>
<P align=justify>Lexaria is an oil and gas company engaged in the exploration
for oil and natural gas in Canada and the United States. The Company is
currently generating revenues from its business operations in Mississippi. The
Company&#146;s business plan is to focus on development of the Belmont Lake oil
field, in which it has working interests, in order to maximize cash flow and use
excess cash flow to pay debt and conduct additional development well drilling.
Eventually, if cash flows are strong enough, the Company will once again be able
to explore for additional oil and gas by way of its existing 60% interest option
to drill 38 exploratory wells (see &#147;Oil &amp; Gas Properties - Mississippi and
Louisiana: Frio-Wilcox Project&#148;). To accomplish this, the Company intends to
focus on development drilling first. Eventually the Company will seek a balance
between exploration, development and exploitation drilling. To achieve sustainable and profitable growth, the Company intends
to control the timing and costs of its projects wherever possible. The Company
is not currently the operator of any of its properties and will consider
becoming the operator only when its financial conditions have improved
sufficiently. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_19></A>
<P align=justify>Due to the implementation of British Columbia Instrument 51-509
on September 30, 2008 by the British Columbia Securities Commission, we have
been deemed to be a British Columbia based reporting issuer. As such, we are
required to file certain information and documents at <U><FONT
color=#0000ff>www.sedar.com</FONT></U>. </P>
<P align=justify><B>Our Current Business </B></P>
<P align=justify>The Company is an oil and gas company engaged in the
exploration for oil and natural gas in Canada and the United States. The Company
is currently generating revenues from its business operations in
Mississippi.</P>
<P align=justify>We have acquired working interests in various oil and gas
properties in Mississippi USA. All of our current oil and gas assets are located
in Wilkinson and Amite counties, Mississippi, where we have between 32% gross
working interest and 60% gross working interests in producing oil and/or gas
wells and in exploration wells yet to be drilled. Our Belmont Lake oil field
discovered in December 2006 is located within the Palmetto Point area of
Wilkinson county, Mississippi. We previously had an interest in oil and gas
wells located in Oklahoma but those assets were sold in August 2008. We had a
nominal interest in a non-commercial well located in Strachan Alberta, but
during this quarter, that lease expired and has now been written down. </P>
<P align=justify>The Company&#146;s business plan is to focus on development of the
Belmont Lake oil field, in which it has working interests, in order to maximize
cash flow and use excess cash flow to pay debt and conduct additional
development well drilling. Eventually, if cash flows are strong enough, the
Company expects to explore for additional oil and gas by way of its existing 60%
interest option to drill 38 exploratory wells (see &#147;Oil &amp; Gas Properties -
Mississippi and Louisiana: Frio-Wilcox Project&#148;). To accomplish this, the
Company intends to focus on development drilling first. Eventually the Company
will seek a balance between exploration, development and exploitation drilling.
To achieve sustainable and profitable growth, the Company intends to control the
timing and costs of its projects wherever possible. The Company is not currently
the operator of any of its properties and will consider becoming the operator
only when its financial conditions have improved sufficiently. </P>
<P align=justify>During the three months period ended January 31, 2011, we
experienced the following significant corporate developments: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1. </TD>
    <TD>
      <P align=justify>On November 16, 2010, the Company settled the debt
      incurred as a result of a consulting agreement, being US$9,375, to Mr. Tom
      Ihrke by issuing 40,761 restricted common shares of the Company at a price
      of $0.23 per share.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2. </TD>
    <TD>
      <P align=justify>On November 30, 2010, we closed the first tranche of a
      private placement offering of convertible debentures in the aggregate
      amount of US$450,000. The convertible debentures mature on November 30,
      2012, subject to forced conversion as set out in the convertible debenture
      certificate. The convertible debentures pay an interest rate of 12% per
      annum (on a simple basis) and are convertible at US$0.35 per unit. Each
      unit is comprised of one share of our common stock and one share purchase
      warrant. Each warrant entitles the holder thereof to purchase one share at
      a price of US$0.40 per share from the earlier of the maturity date of the
      convertible debenture or one year from conversion of the convertible
      debenture. We also entered into a general security agreement with the
      subscribers, whereby the obligations to repay the convertible debenture
      are secured by certain of our assets.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">3. </TD>
    <TD>
      <P align=justify>On December 16, 2010, we closed the second tranche of a
      private placement offering of convertible debentures in the aggregate
      amount of US$170,000. The convertible debentures mature on November 30,
      2012, subject to forced conversion as set out in the convertible debenture
      certificate. The convertible debentures pay an interest rate of 12% per
      annum (on a simple basis) and are convertible at US$0.35 per unit. Each
      unit is comprised of one share of our common stock and one share purchase
      warrant. Each warrant entitles the holder thereof to purchase one share at
      a price of US$0.40 per share from the earlier
of the maturity date of the convertible debenture or one
      year from conversion of the convertible debenture. We also entered into a
      general security agreement with the subscribers, whereby the obligations
      to repay the convertible debenture are secured by certain of our
      assets.</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_20></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">4. </TD>
    <TD>
      <P align=justify>On December 16, 2010, the Company entered into an
      assignment agreement with Emerald Atlantic LLC, solely owned by a Director
      of the Company (the Assignee&#148;), whereby the Assignee has paid a fee of
      US$30,075.95 to earn 18% of a 4.423% share of the Company&#146;s net revenue
      interest after field operating expenses for a well to be drilled in
      Wilkinson County.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">5. </TD>
    <TD>
      <P align=justify>On January 4, 2011, 132,600 warrants were exercised for
      66,300 common shares of the Company at a price of CAD$0.22 for total
      proceeds of CAD$14,586. 100,000 warrants of the 132,600 warrants were
      exercised by a Director of the Company.</P></TD></TR></TABLE>
<P align=justify>The Company plans to continue its current business of acquiring
interests in potentially high-impact oil and gas property interests that offer a
high probability of being able to drill without significant time delays. The
Company also tries to choose North American properties where, if drilling is
successful, the wells could be quickly connected to infrastructure and thus,
with success, brought into production and able to generate cash flow as quickly
as possible. </P>
<P align=justify>The Company&#146;s business plan does not anticipate that it will
hire a large number of employees or that it will require extensive office space.
The Company has to date, and plans to continue to acquire most of the industry
and geological expertise it requires, through third party contractual
relationships with consulting experts and with operating companies which will
act as operators of the Company&#146;s various interests. Although this exposes the
Company to certain risks on behalf of those operators, it also allows the
Company to participate in the often unique experience and knowledge that local
persons have related to certain properties. This strategy allows the Company to
participate in a wider variety of oil and gas opportunities than if all of its
geological expertise were in-house and confined to a single geographical area.
From a business operations perspective, this strategy also enables the Company
to minimize its ongoing fixed in-house costs for geological or geophysical
analytical expenses while still allowing it to contract for that expertise when
and as needed. This business strategy has been successful during a time of
declining oil and gas prices, when many companies with high internal overheads
and cost structures due to large numbers of highly expensive in-house
professionals cannot be sustained due to declining revenues. The Company will
hire third-party consulting geophysicists and geologists on an as-needed basis
to evaluate oil and gas properties that may be of interest, and to reinforce and
double-check the technical work and abilities of its third-party operators. This
provides the Company with the required expertise it needs, when its needed,
whilst avoiding high fixed long-term costs. </P>
<P align=justify>The Company relies on the business experience of its existing
management, on the technical abilities of consulting experts, and on the
technical and operational abilities of its operating partner companies to
evaluate business opportunities. </P>
<P align=justify><B>Alberta </B></P>
<P align=justify>We have acquired an interest in a property located 80 miles
northwest of Calgary, Alberta, Canada. On September 23, 2005, we signed an
agreement to participate in a 13,330 foot drill program. As to date, our Company
has paid $405,407 for a 4% gross interest to participate in any oil and gas
produced (before recovery of the costs of the drill program), reducing to a 2%
interest after recovery of the drilling costs. The property is reached by
traveling 100 miles north from the city of Calgary on Highway #22, and is
approximately a one-half hour drive past the town of Rocky Mountain House.<B><I>
</I></B></P>
<P align=justify>Drilling of this well has been completed and some evaluation
was completed. The well appeared to be noncommercial. In fiscal year 2008, the
Company wrote down the cost of the property to a nominal value of $1 and then
wrote off the property in fiscal year 2010. </P>
<P align=justify><B>Mississippi </B></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_21></A>
<P align=justify>On December 21, 2005, the Company agreed to purchase a 20%
gross working and revenue interest in a 10 well drilling program in Palmetto
Point, Mississippi owned by Griffin &amp; Griffin Exploration (&#147;Griffin&#148;) for
cash payments of $700,000, comprised of $220,000 paid upon entering the
Agreement and the remaining balance of $480,000 paid on January 17, 2006. The
Company applied the full cost method to account for its oil and gas properties
and as of July 31, 2010, seven wells were found to be proved wells, and three
wells were found impaired. One of the wells was impaired due to uneconomic life,
and the other two wells were abandoned due to no apparent gas or oil shows
present. The costs of impaired properties were added to the capitalized cost in
determination of the depletion expense. Palmetto Point is approximately 150
miles southwest of Jackson, Mississippi and approximately 50 miles
north/northwest of Baton Rouge, Louisiana. It is 30 miles west of Woodville,
Mississippi off of State Highway 33 and is entirely within Wilkinson County.
