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sdev
Security Devices International Inc.
2016-11-30
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<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">1.</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">BASIS OF PRESENTATION</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">The Company was incorporated under the laws of the state of Delaware on March 1, 2005. On February 3, 2014 the Company incorporated a wholly owned subsidiary in Canada “Security Devices International Canada Corp”. The consolidated financial statements for the year ended November 30, 2016 include the accounts of Security Devices International, Inc. (the “Company” or “SDI”), and its subsidiary Security Devices International Canada Corp. All material inter-company accounts and transactions have been eliminated.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">2.</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">NATURE OF OPERATIONS AND GOING CONCERN</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">The Company is a less-lethal defense technology company, specializing in the innovative next generation solutions for security situations that do not require the use of lethal force. SDI has implemented manufacturing partnerships to assist in the deployment of their patented and patent pending family of products. These products consist of the current manufacture of Blunt Impact Projectile 40mm (BIP) line of products, and the future Wireless Electric Projectile 40mm (WEP).</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year.</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">The Company’s activities are subject to risk and uncertainties including-</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">The Company has not earned adequate revenue and has used cash in its operations. Therefore the company will need additional financing to continue its operations if it is unable to generate substantial revenue growth.</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The Company has incurred a cumulative loss of $28,298,613
from inception to November 30, 2016. The Company has funded operations through the issuance of capital stock and convertible debentures. The company has started to generate revenue from operations. However, it still expects to incur significant expenses before becoming profitable. The Company’s future success is dependent upon its ability to raise sufficient capital or generate adequate revenue, to cover its ongoing operating expenses, and also to continue to develop and be able to profitably market its products. There can be no assurance that such financing will be available at all or on favorable terms. These factors raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
In addition to raising funds in the prior years, the Company raised $878,328
by issue of Convertible Debentures during the year ended November 30, 2011 and $910,000
during the year ended November 30, 2012. In addition, the Company raised $649,750
by issuance of
2,165,834
common shares during the year ended November 30, 2012. On August 15, 2013, the Company filed an amended and restated final prospectus (the “Prospectus”) in Canada, in the provinces of Alberta, British Columbia and Ontario for listing its shares in these provinces in Canada. On August 27, 2013 the Company completed an initial public offering to raise gross proceeds of CAD $3,993,980
(US $3,794,280) through the issuance of
9,984,950
Common Shares at a price of CAD $0.40
(US $0.38) per Common Share (the “Issue Price”). During the year ended November 30, 2014, the Company issued $1,398,592
(CAD $1,549,000) face value
12% convertible debentures with a term to August 6, 2017 (the “Maturity Date”) and raised net $1,241,299. In 2015, the Company raised $2,500,000
through the issuance of
7,575,757
common shares and also issued
105,600
common shares on exercise of warrants for $16,775
and
35,000
common shares on exercise of options for $6,995. Subsequent to the year the Company raised an additional gross $1,500,000
through the issuance of convertible debentures.
</p>
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<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">3.</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">a)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Use of Estimates</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, and reported amount of revenues and expenses. Significant estimates include accruals, valuation allowance for deferred tax assets, estimates for calculation of stock based compensation, estimating the useful life of its plant and equipment and accounting for conversion features on convertible debt transactions. These estimates are based on management’s best estimates and judgment. Management will adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with certainty, actual results could differ significantly from these estimates.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">b)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Income Taxes</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10- 25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740- 10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets is not more than likely. The Company did not incur any material impact to its financial condition or results of operations due to the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">c)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Revenue Recognition</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The Company records revenue when it is realized, or realizable and earned. The Company considers revenue to be realized, or realizable and earned, when the following revenue recognition requirements are met: persuasive evidence of an arrangement exists; the products have been delivered to the customer; the sales price is fixed or determinable; and collectability is reasonably assured.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">d)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Loss Per Share</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the year. Diluted loss per share is computed by dividing net loss by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each year. There were no common equivalent shares outstanding at November 30, 2016 and 2015 that have been included in dilutive loss per share calculation as the effects would have been anti-dilutive. At November 30, 2016, there were
4,625,000
options and
2,484,650
warrants outstanding, which were convertible into equal number of common shares of the Company. At November 30, 2015, there were
4,750,000
options and
2,767,800
warrants outstanding, which were convertible into equal number of common shares of the Company.
