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WESTMOUNTAIN INDEX ADVISOR INC
0001421601
10-K
2012-10-31
false
--10-31
No
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Yes
Smaller Reporting Company
FY
2012
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<p style="margin: 0pt"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="6" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">October 31, 2012</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold"> </td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Weighted</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold"> </td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Average</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold"> </td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Exercise</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">Shares</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">Price</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; line-height: 115%">Outstanding at beginning of period</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right">6,321,041</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 9%; line-height: 115%; text-align: right">0.901</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Issued</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">5,245,450</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">1.386</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%">Exercised</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">(207,000</td>
<td nowrap="nowrap" style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">(0.483</td>
<td nowrap="nowrap" style="line-height: 115%">)</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Forfeited</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">(100,000</td>
<td nowrap="nowrap" style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">(0.500</td>
<td nowrap="nowrap" style="line-height: 115%">)</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%">Expired</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">-</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">-</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Outstanding at end of period</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">11,259,491</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">1.152</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%">Exerciseable at end of period</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">11,259,491</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td colspan="2" style="line-height: 115%"> </td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="14" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">October 31, 2012</td></tr>
<tr style="vertical-align: bottom">
<td colspan="2" style="line-height: 115%; font-weight: bold"> </td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Weighted</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Weighted</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold"> </td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold; text-align: center">Weighted</td></tr>
<tr style="vertical-align: bottom">
<td colspan="2" style="line-height: 115%; font-weight: bold"> </td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Average</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Average</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold"> </td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold; text-align: center">Average</td></tr>
<tr style="vertical-align: bottom">
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Number of</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Remaining</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Exercise</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Shares</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold; text-align: center">Exercise</td></tr>
<tr style="vertical-align: bottom">
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">Warrants</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">Life</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">Price</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">Exerciseable</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">Price</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 19%; line-height: 115%; text-align: right">62,000</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 17%; line-height: 115%; text-align: right">1.42</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 17%; line-height: 115%; text-align: right">0.001</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 17%; line-height: 115%; text-align: right">62,000</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 17%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">1,250,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">5.00</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">0.250</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">1,250,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">250,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">1.42</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">0.500</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">250,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">3,611,095</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">1.42</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">0.750</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">3,611,095</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">1,945,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">1.42</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">1.000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">1,945,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">1,852,115</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">5.00</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">1.500</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">1,852,115</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">2,089,281</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">2.55</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">2.000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">2,089,281</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">200,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">9.05</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">4.250</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">200,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">11,259,491</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right"> </td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">1.152</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">11,259,491</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">1.152</td></tr>
</table>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="width: 67%; line-height: 115%; font-weight: bold; text-decoration: underline">Assumptions</td>
<td style="width: 33%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%">Dividend yield</td>
<td style="line-height: 115%; text-align: right">0%</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Expected life</td>
<td style="line-height: 115%; text-align: right">3-10 years</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%">Expected volatility</td>
<td style="line-height: 115%; text-align: right">100-143%</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Risk free interest rate</td>
<td style="line-height: 115%; text-align: right">2-3.25%</td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold; text-align: center">Estimated</td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold"> </td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold"> </td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">Useful Lives</td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">October 31, 2012</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">October 31, 2011</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 66%; line-height: 115%">Mining and other equipment</td>
<td style="width: 10%; line-height: 115%; text-align: center">3-5 years</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 9%; line-height: 115%; text-align: right">518,179</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 9%; line-height: 115%; text-align: right">414,647</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Less: accumulated depreciation</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">(100,377</td>
<td nowrap="nowrap" style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">(2,577</td>
<td nowrap="nowrap" style="line-height: 115%">)</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">417,802</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">412,070</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Accounting
Method</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company’s
consolidated financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally
accepted in the United States of America.</p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Principles
of Consolidation</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">These consolidated
financial statements include the Company’s consolidated financial position, results of operations, and cash flows. All material
intercompany balances and transactions have been eliminated in the accompanying consolidated financial statements.</p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Foreign Currency
Translation</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The consolidated
financial statements are presented in US dollars, which is the parent company’s and its subsidiary’s functional currency
and the Company’s presentation currency. Transactions in foreign currencies are initially recorded in the functional currency
at the rate in effect at the date of the transaction.  Monetary assets and liabilities denominated in foreign currencies
are retranslated at the spot rate of exchange in effect at the reporting date. All differences are taken to the consolidated statement
of operations and comprehensive loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rate at the date of the initial transaction.</p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Cash and
Cash Equivalents</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
classifies highly liquid temporary investments with an original maturity of three months or less when purchased as cash equivalents.
The Company maintains cash balances at various financial institutions. Balances at US banks are insured by the Federal Deposit
Insurance Corporation up to $250,000. Beginning December 31, 2010 and through December 31, 2012, all noninterest-bearing transaction
accounts are fully insured, regardless of the balance of the account, at all FDIC-insured institutions. The Company has not experienced
any losses in such accounts and believes it is not exposed to any significant risk for cash on deposit.  As of October
31, 2012, the Company had no uninsured cash amounts.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Equipment</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Equipment consists
of machinery, furniture and fixtures and software, which are stated at cost less accumulated depreciation and amortization. Depreciation
is computed by the straight-line method over the estimated useful lives or lease period of the relevant asset, generally 3 -5 years.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Mineral Properties</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Costs of acquiring
mineral properties are capitalized by project area upon purchase of the associated claims. Costs to maintain the mineral rights
and leases are expensed as incurred.  When a property reaches the production stage, the related capitalized costs will
be amortized, using the units of production method on the basis of periodic estimates of ore reserves.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Mineral properties
are periodically assessed for impairment of value and any diminution in value.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
has access to the camp by airplane. There is no road access from camp to the project area where drilling and bulk sampling mining
occurs. It is approximately 1 1/2 miles from camp to the project area.  Power generation is by diesel generator at the camp.
Fuel is brought in for the generators by a cargo plane to the airstrip.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Long-Lived
Assets</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
reviews its long-lived assets for impairment when changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Long-lived assets under certain circumstances are reported at the lower of carrying amount or fair value. Assets
to be disposed of and assets not expected to provide any future service potential to the Company are recorded at the lower of carrying
amount or fair value (less the projected cost associated with selling the asset). To the extent carrying values exceed fair values,
an impairment loss is recognized in operating results.  As of October 31, 2012, there are no impairments recognized.</p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Alaska Reclamation
and Remediation Liabilities</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
operates in Alaska. The State of Alaska Department of Natural Resources requires a pool of funds from all permittees with exploration
and mining projects to cover reclamation. There is a $750 per acre disturbance reclamation bond that is required for disturbance
of 5 acres or more and/or removal of more the 50,000 cubic yards of material. The Company does not expect to exceed the minimum requirements and
is not expected to be required to file a reclamation bond until the project advances and feasibility justifies
expansion.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
expects to record reclamation bond as a liability in the period in which the Company is required to pay a reclamation bond. A corresponding
asset is also recorded and depreciated over the life of the asset. After the initial measurement of the asset retirement obligation,
the liability will be adjusted at the end of each reporting period to reflect changes in reclamation bond.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Mineral Exploration
and Development Costs</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">All exploration
expenditures are expensed as incurred.  Significant property acquisition payments for active exploration properties are
capitalized.  If no minable ore body is discovered, previously capitalized costs are expensed in the period the property
is abandoned.  Expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand
the capacity of operating mines, are capitalized and amortized on a unit of production basis over proven and probable reserves.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Should a property
be abandoned, its capitalized costs are charged to operations.  The Company charges to operations the allocable portion
of capitalized costs attributable to properties abandoned.  Capitalized costs are allocated to properties sold based
on the proportion of claims sold to the claims remaining within the project area.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Net Loss
Per Share</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Basic loss per
common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common
stock outstanding for the periods presented. Diluted net loss per share reflects the potential dilution that could occur if securities
or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock
that would then share in the income of the Company, subject to anti-dilution limitations. As of October 31, 2012, the Company had