</P>
<P align=justify>There were no further costs to the Company in earning its
interest in the 10 well drilling program, including well development costs or
pipeline connections. Griffin has agreed that the leases held by it covering any
mineral estate underlying the applicable well site acreage shall not provide for
more than twenty-five (25%) percent royalty and overriding royalty interest. The
Company&#146;s net interest in any oil and gas produced is calculated by subtracting
the applicable royalties from its 20% gross interest. Consequently, its original
net working interest in the drilling program was a minimum fifteen (15%) percent
net working interest. Griffin conducted the Drilling Program in its capacity as
Operator and receives a 15% carried interest.</P>
<P align=justify>One of these original 10 wells was the PP F-12-1 well, which
was the discovery well of a field now known as the Belmont Lake field. All of
these original 10 wells were targeting the Frio geological formation of the
Cenozoic era and Oligocene series, which is characterized in this region as a
generally shallow, sandstone-rich layer. In this area of Mississippi, the Frio
geologic formation is generally found between 2,000 and 4,500 foot depth from
surface.</P>
<P align=justify>On September 22, 2006, the Company elected to participate in an
additional two-well program in Palmetto Point, Mississippi owned by Griffin by
paying an additional $140,000 (paid). The Company earned the same 20% gross
interest in the two (2) additional wells (12 wells total and all drilled) and
subsequently increased its gross interest to 32% in these 12 wells, or a net
revenue interest of 20.802815% .</P>
<P align=justify>On June 23, 2007, the Company acquired an assignment of a 10%
gross working interest in the Palmetto Point wells described above from a third
party for $520,000 which was payable by a secured loan. The $520,000 loan was
valued at a Net Present Value of $501,922, which is the capitalized amount. The
Company calculated the net present value of the secured loan payable by applying
8% interest rate, which was based on a T-bill rate of 4.28% plus a risk premium.
</P>
<P align=justify>On October 4, 2007, the Company elected to participate in the
drilling of the PP F-12-3 well in Palmetto Point, Mississippi which was
conducted by Griffin. This well was the second well drilled in the Belmont Lake
oil field. The Company had a 30% gross working interest and paid $266,348. On
July 31, 2008, the Company accrued and paid an additional cost of $127,707 for
the workovers of wells PP F-12 and PP F-12-3. PP F-12 has had intermittent
production from October 2007, and PP F-12-3 has had intermittent production from
November 2007.</P>
<P align=justify>On April 3, 2009, the Company entered into an Asset Purchase
Agreement<B> </B>with Delta Oil &amp; Gas, Inc., and The Stallion Group to
acquire additional interests in its existing core producing Mississippi oil and
gas properties. The Company paid $40,073.39 to acquire an additional two percent
(2%) working interest in the proven Belmont Lake oil and gas field and an
additional 10% working interest in potential nearby exploration wells. Total
working interest for Belmont Lake as of July 31, 2009 is 32%; and total working
interest in the exploration wells on approximately 140,000 acres surrounding
Belmont Lake in all directions as of July 31, 2010, is 60%. </P>
<P align=justify>The Company had a short-lived opportunity to acquire additional
fractional interests in the upcoming Belmont Lake 12-4 well which was expected
to be a horizontal well. An unrelated third party did not participate in its
right to p<FONT color=#444444>a</FONT>rticipate in the 12-4 well, and therefore
a share of its interest (a &#147;non consent&#148; interest) was made available to the
other participating parties including Lexaria. On August 28, 2009 and effective
on September 1, 2009, to take best advantage of this opportunity, the Company
entered into four separate assignment agreements, three of which were with
people or companies with related management. The Company received from these
four parties proceeds of $371,608.57 to fund additional interests in this well.
As a result, the Company has a 25.84% perpetual gross interest in the well
(18.0% net revenue interest); as well as a 5.2% net revenue interest in the
non-consent interest. The non-consent interest remains valid until such time as the well
produces 500% of all costs and expenses back to the participants in the form of
revenue, at which time the non-consent interest ends. Enertopia, a company with
related management, had acquired from Lexaria a 6.16% perpetual gross interest
in the 12-4 well; David DeMartini, a director of Lexaria, had acquired from
Lexaria a 5% gross interest in the non-consent interest in the 12-4 well; and
0743608 BC Ltd. a company owned by the President of the Company, had acquired
from Lexaria a 11.60% gross interest in the non-consent interest in the 12-4
well. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_22></A>
<P align=justify>On May 31, 2010, the Company signed a Settlement Agreement with
Enertopia Corp., whereby the Company issued 499,893 units at $0.12 per unit and
each unit consists of one restricted common share and one share purchase warrant
at $0.20 per share for a period of two years in exchange for the working
interest initially assigned on August 28, 2009. </P>
<P align=justify>On June 16, 2010, the Company signed a Settlement Agreement
with a third party, who had originally participated in the August 28, 2009,
opportunity in the non-consent interest for Belmont Lake 12-4. The Company
returned back $144,063.46 to the third party and cancelled its participation.
</P>
<P align=justify>On July 29, 2010, the Company had agreed with its Operators at
Belmont Lake not to proceed to drill a horizontal 12-4 well. Rather, two of the
three proposed vertical wells 12-2, 12-4, or 12-5 were proposed to be drilled in
August 2010. To take best advantage of this opportunity, the Company cancelled
all previous agreements relating to August 28, 2009 with respect to Belmont Lake
horizontal well 12-4 and entered into three separate assignment agreements, of
which all three were with people or companies with related management. The
Company received total proceeds of $324,677.12 to fund additional interests in
these wells. As a result, the Company has a 32% perpetual gross interest in the
wells (24.0% net revenue interest); as well as a 8% gross interest (6% net
revenue interest) in the non-consent interest. The non-consent interest remains
valid until such time as the well produces 500% of all costs and expenses back
to the participants in the form of revenue, at which time the non-consent
interest ends. Emerald Atlantic LLC, a company owned by a director of Lexaria,
has acquired from Lexaria a 8.74% gross interest in the non-consent interest in
two of the three vertical wells; and 0743608 BC Ltd. a company owned by the
President of the Company, has acquired from Lexaria a 20.79% gross interest in
the non-consent interest in two of the three vertical wells; an advisor to the
Company has acquired from Lexaria 2.46% gross interest in the non-consent
interest in two of the three vertical wells. </P>
<P align=justify>On September 13, 2010, Lexaria Corp. (the &#147;Company&#148;) entered
into three separate assignment agreements with 0743608 BC Limited, solely owned
by Director/Officer of the Company; Emerald Atlantic LLC, solely owned by a
Director of the Company, and the Senior VP Business Development. (the
&#147;Assignees&#148;), whereby the Assignees have paid a fee of US$408,116.48 to earn a
24% share of the Company&#146;s gross non-perpetual 32% interest in the three oil
wells being drilled in Wilkinson County, Mississippi. This agreement replaces
the one signed on August 28, 2009. As a result of the three assignment
agreements, Lexaria receives at no cost to the company, a carried interest of 8%
in these same rights and benefits. The Company assigns, transfers and sets over
to the Assignees, all proportionate rights, interest and benefits in the
Assigned Non Perpetual Interest held by or granted to the Assignor in and to the
Participation Agreement between the Company and Griffin but limited to a gross
500% revenue payout based on the total amount paid under the Initial
Consideration and the Subsequent Consideration after which all rights, interests
and benefits cease. </P>
<P align=justify>Total working interest for Belmont Lake as of October 31, 2010
is 32%, with the exception of a 40% interest in wells PP F-12-4 and PP F-12-5;
and total working interest in the exploration wells on approximately 130,000
acres surrounding Belmont Lake in all directions as of October 31, 2010, is 60%.
