The Company has adopted a stock option and award plan to attract, retain and motivate its directors, officers, employees, consultants and advisors. Options provide the opportunity to acquire a proprietary interest in the Company and to benefit from its growth. Vesting terms and conditions are determined by the Board of Directors at the time of the grant. The Plan provides for the issuance of up to 10,000,000 common shares for employees, consultants, directors, and advisors.

A summary of changes in employee stock options during the period ended June 30, 2012 is as follows:

	Stock Options		Weighted Average Exercise Price
Outstanding, December 31, 2011		3,000,000	$	1.00
Issued		0		0
Exercised		0		0
Expired		0		0
Outstanding, June 30, 2012		3,000,000	$	1.00

As of June 30, 2012, the Company had incentive stock options issued and outstanding to employees as follows:

Stock Options		Exercise Price		Expiry Date
	1,000,000	$	1.00	10/20/20
	2,000,000	$	1.00	10/21/20
	3,000,000

Because the Company’s stock-based compensation options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the estimate, amounts estimated using the Black-Scholes option pricing model may differ materially from the actual fair value of the Company’s stock-based compensation options.

Stock option expense recognized in net earnings amounted to $226,914 and nil for the periods ended June 30, 2012 and 2011 respectively. As of June 30, 2012, there was $1,438,632 of unrecognized compensation expense related to non-vested share awards that we expect to recognize over a weighted average period of 3.67 years.