warrants for the purchase of 11,259,491 common shares and 1,643,639 common shares related promissory notes to which were considered
but were not included in the computation of loss per share at October 31, 2012 because they would have been anti-dilutive.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">As of October
31, 2011, the Company had warrants for the purchase of 6,321,041 common shares which were not included in the computation of loss
per share at October 31, 2011 because they would have been anti-dilutive. In addition, the Company has 1,000,000 shares of common
stock to be issued over three years to International Tower Hill Ltd. which could potentially dilute future earnings per share.</p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Use of Estimates</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The preparation
of financial statements in conformity with accounting principles generally accepted in the United States requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.</p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Recent Accounting
Pronouncements</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In September
2011, the FASB issued guidance regarding testing goodwill for impairment.  The new guidance allows an entity the option
to make a qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair
value of the reporting unit.  The guidance is effective for annual and interim goodwill impairment tests performed for
fiscal years beginning after December 15, 2011, with early adoption permitted.  The adoption of this guidance is not
expected to have a material impact on the Company’s consolidated financial statements.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In December
2011, the FASB issued guidance that defers the effective date of the requirement to present separate line items on the income statement
for reclassification adjustments of items out of accumulated other comprehensive income (loss) into net income (loss).  The
deferral is temporary until the FASB reconsiders the operational concerns and needs of financial statement users.  The
FASB has not yet announced a timetable for its reconsideration.  The adoption of this guidance is not expected to have
a material impact on the Company’s consolidated financial statements.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">A variety of
proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory
agencies. Due to the tentative and preliminary nature of those proposed standards, management has not determined whether implementation
of such proposed standards would be material to the consolidated financial statements.</p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white">There are no pending legal proceedings
against the Company that are expected to have a material adverse effect on cash flows, financial condition or results of operations.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"><b>Employment Agreements</b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On October 1,
2010, TMC signed an Employment Agreement with Gregory Schifrin (“Schifrin Agreement”), which was acquired by WMTN as
a result of the acquisition of TMC. Under the terms of the Schifrin Agreement, Mr. Schifrin was appointed Chief Executive Officer
for an indefinite period at a salary of $120,000 per year. Mr. Schifrin is eligible for annual bonuses and incentive plans as determined
by the Company’s Compensation Committee. Mr. Schifrin received a $10,000 bonus for entering into the Schifrin Agreement and
is eligible for employee benefit programs, including 4 weeks of vacation per year, medical benefits and $500 per day spent on the
Company’s project sites. Mr. Schifrin may resign with 60 days’ notice. If Mr. Schifrin is terminated without cause,
including a change in control (after six months), he is to receive in a lump sum, two times his annual salary, two times his targeted
annual bonus, two times his last year’s bonus and any accrued vacation.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On October 1,
2010, TMC signed an Employment Agreement with James Baughman (“Baughman Agreement”), which was acquired by WMTN as
a result of the acquisition of TMC. Under the terms of the Baughman Agreement, Mr. Baughman was appointed Chief Operating Officer
for an indefinite period at a salary of $120,000 per year. Mr. Baughman is eligible for annual bonuses and incentive plans as determined
by the Company’s Compensation Committee. Mr. Baughman received a $10,000 bonus for entering into the Baughman Agreement and
is eligible for employee benefit programs, including 4 weeks of vacation per year, medical benefits and $500 per day spent on the
Company’s project sites. Mr. Baughman may resign with 60 days’ notice. If Mr. Baughman is terminated without cause,
including a change in control (after six months), he is to receive in a lump sum, two times his annual salary, two times his targeted
annual bonus, two times his last year’s bonus and any accrued vacation.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On February
18, 2011, the Company entered into a Consulting Agreement with Mark Scott (“Scott Consulting Agreement”). Under the
terms of the Scott Consulting Agreement, Mr. Scott agreed to consult on the TMC reorganization and complete the filing of certain
SEC filings during the period ending April 8, 2011.  Mr. Scott received $12,000 in cash and 24,000 shares of the Company’s
restricted common stock. The terms of his appointment as CFO were finalized at the conclusion of the Scott Consulting Agreement.
On April 11, 2011, the Board awarded Mr. Scott an additional $20,000 in cash and 40,000 shares of the Company’s restricted
common stock.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On April 18,
2011, the Company entered into an Employment Agreement (“Scott Employment Agreement”) with Mark Scott as the Company’s
Chief Financial Officer, which was effective April 9, 2011. The Scott Employment Agreement replaced the Scott Consulting Agreement
dated February 18, 2011 and which expired on April 8, 2011.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Under the terms
of the Scott Employment Agreement, Mr. Scott was appointed Chief Financial Officer for an indefinite period at a salary of $96,000
per year. Mr. Scott is eligible for annual bonuses and incentive plans as determined by the Company’s Compensation Committee.
Mr. Scott is eligible for employee benefit programs, including 4 weeks of vacation per year, medical benefits, life and disability
insurance. Mr. Scott may resign with 60 days’ notice. If Mr. Scott is terminated without cause, including a change in control
(after six months), he is to receive in a lump sum, one times his annual salary, one times his targeted annual bonus, one times
his last year’s bonus and any accrued vacation. </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"><b>Leases</b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white">The Company is obligated under various
non-cancelable operating leases for their various facilities and certain equipment.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white">The aggregate unaudited future minimum
lease payments, to the extent the leases have early cancellation options and excluding escalation charges, are as follows:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="line-height: 115%; font-weight: bold; text-align: center">Years Ended October 31,</td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">Total</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 88%; line-height: 115%; text-align: center">2013</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 9%; line-height: 115%; text-align: right">384,000</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%; text-align: center">2014</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">250,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%; text-align: center">2015</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">100,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%; text-align: center">2016</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">125,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%; text-align: center">2017</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">125,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%; text-align: center">Beyond</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">125,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%; text-align: center">Total</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">1,109,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="margin: 0pt"></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"> <br /></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><b>NOTE
7. EQUITY TRANSACTIONS</b></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><b>Common
Stock</b></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><b>Fiscal
Year 2012</b></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">Unless
otherwise indicated, all of the following private placements of Company securities were conducted under the exemption from registration
as provided under Section 4(2) of the Securities Act of 1933 (and also qualified for exemption under 4(5), formerly 4(6) of the
Securities Act of 1933, as noted below). All of the shares issued were issued in private placements not involving a public offering,
are considered to be “restricted stock” as defined in Rule 144 promulgated under the Securities Act of 1933 and stock
certificates issued with respect thereto bear legends to that effect.   </p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">On
November 6, 2011, the Company issued 7,000 shares of WMTN restricted common stock to Edward Hall upon the exercise of warrants.
A notice filing under Regulation D was filed with the SEC on December 14, 2011 with regard to this stock issuance.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">During
the year ended October 31, 2012, the Company signed Subscription Agreements with accredited investors for $1,279,601, net of costs
and issued 1,715,422 shares of restricted common stock. The restricted common stock does not have registration rights.   In
addition, the Company issued warrants for 1,804,701 shares at $2.00 per share. The warrants expire three years from the issuance
date and do not have registration rights. The warrants may be called by the Company if it has registered the sale of the underlying
shares with the SEC and a closing price of $4.00 or more for the Company’s common stock has been sustained for five trading
days. A notice filing under Regulation D was filed with the SEC with regard to these stock issuances.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">The
Company issued 500,000 shares WMTN restricted common stock to Raven during November and December, 2011 at $.50 per share related
to the JV Agreement. The shares do not have registration rights. The shares were valued at $.50 per share and $250,000 was
expensed to exploration during the three months ended January 31, 2012.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">On
January 24, 2012, the Company issued 60,000 restricted shares of common stock at $.50 per share to Gary Courtney under a Consulting
Agreement. The shares do not have registration rights. The shares were valued at $.50 per share and $30,000 was expensed to
services during the three months ended January 31, 2012.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">On
March 28, 2012, the Company issued 200,000 shares of WMTN common stock to the Sterling Group upon the cashless exercise of warrants.
A notice filing under Regulation D was filed with the SEC on March 28, 2012 with regard to these stock issuances.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">  </p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">During
the year ended October 31, 2012, the Company issued 192,500 shares of common stock to convertible debt holders.  The
stock was valued at $192,500 and recorded as additional interest expense.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">During
the three months ended October 31, 2012, the Company converted $110,000 in accounts payable into 110,000 shares of restricted common
stock at $1.00 per share.  In addition, Monihan and Biagi PLLC, our corporate counsel, converted $20,000 of accounts
payable into 20,000 shares of restricted common stock at $1.00 per share. The restricted common stock does not have registration
rights.  In addition, the Company issued warrants for 130,000 shares at $1.85 per share. The warrants expire three years
after issuance and do not have registration rights. The warrants may be called by the Company if it has registered the sale of
the underlying shares with the SEC and a closing price of $4.00 or more for the Company’s common stock has been sustained
for five trading days. The warrants were valued at $0.13 per share based on Black-Scholes and $16,900 was expensed during the year
ended October 31, 2012. A notice filing under Regulation D was filed with the SEC during the three months ended October 31, 2012
with regard to these stock issuances.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">On
October 12, 2012, Mark Macklin converted debt of $100,000 and accrued interest of $2,500 into 102,500 shares of restricted common
stock. The restricted common stock does not have registration rights.  In addition, the Company issued warrants dated
September 19, 2012 for 102,500 shares at $2.00 per share. The warrants expire three years after issuance and do not have registration
rights. The warrants may be called by the Company if it has registered the sale of the underlying shares with the SEC and a closing
price of $4.00 or more for the Company’s common stock has been sustained for five trading days. The warrants were valued
at $0.17 per share based on Black-Scholes and $17,425 was expensed during the year ended October 31, 2012. A notice filing under
Regulation D was filed with the SEC on October 31, 2012 with regard to this stock issuance.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">On
October 24, 2012, the Company granted 25,000 shares of restricted common stock to a director valued at $25,000. A notice filing
under Regulation D was filed with the SEC on October 31, 2012 with regard to this stock issuance.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><b>Fiscal
Year 2011</b></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">During
the period starting February 18, 2011, WMTN entered into Subscription Agreements with accredited investors totaling $1,139,329
net of issuance costs. WMTN agreed to issue 2,361,095 shares of restricted WMTN common stock at an average price of $0.50 and 3,361,095
warrants to purchase common stock. The warrants expire February 17, 2014 and are exercisable at $0.75 per share. WMTN
agreed to file a registration statement with the SEC with regard to the shares issuable upon exercise of the warrants within ninety
days on a best efforts basis. The common stock shares do not have registration rights. </p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">During
August-October, 2011, the Company signed Subscription Agreements with four additional Accredited investors for $525,100 and issued
190,946 shares of restricted common stock at $2.75 per share. The restricted common stock does not have registration rights. In
addition, the Company issued warrants for 190,946 shares at $4.25 per share. The warrants expire by August to October, 2014 and
do not have registration rights. The warrants may be called by the Company if it has registered the sale of the underlying shares
with the SEC and a closing price of $4.00 or more for the Company’s common stock has been sustained for five trading days.