</P>
<P align=justify>As of January 31, 2011, there were additional well interest
changes or workovers pending of wells PP F-12, PP F12-3, PP F12-4, PP F12-5 and
PP F-29 in the amount of $241,876. </P>
<P align=justify>As of February 17, 2011, the status of the Palmetto Point,
Mississippi wells is as follows:</P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>
    <TR vAlign=top bgcolor="#EEEEEE">
      <TD align=left><B>Well Name </B></TD>
      <TD width="16%" align=left><B>Spud/Start </B></TD>
      <TD width="16%" align=left><B>Complete </B></TD>
      <TD width="16%" align=left>&nbsp; &nbsp;<B>Results </B></TD>
      <TD width="16%" align=left><B>Depth </B></TD>
      <TD width="16%" align=left><B>Status </B></TD>
    </TR>
  <TR vAlign=top>
    <TD align=left>PP F-40 </TD>
    <TD align=left width="16%">May 11/06 </TD>
    <TD align=left width="16%">May 16/06 </TD>
    <TD align=left width="16%">Frio Gas; 12 ft. </TD>
    <TD align=left width="16%">3850 </TD>
    <TD align=left width="16%">Shut-in </TD></TR>
  <TR vAlign=top>
    <TD align=left>PP F-118 </TD>
    <TD align=left width="16%">May 18/06 </TD>
    <TD align=left width="16%">May 22/06 </TD>
    <TD align=left width="16%">Frio Gas; 14 ft. </TD>
    <TD align=left width="16%">3808 </TD>
    <TD align=left width="16%">Shut-in </TD></TR>
  <TR vAlign=top>
    <TD align=left>PP F-121 </TD>
    <TD align=left width="16%">May 24/06 </TD>
    <TD align=left width="16%">May 29/06 </TD>
    <TD align=left width="16%">Dry </TD>
    <TD align=left width="16%">3850 </TD>
    <TD align=left width="16%">Plug &amp; abandon
</TD></TR></TABLE></DIV>
<TABLE
style="FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; border-left-color:black; border-right-color:black; border-top-color:black; border-top-width:0; border-bottom-color:black"
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=left style="border-top-style: none; border-top-width: medium">PP F-7 </TD>
    <TD align=left width="16%" style="border-top-style: none; border-top-width: medium">May 31/06 </TD>
    <TD align=left width="16%" style="border-top-style: none; border-top-width: medium">June 4/06 </TD>
    <TD align=left width="16%" style="border-top-style: none; border-top-width: medium">Dry </TD>
    <TD align=left width="16%" style="border-top-style: none; border-top-width: medium">3800 </TD>
    <TD align=left width="16%" style="border-top-style: none; border-top-width: medium">Plug &amp; abandon </TD></TR>
  <TR vAlign=top>
    <TD align=left>PP F-39 </TD>
    <TD align=left width="16%">June 10/06 </TD>
    <TD align=left width="16%">June 16/06 </TD>
    <TD align=left width="16%">Frio Gas/Oil; 12 ft. </TD>
    <TD align=left width="16%">3900 </TD>
    <TD align=left width="16%">Shut-in </TD></TR>
  <TR vAlign=top>
    <TD align=left>PP F-42 </TD>
    <TD align=left width="16%">June 18/06 </TD>
    <TD align=left width="16%">June 21/06 </TD>
    <TD align=left width="16%">Frio Gas/Oil; 10 ft. </TD>
    <TD align=left width="16%">3170 </TD>
    <TD align=left width="16%">Shut-in </TD></TR>
  <TR vAlign=top>
    <TD align=left>PP F-36-2 </TD>
    <TD align=left width="16%">June 23/06 </TD>
    <TD align=left width="16%">July 2/06 </TD>
    <TD align=left width="16%">Frio Gas; 8 ft. </TD>
    <TD align=left width="16%">3450 </TD>
    <TD align=left width="16%">Shut-in </TD></TR>
  <TR vAlign=top>
    <TD align=left>PP F-4 </TD>
    <TD align=left width="16%">Oct 31/06 </TD>
    <TD align=left width="16%">Nov. 5/06 </TD>
    <TD align=left width="16%">Frio Gas; 8 ft. </TD>
    <TD align=left width="16%">4200 </TD>
    <TD align=left width="16%">Shut-in </TD></TR>
  <TR vAlign=top>
    <TD align=left>PP F- 29 </TD>
    <TD align=left width="16%">Nov 11/06 </TD>
    <TD align=left width="16%">Nov. 14/06 </TD>
    <TD align=left width="16%">Frio Gas; 37 ft. </TD>
    <TD align=left width="16%">4100 </TD>
    <TD align=left width="16%">Producing </TD></TR>
  <TR vAlign=top>
    <TD align=left>PP F-12-1 </TD>
    <TD align=left width="16%">Dec 18/06 </TD>
    <TD align=left width="16%">Dec. 24/06 </TD>
    <TD align=left width="16%">Frio Gas; 3 ft. <BR>Frio Oil, 26 ft. </TD>
    <TD align=left width="16%">4016 </TD>
    <TD align=left width="16%">Producing </TD></TR>
  <TR vAlign=top>
    <TD align=left>PP F-6B </TD>
    <TD align=left width="16%">&nbsp; </TD>
    <TD align=left width="16%">July 27/06 </TD>
    <TD align=left width="16%">Frio Gas </TD>
    <TD align=left width="16%">&nbsp; </TD>
    <TD align=left width="16%">Shut-in </TD></TR>
  <TR vAlign=top>
    <TD align=left>PP F-52A </TD>
    <TD align=left width="16%">&nbsp; </TD>
    <TD align=left width="16%">July 27/06 </TD>
    <TD align=left width="16%">Frio Gas </TD>
    <TD align=left width="16%">&nbsp; </TD>
    <TD align=left width="16%">Shut-in </TD></TR>
  <TR vAlign=top>
    <TD align=left>PP F-12-3 </TD>
    <TD align=left width="16%">Oct/07 </TD>
    <TD align=left width="16%">Oct/07 </TD>
    <TD align=left width="16%">Frio Oil </TD>
    <TD align=left width="16%">3150 </TD>
    <TD align=left width="16%">Producing </TD></TR>
  <TR vAlign=top>
    <TD align=left>PP F-12-4 </TD>
    <TD align=left width="16%">Aug/10 </TD>
    <TD align=left width="16%">Oct/10 </TD>
    <TD align=left width="16%">Frio Oil </TD>
    <TD align=left width="16%">3150 </TD>
    <TD align=left width="16%">Producing </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_23></A><BR>
<P align=justify><U>Mississippi and Louisiana: Frio-Wilcox Project</U> </P>
<P align=justify>After participating in the Palmetto Point project, the Company
entered into a separate agreement that expanded both its percentage interest in
future wells, and also expanded the geographical area on which those wells could
be drilled.</P>
<P align=justify>On August 3, 2006, the Company entered into a Phase II
agreement with Griffin, to acquire a working interest in multiple zones of
potential oil and gas production in Mississippi and Louisiana. This agreement
contemplates up to a 50 well drill program, which are exclusive to the
participants, for Wilcox and Frio wells, at the Company&#146;s option, within the
defined area of mutual interest (&#147;AMI&#148;). From these 50 prospects, Griffin and
the participants will select all drill locations with the expectation that the
wells will be drilled to depths sufficient to test prospectively for producible
hydrocarbons from the top of the Frio Formation to the bottom of the Wilcox
Formation.</P>
<P align=justify>These 50 wells are in addition to all wells drilled under the
original 10-well agreement and also in addition to any development wells to be
drilled at the Belmont Lake oil field discovery. The AMI includes over 200,000
gross acres located non-contiguously between Southwest Mississippi and North
East Louisiana which include the approximately 32,000 acres of the Palmetto
Point area but also include other areas. </P>
<P align=justify>The Company had contracted to assume a 40% gross interest in
this AMI, meaning it was obligated to pay 40% of costs related to licensing,
permitting, drilling, completion and all other related costs. Upon payment of
40% of the costs, the Company earned a net 32% of all production from all
producible zones to the base of the Frio formation (Frio Targets); and, 30% of
all production to the base of the Wilcox formation (Wilcox Targets). All working
interests are to be registered in the name of the Company. This 50-well AMI is
intended to be drilled in several stages.</P>
<P align=justify>The Company&#146;s pro rate share of the first stage had a total
cost $1.6 million. As of October 31 2007, the Company had placed $1,600,000 in
trust to completely fund this initial commitment. During the drill program, an
unrelated third party participant elected not to continue their participation in
the program, and we assumed our pro-rata portion of their 10% gross working
interest as our own, at no additional cost, bringing our total gross working
interest in the seven (7) wells and their leases (Initial AMI Drilling Program),
to 45%.</P>
<P align=justify>On June 21, 2007, the Company acquired an additional 10% from a
third party for all rights, title and benefits <I>excluding</I> the seven wells
drilled under the AMI Agreement between August 3, 2006 and June 19, 2007,
specifically wells CMR-USA-39-14, Dixon #1, Faust #1 TEC F-1, CMR/BR F-14, RB
F-1 Red Bug #2, BR F-33, and Randall #1 F-4, and any offset wells that could be
drilled to any of these specified wells (Subsequent AMI Drilling Program). This
brought our interest in the remaining 43 wells to 50% and we drilled 5 wells
under this arrangement. </P>
<P align=justify>On April 3, 2009, the Company acquired an additional 10%
working interest in the 38 exploration wells remaining to be drilled, bringing
its total gross working interest to 60% in the 38 wells that remain to be
drilled of this original 50-well option in over 140,000 acres surrounding
Belmont Lake in all directions.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_24></A>
<P align=justify>On December 16, 2010, the Company entered into an assignment
agreement with Emerald Atlantic LLC, solely owned by a Director of the Company
(the Assignee&#148;), whereby the Assignee has paid a fee of US$30,075.95 to earn 18%
of a 4.423% share of the Company&#146;s net revenue interest after field operating
expenses for a well to be drilled in Wilkinson County. </P>
<P align=justify><I>Initial AMI Drilling Program </I></P>
<P align=justify>The Company&#146;s pro rata share of the first stage had a total
cost $1.6 million. As of October 31 2007, the Company had placed $1,600,000 in
trust to completely fund this initial commitment. During the drill program, an
unrelated third party participant elected not to continue their participation in
the program, and we assumed our pro-rata portion of their 10% gross working
interest as our own, at no additional cost, bringing our total gross working
interest in these seven (7) drilled wells and their leases, to 45%. </P>
<P align=justify>The Company successfully drilled and completed seven (7) wells
under this drilling program. Certain wells were placed into production.</P>
<P align=justify>Details of the drill program are outlined below: </P>
<P align=justify>In December 2006, the first well CMR-US 39-14 was found to have
sufficient hydrocarbons to become economic. USA 1-37 and BR F-33 had started
intermittent production from November 2007. The Company applied the full cost
method to account for its oil and gas properties. </P>
<P align=justify>As at January 31, 2007, the Company abandoned Dixon #1 due to
no economic hydrocarbons being present and $162,420 of drilling costs was added
to the capitalized costs. The Dixon #1 was the only Wilcox well the Company has
drilled to date. Every other well it has participated in located in Mississippi
and Louisiana is a Frio well. Slightly deeper than the Frio targets, but also of
the Cenozoic era, the Wilcox geologic formation is of the Eocene series,
generally found at depths of less than 8,000 feet. </P>
<P align=justify>On June 2, 2007, the Company abandoned Randall #1 and $107,672
drilling costs were added to the capitalized costs in determination of depletion
expense. </P>
<P align=justify>During August to October 2007, three additional wells, PP F-90,
PP F-100, and PP F-111 were drilled in the area. These Frio wells were abandoned
due to modest gas shows and a total of $306,562 drilling costs was added to the
capitalized costs in determination of depletion expense. </P>
<P align=justify>During December 2007, two additional wells, PP F-6A and PP
F-83, were drilled and were plugged and abandoned due to non-economic gas shows.
