Financial Services, Brokers and Dealers

3 Months Ended

Jun. 30, 2012

Brokers and Dealers Disclosure [Text Block]

NOTE 11 - BROKER AND SHARE PURCHASE WARRANTS

In conjunction with the issuance of the $1,500,000 convertible debentures described in Note 7 on December 14, 2009, 166,000 warrants were issued for services provided in execution of the debentures. As discussed in Note 6, the share purchase and broker warrants are also treated as derivatives. The warrants were valued at $104,580 using the Black-Scholes option pricing model with the following assumptions: risk free interest rate of 1.70%, volatility of 165.4%, exercise price of $0.45, current market price of $0.63 per share and an expected life of 3.5 years. The warrants expire June 14, 2013.

In conjunction with the issuance of the $500,000 convertible debentures on or about October 26, 2010, described in Note 7, 55,335 warrants were issued for services provided in execution of the debentures. The warrants were valued at $8,854 using the Black-Scholes option pricing model with the following assumptions: risk free interest rate of 0.59%, volatility of 159.6%, exercise price of $0.18, current market price of $0.16 per share and an expected life of 3.5 years. The warrants expire April 26, 2014.

The fair value of the broker warrants were expensed as financing costs.

A summary of the Company's share purchase and broker warrants outstanding at June 30, 2012 is presented as follows:

		Broker warrants		Broker warrant exercise price		Share purchase warrants		Warrant exercise price
Balance outstanding, September 30, 2010			166,000		$0.45		2,000,000		$0.45
	Granted		55,335		$0.18		2,777,778		$0.18
	Exercised		-				-
	Forfeited		-				-
Balance outstanding, September 30, 2011			221,335		$0.12 ⁽¹⁾		4,777,778		$0.12⁽¹⁾
	Granted		-				-
	Exercised		-				-
	Forfeited		-				-
Balance outstanding, June 30, 2012			221,335		$0.05⁽¹⁾		4,777,778		$0.05⁽¹⁾

⁽¹⁾ Provisions allow for a reduction in exercise price based on equity issuances subsequent to warrant issuance. See Notes 6 and 7.

The Company entered into a Modification Agreement with holders of debentures discussed in Note 7. The Exercise Price of the warrants issued in the 2010 transaction is reduced to five cents ($0.05) per share effective January 9, 2012.

- Definition

The entire disclosure for financial services, specifically for brokers and dealers, for the accounting period and at the balance sheet date. Disclosure may include amounts receivable from and payable to broker-dealers and clearing organizations, including securities failed to receive, deposits received for securities loaned, amounts payable to clearing organizations related to open transactions, floor brokerage payables and payables for commodities futures accounts liquidating to an equity balance on a broker-dealer's records. May also include disclosure on company's consolidation policy and a note indicating the amount of the broker-dealer's actual net capital and the amount of required net capital.

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