A notice filing under Regulation D was filed with the SEC in September 2011. </p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">WMTN
issued to Ben Porterfield 500,000 shares of WMTN restricted common stock for the purchase of mining claims know as Fish Creek.
The common stock was recorded as Contractual Rights and valued at $250,000.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">On
June 1, 2011, Gregory Schifrin and James Baughman converted $30,000 of accrued payroll into 60,000 shares of WMTN common stock
at $0.50 per share.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">On
June 1, 2011, Accredited Members, Inc. converted $84,000 of debt into 168,000 of WMTN common stock at $0.50 per share. </p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">On
August 24, 2011, the Company granted 686,000 shares of restricted common stock to officers and directors that were valued at $222,200.
A notice filing under Regulation D was filed with the SEC on September 1, 2011 with regard to this stock issuance.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">On
February 18, 2011, WMTN entered into a Stock Purchase Agreement with TMC related to the acquisition of Terra Gold Corporation (“TGC”),
a wholly owned subsidiary of TMC. Under the terms of the Stock Purchase Agreement, WMTN acquired 100% of TGC by assuming $500,000
in debt plus accrued interest of $7,685 owed to BOCO Investments LLC (“BOCO”). During the year ended October 31, 2011,
this debt was converted into 1,000,000 shares of common stock and accrued interest was waived.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><b>Warrants</b></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><b>Fiscal
Year 2012</b></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">On
November 13, 2011, the Company issued a warrant for the purchase of 92,000 shares of common stock of the Company at $2.00 per share
to Hinman Au for advisory services.  The warrant expires November 12, 2014 and does not have registration rights. The
warrant may be called by the Company if it has registered the sale of the underlying shares with the SEC and a closing price of
$4.00 or more for the Company’s common stock has been sustained for five trading days. The warrants were valued at $2.05
per share based on Black-Scholes and $188,600 was expensed as consulting expense during the three months ended January 31, 2012.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">During
the year ended October 31, 2012, the Company issued to BOCO a Warrant to purchase 1,250,000 shares of common stock at the exercise
price of $0.25 and a warrant to purchase 1,852,115 shares of common stock at $1.50 or the lowest price at which common shares in
the Company are issued in any round of financing commencing after the date of the convertible note, and a Warrant to purchase 200,000
shares of common stock at $4.00 per share.  These Warrants expire September 2017, September 2017 and November 2021, respectively.
There are no registration requirements. The warrants were valued based on Black-Scholes at $1,044,500, this amount was expensed
as interest during the year ended October 31, 2012.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">On
September 19, 2012, the Company issued a warrant for the purchase of 5,080 shares of common stock of the Company at $2.00 per share
to Hinman Au for advisory services.  The warrant expires September 18, 2015 and does not have registration rights. The
warrant may be called by the Company if it has registered the sale of the underlying shares with the SEC and a closing price of
$4.00 or more for the Company’s common stock has been sustained for five trading days. The warrants were valued based on
Black-Scholes and $1,727 was expensed as consulting expense during the year ended October 31, 2012.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">The
Company issued Warrants to purchase 130,000 shares of common stock at a price of $2.00 per share with shares issued in payment
of accounts payable. The warrants were valued based on Black-Scholes and $16,900 was expensed during the year ended October 31,
2012.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">The
Company issued Warrants to 102,500 shares of common stock at a price of $2.00 per share with shares issued in payment of a convertible
note. The warrants were valued based on Black-Scholes and $17,425 was expensed during the year ended October 31, 2012.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><b>Fiscal
Year 2011</b></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">On
February 18, 2011, WMTN entered into a Consulting Agreement with Capital Peak Partners LLC (“CPP and CPP Agreement”).
Under the terms of the CPP Agreement, CPP agreed to advise WMTN on the acquisition of TMC, funding of WMTN and strengthening the
WMTN balance sheet during the period ending February 17, 2012. CPP received a Warrant for 1,800,000 shares at $0.001 per share.
The warrant was valued at $900,000 ($0.50 per share) using the Black-Scholes-Merton option valuation model. WMTN agreed to file
a registration statement with the SEC with regard to the shares issuable upon exercise of the warrant within ninety days on a best
efforts basis. On June 13, 2011, the warrants were exercised.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">On
February 18, 2011, WMTN entered into a Consulting Agreement with WestMountain Asset Management, Inc. (“WASM” and “WASM
Agreement”), a WMTN shareholder affiliated with BOCO Investments LLC. Under the terms of the WASM Agreement, WASM agreed
to advise WMTN on the acquisition of TMC, funding of WMTN and strengthening the WMTN balance sheet during the period ending December
31, 2011. WASM received a Warrant for 925,000 shares at $.001 per share.  WMTN agreed to file a registration statement
with the SEC with regard to the shares issuable upon exercise of the warrant within ninety days on a best efforts basis. On August
10, 2011, WASM exercised a portion of the warrant and 866,000 shares of WMTN common stock were issued. On November 15, 2011, WASM
exercised a portion of the warrant and 7,000 shares of WMTN common stock were issued.</p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br /></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">WMTN
issued warrants to the TMC founder investors Gregory Schifrin and James Baughman for 300,000 and 200,000 shares of WMTN common
stock, respectively. WMTN issued warrants to other TMC founder investors for 490,000 shares of common stock. The warrants expire
February 17, 2014 and are exercisable at $0.001 per share. WMTN agreed to file a registration statement with the SEC with regard
to the shares and shares issuable upon exercise of the warrants within ninety days on a best efforts basis. On June 13, 2011, the
warrants were exercised and 1,000,000 shares of WMTN common stock were issued.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">WMTN
issued 1,000,000 shares of its common stock and a warrant to acquire an additional 1,000,000 shares of WMTN common stock exercisable
for $0.001 per share to BOCO in exchange for the $500,000 demand note. On June 13, 2011, the warrant was exercised and 1,000,000
shares of WMTN common stock were issued.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">On
April 1, 2011, the Company issued a warrant for the purchase of 300,000 shares of common stock of the Company to the Sterling Fund
for advisory services.  The warrant has an exercise price of $0.50 and expires in March 31, 2014. The warrant was valued
at $117,000 ($0.39 per share) using the Black-Scholes-Merton option valuation model. The warrant may be called by the Company if
registered and with a closing price $4.00 or more for five trading days. </p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">On
April 7, 2011, the Company signed a Services Agreement (“Logic Agreement”) with Logic International Consulting Group
LLC (“Logic”). Under the Logic Agreement, Logic agreed to provide certain advisory services to the Company. The Company
issued Logic a warrant dated April 7, 2011 for the purchase of 1,200,000 shares of the Company’s common stock. The Warrant
exercise price is $1.00 per share and it expires April 6, 2014. The warrant was valued at $420,000 ($0.35 per share) using the
Black-Scholes-Merton option valuation model. The Warrant may be called by the Company if registered and with a closing price $4.00
or more for five trading days.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">On
August 24, 2011, the Company granted CPP under its Service Agreement a warrant for 250,000 shares at $0.50 per share and 250,000
shares at $0.75 per share. The warrants expire August 23, 2014 and do not have registration rights. The warrants may be called
by the Company if it has registered the sale of the underlying shares with the SEC and a closing price of $2.00 or more for the
Company’s common stock has been sustained for five trading days. The shares were valued at the measurement date at $92,446
and will be amortized over the life of the service agreement.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">On
August 24, 2011, the Company granted Logic under the Logic Agreement a warrant for 700,000 shares at $1.00 per share. The warrant
expires August 23, 2014 and does not have registration rights. The warrants may be called by the Company if it has registered the
sale of the underlying shares with the SEC and a closing price of $4.00 or more for the Company’s common stock has been sustained
for five trading days. The shares were valued at the measurement date at $246,313 and will be amortized over the life of the service
agreement.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">Except
as disclosed, all of the above private placements of our securities were conducted under the exemption from registration as provided
under Section 4(2) of the Securities Act of 1933.</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">A summary
of the warrants issued as of October 31, 2012 were as follows:</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">  </p>
<table cellpadding="0" cellspacing="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td colspan="6" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">October 31, 2012</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Weighted</td>
<td nowrap="nowrap" style="text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Average</td>
<td nowrap="nowrap" style="text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Exercise</td>
<td nowrap="nowrap" style="text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Shares</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Price</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; width: 76%; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Outstanding at beginning of period</td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 9%; font: 8pt Times New Roman, Times, Serif">6,321,041</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif">$</td>
<td style="text-align: right; width: 9%; font: 8pt Times New Roman, Times, Serif">0.901</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Issued</td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">5,245,450</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">1.386</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Exercised</td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">(207,000</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif">)</td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">(0.483</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif">)</td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Forfeited</td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">(100,000</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif">)</td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">(0.500</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif">)</td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2px; text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Expired</td>
<td style="padding-bottom: 2px; text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">-</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">-</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 4px; text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Outstanding at end of period</td>