A total of $247,086 drilling costs were added to the capitalized costs in
determination of depletion expense.</P>
<P align=justify>The results of the initial drill program are as follows: </P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>
    <TR vAlign=top bgcolor="#EEEEEE">
      <TD align=left><B>Well Name </B></TD>
      <TD width="16%" align=left><B>Spud/Start </B></TD>
      <TD width="16%" align=left><B>Complete </B></TD>
      <TD width="16%" align=left><B>Results </B></TD>
      <TD width="16%" align=left><B>Depth </B></TD>
      <TD width="16%" align=left><B>Status </B></TD>
    </TR>
  <TR vAlign=top>
    <TD align=left>CMR-USA-39- 14 RB F-3 </TD>
    <TD align=left width="16%">Sept. 8/06 </TD>
    <TD align=left width="16%">Sept. 12/06 </TD>
    <TD align=left width="16%">Frio Gas 14 ft. </TD>
    <TD align=left width="16%">3,200 </TD>
    <TD align=left width="16%">Shut-in </TD></TR>
  <TR vAlign=top>
    <TD align=left>Dixon #1 </TD>
    <TD align=left width="16%">Jan. 03/07 </TD>
    <TD align=left width="16%">Jan. 20/07 </TD>
    <TD align=left width="16%">Wilcox Target; Dry </TD>
    <TD align=left width="16%">8,650 </TD>
    <TD align=left width="16%">Plug &amp; abandon </TD></TR>
  <TR vAlign=top>
    <TD align=left>Faust #1, TEC F-1 </TD>
    <TD align=left width="16%">Feb. 05/07 </TD>
    <TD align=left width="16%">Feb. 11/07 </TD>
    <TD align=left width="16%">Frio Gas 9 ft </TD>
    <TD align=left width="16%">5,350 </TD>
    <TD align=left width="16%">Shut-in </TD></TR>
  <TR vAlign=top>
    <TD align=left>CMR/BR F-24 </TD>
    <TD align=left width="16%">Feb. 20/07 </TD>
    <TD align=left width="16%">Feb. 24/07 </TD>
    <TD align=left width="16%">Frio Gas </TD>
    <TD align=left width="16%">3,250 </TD>
    <TD align=left width="16%">Shut-in </TD></TR>
  <TR vAlign=top>
    <TD align=left>RB F-1 Red Bug #2 </TD>
    <TD align=left width="16%">May 08/07 </TD>
    <TD align=left width="16%">May 13/07 </TD>
    <TD align=left width="16%">Frio Gas 10 ft </TD>
    <TD align=left width="16%">3,180 </TD>
    <TD align=left width="16%">Shut-in </TD></TR>
  <TR vAlign=top>
    <TD align=left>BR F-33 </TD>
    <TD align=left width="16%">May 20/07 </TD>
    <TD align=left width="16%">May 24/07 </TD>
    <TD align=left width="16%">Frio Gas 12 ft </TD>
    <TD align=left width="16%">3,837 </TD>
    <TD align=left width="16%">Shut-in </TD></TR>
  <TR vAlign=top>
    <TD align=left>Randall #1 Closure F-4 </TD>
    <TD align=left width="16%">May 27/07 </TD>
    <TD align=left width="16%">June 03/07 </TD>
    <TD align=left width="16%">Frio Target: Dry </TD>
    <TD align=left width="16%">5,100 </TD>
    <TD align=left width="16%">Plug &amp; abandon
</TD></TR></TABLE></DIV><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_25></A>
<P align=justify><I>Subsequent AMI Drilling Program</I> </P>
<P align=justify>Five additional wells were drilled under the 50-well AMI. Each
of these wells encountered non commercial quantities of hydrocarbons and were
plugged and abandoned.</P>
<P align=justify><I>Significant Acquisitions and Dispositions</I></P>
<P align=justify><I>Purchase of Significant Equipment</I> </P>
<P align=justify>We do not intend to purchase any significant equipment
(excluding oil and gas activities) over the twelve months other than office
computers, furnishings, and communication equipment as required. </P>
<P align=justify><I>Corporate Offices </I></P>
<P align=justify>The address of our principal executive office is Suite 950,
1130 West Pender Street, Vancouver, British Columbia, V6E 4A4, for which we
share 250 square feet of office space, which includes one executive office for a
monthly rental of CAD$1,337. Our telephone number is (604) 602-1675. We have
another office located in Kelowna, for which we share 1,500 square feet of
office space, which includes two executive offices. Our current locations
provide adequate office space for our purposes at this stage of our
development.</P>
<P align=justify><I>Employees</I> </P>
<P align=justify>We primarily used the services of sub-contractors and
consultants for manual labour exploration work and drilling on our properties.
Our Director, Mr. David DeMartini is our technical advisor.</P>
<P align=justify>The Company has a consulting agreement with BKB Management
Ltd., a corporation organized under the laws of the Province in British
Columbia. BKB Management Ltd. is a consulting company controlled by the chief
financial officer and director for a consideration of CAD $5,500 per month plus
HST.</P>
<P align=justify>The Company has a consulting agreement with CAB Financial
Services Ltd., a corporation organized under the laws of the Province of British
Columbia. CAB Financial Services is a consulting company controlled by the
chairman of the board and the chief executive officer of the Company. The
consulting services provided by CAB Financial Services are on a continuing basis
for a consideration of $8,000 per month plus HST. CAB Financial Services Ltd.
may terminate the agreement at any time by giving 30 days written notice.</P>
<P align=justify>On September 9, 2009, the Company appointed Mr. David DeMartini
to the Board of Directors.</P>
<P align=justify>On August 6, 2010 the Company entered into a three month
consulting agreement with Tom Ihrke to act as the Company&#146;s Senior Vice
President, Business Development for consideration of US$3,125 per month and
150,000 stock options granted at $0.20. On December 2, 2010, the Company entered
into a month to month management agreement with Tom Ihrke, where by Mr. Ihrke
will continue to act as the Senior Vice-President Business Development for the
Company. The Company will pay a monthly consulting fee of $3,125. </P>
<P align=justify>We do not expect any material changes in the number of
employees over the next 12 month period. We do and will continue to outsource
contract employment as needed. However, with project advancement and if we are
successful in our initial and any subsequent drilling programs we may retain
additional employees. </P>
<P align=justify><B>Off-Balance Sheet Arrangements </B></P>
<P align=justify>We have no significant 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. </P>
<P align=justify><B>Critical Accounting Policies </B></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_26></A>
<P align=justify>Our financial statements and accompanying notes are prepared in
accordance with generally accepted accounting principles used in the United
States. Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue,
and expenses. These estimates and assumptions are affected by management's
application of accounting policies. We believe that understanding the basis and
nature of the estimates and assumptions involved with the following aspects of
our financial statements is critical to an understanding of our financials. </P>
<P align=justify><B>Oil and Gas Properties </B></P>
<P align=justify>We utilize the full cost method to account for our investment
in oil and gas properties. Accordingly, all costs associated with acquisition,
exploration and development of oil and gas reserves, including such costs as
leasehold acquisition costs, capitalized interest costs relating to unproved
properties, geological expenditures, and tangible and intangible development
costs including direct internal costs are capitalized to the full cost pool. As
of January 31, 2011, we have properties with proven reserves and production and
sales from these reserves has commenced. Capitalized costs, including estimated
future costs to develop the reserves and estimated abandonment costs, net of
salvage, are being depleted on the units-of-production method using estimates of
the proved reserves. Investments in unproved properties and major development
projects including capitalized interest, if any, are not depleted until proved
reserves associated with the projects can be determined. If the future
exploration of unproved properties are determined uneconomical the amount of
such properties are added to the capitalized cost to be depleted. At July 31,
2010, management believes none of our unproved oil and gas properties were
considered impaired other than as previously reported.</P>
<P align=justify>The capitalized costs included in the full cost pool are
subject to a "ceiling test", which limits such costs to the aggregate of the
estimated present value, using a ten percent discount rate, of the future net
revenues from proved reserves, based on current economic and operating
conditions plus the lower of cost and estimated net realizable value of unproven
properties.</P>
<P align=justify>Sales of proved and unproved properties are accounted for as
adjustments of capitalized costs with no gain or loss recognized, unless such
adjustments would significantly alter the relationship between capitalized costs
and proved reserves of oil and gas, in which case the gain or loss is recognized
in the statement of operations. </P>
<P align=justify><B>Long-Lived Assets </B></P>
<P align=justify>In accordance with SFAS No. 144, &#147;Accounting for the Impairment
or Disposal of Long-Lived Assets", the carrying value of intangible assets and
other long-lived assets is reviewed on a regular basis for the existence of
facts or circumstances that may suggest impairment. We recognize impairment when
the sum of the expected undiscounted future cash flows is less than the carrying
amount of the asset. Impairment losses, if any, are measured as the excess of
the carrying amount of the asset over its estimated fair value. </P>
<P align=justify><B>Revenue Recognition </B></P>
<P align=justify>Oil and natural gas revenues are recorded using the sales
method whereby our Company recognizes oil and natural gas revenue based on the
amount of oil and gas sold to purchasers when title passes, the amount is
determinable and collection is reasonably assured. Actual sales of gas are based
on sales, net of the associated volume charges for processing fees and for costs
associated with delivery, transportation, marketing, and royalties in accordance
with industry standards. Operating costs and taxes are recognized in the same
period of which revenue is earned. </P>
<P align=justify><B>Going Concern</B></P>
<P align=justify>We have suffered recurring losses from operations. The
continuation of our Company as a going concern is dependent upon our Company
attaining and maintaining profitable operations and/or raising additional
capital. The financial statements do not include any adjustment relating to the
recovery and classification of recorded asset amounts or the amount and classification of liabilities that
might be necessary should our Company discontinue operations. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_27></A>
<P align=justify>The continuation of our business is dependent upon us raising
additional financial support and/or attaining and maintaining profitable levels
of internally generated revenue. The issuance of additional equity securities by
us could result in a significant dilution in the equity interests of our current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments. </P>
<P align=justify><B>Recently Issued Accounting Standards</B></P>
<P align=justify>Accounting standards that have been issued or proposed by the
FASB or other standards-setting bodies that do not require adoption until a
future date are not expected to have a material impact on the Company&#146;s
financial statements upon adoption. </P>
<P align=justify><B>Results of Operations &#150; Three Months Ended January 31, 2011
and 2010 </B></P>
<P align=justify>The following summary of our results of operations should be
read in conjunction with our financial statements for the quarter ended January
31, 2011, which are included herein. </P>
<P align=justify>Our operating results for the three months ended January 31,
2011, for the three months ended January 31, 2010 and the changes between those
periods for the respective items are summarized as follows:</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=left><BR><BR><BR><BR></TD>
    <TD align=left width="2%"  ><BR><BR><BR><BR></TD>
    <TD align=center width="23%"><BR><BR><B>Three Months Ended</B>
      <BR><B>January 31,</B> <BR><B>2011</B> </TD>
    <TD align=left width="2%"  ><BR><BR><BR><BR></TD>
    <TD align=center width="23%"><BR><BR><B>Three Months Ended</B>
      <BR><B>January 31,</B> <BR><B>2010</B> </TD>
    <TD align=left width="2%"  ><BR><BR><BR><BR></TD>
    <TD align=center width="23%"><B>Change Between</B> <BR><B>Three Month
      Period</B> <BR><B>Ended</B> <BR><B>January 31, 2011</B> <BR><B>and January
      31, 2010</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Revenue </TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff
