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&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;During the nine months ended May 31,
2013, Richard Genovese, a Director of the Company (&amp;#34;Genovese&amp;#34;), converted $661,000 of debt owed to him into 6,610,000
common shares at a conversion price per share of $0.10.&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;During the nine months ended May 31,
2013, Janst Limited, an affiliate of the Company (&amp;#147;Janst&amp;#148;), entered into a subscription agreement to purchase 5,714,287
shares of our common stock at $0.07 per share for an aggregate investment in the Company of $400,000.&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;As of May 31, 2013 and August&amp;#160;31,
2012, the amount due Genovese was $461,510 and $661,510 respectively. The advances are non-interest bearing.&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;As of May 31, 2013 and August&amp;#160;31,
2012, the amount due Clayoquot Wilderness Resort, a company which Genovese is a principal, was $100,000 and $-0-, respectively.&amp;#160;&amp;#160;The
advance is non-interest bearing.&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;During the nine months ended May 31,
2013, Richard Genovese exercised 2,000,000 warrants at $0.15 for an aggregate amount of $300,000.&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;During the nine months ended May 31,
2013, Janspec Holdings Limited and affiliated companies, a shareholder of the Company, made advances to the Company of $792,000,
evidenced by one year 10% notes of the Company, due December 23, 2013 through May 30, 2014.&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

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