<td style="padding-bottom: 4px; text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">11,259,491</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 4px; text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left">$</td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">1.152</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2px; text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Exerciseable at end of period</td>
<td style="padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">11,259,491</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"> </p>
<p style="text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"> <br /></p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">A summary
of the status of the warrants outstanding as of October 31, 2012 is presented below:</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"> </p>
<p style="text-align: left; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"> </p>
<table cellpadding="0" cellspacing="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td colspan="2" style="padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td colspan="14" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">October 31, 2012</td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td colspan="2" style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Weighted</td>
<td nowrap="nowrap" style="text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Weighted</td>
<td nowrap="nowrap" style="text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Weighted</td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td colspan="2" style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Average</td>
<td nowrap="nowrap" style="text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Average</td>
<td nowrap="nowrap" style="text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Average</td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td colspan="2" style="font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Number of</td>
<td nowrap="nowrap" style="text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Remaining</td>
<td nowrap="nowrap" style="text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Exercise</td>
<td nowrap="nowrap" style="text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Shares</td>
<td nowrap="nowrap" style="text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Exercise</td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Warrants</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Life</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Price</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Exerciseable</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">Price</td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 19%; font: 8pt Times New Roman, Times, Serif">62,000</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 17%; font: 8pt Times New Roman, Times, Serif">1.42</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif">$</td>
<td style="text-align: right; width: 17%; font: 8pt Times New Roman, Times, Serif">0.001</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 17%; font: 8pt Times New Roman, Times, Serif">62,000</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 17%; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">1,250,000</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">5.00</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">0.250</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">1,250,000</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">250,000</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">1.42</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">0.500</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">250,000</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">3,611,095</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">1.42</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">0.750</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">3,611,095</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">1,945,000</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">1.42</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">1.000</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">1,945,000</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">1,852,115</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">5.00</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">1.500</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">1,852,115</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">2,089,281</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">2.55</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">2.000</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">2,089,281</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">200,000</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">9.05</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">4.250</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">200,000</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">11,259,491</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 4px; text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right"> </td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 4px; text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left">$</td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">1.152</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 4px; text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">11,259,491</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 4px; text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left">$</td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right; text-indent: 0pt">1.152</td></tr>
</table>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"> </p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt">The significant
weighted average assumptions relating to the valuation of the Company’s warrants for the year ended October 31, 2012 were
as follows:</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"> </p>
<p style="text-align: left; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"> </p>
<table cellpadding="0" cellspacing="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; width: 67%; font: bold 8pt Times New Roman, Times, Serif; text-decoration: underline; text-indent: 0pt">Assumptions</td>
<td style="width: 33%; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Dividend yield</td>
<td style="text-align: right; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">0%</td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Expected life</td>
<td style="text-align: right; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">3-10 years</td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Expected volatility</td>
<td style="text-align: right; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">100-143%</td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Risk free interest rate</td>
<td style="text-align: right; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">2-3.25%</td></tr>
</table>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
<font style="font: 10pt Times New Roman, Times, Serif">At October 31, 2012, vested warrants totaling 11,259,491 shares had an aggregate
intrinsic value of $9,007,593.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Secured Promissory
Notes</b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On September
17, 2012, the Company entered into Amended and Restated Revolving Credit Loan and Security and Secured Convertible Promissory Note
Agreements with BOCO Investments, LLC (“BOCO”), an existing lender to and shareholder in the Company. On October 1,
2012, the Company entered into a Warrant to Purchase Stock Agreement with BOCO related to this financing (such Agreements and Warrant,
the “Transaction Documents”). The Transaction Documents supersede the Revolving Credit Loan and Security, Secured Convertible
Promissory Note and Warrant to Purchase Stock Agreements entered into on August 8, 2012 with BOCO as reported in the Company 8-K
filed on Aug. 2012.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Under the Transaction
Documents, the Company issued an Amended and Restated Secured Convertible Promissory Note (“Note”) in the principal
amount of $1,853,965. The Note is due July 31, 2013 and provides for interest at 15% payable in arrears. The Note and accrued interest
are convertible into common stock at the lesser of $3.00 or the lowest price at which common shares in the Company are issued in
any round of financing commencing after the date of this Note and prior to the conversion, at the discretion of BOCO. The Note
is secured by a security interest in the Company’s assets to secure the Company’s performance under the Note.  The
Note includes and replaces previously issued notes for $350,000 dated November 15, 2011 and $50,000 dated June 1, 2012. In addition,
the Company issued a Warrant to purchase 1,852,115 shares of common stock at the lesser of $1.50 or the lowest price at which common
shares in the Company are issued in any round of financing commencing after the date of this Note. The Warrant expires September
30, 2017. There are no registration requirements. The Transaction Documents place certain operating restrictions on the Company.  This
warrant is also discussed under Note 7, Equity Transactions, under “Warrants 2012”</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Agreements
also contains certain representations and warranties of the Company and BOCO, including customary investment-related representations
provided by BOCO, as well as acknowledgements by BOCO that it has reviewed certain disclosures of the Company (including the periodic
reports that the Company has filed with the SEC) and that the Company’s issuance of the shares has not been registered with
the SEC or qualified under any state securities laws.  The Company provided customary representations regarding, among
other things, its organization, subsidiaries, disclosure reports, absence of certain legal or governmental proceedings, financial
statements, tax matters, insurance matters, real property and other assets, and compliance with applicable laws and regulations.  The
representations and warranties made to BOCO are qualified in their entirety (to the extent applicable) by the Company’s disclosures
in the reports it files with the SEC.  The Company also delivered confidential disclosure schedules qualifying certain
of its representations and warranties in connection with executing and delivering the Agreement.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In addition
to the Transaction Documents described above, on September 11, 2012, the Company entered into a Warrant to Purchase Stock Agreement
with BOCO. The Company issued a Warrant to purchase 1,250,000 shares of common stock at $0.25 per share. The Warrant expires September
30, 2017. There are no registration requirements.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Unsecured
Promissory Notes</b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On February
10, 2012 the Company entered into Promissory Note Documents with Mark Macklin, an existing shareholder in the Company. Under the
Promissory Note Documents, the Company issued a Convertible Promissory Note (“Macklin Note”) in the principal amount
of $100,000. The Macklin Note was due October 10, 2012 and provided for interest at 5% payable in arrears. On October 12, 2012,
Mark Macklin converted the entire principal amount of $100,000 plus accrued interest of $2,500 into 102,500 shares of restricted
common stock. The restricted common stock does not have registration rights.  In addition, the Company issued warrants
dated September 19, 2012 for 102,500 shares at $2.00 per share. The warrants expire three years after issuance and do not have
registration rights. The warrants may be called by the Company if it has registered the sale of the underlying shares with the
SEC and a closing price of $4.00 or more for the Company’s common stock has been sustained for five trading days. A notice
filing under Regulation D was filed with the SEC on October 31, 2012 with regard to this stock issuance.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On March 21,
2012 the Company entered into Promissory Note Documents with Fabin Andres and Bill Andres, existing shareholders in the Company.