    >$</TD>
    <TD vAlign=bottom align=center width="23%" bgColor=#e6efff>&nbsp;330,163
    </TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff
    >$</TD>
    <TD vAlign=bottom align=center width="23%" bgColor=#e6efff>67,096 </TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff
    >$</TD>
    <TD vAlign=bottom align=center width="23%" bgColor=#e6efff>(263,067)
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Other income/expenses </TD>
    <TD vAlign=bottom align=left width="2%"
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%">Nil </TD>
    <TD vAlign=bottom align=left width="2%"
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%">Nil </TD>
    <TD vAlign=bottom align=left width="2%"
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%">Nil </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>General and administrative </TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%" bgColor=#e6efff>181,210 </TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%" bgColor=#e6efff>284,312 </TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%" bgColor=#e6efff>(104,607)
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Interest expense </TD>
    <TD vAlign=bottom align=left width="2%"
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%">56,864 </TD>
    <TD vAlign=bottom align=left width="2%"
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%">39,106 </TD>
    <TD vAlign=bottom align=left width="2%"
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%">16,254 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Impairment loss on oil and gas properties
    </TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%" bgColor=#e6efff>Nil </TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%" bgColor=#e6efff>Nil </TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%" bgColor=#e6efff>Nil </TD></TR>
  <TR vAlign=top>
    <TD align=left>Consulting fees </TD>
    <TD vAlign=bottom align=left width="2%"
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%">48,115 </TD>
    <TD vAlign=bottom align=left width="2%"
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%">43,185 </TD>
    <TD vAlign=bottom align=left width="2%"
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%">4,930 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Oil and gas operating expenses </TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%" bgColor=#e6efff>151,910 </TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%" bgColor=#e6efff>29,872 </TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%" bgColor=#e6efff>122,038 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Professional Fees (legal and audit fees) </TD>
    <TD vAlign=bottom align=left width="2%"
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%">22,284 </TD>
    <TD vAlign=bottom align=left width="2%"
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%">37,344 </TD>
    <TD vAlign=bottom align=left width="2%"
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%">(15,060) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net loss </TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%" bgColor=#e6efff>(130,177) </TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%" bgColor=#e6efff>(282,815) </TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD vAlign=bottom align=center width="23%" bgColor=#e6efff>(152,638)
  </TD></TR></TABLE></DIV>
<P align=justify>Our accumulated losses increased to $4,054,569 as of January
31, 2011. Our financial statements report a net loss of $130,177 for the three
month period ended January 31, 2011 compared to a net loss of $282,815 for the
three month period ended January 31, 2010. Our revenues have increased primarily
as a result of the new producing oil well at Belmont Lake, PPF-12-4, along with
the increased percentage working interest on that well. Our losses have
decreased primarily because of the stock based compensation expense from the
issuance of stock options in January 2010. For the three month period ended
January 31, 2011, there has been an increase in our interest expense due to the
new convertible debt of $620,000; an increase in foreign exchange loss; and, an
increase in consulting fees due to a new consulting contract with the Senior
VP-Business Development in comparison to the three month period ended January
31, 2010 . The Company also recognized an increase in depletion of its
capitalized oil and gas expenditures $127,219 during the three months ended
January 31, 2011, compared to $35,726 for the three months ended January 31. 2010. The Company also recognized an increase
in its oil and gas operating expenses of $151,910 compared to $29,872 for the
three months ended January 31, 2010. The increase in the costs are due to the
increased production in oil, the addition of the new oil well at Belmont Lake
PPF-12-4, and its increased percentage in working interest . </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_28></A>
<P align=justify>As at January 31, 2011, we had $972,800 in current liabilities.
Our net cash used in operating activities for the three months ended January 31,
2011 was $71,117 compared to $67,676 used in the three months ended January 31,
2010. Our accumulated losses increased to $4,054,569 as of January 31, 2011. Our
financial statements report a net loss of $130,177 for the three month period
ended January 31, 2011 compared to a net loss of $282,815 for the three month
period ended January 31, 2010. Our losses have decreased primarily because of an
increase in revenues resulting from the new producing oil well at Belmont Lake
PPF-12-4 along and the increased percentage working interest on that well. Our
losses have decreased primarily because of the stock options that were issued in
January 2010. The Company also recognized cost of revenue in oil and gas
properties of $279,129 during the three months ended January 31, 2011, compared
to $65,599 for the three months ended January 31, 2010. </P>
<P align=justify>Our total liabilities as of January 31, 2011 were $1,648,743 as
compared to total liabilities of $1,124,647 as of October 31, 2010. The increase
is due to the Convertible Debt financing of $620,000 that was completed in
December 2010. </P>
<P align=justify><B>Liquidity and Financial Condition</B></P>
<P align=justify><I>Working Capital</I></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">January </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">October </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">31, </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">31, </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">2011
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">2010
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Current assets </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;464,246 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;140,207 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Current liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">972,800 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">1,049,647 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Working capital (Deficit) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;(508,554</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;(909,440</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>) </TD></TR></TABLE>
<P align=justify><I>Cash Flows</I> </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center>Three Months Ended </TD>
    <TD align=right width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">January </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">January </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">31,
      2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">31,
      2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash flows (used in) operating activities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(71,117</TD>
    <TD align=left width="2%"  bgColor=#e6efff>)</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>(67,676</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cash flows (used in) investing activities </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(241,876</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(-) </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash flows provided by (used in) financing
      activities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>529,600 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>183,400 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Increase (decrease) in cash and cash equivalents </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">216,607 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">115,724 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><I>Operating Activities</I> </P>
<P align=justify>Net cash used in operating activities was $71,117 for the three
months ended January 31, 2011 compared with net cash used in operating
activities of $67,676 in the same period in 2010. </P>
<P align=justify><I>Investing Activities</I> </P>
<P align=justify>Net cash used in investing activities was $241,876 in the three
months ended January 31, 2011 compared to net cash used in investing activities
was $nil in the same period in 2010. The use of cash in investing activities is
mainly attributable to the new oil well at Belmont Lake PPF-12-4. </P>
<P align=justify><I>Financing Activities</I> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_29></A>
<P align=justify>Net cash provided in financing activities was $529,600 in the
three months ended January 31, 2011 compared to net cash used by financing
activities of $183,400 in the same period in 2010. This is attributable to the
convertible debt financing completed on December 16, 2010. </P>
<P align=justify><B><I>Oil and gas sales volume comparisons for the Quarter
ended January 31, 2011 compared to the quarter ended January 31, 2010
</I></B></P>
<P align=justify>For the three-month period ended January 31, 2011, the Company
had $330,163 in revenues compared to $67,096 in revenues for the same
three-month period in the prior year. The increase in revenues is a result from
the new producing oil well at Belmont Lake PPF-12-4 along and the increased
percentage working interest on that well, which has led to increased volumes.
</P>
<P align=justify><B>Item 4. Controls and Procedures </B></P>
<P align=justify><B><I>Management&#146;s Report on Disclosure Controls and
Procedures</I></B> </P>
<P align=justify>We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the <I>Securities Exchange Act of 1934</I>, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our president and
chief executive officer (also our principal executive officer) and our chief
financial officer (also our principal financial and accounting officer) to allow
for timely decisions regarding required disclosure.</P>
<P align=justify>As of January 31, 2011, the end of our quarter covered by this
report, we carried out an evaluation, under the supervision and with the
participation of our president and chief executive officer (also our principal
executive officer) and our chief financial officer (also our principal financial
and accounting officer), of the effectiveness of the design and operation of our
disclosure controls and procedures. Based on the foregoing, our president and
chief executive officer (also our principal executive officer) and our chief
financial officer (also our principal financial and accounting officer)
concluded that our disclosure controls and procedures were effective as of the
end of the period covered by this annual report.</P>
<P align=justify><B><I>Management&#146;s Report on Internal Control over Financial
Reporting</I></B> </P>
<P align=justify>Our management is responsible for establishing and maintaining
adequate internal control over financial reporting. Responsibility, estimates
and judgments by management are required to assess the expected benefits and
related costs of control procedures. The objectives of internal control include
providing management with reasonable, but not absolute, assurance that assets
are safeguarded against loss from unauthorized use or disposition, and that
transactions are executed in accordance with management&#146;s authorization and
recorded properly to permit the preparation of financial statements in
conformity with accounting principles generally accepted in the United States.
Our management assessed the effectiveness of our internal control over financial
reporting as of January 31, 2011. In making this assessment, our management used
the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (&#147;COSO&#148;) in <I>Internal Control-Integrated Framework</I>.