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">e)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Stock-Based Compensation</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">All awards granted to employees and non-employees after November 30, 2006 are valued at fair value by using the Black-Scholes option pricing model and recognized on a straight line basis over the service periods of each award. The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees using the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">If there is a modification of the terms of an award, either by repricing or extending the expiry of the award, the award is re-measured. If the modification results in an increase in the fair value of the new award as compared to the old award immediately prior to the modification, the excess fair value is recognized as compensation expense.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">f)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Foreign Currency</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The parent Company maintains its books and records in U.S. dollars which is its functional and reporting currency. The Company’s operating subsidiary is a foreign private company and maintains its books and records in Canadian dollars (the functional currency). The subsidiary’s financial statements are converted to US dollars for consolidation purposes. The translation method used is the current rate method. Under the current rate method all assets and liabilities are translated at the current rate, stockholders’ equity accounts are translated at historical rates and revenues and expenses are translated at average rates for the year. The resulting translation adjustment has been included in Accumulated Other Comprehensive Income (Loss).</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">g)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Comprehensive loss</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Comprehensive loss includes all changes in equity (net assets) during a period from non- owner sources. Items included in comprehensive loss, which are excluded from net loss, include foreign currency translation adjustments relating to its Canadian subsidiary.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">h)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Financial Instruments</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The carrying amount of accounts and other receivable and accounts payable, approximated their fair value because of the relatively short maturity of these instruments. The Company determines fair value based on its accounting policy fair value measurement i.e. exit price that would be recovered for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Company does not use derivative financial instruments such as forwards to hedge foreign currency exposures.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">i)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Fair Value Measurement</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The Company follows ASC 820-10, “Fair Value Measurements and Disclosures” (ASC 820-10), which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:</p>
<p align="justify" style="margin-left: 15%; font-family: times new roman,times,serif; font-size: 10pt;">
<b>•</b>
Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
</p>
<p align="justify" style="margin-left: 15%; font-family: times new roman,times,serif; font-size: 10pt;">
<b>•</b>
Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.
</p>
<p align="justify" style="margin-left: 15%; font-family: times new roman,times,serif; font-size: 10pt;">
<b>•</b>
Level 3—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Assets and liabilities measured at fair value as of November 30, 2016 and 2015 are classified below based on the three fair value hierarchy tiers described above:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
<u>Carrying</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
<u>Fair Value</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
<u>Value</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="12%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">November 30, 2016:</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" valign="bottom">Cash</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
192,826
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
192,826
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Accounts receivable</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
32,534
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
32,534
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" valign="bottom">Accounts payable and accrued liabilities</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
245,911
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
245,911
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Convertible debentures</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,153,540
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,153,540
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
<u>Carrying</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
<u>Fair Value</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
<u>Value</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">(Restated)</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">(Restated)</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">November 30, 2015:</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">(See Note 17)</td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">(See Note 17)</td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" valign="bottom">Cash</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
1,851,021
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
1,851,021
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Accounts receivable</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
39,676
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
39,676
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" valign="bottom">Accounts payable and accrued liabilities</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
173,329
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
173,329
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Convertible debentures</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,161,750
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,161,750
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Cash has been measured using Level 1 of the Fair Value Hierarchy</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The carrying values of cash, accounts receivable, accounts payable and accrued liabilities and convertible debentures approximate their fair values because of the short-term nature of these instruments.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">j)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Convertible debt instruments</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
The Company accounts for convertible debt instruments when the Company has determined that the embedded conversion options should not be bifurcated from their host instruments in accordance with ASC 470-20
<i>Debt with Conversion and Other Options</i>
. The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. The Company amortizes the respective debt discount over the term of the notes, using the straight-line method, which approximates the effective interest method. The Company records, when necessary, induced conversion expense, at the time of conversion for the difference between the reduced conversion price per share and the original conversion price per share.
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">k)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Intellectual Property</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Five patent applications, four non-provisional and one provisional, have been filed by the Company with the U.S. Patent Office. The Patents have been granted on the four non-provisional patents.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Non-Provisional (granted patents):</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">(a) Less-lethal Projectile: This issued patent relates to the Company’s distinctive collapsible ammunition head technology that absorbs kinetic energy of the projectile upon impact. The Corporation’s collapsible head is used in both the BIP and the WEP.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">(b) Electronic Circuitry for Incapacitating a Living Target: This issued patent relates to the electronic circuitry incapacitation system which forms part of the WEP. The patent describes an electronic circuit which provides an electrical incapacitation current to a living target.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">(c) Less-lethal Wireless Stun Projectile System for Immobilizing a Target by Neuro-Muscular Disruption: This issued patent describes the process by which the WEP operates with its attachment system to halt a target through a neuro-muscular-disruption system.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">(d) Autonomous Operation of a Less-lethal Projectile: This patent describes a motion sensing system within the WEP. The sensor will monitor movement of the target and enable the electrical output until the target is subdued. The electrical pulse is programmed for an exact time-frame to specifications of the user.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Provisional Patent:</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">(e) Payload carrying arrangement for a non-lethal projectile: This Provisional patent relates to the process of carrying liquid and powder payloads in the head of the BIP munitions that upon impact release from the head and are dispersed upon the target.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The Company’s policy has been to write off cost incurred in connection with non-provisional and provisional patent costs as they are incurred as a recoverability of such expenditure is uncertain.</p>