Under the Promissory Note Documents, the Company issued a Convertible Promissory Note (“Andres Notes”) in the principal
amount of $100,000 and $100,000, respectively. The Andres Notes are due in twelve months and provide for interest at 5% payable
in arrears. The Andres Notes are convertible into common stock as $1.00 per share. In addition, the Company issued 50,000 shares
of restricted common stock to each party that was expensed to interest at $1.00 per share or $100,000 during the three months ended
April 30, 2012.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On April 30,
2012 the Company entered into Promissory Note Documents with Silver Verde May Mining Company Inc. (“SVM”), a party
related to an existing shareholder and a Director of the Company. Under the Promissory Note Documents, the Company issued Convertible
Promissory Notes (“SVM Notes”) in the principal amounts of $75,000 and $10,000, respectively. The Notes are due in
seven months and ten months, respectively, and provide for interest at 5% payable in arrears. The SVM Notes are convertible into
common stock as $1.00 per share. In addition, the Company issued 42,500 shares of restricted common stock to SVM in connection
with the issuance of the SVM Notes that was expensed to interest at $1.00 per share or $42,500 during the three months ended April
30, 2012.</p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The following
relationships are material or are related as indicated.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Related Party
Transactions</b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Share Exchange
Agreement with TMC</b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">WMTN entered
into a Share Exchange Agreement with Gregory Schifrin, American Mining Corporation (“AMC”) and James Baughman to acquire
100% of the issued and outstanding shares of common stock of TMC in exchange for 1,500,000 shares of restricted common stock of
WMTN, par value of $0.001 per share.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">WMTN entered
into a Share Exchange Agreement with Mining Minerals LLC (owned 60% and 40 % by Gregory Schifrin and James Baughman, respectively)
whereby WMTN acquired the claims recorded with the Alaska Department of Natural Resources, Recording Numbers 2010-000468-0 through
2010-000481-0, recorded on October 19, 2010, in exchange for a total of 5,000,000 shares of common stock of WMTN. As of February
18, 2011, the Alaska claims are owned by WMTN. On June 13, 2011, Mineral Mining LLC sold 100,000 shares to Mark Scott for $0.001
per share.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In addition,
WMTN issued warrants to the TMC founder investors Gregory Schifrin and James Baughman for 300,000 and 200,000 shares of WMTN
common stock, respectively. WMTN issued warrants to other TMC founder investors for 500,000 shares of common stock. The warrants
expire February 17, 2014 and are exercisable at $0.001 per share. WMTN agreed to file a registration statement with the SEC with
regard to the shares and shares issuable upon exercise of the warrants within ninety days on a best efforts basis. On June 13,
2011, the warrants were exercised and 1,000,000 shares of WMTN common stock were issued.<b> </b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Other Reverse
Merger Agreements</b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">WMTN entered
into a Consulting Agreement with WestMountain Asset Management, Inc. (“WASM and WASM Agreement”), a WMTN shareholder.
Under the terms of the WASM Agreement, WASM agreed to advise WMTN on the acquisition of TMC, funding of WMTN and strengthening
the WMTN balance sheet during the period ending December 31, 2011. WASM received a Warrant for 925,000 shares at $0.001 per share.  
The Warrant is in substantially the form and with the terms as contained in Exhibit 10.14 filed herewith.  WMTN agreed
to file a registration statement with the SEC with regard to the shares issuable upon exercise of the warrant within ninety days
on a best efforts basis. As of January 22, 2013, WASM has exercised a portion of the warrant and 873,000 shares of WMTN common
stock were issued.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Stock Purchase
Agreement with TMC</b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On February
18, 2011, WMTN entered into a Stock Purchase Agreement with TMC related to the acquisition of Terra Gold Corporation (“TGC”),
a wholly owned subsidiary of TMC. Under the terms of the Stock Purchase Agreement, WMTN acquired 100% of TGC by assuming $500,000
in debt plus accrued interest of $7,685 owed to BOCO Investments LLC (“BOCO”), an existing shareholder in the Company.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Other Related
Party Transactions</b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
has five full-time and part-time employees. The Company shares offices with Minex Exploration LLP, an Idaho partnership affiliated
with the Company’s Chief Executive Officer. Also, the Company utilizes Minex Mining contractors for exploration and development
of the Alaska property. The Company has recorded accounts payable- related party of $493,164 and $468,596 as of October 31, 2012
and 2011, respectively.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Secured Promissory
Notes with BOCO</b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">From time to
time, the Company entered into promissory notes and other agreements with BOCO related to loans from BOCO to the Company.  The
current status of BOCO loans to the Company and their terms are described in Note 6, Promissory Notes, below.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Any material
related party transactions are reported in applicable sections of this Form 10-K.</p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Equipment, net
comprises of the following: </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold; text-align: center">Estimated</td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold"> </td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold"> </td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">Useful Lives</td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">October 31, 2012</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">October 31, 2011</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 66%; line-height: 115%">Mining and other equipment</td>
<td style="width: 10%; line-height: 115%; text-align: center">3-5 years</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 9%; line-height: 115%; text-align: right">518,179</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 9%; line-height: 115%; text-align: right">414,647</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Less: accumulated depreciation</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">(100,377</td>
<td nowrap="nowrap" style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">(2,577</td>
<td nowrap="nowrap" style="line-height: 115%">)</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">417,802</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">412,070</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white">Depreciation expense for the year
ended October 31, 2012 and 2011 was $97,800 and $2,577, respectively.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Exploration,
Development and Mine Operating Agreements</b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Joint Venture
Agreement</b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On September
15, 2010, TMC and its wholly owned subsidiary, TGC and Raven Gold Alaska, Inc. (“Raven”) signed an Exploration, Development
and Mine Operating Agreement (“JV Agreement”). TMC agreed to have 250,000 shares of WMTN common stock issued to Raven
no later than one year after the closing of the acquisition of TMC by WMTN and an additional 250,000 shares of WMTN common stock
issued on or before each of December 31, 2011 and December 31, 2012. The $50,000 due with the signing of the Letter of Intent in
February 2010 was paid September 17, 2010. TMC has spent $4,796,000 of project expenses through January 22, 2013 as defined by
the JV Agreement.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The JV Agreement
has a term of twenty years, which can continue longer as long as products are produced on a continuous basis and thereafter until
all materials, equipment and infrastructure are salvaged and disposed of, environmental compliance is completed and accepted and
the parties have completed a final accounting. The JV Agreement defines terms and conditions where TMC and TGC earns a 51% interest
with the following payments and stock issuances-</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Pay the following
options payments:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="width: 4%; font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">●</td>
<td style="width: 96%; font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">Payment of $10,000 with the signing of the Letter of Intent in February 2010 (paid September 2010).</td></tr>
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">●</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">Payment of $40,000 with the signing of the JV Agreement (paid September 2010).</td></tr>
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">●</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">Payment of $100,000 on or before December 31, 2011 (paid in December 2011).</td></tr>
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">●</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">Payment of $150,000 on or before December 31, 2012 (paid in January 2013).</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Provide the
following project funding-</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="width: 4%; font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">●</td>
<td style="width: 96%; font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">Payment of $1 million in project expenses on or before December 31, 2011, including $100,000 (paid) to Raven for camp equipment. </td></tr>
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">●</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">Payment of $2.5 million in additional project expenses on or before December 31, 2012, including $100,000 to Raven for camp equipment (paid in January 2013).</td></tr>
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">●</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">Payment of $2.5 million in additional project expenses on or before December 31, 2013.</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Issue the following
common stock, which is subject to a two year trading restriction, upon the completion of the acquisition of TMC by WMTN:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="width: 4%; font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">●</td>
<td style="width: 96%; font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">Issue 250,000 shares of WMTN common stock no later than one year after the closing of the acquisition of TMC (issued).</td></tr>
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">●</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">Issue 250,000 shares of WMTN common stock on or before December 31, 2011 (issued), and December 31, 2012.</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">TMC and TGC
then can increase their interest to 80% in the project with the following payments and stock issuances:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="width: 4%; font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">●</td>
<td style="width: 96%; font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">Payment of $150,000 on or before December 31, 2013.</td></tr>
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">●</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">Payment of $3.05 million in additional project expenses on or before December 31, 2014.</td></tr>
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">●</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif; text-align: justify">Issue 250,000 shares of WMTN common stock on or before December 31, 2014.</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The failure
to operate in accordance with the JV Agreement could result in the Company’s interest in the JV being revoked or the JV Agreement
being terminated.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">All costs related
to the JV Agreement have been recorded as exploration expenses.  The Company has not earned its 51% interest in the joint
venture and does not control the joint venture therefore, the joint venture is not consolidated in the Company’s financial
statements. At such time as the Company earns its 51% or gains control of the joint venture, it will consolidate the operations
of the joint venture. </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Amended Claims
and Lease Agreements with Ben Porterfield</b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On January 7,
2011, TMC entered into an Amended Claims Agreement with Ben Porterfield related to five mining claims known as Fish Creek 1-5 (ADL-648383
through ADL-648387), which claims have been assigned to the Terra Project. As part of this Amended Claims Agreement, Ben Porterfield
consented to certain conveyances, assignments, contributions and transfers related to this above five mining claims.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Amended
Lease Agreement, which incorporates the Lease dated March 22, 2005 and the September 27, 2010 Consent between Ben Porterfield and
AngloGold Ashanti (USA) Exploration Inc., has a term of ten years, which can be extended for an additional ten years with thirty
days written notice. The Amended Lease Agreement defines terms and conditions and requires the following minimum royalties:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="width: 4%; font: 8pt/115% Times New Roman, Times, Serif">●</td>