Our management has concluded that, as of January 31, 2011, our internal control
over financial reporting is effective in providing reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with US generally
accepted accounting principles. Our management reviewed the results of their
assessment with our Board of Directors. </P>
<P align=justify>This annual report does not include an attestation report of
our Company&#146;s registered public accounting firm regarding internal control over
financial reporting. Management&#146;s report was not subject to attestation by our
Company&#146;s registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit our Company to provide only
management&#146;s report in this annual report. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<A name=page_30></A>
<P align=justify><B><I>Inherent limitations on effectiveness of controls</I></B>
</P>
<P align=justify>Internal control over financial reporting has inherent
limitations which include but is not limited to the use of independent
professionals for advice and guidance, interpretation of existing and/or
changing rules and principles, segregation of management duties, scale of
organization, and personnel factors. Internal control over financial reporting
is a process which involves human diligence and compliance and is subject to
lapses in judgment and breakdowns resulting from human failures. Internal
control over financial reporting also can be circumvented by collusion or
improper management override. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements on a
timely basis, however these inherent limitations are known features of the
financial reporting process and it is possible to design into the process
safeguards to reduce, though not eliminate, this risk. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate. </P>
<P align=justify><B><I>Changes in Internal Control over Financial
Reporting</I></B> </P>
<P align=justify>There have been no changes in our internal controls over
financial reporting that occurred during the quarter ended January 31, 2011 that
have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.</P>
<P align=center><B>PART II </B></P>
<P align=center><B>OTHER INFORMATION </B></P>
<P align=justify><B>Item 1. Legal Proceedings </B></P>
<P align=justify>We know of no material, existing or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, executive officers or affiliates, or any registered or beneficial
stockholder, is an adverse party or has a material interest adverse to our
interest. </P>
<P align=justify><B>Item 1A. Risk Factors </B></P>
<P align=justify>Much of the information included in this quarterly 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. </P>
<P align=justify>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". </P>
<P align=justify>Prospective investors should consider carefully the risk
factors set out below. </P>
<P align=justify><I>We have had negative cash flows from operations. </I></P>
<P align=justify>To date we have had negative cash flows from operations and we
have been dependent on sales of our equity securities and debt financing to meet
our cash requirements and have incurred losses totaling approximately $128,672
for the three month period ending January 31, 2011, and cumulative losses of
$4,053,064 to January 31, 2011. As of January 31, 2011 we had deficit in working
capital of $508,554 as a result of past financing activities. We do expect
positive cash flow from operations at some point; however there is no assurance
that actual cash requirements will not exceed our estimates, or that our sales
projections will be realized as estimated. In particular, additional capital may
be required in the event that: </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%" >&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%" >-&nbsp;&nbsp; drilling and
      completion costs for further wells increase beyond our expectations; or
  </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%" >-&nbsp;&nbsp; commodity prices
      for our production decline beyond our expectations; or </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%" >-&nbsp;&nbsp; production levels
      do not meet our expectations; or </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%" >-&nbsp;&nbsp; we incur higher
      well plug and abandonment costs than currently expected; or </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%" >-&nbsp;&nbsp; we encounter
      greater costs associated with general and administrative expenses or
      offering costs. </TD></TR></TABLE>
<P align=justify>The occurrence of any of the aforementioned events could
adversely affect our ability to meet our business plans.</P>
<P align=justify>We will depend almost exclusively on outside capital to pay for
the continued exploration and development of our properties. Such outside
capital may include the sale of additional stock and/or commercial borrowing.
Capital may not continue to be available if necessary to meet these continuing
development costs or, if the capital is available, that it will be on terms
acceptable to us. The issuance of additional equity securities by us would
result in a significant dilution in the equity interests of our current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments. </P>
<P align=justify>If we are unable to obtain financing in the amounts and on
terms deemed acceptable to us, we may be unable to continue our business and as
a result may be required to scale back or cease operations for our business, the
result of which would be that our stockholders would lose some or all of their
investment. </P>
<P align=justify><I>A decline in the price of our common stock could affect our
ability to raise further working capital and adversely impact our operations.
</I></P>
<P align=justify>A prolonged decline in the price of our common stock could
result in a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital. Because our operations have been primarily
financed through the sale of equity securities, a decline in the price of our
common stock could be especially detrimental to our liquidity and our continued
operations. Any reduction in our ability to raise equity capital in the future
would force us to reallocate funds from other planned uses and would have a
significant negative effect on our business plans and operations, including our
ability to develop new products and continue our current operations. If our
stock price declines, we may not be able to raise additional capital or generate
funds from operations sufficient to meet our obligations. </P>
<P align=justify><I>We have a history of losses and fluctuating operating
results. </I></P>
<P align=justify>From inception through to January 31, 2011, we have incurred
aggregate losses of approximately $4,054,569. Our loss from operations for the
three-month period ended January 31, 2011 was $130,177. There is no assurance
that we will operate profitably or will generate positive cash flow in the
future. In addition, our operating results in the future may be subject to
significant fluctuations due to many factors not within our control, such as the
unpredictability of world prices and market for oil and gas, the demand for our
production, and the level of competition and general economic conditions. If we
cannot generate positive cash flows in the future, or raise sufficient financing
to continue our normal operations, then we may be forced to scale down or even
close our operations. Until such time as we generate significant revenues, we
expect an increase in development costs and operating costs. Consequently, we
expect to continue to incur operating losses and negative cash flow until we
receive significant commercial production from our properties. </P>
<P align=justify><I>We have a limited operating history and if we are not
successful in continuing to grow our business, then we may have to scale back or
even cease our ongoing business operations. </I></P>
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<A name=page_32></A>
<P align=justify>We have limited history of revenues from operations and have
limited significant tangible assets. We have yet to generate positive earnings
and there can be no assurance that we will ever operate profitably. The success
of our company is significantly dependent on a successful acquisition, drilling,
completion and production program. Our company&#146;s operations will be subject to
all the risks inherent in the establishment of a developing enterprise and the
uncertainties arising from the absence of a significant operating history. We
may be unable to locate recoverable reserves, extract the reserves economically,
and/or operate on a profitable basis.</P>
<P align=justify><I>Trading of our stock may be restricted by the SEC's "Penny
Stock" regulations, which may limit a stockholder's ability to buy and sell our
stock. </I></P>
<P align=justify>The U.S. Securities and Exchange Commission has adopted
regulations which generally define "penny stock" to be any equity security that
has a market price (as defined) less than $5.00 per share or an exercise price
of less than $5.00 per share, subject to certain exceptions. Our securities are
covered by the penny stock rules, which impose additional sales practice
requirements on broker-dealers who sell to persons other than established
customers and "accredited investors." The term "accredited investor" refers
generally to institutions with assets in excess of $5,000,000 or individuals
with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse. The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
the rules, to deliver a standardized risk disclosure document in a form prepared
by the SEC, which provides information about penny stocks and the nature and
level of risks in the penny stock market. The broker-dealer also must provide
the customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customer's confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of, our common stock. </P>
<P align=justify><I>The Financial Industry Regulatory Authority, or FINRA, has
adopted sales practice requirements which may also limit a stockholder's ability
to buy and sell our stock. </I></P>
<P align=justify>In addition to the "penny stock" rules described above, 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 stock, which may limit your ability to buy and sell our
stock and have an adverse effect on the market for our shares. </P>
<P align=justify><I>Trading in our common shares on the OTC Bulletin Board is
limited and sporadic making it difficult for our shareholders to sell their
shares or liquidate their investments. </I></P>
<P align=justify>Our common shares are currently listed for public trading on
the OTC Bulletin Board. The trading price of our common shares has been subject
to wide fluctuations. Trading prices of our common shares 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
shares will be matched or maintained. These broad market and industry factors
may adversely affect the market price of our common shares, regardless of our
operating performance. </P>
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<P align=justify>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. </P>
<P align=justify><I>Because of the early stage of development and the nature of
our business, our securities are considered highly speculative. </I></P>
<P align=justify>Our securities must be considered highly speculative, generally
because of the nature of our business and the early stage of its development. We
have largely been engaged in the business of exploring and until only recently
attempting to develop commercial reserves of oil and gas. Only our Mississippi
properties have commenced production. Accordingly, we have generated revenues
but we have not realized a profit from our operations to date and there is
little likelihood that we will generate significant revenues or realize any
profits in the short term. Any profitability in the future from our business
will be dependent upon attaining adequate levels of internally generated
revenues through locating and developing economic reserves of oil and gas, which
itself is subject to numerous risk factors as set forth herein. Since we have
not generated significant revenues, we will have to raise additional monies
through either securing industry reserve based debt financing, or the sale of
our equity securities or debt, or combinations of the above in order to continue
our business operations. </P>
<P align=justify><I>As our properties are in the exploration and early
development stage there can be no assurance that we will establish commercial
discoveries and/or profitable production programs on these properties. </I></P>
<P align=justify>Exploration for economic reserves of oil and gas is subject to
a number of risk factors. Few properties that are explored are ultimately
developed into producing oil and/or gas wells. Our Mississippi properties are in
the production and development stages only.</P>
<P align=justify><I>The potential profitability of oil and gas ventures depends
upon factors beyond the control of our company. </I></P>
<P align=justify>The potential profitability of oil and gas properties is
dependent upon many factors beyond our control. For instance, world prices and
markets for oil and gas are unpredictable, highly volatile, potentially subject
to governmental fixing, pegging, controls, or any combination of these and other
factors, and respond to changes in domestic, international, political, social,
and economic environments. Additionally, due to worldwide economic uncertainty,
the availability and cost of funds for production and other expenses have become
increasingly difficult, if not impossible, to project. These changes and events
may materially affect our financial performance. </P>
<P align=justify>Adverse weather conditions can also hinder drilling operations.