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<tr>
<td width="5%"> </td>
<td valign="top" width="5%">l)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Property and Equipment</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Property and equipment are recorded at cost less accumulated depreciation. Depreciation is provided commencing in the month following acquisition using the following annual rate and method:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">Computer equipment</td>
<td align="left" bgcolor="#e6efff" width="50%">
30% declining balance method
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">Furniture and fixtures</td>
<td align="left" width="50%">
30% declining balance method
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">Leasehold Improvements</td>
<td align="left" bgcolor="#e6efff" width="50%">straight line over period of lease</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">Moulds</td>
<td align="left" width="50%">
20% Straight line over
5
years
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">m)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Impairment of Long-lived Assets</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset group over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">n)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Inventories</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Inventories comprise primarily of Blunt Impact Projectiles (Finished goods) and are valued at the lower of cost and net realizable value with cost being determined on the first-in, first-out basis. Costs consist of sub contracted manufacturing costs.</p>
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<tr>
<td width="5%"> </td>
<td valign="top" width="5%">o)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Consolidation</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">These consolidated financial statements include the accounts of Security Devices International Inc. and entities it controls. Control exists when SDI has the power, directly or indirectly, to govern the financial and operating policies of an entity/arrangement to obtain benefit from its activities. In assessing control, potential voting rights that currently are exercisable are considered. The financial statement of subsidiaries is included in the consolidated financial statements from the date that control commences until the date that control ceases. These consolidated financial statements include the results of SDI and its wholly-owned subsidiary, Security Devices International Canada Corp.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">p)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Recent Accounting Pronouncements</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">In January 2015, the FASB issued ASU No. 2015-01, "Income Statement - Extraordinary and Unusual Items (Subtopic 225-20) Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items" (ASU 2015-01). The amendments in ASU 2015-01 eliminate the GAAP concept of extraordinary items and no longer requires that transactions that met the criteria for classification as extraordinary items be separately classified and reported in the financial statements. ASU 2015-01 retains the presentation and disclosure guidance for items that are unusual in nature or occur infrequently and expands them to include items that are both unusual in nature and infrequently occurring. ASU 2015-01 will become effective in fiscal 2017. The Company is in the process of evaluating the amendments to determine if they have a material impact on the Company’s financial position, results of operations or cash flow.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">In February, 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU No. 2015-02 provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). ASU No. 2015-02 is effective for periods beginning after December 15, 2015, with early adoption permitted. The Company is in the process of evaluating the amendments to determine if they have a material impact on the Company’s financial position, results of operations or cash flow.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. ASU No. 2015-03 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 with early adoption permitted. The Company is in the process of evaluating the amendments to determine if they have a material impact on the Company’s financial position, results of operations or cash flow.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes,” as part of its simplification initiative. Under the ASU, organizations that present a classified balance sheet are required to classify all deferred taxes as noncurrent assets or noncurrent liabilities. ASU No. 2015-17 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company is in the process of evaluating the amendments to determine if they have a material impact on the Company’s financial position, results of operations or cash flow.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">In January 2016, the FASB issued ASU 2016-01, which makes limited amendments to the guidance in U.S. GAAP on the classification and measurement of financial instruments. The new standard significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. ASU No. 2016-01 is effective for fiscal years beginning after December 15, 2017, and interim periods within those annual periods. The Company is in the process of evaluating the amendments to determine if they have a material impact on the Company’s financial position, results of operations or cash flow.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
In February 2016, the FASB issued ASU 2016-02,
<i>Leases (Topic 842)</i>
(ASU 2016-02). The FASB issued the update to require the recognition of lease assets and liabilities on the balance sheet of lessees. ASU 2016-02is effective for fiscal years beginning after December 15, 2018. ASU 2016-02 requires a modified retrospective transition method with the option to elect a package of practical expedients. Early adoption is permitted. The Company is evaluating the effect that ASU 2016-02 will have on its financial statements and related disclosures.
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
In March 2016, the FASB issued ASU 2016-08,
<i>Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)</i>
(ASU 2016-08). The FASB issued the amendment to clarify the implementation guidance on principal versus agent considerations. The effective date and transition requirements for the amendments in this update is for annual reporting period beginning after December 15, 2017. The Company is evaluating the effect that ASU 2016-08 will have on its financial statements and related disclosures.
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
In March 2016, the FASB issued ASU 2016-09,
<i>Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting</i>
(ASU 2016-09). The FASB issued the amendment to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. ASU 2016-09 is effective for the Company for annual periods beginning after December 15, 2016, with early adoption permitted. The adoption of ASU 2016-09 is not expected to have a material impact on the financial statements of the Company.
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
In April 2016, the FASB issued ASU 2016-10,
<i>Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing</i>
(ASU 2016-10). The FASB issued the amendment to clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. The effective date and transition requirements for the amendments in this update is for annual reporting periods beginning after December 15, 2017. The Company is evaluating the effect that ASU 2016-10 will have on its financial statements and related disclosures.
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
In May 2016, the FASB issued ASU 2016-12,
<i>Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients</i>
(ASU 2016-12). The FASB issued the amendment to improve Topic 606 by reducing the potential for diversity in practice at initial application and reducing the cost and complexity of applying Topic 606 both at transition and on an ongoing basis. The effective date and transition requirements for the amendments in this update are the same as the effective date and transition requirements of ASU 2014-09. The Company is evaluating the effect that ASU 2016-12 will have on its financial statements and related disclosures.
