Financial Services, Brokers and Dealers

3 Months Ended

Dec. 31, 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, 166,000 warrants were issued for services provided in execution of the debentures. As discussed in Note 8, the share purchase and broker warrants are 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.

As discussed in Note 8, 1,000,000 warrants were issued to an investment banking advisor for services rendered. The warrants contained anti-dilution provisions which call for the warrant exercise price to be reduced based on future issues of debt or equity with more favorable provisions. Therefore, based on current guidance, the warrants were treated as derivatives. The warrants were valued at $59,200 using the Black-Scholes option pricing model with the following assumptions: risk free interest rate of 0.81%, volatility of 158.4%, exercise price of $0.06, current market price of $0.06 per share and an expected life of 5 years. The warrants expire February 15, 2017.

A summary of the Company's share purchase and broker warrants outstanding at December 31, 2012 is presented as follows:

		Broker warrants		Broker warrant exercise price		Share purchase warrants		Warrant exercise price
Balance outstanding, September 30, 2011			221,335		$0.12 ⁽¹⁾		4,777,778		$0.12⁽¹⁾
	Forfeited
	Exercised
	Granted
Balance outstanding, September 30, 2012			221,335		$0.05 ⁽¹⁾		4,777,778		$0.05⁽¹⁾
	Forfeited		-		-		-
	Exercised		-		-		-
	Granted		1,000,000		$0.06		-
Balance outstanding, December 31, 2012			1,221,335		$0.05 ⁽²⁾		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 8 and 9.

⁽²⁾ Weighted average exercise price.

- 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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