A productive well may become uneconomic in the event water or other deleterious
substances are encountered which impair or prevent the production of oil and/or
gas from the well. In addition, production from any well may be unmarketable if
it is impregnated with water or other deleterious substances. The marketability
of oil and gas, which may be acquired or discovered, will be affected by
numerous factors beyond our control. These factors include the proximity and
capacity of oil and gas pipelines and processing equipment, market fluctuations
of prices, taxes, royalties, land tenure, allowable production and environmental
protection. These factors cannot be accurately predicted and the combination of
these factors may result in our company not receiving an adequate return on
invested capital. </P>
<P align=justify><I>Competition in the oil and gas industry is highly
competitive and there is no assurance that we will be successful in</I>
<I>acquiring the leases. </I></P>
<P align=justify>The oil and gas industry is intensely competitive. We compete
with numerous individuals and companies, including many major oil and gas
companies, which have substantially greater technical, financial and operational
resources and staff. Accordingly, there is a high degree of competition for
desirable oil and gas leases, suitable properties for drilling operations and
necessary drilling equipment, as well as for access to funds. We cannot predict
if the necessary funds can be raised or that any projected work will be
completed. Our budget does not anticipate the potential acquisition of
additional acreage in Mississippi although this may change at any time without
notice. This acreage may not become available or if it is available for leasing,
that we may not be successful in acquiring the leases. There are other
competitors that have operations in these areas and the presence of these
competitors could adversely affect our ability to acquire additional leases.
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<A name=page_34></A>
<P align=justify><I>The marketability of natural resources will be affected by
numerous factors beyond our control, which may result in us not receiving an
adequate return on invested capital to be profitable or viable. </I></P>
<P align=justify>The marketability of natural resources, which may be acquired
or discovered by us, will be affected by numerous factors beyond our control.
These factors include market fluctuations in oil and gas pricing and demand, the
proximity and capacity of natural resource markets and processing equipment,
governmental regulations, land tenure, land use, regulation concerning the
importing and exporting of oil and gas and environmental protection regulations.
The exact effect of these factors cannot be accurately predicted, but the
combination of these factors may result in us not receiving an adequate return
on invested capital to be profitable or viable. </P>
<P align=justify><I>Oil and gas operations 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. </I></P>
<P align=justify>Oil and gas operations are subject to federal, state, and local
laws relating to the protection of the environment, including laws regulating
removal of natural resources from the ground and the discharge of materials into
the environment. Oil and gas operations 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 standards imposed by federal, provincial, or local authorities may
be changed and any such changes may have material adverse effects on our
activities. 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 it may elect not to insure against due to
prohibitive premium costs and other reasons. To date we have not been required
to spend any material amount on compliance with environmental regulations.
However, we may be required to do so in future and this may affect our ability
to expand or maintain our operations. </P>
<P align=justify><I>Exploration and production activities are subject to certain
environmental regulations, which may prevent or delay the commencement or
continuance of our operations. </I></P>
<P align=justify>In general, our exploration and production activities are
subject to certain federal, state and local laws and regulations relating to
environmental quality and pollution control. Such laws and regulations increase
the costs of these activities and may prevent or delay the commencement or
continuance of a given operation. Compliance with these laws and regulations has
not had a material effect on our operations or financial condition to date.
Specifically, we are subject to legislation regarding emissions into the
environment, water discharges and storage and disposition of hazardous wastes.
In addition, legislation has been enacted which requires well and facility sites
to be abandoned and reclaimed to the satisfaction of state authorities. However,
such laws and regulations are frequently changed and we are unable to predict
the ultimate cost of compliance. Generally, environmental requirements do not
appear to affect us any differently or to any greater or lesser extent than
other companies in the industry. </P>
<P align=justify><I>We believe that our operations comply, in all material
respects, with all applicable environmental regulations. </I></P>
<P align=justify>Our operating partners maintain insurance coverage customary to
the industry; however, we are not fully insured against all possible
environmental risks. </P>
<P align=justify><I>Exploratory and development drilling involves many risks and
we may become liable for pollution or other liabilities, which may have an
adverse effect on our financial position. </I></P>
<P align=justify>Drilling operations generally involve a high degree of risk.
Hazards such as unusual or unexpected geological formations, power outages,
labor disruptions, blow-outs, sour gas leakage, fire, inability to obtain
suitable or adequate machinery, equipment or labour, and other risks are
involved. We may become subject to liability for pollution or hazards against
which it cannot adequately insure or which it may elect not to insure. Incurring
any such liability may have a material adverse effect on our financial position
and operations. </P>
<P align=justify><I>Any change to government regulation/administrative practices
may have a negative impact on our ability to operate and our profitability.
</I></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<A name=page_35></A>
<P align=justify>The laws, regulations, policies or current administrative
practices of any government body, organization or regulatory agency in the
United States, Canada, or any other jurisdiction, may be changed, applied or
interpreted in a manner which will fundamentally alter the ability of our
company to carry on our business. </P>
<P align=justify>The actions, policies or regulations, or changes thereto, of
any government body or regulatory agency, or other special interest groups, may
have a detrimental effect on us. Any or all of these situations may have a
negative impact on our ability to operate and/or our profitably. </P>
<P align=justify><I>Our By-laws contain provisions indemnifying our officers and
directors against all costs, charges and expenses incurred by them. </I></P>
<P align=justify>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.</P>
<P align=justify><I>Investors' interests in our company will be diluted and
investors may suffer dilution in their net book value per share if we issue
additional shares or raise funds through the sale of equity securities. </I></P>
<P align=justify>Our constating documents authorize the issuance of 200,000,000
shares of common stock with a par value of $0.001. In the event that we are
required to issue any additional shares or enter into private placements to
raise financing through the sale of equity securities, investors' interests in
our company will be diluted and investors may suffer dilution in their net book
value per share depending on the price at which such securities are sold. If we
issue any such additional shares, such issuances also will cause a reduction in
the proportionate ownership and voting power of all other shareholders. Further,
any such issuance may result in a change in our control. </P>
<P align=justify><I>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. </I></P>
<P align=justify>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. </P>
<P align=justify><I>As a result of a majority of our directors and officers are
residents of other countries other than the United States, investors may find it
difficult to enforce, within the United States, any judgments obtained against
our company or our directors and officers. </I></P>
<P align=justify>Other than our operations offices in Vancouver and Kelowna,
British Columbia, we do not currently maintain a permanent place of business
within the United States. In addition, a majority of our directors and officers
are nationals and/or residents of countries other than the United States, and
all or a substantial portion of such persons' assets are located outside the
United States. As a result, it may be difficult for investors to enforce within
the United States any judgments obtained against our company or our officers or
directors, including judgments predicated upon the civil liability provisions of
the securities laws of the United States or any state thereof.</P>
<P align=justify><B>Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds </B></P>
<P align=justify>None. </P>
<P align=justify><B>Item 3. Defaults Upon Senior Securities </B></P>
<P align=justify>None. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_36></A>
<P align=justify><B>Item 4. Submission of Matters to a Vote of Securities
Holders </B></P>
<P align=justify>None. </P>
<P align=justify><B>Item 5. Other Information </B></P>
<P align=justify>Due to the implementation of British Columbia Instrument 51-509
on September 30, 2008 by the British Columbia Securities Commission, we have
been deemed to be a British Columbia based reporting issuer. As such, we are
required to file certain information and documents at <U><FONT
color=#0000ff>www.sedar.com</FONT></U>. </P>
<P align=justify><B>Item 6. Exhibits</B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left><B>Exhibit</B> </TD>
    <TD align=left width="90%"><B>Description</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Number</B> </TD>
    <TD align=left width="90%">&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee></TD>
    <TD align=left width="90%" bgColor=#eeeeee><B>(i) Articles of Incorporation;
      and (ii) Bylaws</B> </TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>3.1*</TD>
    <TD align=left width="90%" bgColor=#eeeeee>Articles of Incorporation </TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>3.2*</TD>
    <TD align=left width="90%" bgColor=#eeeeee>Bylaws </TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee>4.1*</TD>
    <TD align=left width="90%" bgColor=#eeeeee>Specimen ordinary share certificate
    </TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit31-1.htm">31.1</a></TD>
    <TD align=left width="90%" bgColor=#eeeeee><a href="exhibit31-1.htm">Rule
      13(a) - 14 (a)/15(d) - 14(a) Certifications </a></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><a href="exhibit32-1.htm">32.1</a></TD>
    <TD align=left width="90%" bgColor=#eeeeee><a href="exhibit32-1.htm">Section
      1350 Certifications </a></TD>
  </TR>
</TABLE>
<P align=justify>*Incorporated by reference to same exhibit filed with the
Company's Registration Statement on Form SB-2 dated January 10, 2006.