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
In June 2016, the FASB issued ASU 2016-13,
<i>Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments</i>
(ASU 2016-13). The FASB issued the amendment to require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The updates will be effective for the Company for fiscal years beginning after December 15, 2019. The Company is evaluating the effect that ASU 2016-13 will have on its financial statements and related disclosures.
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments" (ASU 2016-15. The new guidance clarifies eight cash flow classification issues where current GAAP was either unclear or has no specific guidance. The new standard is effective for annual reporting periods beginning after December 15, 2017 and interim periods within those fiscal years. All entities may elect to early adopt ASU 2016-15 in any interim period. If an entity early adopts it must adopt all eight of the amendments in the same period and if early adopted in an interim period any adjustments should be reflected as of the beginning of the year. The amendments in ASU 2016-15 will be applied using the modified retrospective transition method for each period presented. The Company is evaluating the impact the adoption of this guidance will have on the classification of certain items on its consolidated statements of cash flows.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">In January 2017, the FASB issued ASU No. 2017-01 Business Combinations (Topic 805) - Clarifying the Definition of a Business. This update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments provide a screen to determine when a set of assets and activities is not a business. If the screen is not met, the amendments require further consideration of inputs, substantive processes and outputs to determine whether the transaction is an acquisition of a business. The new update is effective for annual periods beginning after December 15, 2017. The amendments in ASU 2017-01 will be implemented on a prospective basis.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">a)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Use of Estimates</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, and reported amount of revenues and expenses. Significant estimates include accruals, valuation allowance for deferred tax assets, estimates for calculation of stock based compensation, estimating the useful life of its plant and equipment and accounting for conversion features on convertible debt transactions. These estimates are based on management’s best estimates and judgment. Management will adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with certainty, actual results could differ significantly from these estimates.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">b)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Income Taxes</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10- 25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740- 10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets is not more than likely. The Company did not incur any material impact to its financial condition or results of operations due to the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">c)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Revenue Recognition</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The Company records revenue when it is realized, or realizable and earned. The Company considers revenue to be realized, or realizable and earned, when the following revenue recognition requirements are met: persuasive evidence of an arrangement exists; the products have been delivered to the customer; the sales price is fixed or determinable; and collectability is reasonably assured.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">d)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Loss Per Share</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the year. Diluted loss per share is computed by dividing net loss by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each year. There were no common equivalent shares outstanding at November 30, 2016 and 2015 that have been included in dilutive loss per share calculation as the effects would have been anti-dilutive. At November 30, 2016, there were
4,625,000
options and
2,484,650
warrants outstanding, which were convertible into equal number of common shares of the Company. At November 30, 2015, there were
4,750,000
options and
2,767,800
warrants outstanding, which were convertible into equal number of common shares of the Company.
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">e)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Stock-Based Compensation</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">All awards granted to employees and non-employees after November 30, 2006 are valued at fair value by using the Black-Scholes option pricing model and recognized on a straight line basis over the service periods of each award. The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees using the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">If there is a modification of the terms of an award, either by repricing or extending the expiry of the award, the award is re-measured. If the modification results in an increase in the fair value of the new award as compared to the old award immediately prior to the modification, the excess fair value is recognized as compensation expense.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">f)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Foreign Currency</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The parent Company maintains its books and records in U.S. dollars which is its functional and reporting currency. The Company’s operating subsidiary is a foreign private company and maintains its books and records in Canadian dollars (the functional currency). The subsidiary’s financial statements are converted to US dollars for consolidation purposes. The translation method used is the current rate method. Under the current rate method all assets and liabilities are translated at the current rate, stockholders’ equity accounts are translated at historical rates and revenues and expenses are translated at average rates for the year. The resulting translation adjustment has been included in Accumulated Other Comprehensive Income (Loss).</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">g)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Comprehensive loss</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Comprehensive loss includes all changes in equity (net assets) during a period from non- owner sources. Items included in comprehensive loss, which are excluded from net loss, include foreign currency translation adjustments relating to its Canadian subsidiary.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">h)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Financial Instruments</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The carrying amount of accounts and other receivable and accounts payable, approximated their fair value because of the relatively short maturity of these instruments. The Company determines fair value based on its accounting policy fair value measurement i.e. exit price that would be recovered for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Company does not use derivative financial instruments such as forwards to hedge foreign currency exposures.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">i)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Fair Value Measurement</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The Company follows ASC 820-10, “Fair Value Measurements and Disclosures” (ASC 820-10), which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:</p>
<p align="justify" style="margin-left: 15%; font-family: times new roman,times,serif; font-size: 10pt;">
<b>•</b>
Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
</p>
<p align="justify" style="margin-left: 15%; font-family: times new roman,times,serif; font-size: 10pt;">
<b>•</b>
Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.
