OPTIONS AND WARRANTS (Tables)

12 Months Ended

Aug. 31, 2012

Notes to Financial Statements

Summary of stock option awarded

The following table summarizes the changes in options outstanding and the related prices for the shares of the Company’s common stock issued to employees and non-employees of the Company. These options were granted in lieu of cash compensation for services performed.

	Shares		Weighted Average Exercise Price
Outstanding, September 1, 2008		230,000	$	9.70
Granted		15,000		7.10
Expired/Cancelled		-		-
Exercised		-		-
Outstanding, year ended August 31, 2009		245,000		9.50
Granted		-		-
Expired/Cancelled		(200,000)		-
Exercised		-		-
Outstanding, year ended August 31, 2010		45,000		7.70
Granted		-		-
Expired/Cancelled		(20,000)		-
Exercised		-		-
Outstanding, year ended August 31, 2011		25,000	$	7.86

Granted	-		-
Expired/Cancelled	(25,000)		7.86
Exercised	-		-
Outstanding, period ended August 31, 2012	-0-	$	-0-
Exercisable at August 31, 2012	-0-	$	-0-

Summary of stock warrant awarded

	Warrants			Weighted Average Exercise Price
Outstanding, September 1, 2008		100,000		$	2.00
Granted		17,500,000			0.15
Expired/Cancelled		-			-
Exercised		-			-
Granted		37,500			3.00
Outstanding, year ended August 31, 2009		17,637,500			0.17
Expired/Cancelled		-			-
Exercised		-			-
Granted		1,000,002			0.60
Outstanding, year ended August 31, 2010		18,637,502			0.19
Granted		14,440,625			0.20
Expired/Cancelled		(37,500	)		3.00
Outstanding, September 1, 2011		33,040,627		$	0.19
Granted		400,000		$	0.25
Expired/Cancelled		(1,000,002	)	$	0.60
Exercised
Outstanding, period ended August 31, 2012		32,440,625		$	0.18
Exercisable, period ended August 31, 2012		32,440,625		$	0.18

Summary of stock warrant

	Warrants Outstanding						Warrants Exercisable
Year	Exercise  Price		Number of  Warrants Issued		Weighted Average Contractual Life (Years)		Number Exercisable		Weighted Average Exercise Price
2008	$	2.00		100,000		0.65		100,000		2.00
2009		0.15		*10,000,000		0.42		10,000,000		0.15
2009		0.15		*2,500,000		0.48		2,500,000		0.15
2009		0.15		*500,000		0.50		500,000		0.15
2009		0.15		*1,700,000		0.64		1,700,000		0.15
2009		0.15		*150,000		0.66		150,000		0.15
2009		0.15		*50,000		0.68		50,000		0.15
2009		0.15		*50,000		0.70		50,000		0.15
2009		0.15		*500,000		0.97		500,000		0.15
2009		0.15		*2,050,000		0.97		2,050,000		0.15
2011		0.30		6,600,625		3.25		6,600,625		0.30
2011		0.30		500,000		3.35		500,000		0.30
2011		0.10		6,840,000		3.75		6,840,000		0.10
2011		0.10		500,000		3.86		500,000		0.10
2012		0.25		400,000		4.21		400,000		0.25
Total				32,440,625				32,440,625

Common stock equivalents

The following table sets forth common stock equivalents (potential common stock) for the years ended August 31, 2012 and 2011 that are not included in the loss per share calculation above because their effect would be anti-dilutive for the periods indicated:

	For the Years Ended  August 31,
	2012		2011
Plan Stock Options		-0-		25,000
Warrants		32,440,625		33,040,627
Convertible notes		-		-