<BR>**Certain parts of this document have not been disclosed and have been filed
separately with the Secretary, Securities and Exchange Commission, and is
subject to a confidential treatment request pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_37></A>
<P align=center><B>SIGNATURES </B></P>
<P align=justify>Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized. </P>
<P align=justify><B>LEXARIA CORP. </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>By: </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="95%"
    ><I>/s/ " Chris Bunka "</I> </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%" >Chris Bunka, </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%" >President, Chief Executive
      Officer, Chairman and Director </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%" >(Principal Executive Officer)
  </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%" >14/03/2011 </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%" >&nbsp; </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%" >&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>By: </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="95%"
    ><I>/s/ "Bal Bhullar"</I> </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%" >Bal Bhullar </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%" >Chief Financial Officer and
      Director </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%" >14/03/2011
</TD></TR></TABLE><BR>
<HR align=center width="100%" color=black noShade SIZE=5>

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</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>exhibit31-1.htm
<DESCRIPTION>CERTIFICATION
<TEXT>


<HTML>
<HEAD>
   <TITLE>Lexaria Corp. - Exhibit 31.1 - Filed by newsfilecorp.com</TITLE>
   <META name="HandheldFriendly" content="true">
</HEAD>

<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
<A name=page_1></A>
<P align=right>EXHIBIT 31.1 </P>
<P align=center><B>CERTIFICATION PURSUANT TO </B><BR><B>18 U.S.C. ss 1350, AS
ADOPTED PURSUANT TO </B><BR>
  <B>SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 </B></P>
<P align=justify>I, Chris Bunka, certify that: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">1. </TD>
    <TD colSpan=2>
      <P align=justify>I have reviewed this Quarterly Report on Form 10-Q of
      Lexaria Corp.;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">2. </TD>
    <TD colSpan=2>
      <P align=justify>Based on my knowledge, this report does not contain any
      untrue statement of a material fact or omit to state a material fact
      necessary to make the statements made, in light of the circumstances under
      which such statements were made, not misleading with respect to the period
      covered by this report;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">3. </TD>
    <TD colSpan=2>
      <P align=justify>Based on my knowledge, the financial statements, and
      other financial information included in this report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      report;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">4. </TD>
    <TD colSpan=2>
      <P align=justify>The registrant's other certifying officer(s) and I are
      responsible for establishing and maintaining disclosure controls and
      procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
      internal control over financial reporting (as defined in Exchange Act
      Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">a. </TD>
    <TD>
      <P align=justify>Designed such disclosure controls and procedures, or
      caused such disclosure controls and procedures to be designed under our
      supervision, to ensure that material information relating to the
      registrant, including its consolidated subsidiaries, is made known to us
      by others within those entities, particularly during the period in which
      this report is being prepared;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">b. </TD>
    <TD>
      <P align=justify>Designed such internal control over financial reporting,
      or caused such internal control over financial reporting to be designed
      under our supervision, to provide reasonable assurance regarding the
      reliability of financial reporting and the preparation of financial
      statements for external purposes in accordance with generally accepted
      accounting principles;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">c. </TD>
    <TD>
      <P align=justify>Evaluated the effectiveness of the registrant's
      disclosure controls and procedures and presented in this report our
      conclusions about the effectiveness of the disclosure controls and
      procedures, as of the end of the period covered by this report based on
      such evaluation; and</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">d. </TD>
    <TD>
      <P align=justify>Disclosed in this report any change in the registrant's
      internal control over financial reporting that occurred during the
      registrant's most recent fiscal quarter (the registrant's first fiscal
      quarter in the case of an annual report) that has materially affected, or
      is reasonably likely to materially affect, the registrant's internal
      control over financial reporting; and</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TR>
    <TD vAlign=top width="5%">5. </TD>
    <TD colSpan=2>
      <P align=justify>The registrant's other certifying officer(s) and I have
      disclosed, based on our most recent evaluation of internal control over
      financial reporting, to the registrant's auditors and the audit committee
      of the registrant's board of directors (or persons performing the
      equivalent functions):</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">a. </TD>
    <TD>
      <P align=justify>All significant deficiencies and material weaknesses in
      the design or operation of internal control over financial reporting which
      are reasonably likely to adversely affect the registrant's ability to
      record, process, summarize and report financial information; and</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">b. </TD>
    <TD>
      <P align=justify>Any fraud, whether or not material, that involves
      management or other employees who have a significant role in the
      registrant's internal control over financial
reporting.</P></TD></TR></TABLE>
<P align=justify>Date: March 14, 2011 </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><I>&#147;Chris
      Bunka&#148;</I> </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Chris Bunka </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>CEO and Director </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>(Principal Executive Officer) </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" color=black noShade SIZE=5>

</BODY>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>exhibit31-2.htm
<DESCRIPTION>CERTIFICATION
<TEXT>


<HTML>
<HEAD>
   <TITLE>Lexaria Corp. - Exhibit 31.2 - Filed by newsfilecorp.com</TITLE>
   <META name="HandheldFriendly" content="true">
</HEAD>

<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
<A name=page_1></A>
<P align=right>EXHIBIT 31.2 </P>
<P align=center><B>CERTIFICATION PURSUANT TO </B><BR><B>18 U.S.C. ss 1350, AS
ADOPTED PURSUANT TO </B><BR>
  <B>SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 </B></P>
<P align=justify>I, Bal Bhullar, certify that: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">1. </TD>
    <TD colSpan=2>
      <P align=justify>I have reviewed this Quarterly Report on Form 10-Q of
      Lexaria Corp.;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">2. </TD>
    <TD colSpan=2>
      <P align=justify>Based on my knowledge, this report does not contain any
      untrue statement of a material fact or omit to state a material fact
      necessary to make the statements made, in light of the circumstances under
      which such statements were made, not misleading with respect to the period
      covered by this report;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">3. </TD>
    <TD colSpan=2>
      <P align=justify>Based on my knowledge, the financial statements, and
      other financial information included in this report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      report;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">4. </TD>
    <TD colSpan=2>
      <P align=justify>The registrant's other certifying officer(s) and I are
      responsible for establishing and maintaining disclosure controls and
      procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
      internal control over financial reporting (as defined in Exchange Act
      Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">a. </TD>
    <TD>
      <P align=justify>Designed such disclosure controls and procedures, or
      caused such disclosure controls and procedures to be designed under our
      supervision, to ensure that material information relating to the
      registrant, including its consolidated subsidiaries, is made known to us
      by others within those entities, particularly during the period in which
      this report is being prepared;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">b. </TD>
    <TD>
      <P align=justify>Designed such internal control over financial reporting,
      or caused such internal control over financial reporting to be designed
      under our supervision, to provide reasonable assurance regarding the
      reliability of financial reporting and the preparation of financial
      statements for external purposes in accordance with generally accepted
      accounting principles;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">c. </TD>
    <TD>
      <P align=justify>Evaluated the effectiveness of the registrant's
      disclosure controls and procedures and presented in this report our
      conclusions about the effectiveness of the disclosure controls and
      procedures, as of the end of the period covered by this report based on
      such evaluation; and</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">d. </TD>
    <TD>
      <P align=justify>Disclosed in this report any change in the registrant's
      internal control over financial reporting that occurred during the
      registrant's most recent fiscal quarter (the registrant's first fiscal
      quarter in the case of an annual report) that has materially affected, or
      is reasonably likely to materially affect, the registrant's internal
      control over financial reporting; and</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TR>
    <TD vAlign=top width="5%">5. </TD>
    <TD colSpan=2>
      <P align=justify>The registrant's other certifying officer(s) and I have
      disclosed, based on our most recent evaluation of internal control over
      financial reporting, to the registrant's auditors and the audit committee
      of the registrant's board of directors (or persons performing the
      equivalent functions):</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">a. </TD>
    <TD>
      <P align=justify>All significant deficiencies and material weaknesses in
      the design or operation of internal control over financial reporting which
      are reasonably likely to adversely affect the registrant's ability to
      record, process, summarize and report financial information; and</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">b. </TD>
    <TD>
      <P align=justify>Any fraud, whether or not material, that involves
      management or other employees who have a significant role in the
      registrant's internal control over financial
reporting.</P></TD></TR></TABLE>
<P align=justify>Date: March 14, 2011 </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><I>&#147;Bal
      Bhullar&#148;</I> </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Bal Bhullar </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Chief Financial Officer and Treasurer </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>(Principal Financial Officer and Principal Accounting </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Officer) </TD>
    <TD align=left width="50%" >&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" color=black noShade SIZE=5>

</BODY>

</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>exhibit32-1.htm
<DESCRIPTION>CERTIFICATION
<TEXT>


<HTML>
<HEAD>
   <TITLE>Lexaria Corp. - Exhibit 32.1 - Filed by newsfilecorp.com</TITLE>
   <META name="HandheldFriendly" content="true">
</HEAD>

<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
<A name=page_1></A>
<P align=right>EXHIBIT 32.1 </P>
<P align=center>CERTIFICATION PURSUANT TO <BR>18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO <BR>
  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 </P>
<P align=justify>I, Chris Bunka, hereby certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>the Quarterly Report on Form 10-Q of Lexaria Corp. for
      the quarter ended January 31, 2011 (the "Report") fully complies with the
      requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
      1934; and</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>the information contained in the Report fairly presents,
      in all material respects, the financial condition and results of
      operations of Lexaria Corp.</P></TD></TR></TABLE>
<P align=justify>Dated: March 14, 2011 </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="50%"><I>&#147;Chris Bunka&#148;</I> </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="50%">Chris Bunka </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="50%">CEO and Director </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="50%">(Principal Executive Officer) </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="50%">Lexaria Corp. </TD></TR></TABLE>
<P align=justify>&nbsp;</P>
<P align=justify>A signed original of this written statement required by Section
906, or other document authenticating, acknowledging, or otherwise adopting the
signature that appears in typed form within the electronic version of this
written statement required by Section 906, has been provided to Lexaria Corp.
and will be retained by Lexaria Corp. and furnished to the Securities and
Exchange Commission or its staff upon request.</P>
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<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>exhibit32-2.htm
<DESCRIPTION>CERTIFICATION
<TEXT>


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   <TITLE>Lexaria Corp. - Exhibit 32.2 - Filed by newsfilecorp.com</TITLE>
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<P align=right>EXHIBIT 32.2 </P>
<P align=center>CERTIFICATION PURSUANT TO <BR>18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO <BR>
  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 </P>
<P align=justify>I, Bal Bhullar, hereby certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that: </P>
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  <TR>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>the Quarterly Report on Form 10-Q of Lexaria Corp. for
      the quarter ended January 31, 2011 (the "Report") fully complies with the
      requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
      1934; and</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>the information contained in the Report fairly presents,
      in all material respects, the financial condition and results of
      operations of Lexaria Corp.</P></TD></TR></TABLE>
<P align=justify>Dated: March 14, 2011 </P>
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  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="50%"><I>&#147;Bal Bhullar&#148;</I> </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="50%">Bal Bhullar </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="50%">Chief Financial Officer and Treasurer </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="50%">(Principal Financial Officer and Principal
  </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="50%">Accounting Officer) </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="50%">Lexaria Corp. </TD></TR></TABLE>
<P align=justify>&nbsp;</P>
<P align=justify>A signed original of this written statement required by Section
906, or other document authenticating, acknowledging, or otherwise adopting the
signature that appears in typed form within the electronic version of this
written statement required by Section 906, has been provided to Lexaria Corp.
and will be retained by Lexaria Corp. and furnished to the Securities and
Exchange Commission or its staff upon request.</P>
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