</p>
<p align="justify" style="margin-left: 15%; font-family: times new roman,times,serif; font-size: 10pt;">
<b>•</b>
Level 3—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Assets and liabilities measured at fair value as of November 30, 2016 and 2015 are classified below based on the three fair value hierarchy tiers described above:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
<u>Carrying</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
<u>Fair Value</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
<u>Value</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="12%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">November 30, 2016:</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" valign="bottom">Cash</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
192,826
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
192,826
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Accounts receivable</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
32,534
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
32,534
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" valign="bottom">Accounts payable and accrued liabilities</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
245,911
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
245,911
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Convertible debentures</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,153,540
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,153,540
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
<u>Carrying</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
<u>Fair Value</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
<u>Value</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">(Restated)</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">(Restated)</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">November 30, 2015:</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">(See Note 17)</td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">(See Note 17)</td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" valign="bottom">Cash</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
1,851,021
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
1,851,021
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Accounts receivable</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
39,676
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
39,676
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" valign="bottom">Accounts payable and accrued liabilities</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
173,329
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
173,329
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Convertible debentures</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,161,750
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,161,750
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Cash has been measured using Level 1 of the Fair Value Hierarchy</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The carrying values of cash, accounts receivable, accounts payable and accrued liabilities and convertible debentures approximate their fair values because of the short-term nature of these instruments.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">j)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Convertible debt instruments</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
The Company accounts for convertible debt instruments when the Company has determined that the embedded conversion options should not be bifurcated from their host instruments in accordance with ASC 470-20
<i>Debt with Conversion and Other Options</i>
. The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. The Company amortizes the respective debt discount over the term of the notes, using the straight-line method, which approximates the effective interest method. The Company records, when necessary, induced conversion expense, at the time of conversion for the difference between the reduced conversion price per share and the original conversion price per share.
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">k)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Intellectual Property</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Five patent applications, four non-provisional and one provisional, have been filed by the Company with the U.S. Patent Office. The Patents have been granted on the four non-provisional patents.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Non-Provisional (granted patents):</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">(a) Less-lethal Projectile: This issued patent relates to the Company’s distinctive collapsible ammunition head technology that absorbs kinetic energy of the projectile upon impact. The Corporation’s collapsible head is used in both the BIP and the WEP.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">(b) Electronic Circuitry for Incapacitating a Living Target: This issued patent relates to the electronic circuitry incapacitation system which forms part of the WEP. The patent describes an electronic circuit which provides an electrical incapacitation current to a living target.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">(c) Less-lethal Wireless Stun Projectile System for Immobilizing a Target by Neuro-Muscular Disruption: This issued patent describes the process by which the WEP operates with its attachment system to halt a target through a neuro-muscular-disruption system.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">(d) Autonomous Operation of a Less-lethal Projectile: This patent describes a motion sensing system within the WEP. The sensor will monitor movement of the target and enable the electrical output until the target is subdued. The electrical pulse is programmed for an exact time-frame to specifications of the user.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Provisional Patent:</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">(e) Payload carrying arrangement for a non-lethal projectile: This Provisional patent relates to the process of carrying liquid and powder payloads in the head of the BIP munitions that upon impact release from the head and are dispersed upon the target.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The Company’s policy has been to write off cost incurred in connection with non-provisional and provisional patent costs as they are incurred as a recoverability of such expenditure is uncertain.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">l)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Property and Equipment</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Property and equipment are recorded at cost less accumulated depreciation. Depreciation is provided commencing in the month following acquisition using the following annual rate and method:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">Computer equipment</td>
<td align="left" bgcolor="#e6efff" width="50%">
30% declining balance method
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">Furniture and fixtures</td>
<td align="left" width="50%">
30% declining balance method
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">Leasehold Improvements</td>
<td align="left" bgcolor="#e6efff" width="50%">straight line over period of lease</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">Moulds</td>
<td align="left" width="50%">
20% Straight line over
5
years
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">m)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Impairment of Long-lived Assets</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset group over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">n)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Inventories</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Inventories comprise primarily of Blunt Impact Projectiles (Finished goods) and are valued at the lower of cost and net realizable value with cost being determined on the first-in, first-out basis. Costs consist of sub contracted manufacturing costs.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">o)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Consolidation</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">These consolidated financial statements include the accounts of Security Devices International Inc. and entities it controls. Control exists when SDI has the power, directly or indirectly, to govern the financial and operating policies of an entity/arrangement to obtain benefit from its activities. In assessing control, potential voting rights that currently are exercisable are considered. The financial statement of subsidiaries is included in the consolidated financial statements from the date that control commences until the date that control ceases. These consolidated financial statements include the results of SDI and its wholly-owned subsidiary, Security Devices International Canada Corp.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">p)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Recent Accounting Pronouncements</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">In January 2015, the FASB issued ASU No. 2015-01, "Income Statement - Extraordinary and Unusual Items (Subtopic 225-20) Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items" (ASU 2015-01). The amendments in ASU 2015-01 eliminate the GAAP concept of extraordinary items and no longer requires that transactions that met the criteria for classification as extraordinary items be separately classified and reported in the financial statements. ASU 2015-01 retains the presentation and disclosure guidance for items that are unusual in nature or occur infrequently and expands them to include items that are both unusual in nature and infrequently occurring. ASU 2015-01 will become effective in fiscal 2017. The Company is in the process of evaluating the amendments to determine if they have a material impact on the Company’s financial position, results of operations or cash flow.