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STOCK OPTIONS AND WARRANTS
 12 Months Ended
Aug. 31, 2015
STOCK OPTIONS AND WARRANTS [Text Block]
10.

STOCK OPTIONS AND WARRANTS

   
 

Stock Options

   
 

On July 15, 2014, the shareholders approved and adopted at the Annual General Meeting the Company’s 2014 Stock Option Plan. On April 14, 2011, the shareholders approved and adopted at the Annual General Meeting to consolidate the Company’s 2007 Equity compensation plan and the Company’s 2010 Equity Compensation Plan into a new Company 2011 Stock Option Plan. The purpose of these Plans is to advance the interests of the Corporation, through the grant of Options, by providing an incentive mechanism to foster the interest of eligible persons in the success of the Corporation and its affiliates; encouraging eligible persons to remain with the Corporation or its affiliates; and attracting new Directors, Officers, Employees and Consultants.
   
 

On November 3, 2014 the Company granted 2,100,000 stock options to directors, officers, and consultant of the Company with an exercise price of $0.10 vested immediately, expiring November 3, 2019.

   
 

On November 18, 2014, the Company granted 100,000 stock options to consultant of the Company with an exercise price of $0.10 vested immediately, expiring November 18, 2019.

   
 

For the year ended August 31, 2015, the Company recorded $177,595 (August 31, 2014 – $673,886) stock based compensation expenses which has been included in consulting fees.

   
 

A summary of the changes in stock options for the years ended August 31, 2015 and 2014 are presented below:
   
          Options Outstanding     
          Weighted Average  
    Number of Shares     Exercise Price  
Balance, August 31, 2014   3,655,000   $ 0.30  
Cancelled   (1,200,000 )   0.10 – 0.86  
Expired   (700,000 )   0.10  
Granted   2,200,000     0.10  
Balance, August 31, 2015   3,955,000   $ 0.20  

The fair value of options granted has been estimated as of the date of the grant by using the Black-Scholes option pricing model with the following assumptions:

    August 31, 2015     August 31, 2014  
Expected volatility   216% - 219%     204% - 219%  
Risk-free interest rate   1.63% - 1.79%     1.33% - 1.79%  
Expected life   5.00 years     5.00 years  
Dividend yield   0.00%     0.00%  
Estimated fair value per option $ 0.06 - $0.07   $ 0.05 - $0.69  

The Company has the following options outstanding and exercisable.

August 31, 2015         Options outstanding           Options exercisable        
          Remaining           Number        
    Number     contractual     Exercise     of shares     Exercise  
Exercise prices   of shares     life     price     exercisable     Price  
$0.10   100,000     4.22 years   $ 0.10     100,000   $ 0.10  
$0.10   1,600,000     4.18 years   $ 0.10     1,600,000   $ 0.10  
$0.50   50,000     3.60 years   $ 0.50     50,000   $ 0.50  
$0.70   500,000     3.57 years   $ 0.70     500,000   $ 0.70  
$0.35   50,000     3.43 years   $ 0.35     50,000   $ 0.35  
$0.16   250,000     3.37 years   $ 0.16     250,000   $ 0.16  
$0.06   550,000     3.18 years   $ 0.06     550,000   $ 0.06  
$0.15   555,000     0.45 years   $ 0.15     555,000   $ 0.15  
$0.15   150,000     0.52 years   $ 0.15     150,000   $ 0.15  
$0.20   100,000     0.19 years   $ 0.20     100,000 *   $ 0.20  
$0.25   50,000     0.75 years   $ 0.25     50,000   $ 0.25  
                               
    3,955,000     3.09 years   $ 0.20     3,955,000   $ 0.20  

* These options expired without exercising subsequent to yearend.

August 31, 2014         Options outstanding           Options exercisable        
          Remaining           Number        
    Number     contractual     Exercise     of shares     Exercise  
Exercise prices   of shares     life     price     exercisable     Price  
$0.50   50,000     4.60 years   $ 0.50     50,000   $ 0.50  
$0.72   100,000     4.59 years   $ 0.72     100,000   $ 0.72  
$0.86   200,000     4.58 years   $ 0.86     200,000   $ 0.86  
$0.70   500,000     4.57 years   $ 0.70     250,000   $ 0.70  
$0.68   200,000     4.53 years   $ 0.68     100,000   $ 0.68  
$0.35   50,000     4.43 years   $ 0.35     50,000   $ 0.35  
$0.16   250,000     4.37 years   $ 0.16     250,000   $ 0.16  
$0.075   50,000     4.34 years   $ 0.075     50,000   $ 0.075  
$0.06   550,000     4.18 years   $ 0.06     550,000   $ 0.06  
$0.10   300,000     0.14 years   $ 0.10     300,000   $ 0.10  
$0.10   400,000     0.33 years   $ 0.10     400,000   $ 0.10  
$0.15   555,000     1.45 years   $ 0.15     555,000   $ 0.15  
$0.15   150,000     1.52 years   $ 0.15     150,000   $ 0.15  
$0.15   150,000     2.55 years   $ 0.15     150,000   $ 0.15  
$0.20   100,000     1.19 years   $ 0.20     100,000   $ 0.20  
$0.25   50,000     1.75 years   $ 0.25     50,000   $ 0.25  
                               
    3,655,000     2.85 years   $ 0.30     3,305,000   $ 0.30  

Warrants

As at August 31, 2015, the Company has 15,435,085 warrants issued and outstanding. A summary of warrants as at August 31, 2015 and 2014 is as follows:

          Warrant Outstanding  
          Weighted Average  
    Number of warrant     Exercise Price  
Balance, August 31, 2014   13,606,245   $ 0.14  
Granted   2,424,840     0.10  
Expired   (596,000 )   0.20  
Balance, August 31, 2015   15,435,085   $ 0.14  

Number   Exercise     Expiry  
Outstanding 1   Price     Date  
             
278,275 $ 0.20     September 28, 2015 2  
430,670 $ 0.20     November 15, 2015 2  
1,468,000 $ 0.10     November 26, 2016  
1,438,800 $ 0.10     December 23, 2016  
2,167,160 $ 0.15     January 31, 2016  
7,227,340 $ 0.15     February 13, 2016  
1,787,640 $ 0.10 and $0.15 after 24 months     January 30, 2018  
637,200 $ 0.10 and $0.15 after 24 months     March 12, 2018  
15,435,085            

  1.

Each warrant entitles a holder to purchase one common share.
  2.

These warrants expired without exercising subsequent to yearend.