<td style="width: 96%; font: 8pt/115% Times New Roman, Times, Serif">Payment of $100,000 annually on March 22, 2011 (paid). </td></tr>
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt/115% Times New Roman, Times, Serif">●</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Payment of $100,000 annually on March 22, 2012 (paid) through March 22, 2015.</td></tr>
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt/115% Times New Roman, Times, Serif">●</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Payment of $125,000 annually on March 22, 2016 through the termination of the Amended Claims Agreement.</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
can terminate the Amended Lease Agreement with the payment of $875,000, less $75,000 paid during the years 2006-2011<i>. </i>The
payment maybe paid over three annual payments.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">TMC has paid
in total $300,000 to Ben Porterfield and WMTN issued 500,000 shares of WMTN restricted common stock on March 23, 2011. The common
stock was recorded as Contractual Rights at $250,000 or $.50 per share. Mr. Porterfield is to receive 200 tons of Bens Vein materials
over the next two years. The investment in the exclusive rights to the mineral properties is accounted for at cost. As of
October 31, 2012, the Company has capitalized $550,000 related to this Claims Agreement.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Amended
Claims Agreement, which incorporates the Lease dated March 22, 2005, provides for a production royalty of 4% of the net smelter
return for all minerals produced or sold. The Company may repurchase 1% of the production royalty right for $1,000,000 and an additional
1% for $3,000,000.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The failure
to operate in accordance with the Amended Claims or Lease Agreements could result in the Lease being terminated. </p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"> </p>
<p style="margin: 0pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">This summary
of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial
statements. The consolidated financial statements and notes are representations of the Company’s management, which is responsible
for their integrity and objectivity.  These accounting policies conform to accounting principles generally accepted in
the United States of America, and have been consistently applied in the preparation of the consolidated financial statements.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Accounting
Method</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company’s
consolidated financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally
accepted in the United States of America.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Principles
of Consolidation</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">These consolidated
financial statements include the Company’s consolidated financial position, results of operations, and cash flows. All material
intercompany balances and transactions have been eliminated in the accompanying consolidated financial statements.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Foreign Currency
Translation</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The consolidated
financial statements are presented in US dollars, which is the parent company’s and its subsidiary’s functional currency
and the Company’s presentation currency. Transactions in foreign currencies are initially recorded in the functional currency
at the rate in effect at the date of the transaction.  Monetary assets and liabilities denominated in foreign currencies
are retranslated at the spot rate of exchange in effect at the reporting date. All differences are taken to the consolidated statement
of operations and comprehensive loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rate at the date of the initial transaction.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Cash and
Cash Equivalents</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
classifies highly liquid temporary investments with an original maturity of three months or less when purchased as cash equivalents.
The Company maintains cash balances at various financial institutions. Balances at US banks are insured by the Federal Deposit
Insurance Corporation up to $250,000. Beginning December 31, 2010 and through December 31, 2012, all noninterest-bearing transaction
accounts are fully insured, regardless of the balance of the account, at all FDIC-insured institutions. The Company has not experienced
any losses in such accounts and believes it is not exposed to any significant risk for cash on deposit.  As of October
31, 2012, the Company had no uninsured cash amounts.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Prepaid expenses</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Prepaid expenses
were $7,017 and $238,860 as of October 31, 2012 and 2011, respectively. The prepaid expenses primarily reflect expenses that are
being amortized over the life of the service agreements.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Equipment</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Equipment consists
of machinery, furniture and fixtures and software, which are stated at cost less accumulated depreciation and amortization. Depreciation
is computed by the straight-line method over the estimated useful lives or lease period of the relevant asset, generally 3 -5 years.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Mineral Properties</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Costs of acquiring
mineral properties are capitalized by project area upon purchase of the associated claims. Costs to maintain the mineral rights
and leases are expensed as incurred.  When a property reaches the production stage, the related capitalized costs will
be amortized, using the units of production method on the basis of periodic estimates of ore reserves.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Mineral properties
are periodically assessed for impairment of value and any diminution in value.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
has access to the camp by airplane. There is no road access from camp to the project area where drilling and bulk sampling mining
occurs. It is approximately 1 1/2 miles from camp to the project area.  Power generation is by diesel generator at the camp.
Fuel is brought in for the generators by a cargo plane to the airstrip.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Long-Lived
Assets</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
reviews its long-lived assets for impairment when changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Long-lived assets under certain circumstances are reported at the lower of carrying amount or fair value. Assets
to be disposed of and assets not expected to provide any future service potential to the Company are recorded at the lower of carrying
amount or fair value (less the projected cost associated with selling the asset). To the extent carrying values exceed fair values,
an impairment loss is recognized in operating results.  As of October 31, 2012, there are no impairments recognized.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Alaska Reclamation
and Remediation Liabilities</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
operates in Alaska. The State of Alaska Department of Natural Resources requires a pool of funds from all permittees with exploration
and mining projects to cover reclamation. There is a $750 per acre disturbance reclamation bond that is required for disturbance
of 5 acres or more and/or removal of more the 50,000 cubic yards of material. The Company does not expect to exceed the minimum requirements and
is not expected to be required to file a reclamation bond until the project advances and feasibility justifies
expansion.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
expects to record reclamation bond as a liability in the period in which the Company is required to pay a reclamation bond. A corresponding
asset is also recorded and depreciated over the life of the asset. After the initial measurement of the asset retirement obligation,
the liability will be adjusted at the end of each reporting period to reflect changes in reclamation bond.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Fair Value
Measurements</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Fair value is
defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or
most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
The fair value hierarchy contains three levels as follows:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Level 1 -</i> Unadjusted
quoted prices that are available in active markets for the identical assets or liabilities at the measurement date.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Level 2 -</i> Other
observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly,
including:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 4%; line-height: 115%; font-style: italic">•</td>
<td style="width: 96%; line-height: 115%">Quoted prices for similar assets or liabilities in active markets;</td></tr>
<tr style="vertical-align: top">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: top">
<td style="line-height: 115%">•</td>
<td style="line-height: 115%">Quoted prices for identical or similar assets in nonactive markets;</td></tr>
<tr style="vertical-align: top">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: top">
<td style="line-height: 115%">•</td>
<td style="line-height: 115%">Inputs other than quoted prices that are observable for the asset or liability; and</td></tr>
<tr style="vertical-align: top">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: top">
<td style="line-height: 115%">•</td>
<td style="line-height: 115%">Inputs that are derived principally from or corroborated by other observable market data.</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Level 3 -</i> Unobservable
inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values
are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant
assumptions.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Assets and
Liabilities that are Measured at Fair Value on a Recurring Basis.</i> The Company accounts for fair value measurements in
accordance with ASC 820,<i> Fair Value Measurements and Disclosures,</i>which defines fair value, establishes a framework
for measurement and expands disclosure about fair value measurement. The fair value hierarchy requires the use of observable market
data when available. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy,
the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement
in its entirety. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety
requires judgment, including the consideration of inputs specific to the asset or liability.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Mineral Exploration
and Development Costs</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">All exploration
expenditures are expensed as incurred.  Significant property acquisition payments for active exploration properties are
capitalized.  If no minable ore body is discovered, previously capitalized costs are expensed in the period the property
is abandoned.  Expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand
the capacity of operating mines, are capitalized and amortized on a unit of production basis over proven and probable reserves.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Should a property
be abandoned, its capitalized costs are charged to operations.  The Company charges to operations the allocable portion
of capitalized costs attributable to properties abandoned.  Capitalized costs are allocated to properties sold based
on the proportion of claims sold to the claims remaining within the project area.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Provision
for Income Taxes</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Income taxes
are provided based upon the liability method of accounting. Under this approach, deferred income taxes are recorded to reflect
the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting
amounts at each year-end.  A valuation allowance is recorded against deferred tax assets if management does not believe the
Company has met the “more likely than not” standard.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Deferred income
taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amount used for income tax purposes.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Net Loss
Per Share</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Basic loss per
common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common
stock outstanding for the periods presented. Diluted net loss per share reflects the potential dilution that could occur if securities
or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock
that would then share in the income of the Company, subject to anti-dilution limitations. As of October 31, 2012, the Company had
warrants for the purchase of 11,259,491 common shares and 1,643,639 common shares related promissory notes to which were considered
but were not included in the computation of loss per share at October 31, 2012 because they would have been anti-dilutive.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">As of October
31, 2011, the Company had warrants for the purchase of 6,321,041 common shares which were not included in the computation of loss
per share at October 31, 2011 because they would have been anti-dilutive. In addition, the Company has 1,000,000 shares of common
stock to be issued over three years to International Tower Hill Ltd. which could potentially dilute future earnings per share.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Use of Estimates</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The preparation
of financial statements in conformity with accounting principles generally accepted in the United States requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Recent Accounting