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">In February, 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU No. 2015-02 provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). ASU No. 2015-02 is effective for periods beginning after December 15, 2015, with early adoption permitted. The Company is in the process of evaluating the amendments to determine if they have a material impact on the Company’s financial position, results of operations or cash flow.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. ASU No. 2015-03 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 with early adoption permitted. The Company is in the process of evaluating the amendments to determine if they have a material impact on the Company’s financial position, results of operations or cash flow.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes,” as part of its simplification initiative. Under the ASU, organizations that present a classified balance sheet are required to classify all deferred taxes as noncurrent assets or noncurrent liabilities. ASU No. 2015-17 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company is in the process of evaluating the amendments to determine if they have a material impact on the Company’s financial position, results of operations or cash flow.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">In January 2016, the FASB issued ASU 2016-01, which makes limited amendments to the guidance in U.S. GAAP on the classification and measurement of financial instruments. The new standard significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. ASU No. 2016-01 is effective for fiscal years beginning after December 15, 2017, and interim periods within those annual periods. The Company is in the process of evaluating the amendments to determine if they have a material impact on the Company’s financial position, results of operations or cash flow.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
In February 2016, the FASB issued ASU 2016-02,
<i>Leases (Topic 842)</i>
(ASU 2016-02). The FASB issued the update to require the recognition of lease assets and liabilities on the balance sheet of lessees. ASU 2016-02is effective for fiscal years beginning after December 15, 2018. ASU 2016-02 requires a modified retrospective transition method with the option to elect a package of practical expedients. Early adoption is permitted. The Company is evaluating the effect that ASU 2016-02 will have on its financial statements and related disclosures.
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
In March 2016, the FASB issued ASU 2016-08,
<i>Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)</i>
(ASU 2016-08). The FASB issued the amendment to clarify the implementation guidance on principal versus agent considerations. The effective date and transition requirements for the amendments in this update is for annual reporting period beginning after December 15, 2017. The Company is evaluating the effect that ASU 2016-08 will have on its financial statements and related disclosures.
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
In March 2016, the FASB issued ASU 2016-09,
<i>Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting</i>
(ASU 2016-09). The FASB issued the amendment to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. ASU 2016-09 is effective for the Company for annual periods beginning after December 15, 2016, with early adoption permitted. The adoption of ASU 2016-09 is not expected to have a material impact on the financial statements of the Company.
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
In April 2016, the FASB issued ASU 2016-10,
<i>Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing</i>
(ASU 2016-10). The FASB issued the amendment to clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. The effective date and transition requirements for the amendments in this update is for annual reporting periods beginning after December 15, 2017. The Company is evaluating the effect that ASU 2016-10 will have on its financial statements and related disclosures.
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
In May 2016, the FASB issued ASU 2016-12,
<i>Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients</i>
(ASU 2016-12). The FASB issued the amendment to improve Topic 606 by reducing the potential for diversity in practice at initial application and reducing the cost and complexity of applying Topic 606 both at transition and on an ongoing basis. The effective date and transition requirements for the amendments in this update are the same as the effective date and transition requirements of ASU 2014-09. The Company is evaluating the effect that ASU 2016-12 will have on its financial statements and related disclosures.
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
In June 2016, the FASB issued ASU 2016-13,
<i>Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments</i>
(ASU 2016-13). The FASB issued the amendment to require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The updates will be effective for the Company for fiscal years beginning after December 15, 2019. The Company is evaluating the effect that ASU 2016-13 will have on its financial statements and related disclosures.
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments" (ASU 2016-15. The new guidance clarifies eight cash flow classification issues where current GAAP was either unclear or has no specific guidance. The new standard is effective for annual reporting periods beginning after December 15, 2017 and interim periods within those fiscal years. All entities may elect to early adopt ASU 2016-15 in any interim period. If an entity early adopts it must adopt all eight of the amendments in the same period and if early adopted in an interim period any adjustments should be reflected as of the beginning of the year. The amendments in ASU 2016-15 will be applied using the modified retrospective transition method for each period presented. The Company is evaluating the impact the adoption of this guidance will have on the classification of certain items on its consolidated statements of cash flows.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">In January 2017, the FASB issued ASU No. 2017-01 Business Combinations (Topic 805) - Clarifying the Definition of a Business. This update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments provide a screen to determine when a set of assets and activities is not a business. If the screen is not met, the amendments require further consideration of inputs, substantive processes and outputs to determine whether the transaction is an acquisition of a business. The new update is effective for annual periods beginning after December 15, 2017. The amendments in ASU 2017-01 will be implemented on a prospective basis.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
<u>Carrying</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
<u>Fair Value</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
<u>Value</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="12%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">November 30, 2016:</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" valign="bottom">Cash</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
192,826
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
192,826
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Accounts receivable</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
32,534
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
32,534
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" valign="bottom">Accounts payable and accrued liabilities</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
245,911
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
245,911
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Convertible debentures</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,153,540
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,153,540
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
192826
192826
32534
32534
245911
245911
1153540
1153540
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
<u>Carrying</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
<u>Fair Value</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
<u>Value</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">(Restated)</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">(Restated)</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">November 30, 2015:</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">(See Note 17)</td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">(See Note 17)</td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" valign="bottom">Cash</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
1,851,021
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
1,851,021
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Accounts receivable</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
39,676
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
