CAPITAL STOCK

6 Months Ended

Jan. 31, 2013

CAPITAL STOCK [Text Block]

NOTE 10: CAPITAL STOCK

Capital Stock

At January 31, 2013, the Company’s capital stock was 750,000,000 authorized common shares with a par value of $0.001 per share.

Share Transactions

	Common		Value per Share
Period / Description	Shares Issued		Low		High		Issuance Value
Balance, July 31, 2012	84,975,155
Options Exercised (1)	193,000	$	0.33	$	0.45	$	39,748
Yuty Settlement Agreement	75,000		2.54		2.54		190,500
Balance, October 31, 2012	85,243,155
Options Exercised (2)	252,298	$	0.33	$	0.45	$	1,900
Balance, January 31, 2013	85,495,453

(1)	118,750 options were exercised on a cashless basis resulting in 100,000 net shares issued.
(2)	287,866 options were exercised on a cashless basis resulting in 246,598 net shares issued.

Share Purchase Warrants

A continuity schedule of outstanding and exercisable share purchase warrants for the underlying common shares at January 31, 2013, and the changes during the period, is presented below:

	Number of			Weighted average	Weighted average remaining
	Warrants			exercise price	contractual term (years)
Balance, July 31, 2012	1,558,812		$	4.95	1.45
Expired	(888,687	)		6.76	-
Balance, January 31, 2013	670,125		$	2.56	2.46

Stock Options

At January 31, 2013, the Company had two Stock Option Plans as follows:

• 2006 Stock Option Plan: The number of common shares available for issuance under this plan is 10,000,000 shares; and
• 2009 Stock Option Plan: The number of common shares available for issuance under this plan is 7,000,000 shares.

A summary of stock option grants under the Company’s Stock Option Plans, including their fair values calculated using the Black Scholes pricing model, for the three and six months ended January 31, 2013 is presented below:

	Options		Exercise	Term			Expected	Risk-Free	Dividend	Expected
Date / Period	Issued		Price	(Years)		Fair Value	Life (Years)	Interest Rate	Yield	Volatility
January 15, 2013	130,000	$	2.41	10	$	179,608	4	0.55%	0.00%	71.13%
Three and six months ended January 31, 2013	130,000				$	179,608

The weighted average grant date fair value per stock option granted during the three and six months ended January 31, 2013 was $1.38.

A continuity schedule of outstanding stock options for the underlying common shares at January 31, 2013, and the changes during the three and six month periods, is presented below:

	Number of Stock			Weighted Average	Weighted Average
	Options			Exercise Price	Remaining Contractual
					Term (Years)
Balance, July 31, 2012	9,559,271		$	1.95	6.52
Exercised	(211,750	)		0.37	3.99
Balance, October 31, 2012	9,347,521		$	1.99	6.33
Issued	130,000			2.41	10.00
Exercised	(293,566	)		0.37	3.23
Forfeited	(93,000	)		2.80	8.27
Expired	(38,773	)		3.59	-
Balance, January 31, 2013	9,052,182		$	2.03	6.23

Effective March 30, 2012, in connection with the acquisition of Cue and in exchange for equivalent Cue securities, the Company issued stock options to purchase 48,748 common shares and broker options to purchase 38,773 common shares. These stock options and broker options were not issued pursuant to and are not subject to the terms and conditions of the Company’s Stock Option Plans. During the three months ended January 31, 2013, broker options to purchase 38,773 common shares expired without exercise. At January 31, 2013, stock options to purchase 48,748 common shares remained outstanding and are included in the above continuity schedule of outstanding stock options.

The aggregate intrinsic value under the provisions of ASC 718 of all outstanding options at January 31, 2013 was estimated at $5,160,112 (vested: $5,160,112 and unvested: $Nil).

As at January 31, 2013, unrecognized compensation cost related to non-vested stock options granted under the Company’s Stock Option Plans was $489,017, which is expected to be recognized over 1.32 years.

A summary of options outstanding and exercisable at January 31, 2013 is presented below:

	Options Outstanding			Options Exercisable
Range of Exercise Prices	Outstanding at		Weighted Average	Exercisable at		Weighted Average
	January 31, 2013		Exercise Price	January 31, 2013		Exercise Price
$0.33 to $0.70	2,729,684	$	0.41	2,729,684	$	0.41
$0.71 to $2.45	3,826,250		2.37	3,676,250		2.37
$2.46 to $23.08	2,496,248		3.28	2,177,084		3.32
	9,052,182	$	2.03	8,583,018	$	1.99

Stock-Based Compensation

A summary of stock-based compensation expense for the three and six months ended January 31, 2013 and 2012 is presented below:

		Three Months Ended January 31,						Six Months Ended January 31,
		2013			2012			2013			2012
Stock-Based Consulting Fees
Common stock issued for Yuty Settlement Agreement	$	-		$	-		$	190,500		$	-
Common stock issued for consulting services		-			30,200			-			62,600
Options issued to consultants		170,011			334,581			270,488			576,215
		170,011			364,781			460,988			638,815
Stock-Based Management Fees
Options issued to management		-			-			-			834,219
		-			-			-			834,219
Stock-Based Wages and Benefits
Options issued to employees		125,785			310,818			268,452			839,290
		125,785			310,818			268,452			839,290
Stock-based compensation charged to inventory		(21,724	)		(607	)		(42,089	)		(131,012	)
	$	274,072		$	674,992		$	687,351		$	2,181,312