Pronouncements</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In September
2011, the FASB issued guidance regarding testing goodwill for impairment.  The new guidance allows an entity the option
to make a qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair
value of the reporting unit.  The guidance is effective for annual and interim goodwill impairment tests performed for
fiscal years beginning after December 15, 2011, with early adoption permitted.  The adoption of this guidance is not
expected to have a material impact on the Company’s consolidated financial statements.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In December
2011, the FASB issued guidance that defers the effective date of the requirement to present separate line items on the income statement
for reclassification adjustments of items out of accumulated other comprehensive income (loss) into net income (loss).  The
deferral is temporary until the FASB reconsiders the operational concerns and needs of financial statement users.  The
FASB has not yet announced a timetable for its reconsideration.  The adoption of this guidance is not expected to have
a material impact on the Company’s consolidated financial statements.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">A variety of
proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory
agencies. Due to the tentative and preliminary nature of those proposed standards, management has not determined whether implementation
of such proposed standards would be material to the consolidated financial statements.</p>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"><b>THE COMPANY AND OUR BUSINESS</b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
acquired Terra Mining Corporation (“TMC”) on February 28, 2011 and accounted for the transaction as a reverse acquisition
using the purchase method of accounting, whereby TMC is deemed to be the accounting acquirer (legal acquiree) and WMTN to be the
accounting acquiree (legal acquirer). The Company’s financial statements before the date of Share Exchange are those of TMC
with the results of WMTN being consolidated from the date of Share Exchange. The equity section and earnings per share have been
retroactively restated to reflect the reverse acquisition and no goodwill has been recorded. The Company adopted TMC’s fiscal
year, which is October 31.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">WMTN is an exploration
and development stage company that explores, acquires, and develops advanced stage properties.<b> </b>The Company has a high-grade
gold system in the resource definition phase with 168,000 ounces of inferred gold which in total offers potential of 1,000,000
or more ounces that is owned by the Company’s wholly owned subsidiary, TMC. The property consists of 344 Alaska state mining
claims covering approximately 85 square miles. All Government permits and reclamation plans for continued exploration through 2014
were renewed in 2010, which is referred to as the “TMC project”.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company’s
primary activity will be to proceed with the TMC project and other mining opportunities that may present themselves from time to
time. The Company cannot guarantee that the TMC project will be successful or that any project that WMTN embarks upon will be successful.
The goal is to build our Company into a successful mineral exploration and development Company.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
has budgeted expenditures for the next twelve months of approximately $2,425,000, depending on additional financing, for general
and administrative expenses and exploration and development to implement the business plan as described below.  </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">WMTN believes
it will have to raise substantial additional capital in order to fully implement the business plan.  If economic reserves
of gold and/or other minerals are proven, additional capital will be needed to actually develop and mine those reserves. The Company
must expend $4,704,000 for a total of $9,050,000 plus option payments of $450,000 over the next two years as an “earn in”
on the TMC project to own rights to 80% of the project.  Even if economic reserves are found, if the Company is unable
to raise this capital, the Company will not be able to complete the earn-in on this project.  </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company’s
principal source of liquidity for the next several years will need to be the continued raising of capital through the issuance
of equity or debt.  WMTN plans to raise funds for each step of the project and as each step is successfully completed,
raise the capital for the next phase.  WMTN believes this will reduce the cost of capital as compared to trying to raise
all the anticipated capital at once up front.  However, since WMTN’s ability to raise additional capital will be
affected by many factors, most of which are not within the Company’s control (see “Risk Factors”), no assurance
can be given that WMTN will in fact be able to raise the additional capital as it is needed.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
may choose to scale back operations to operate at break-even with a smaller level of business activity, while adjusting overhead
depending on the availability of additional financing. In addition, the Company expects that it will need to raise additional funds
if the Company decides to pursue more rapid expansion, appropriate responses to competitive pressures, or the acquisition of complementary
businesses or technologies, or if it must respond to unanticipated events that require it to make additional investments. The Company
cannot assure that additional financing will be available when needed on favorable terms, or at all.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company’s
accountants have expressed substantial doubt about the Company’s ability to continue as a going concern as a result of its
history of net loss. The Company’s ability to achieve and maintain profitability and positive cash flow is dependent upon
our ability to successfully execute the plans to pursue the TMC project as described in this Form 10-K. The outcome of these matters
cannot be predicted at this time. These consolidated financial statements do not include any adjustments to the amounts and classifications
of assets and liabilities that might be necessary should the Company be unable to continue its business.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="margin: 0pt"></p>
9309852
23732344
7017
238860
417802
412070
1229192
1277857
88870
9791
512006
2039332
1710150
4191941
2167052
1461183
3628235
-4206384
-3171333
-7820176
-1343806
118
-1356047
50400
50400
14445
54645
900000
900000
-1343806
-863927
-2260292
-5550190
-4035260
-10080468
-5550190
-4035260
-10080468
-495018
-4035260
-5550190
-495018
-0.28
-0.32
19965241
12592922
99433
2577
102010
1265804
1265804
627507
1773200
2400707
48202
231843
-290136
-60793
-2050
-2050
145463
1121817
1430877
-3180140
-1429852
-4895711
103532
413998
517530
101252
101252
4628
15903
-203532
-517374
-732181
2183150
5000
2813150
630000
630000
400000
550000
34000
1279601
1670011
2949612
3462751
1445011
5716762
79079
-502215
88870
481
29197
29588
44670
44670
649
649
-86815
-86815
250000
400000
102500
500000
602500
100000
200000
300000
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
has incurred losses since inception, which have generated net operating loss carryforwards.  The net operating loss carryforwards
arise from both United States and Canadian sources.  </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Pretax losses
arising from domestic operations (United States) were approximately $5,795,000 for the year ended October 31, 2012.  Pretax
losses arising from foreign operations (Canada) were approximately $0, for the year ended October 31, 2012.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Pretax losses
arising from domestic operations (United States) were approximately $4,386,000 for the year ended October 31, 2011.  Pretax
losses arising from foreign operations (Canada) were approximately $144,000, for the year ended October 31, 2012.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
has non- US net operating loss carryforwards of approximately $356,000, which expire in 2020-2031 and US of approximately $10,325,000
which expire in 2020-2031. Because it is not more likely than not that sufficient tax earnings will be generated to utilize the
net operating loss carryforwards, a corresponding valuation allowance of approximately $3,510,000 and $1,522,000 was established
as of October 31, 2012 and 2011 respectively. Additionally, under the Tax Reform Act of 1986, the amounts of, and benefits
from, net operating losses may be limited in certain circumstances, including a change in control.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Section 382
of the Internal Revenue Code generally imposes an annual limitation on the amount of net operating loss carryforwards that may
be used to offset taxable income when a corporation has undergone significant changes in its stock ownership. There can be no assurance
that the Company will be able to utilize any net operating loss carryforwards in the future.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">For the year
ended October 31, 2012, the Company’s effective tax rate differs from the federal statutory rate principally due to net operating
losses and warrants issued for services.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The principal
components of the Company’s deferred tax assets at October 31, 2012 and 2011 are as follows:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">2012</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">2011</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; line-height: 115%">U.S. operations loss carry forward at statutory rate of 34%</td>
<td style="width: 1%; line-height: 115%; text-align: right"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 9%; line-height: 115%; text-align: right">3,510,454</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%; text-align: right"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 9%; line-height: 115%; text-align: right">1,491,235</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Non-U.S. operations loss carry forward at statutory rate of 20.5%</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">-</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">30,300</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%">Total</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">3,510,454</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">1,521,535</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Less Valuation Allowance</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">(3,510,454</td>
<td nowrap="nowrap" style="line-height: 115%">)</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">(1,521,535</td>
<td nowrap="nowrap" style="line-height: 115%">)</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%">Net Deferred Tax Assets</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">-</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">-</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Change in Valuation allowance</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">(3,510,454</td>
<td nowrap="nowrap" style="line-height: 115%">)</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">(1,521,535</td>
<td nowrap="nowrap" style="line-height: 115%">)</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white">A reconciliation of the United States
Federal Statutory rate to the Company’s effective tax rate for the year ended October 31, 2012 and 2011 is as follows:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">2012</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">2011</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; line-height: 115%">Federal Statutory Rate</td>
<td style="width: 1%; line-height: 115%; text-align: right"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right">-34.0</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%">%</td>
<td style="width: 1%; line-height: 115%; text-align: right"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right">-34.0</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%">%</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td colspan="4" style="line-height: 115%">Increase in Income Taxes Resulting from:</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%">    Change in Valuation allowance</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">34.0</td>
<td nowrap="nowrap" style="line-height: 115%">%</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">34.0</td>
<td nowrap="nowrap" style="line-height: 115%">%</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Effective Tax Rate</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">0.0</td>
<td nowrap="nowrap" style="line-height: 115%">%</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">0.0</td>
<td nowrap="nowrap" style="line-height: 115%">%</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
evaluates subsequent events, for the purpose of adjustment or disclosure, up through the date the financial statements are available.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Subsequent to
October 31, 2012, the following material transactions occurred:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
determined it was necessary to revise the terms of the 2012 Offering going forward in order to attract additional capital.  The
Company offered up to thirteen million three hundred and thirty three thousand and three hundred and thirty three (13,333,333)
Units of the Company at a price of Seventy-Five Cents (USD $0.75) per Unit.  Each Unit will consist of one (1) share
of the Company’s common stock together with a warrant to purchase one (1) additional share of the Company’s common
stock at an exercise price of One Dollar and Fifty Cents (USD $1.50) per share (the “<u>Revised 2012 Offering</u>”).