39,676
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" valign="bottom">Accounts payable and accrued liabilities</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
173,329
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
173,329
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Convertible debentures</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,161,750
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,161,750
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
1851021
1851021
39676
39676
173329
173329
1161750
1161750
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">Computer equipment</td>
<td align="left" bgcolor="#e6efff" width="50%">
30% declining balance method
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">Furniture and fixtures</td>
<td align="left" width="50%">
30% declining balance method
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">Leasehold Improvements</td>
<td align="left" bgcolor="#e6efff" width="50%">straight line over period of lease</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">Moulds</td>
<td align="left" width="50%">
20% Straight line over
5
years
</td>
</tr>
</table>
0.30
0.30
0.20
5
4625000
2484650
4750000
2767800
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">4.</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">ACCOUNTS PAYABLE AND ACCRUED LIABILITIES</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="12%">2016</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="12%">2015</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Accounts payable and accrued liabilities are comprised of the following:</td>
<td align="left" bgcolor="#e6efff" style="border-top-style: solid; border-top-width: 1" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" style="border-top-style: solid; border-top-width: 1" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="border-top-style: solid; border-top-width: 1" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" style="border-top-style: solid; border-top-width: 1" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="bottom"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">                               Trade payables</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
85,603
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
69,962
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">                               Accrued liabilities-accrued interest</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
54,259
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
53,339
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">                               Accrued liabilities-other liabilities</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
106,049
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
50,028
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
245,911
</td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
173,329
</td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">Accrued liabilities-other liabilities relate primarily to professional fees.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="12%">2016</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="12%">2015</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Accounts payable and accrued liabilities are comprised of the following:</td>
<td align="left" bgcolor="#e6efff" style="border-top-style: solid; border-top-width: 1" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" style="border-top-style: solid; border-top-width: 1" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="border-top-style: solid; border-top-width: 1" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" style="border-top-style: solid; border-top-width: 1" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="bottom"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">                               Trade payables</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
85,603
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
69,962
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">                               Accrued liabilities-accrued interest</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
54,259
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
53,339
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">                               Accrued liabilities-other liabilities</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
106,049
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
50,028
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
245,911
</td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
173,329
</td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="2%"> </td>
</tr>
</table>
85603
69962
54259
53339
106049
50028
245911
173329
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">5.</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">CAPITAL STOCK</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">a)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Authorized</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
100,000,000
* Common shares, $0.001
par value
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">And</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
5,000,000
Preferred shares, $0.001
par value
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
*On March 20, 2013 the Company filed with the Secretary of the State of Delaware a certificate of amendment (the “Amendment”) to the Company’s certificate of incorporation. The Amendment increased the number of authorized shares of the Company’s common stock, par value $0.001, from
50,000,000
to
100,000,000
common shares.
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
The Company’s Articles of Incorporation authorize its Board of Directors to issue up to
5,000,000
shares of preferred stock having par value of $0.001. The provisions in the Articles of Incorporation relating to the preferred stock allow the directors to issue preferred stock with multiple votes per share and dividend rights, which would have priority over any dividends paid with respect to the holders of SDI’s common stock.
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">b)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Issued</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
55,104,493
Common shares (2015:
54,615,642
Common shares)
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">c)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Changes to Issued Share Capital</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
<u>Year ended November 30, 2016</u>
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
Effective July 21, 2016, Bryan Ganz was elected as a director of the Company. Prior to his appointment, effective May 1, 2016, the Company executed a one-year consulting agreement with a Corporation in which the said director has an ownership interest. For the consultant services, the consultant was paid cash for $50,000
and issued a value of $200,000
in Company’s stock in four quarterly instalments over the
12
-month period ending May 15, 2017. In September 2016, the Company issued
488,851
common stock to the consultant being the first quarterly instalment for a value of $50,000
which was due August 15, 2016.
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
<u>Year ended November 30, 2015</u>
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
On June 3, 2015, the Company received $16,775
and $6,995
for the exercise of
105,600
warrants and
35,000
options respectively.
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
On June 19, 2015, the Company issued
7,575,757
common stock at price of $0.33
(CAD $0.40) per share on a non-brokered private placement basis and raised $2,500,000. There were no broker commissions or fees associated with this subscription. The closing of the private placement was approved by the TSX-Venture Exchange, as required under stock exchange rules.
</p>
100000000
0.001
5000000
0.001
0.001
50000000
100000000
5000000
0.001
55104493
54615642
50000
200000
12
488851
50000
16775
6995
105600
35000
7575757
0.33
0.40
2500000
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">6.</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">STOCK BASED COMPENSATION</p>
</td>
</tr>
</table>
<br/>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">Effective May 31, 2013, the Company adopted an incentive stock option plan (the “2013 Plan”), which replaces the stock option and stock bonus plans that were in place prior to adoption of the 2013 Plan. All outstanding options to purchase Common Shares granted by the Company under the prior plans are now governed by the 2013 Plan and the prior plans (an Incentive Stock Option Plan, a Non-Qualified Stock Option Plan, and a Stock Bonus Plan) have been terminated.</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">The purpose of this Plan is to authorize the grant to Eligible Persons of the Company of Options to purchase Shares and thus benefit the Company by enabling it to attract, retain and motivate Eligible Persons by providing them with the opportunity, through Options, to acquire an increased proprietary interest in the Company.</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The maximum number of Shares which may be reserved for issuance to any one Consultant under the Plan, any other employer stock options plans or options for services, within any
12
-month period, shall be
2% of the Shares issued and outstanding at the time of the grant (on a non-diluted basis).