The warrants expire in three years from issuance and do not have registration rights. The warrants may be called by the Company
if it has registered the sale of the underlying shares with the SEC and a closing price of $4.00 or more for the Company’s
common stock has been sustained for five trading days. A notice filing under Regulation D was filed with the SEC on January 15,
2013 with regard to these stock issuances.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">As of the January
4, 2013, a total of 1,519,669 Units have been sold under the terms of the Revised 2012 Offering.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Units being
offered under the Revised 2012 Offering have terms that are more favorable to investors than the terms of the 2011 Offering and
the 2012 Offering.  Accordingly, in order to give investors in the 2011 Offering and the 2012 Offering the same benefits
being offered to investors in the Revised 2012 Offering, the Company has elected to grant to each investor in the 2011 Offering
and the 2012 Offering, without payment of any additional consideration, the following:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">For each Unit
purchased in the 2011 Offering (as adjusted) or the 2012 Offering, an investor will receive an additional 0.33 restricted share
of the Company’s common stock (rounded up to the nearest whole share);</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">For each Unit
purchased in the 2011 Offering (as adjusted) or the 2012 Offering, an investor also will receive a warrant to purchase an additional
0.33 share of common stock (rounded up to the nearest whole share); and</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The exercise
price for all such original and additional warrant shares will be set at $1.50 per share.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">As a result
of the foregoing, investors in the Company’s 2011 Offering and 2012 Offering collectively will receive a total of 628,232
additional restricted shares of the Company’s common stock and warrants to purchase a total of 628,232 additional shares
of common stock at an exercise price of $1.50 per share.</p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Prepaid expenses</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Prepaid expenses
were $7,017 and $238,860 as of October 31, 2012 and 2011, respectively. The prepaid expenses primarily reflect expenses that are
being amortized over the life of the service agreements.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Fair Value
Measurements</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Fair value is
defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or
most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
The fair value hierarchy contains three levels as follows:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Level 1 -</i> Unadjusted
quoted prices that are available in active markets for the identical assets or liabilities at the measurement date.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Level 2 -</i> Other
observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly,
including:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 4%; line-height: 115%; font-style: italic">•</td>
<td style="width: 96%; line-height: 115%">Quoted prices for similar assets or liabilities in active markets;</td></tr>
<tr style="vertical-align: top">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: top">
<td style="line-height: 115%">•</td>
<td style="line-height: 115%">Quoted prices for identical or similar assets in nonactive markets;</td></tr>
<tr style="vertical-align: top">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: top">
<td style="line-height: 115%">•</td>
<td style="line-height: 115%">Inputs other than quoted prices that are observable for the asset or liability; and</td></tr>
<tr style="vertical-align: top">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: top">
<td style="line-height: 115%">•</td>
<td style="line-height: 115%">Inputs that are derived principally from or corroborated by other observable market data.</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Level 3 -</i> Unobservable
inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values
are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant
assumptions.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Assets and
Liabilities that are Measured at Fair Value on a Recurring Basis.</i> The Company accounts for fair value measurements in
accordance with ASC 820,<i> Fair Value Measurements and Disclosures,</i>which defines fair value, establishes a framework
for measurement and expands disclosure about fair value measurement. The fair value hierarchy requires the use of observable market
data when available. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy,
the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement
in its entirety. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety
requires judgment, including the consideration of inputs specific to the asset or liability.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Provision
for Income Taxes</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Income taxes
are provided based upon the liability method of accounting. Under this approach, deferred income taxes are recorded to reflect
the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting
amounts at each year-end.  A valuation allowance is recorded against deferred tax assets if management does not believe the
Company has met the “more likely than not” standard.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Deferred income
taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amount used for income tax purposes.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">2012</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">2011</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; line-height: 115%">U.S. operations loss carry forward at statutory rate of 34%</td>
<td style="width: 1%; line-height: 115%; text-align: right"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 9%; line-height: 115%; text-align: right">3,510,454</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%; text-align: right"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 9%; line-height: 115%; text-align: right">1,491,235</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Non-U.S. operations loss carry forward at statutory rate of 20.5%</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">-</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">30,300</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%">Total</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">3,510,454</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">1,521,535</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Less Valuation Allowance</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">(3,510,454</td>
<td nowrap="nowrap" style="line-height: 115%">)</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">(1,521,535</td>
<td nowrap="nowrap" style="line-height: 115%">)</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%">Net Deferred Tax Assets</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">-</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">-</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Change in Valuation allowance</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">(3,510,454</td>
<td nowrap="nowrap" style="line-height: 115%">)</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">(1,521,535</td>
<td nowrap="nowrap" style="line-height: 115%">)</td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">2012</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">2011</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; line-height: 115%">Federal Statutory Rate</td>
<td style="width: 1%; line-height: 115%; text-align: right"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right">-34.0</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%">%</td>
<td style="width: 1%; line-height: 115%; text-align: right"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right">-34.0</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%">%</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td colspan="4" style="line-height: 115%">Increase in Income Taxes Resulting from:</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%">    Change in Valuation allowance</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">34.0</td>
<td nowrap="nowrap" style="line-height: 115%">%</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">34.0</td>
<td nowrap="nowrap" style="line-height: 115%">%</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Effective Tax Rate</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">0.0</td>
<td nowrap="nowrap" style="line-height: 115%">%</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">0.0</td>
<td nowrap="nowrap" style="line-height: 115%">%</td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="line-height: 115%; font-weight: bold; text-align: center">Years Ended October 31,</td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">Total</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 88%; line-height: 115%; text-align: center">2013</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 9%; line-height: 115%; text-align: right">384,000</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%; text-align: center">2014</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">250,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%; text-align: center">2015</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">100,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%; text-align: center">2016</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">125,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%; text-align: center">2017</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">125,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%; text-align: center">Beyond</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 115%; text-align: right">125,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%; text-align: center">Total</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">1,109,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
</table>
1109000
125000
125000
125000
100000
250000
384000
3510454
1491235
-3510454
-1521535
3510454
1521535
30300
0
0
-.34
-.34
.34
.34
550000
97800
2577
493164
458596
8828313
18450354
21382776
518179
414647
-100377
-2577
11259491
6321041
5245450
1.152
0.901
-207000
-100000
11259491
0.00
P3Y
P10Y
1.00
1.43
.02
.0325
11259491
62000
1250000
250000
3611095
1945000
1852115
2089281
200000
P1Y5M1D
P5Y
P1Y5M1D
P1Y5M1D
P1Y5M1D
P5Y
P2Y6M
P9Y
1.152
0.001
0.250
0.500
0.750
1.000
1.500
2.000
4.250
11259491
62000
1250000
250000
3611095
1945000
1852115
2089281
200000
185000
222200
686
215
221514
184785
686000
215000
114000
228
113772
228000
8828313
8828
219174
228002
500000
250000
500
249500
500000
250000
500
249500
537000
1000000
500000
1000
499000
900000
900000
2552041
1715422
1279601
1664429
2552
1715
1661877
1277886
4656000
207000
7
5581
4656
207
925
-200
295000
295000
296
294704
1265804
1265804
1.386
-0.483
-0.500
0