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The maximum number of Shares which may be reserved for issuance to Investor Relations Optionees under the Plan, any other employer stock options plans or options for services, within any
12
-month period shall be
2% of the Shares issued and outstanding at the time of the grant (on a non-diluted basis).
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The maximum number of Shares which may be reserved for issuance to insiders of the Company in any
12
-month period shall be
10% of the Shares issued and outstanding at the start of such
12
-month period (on a non-diluted basis).
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The purchase price (the “Price”) for the Shares under each Option shall be determined by the Board of Directors or Committee, as applicable, on the basis of the market price, where “market price” shall mean the prior trading day closing price of the Shares on any stock exchange on which the Shares are listed or last trading price on the prior trading day on any dealing network where the Shares trade, and where there is no such closing price or trade on the prior trading day, “market price” shall mean the average of the daily high and low board lot trading prices of the Shares on any stock exchange on which the Shares are listed or dealing network on which the Shares trade for the five (5) immediately preceding trading days. In the event the Shares are listed on the TSXV, the price may be the market price less any discounts from the market price allowed by the TSXV, subject to a minimum price of CDN$0.10.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
<u>Year ended November 30, 2016</u>
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
<u>Warrants:</u>
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
On June 9, 2016, the board of directors extended the expiry dates of
400,000
warrants issued in 2012 to a director at exercise price of $0.20, from original expiry date of August 9, 2016 to August 7, 2020. The change in the terms of the warrants was determined to be a modification and not a cancellation and issuance of a new warrant. As a result of these modifications, the fair value of
400,000
warrants increased by $49,912.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">Fair value of warrants was calculated using the Black Scholes option pricing model with the following assumptions:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">Risk free rate</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="12%">
2.00%
</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">Expected dividends</td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
0%
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Forfeiture rate</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0%
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
101.25% to
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Volatility</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
150.29%
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Warrant modification expense</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
49,912
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
<u>Stock Options</u>
:
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
On August 18, 2016, the board of directors granted options to a consultant to acquire a total of
25,000
common shares. These options were issued at an exercise price of $0.11
(CAD $0.14) per share and vest immediately with an expiry term of five years. The fair value of each option used for the purpose of estimating the stock compensation is calculated using the Black-Scholes option pricing model with the following assumptions:
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">Risk free rate</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="12%">
2.00%
</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">Expected dividends</td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
0%
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Forfeiture rate</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0%
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Volatility</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
163.68%
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Market price of Company’s common stock on date of grant of options</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0.11
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Stock-based compensation cost</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
2,574
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
On October 20, 2016, the board of directors granted options to a new director to acquire a total of
350,000
common shares. These options were issued at an exercise price of $0.08
(CAD $0.11) per share and vest immediately with an expiry term of five years. The fair value of each option used for the purpose of estimating the stock compensation is calculated using the Black-Scholes option pricing model with the following assumptions:
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">Risk free rate</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="15%">
2.00%
</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">Expected dividends</td>
<td align="right" nowrap="nowrap" valign="bottom" width="15%">
0%
</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Forfeiture rate</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="15%">
0%
</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Volatility</td>
<td align="right" valign="bottom" width="15%">
149.08%
</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Market price of Company’s common stock on date of grant of options</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="15%">
$0.08
</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Stock-based compensation cost</td>
<td align="right" valign="bottom" width="15%">
$25,450
</td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
As of November 30, 2016, there was $Nil
of unrecognized expense related to non-vested stock-based compensation arrangements granted.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
<u>Year ended November 30, 2015</u>
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
<u>Warrants:</u>
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
On September 24, 2015, the board of directors extended the expiry dates of
572,000
warrants issued in 2010 to directors and officers at exercise price of $0.20, from original expiry date of September 30, 2015 to September 23, 2019. In addition, on same date, the board of directors extended the expiry dates of
1,470,000
warrants issued to directors and officers and
35,000
to a consultant, all issued in 2012 at exercise price of $0.13, from original expiry date of January 4, 2016 to September 23, 2019. The change in the terms of the warrants was determined to be a modification and not a cancellation and issuance of a new warrant. As a result of these modifications, the fair value of
2,077,000
warrants increased by $216,684. Fair value of warrants was calculated using the Black Scholes option pricing model with the following assumptions:
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Risk free rate</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
2.00%
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Expected dividends</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
0%
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Forfeiture rate</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
0%
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
17.29% to
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Volatility</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
134.39%
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Warrant modification expense</td>
<td align="left" width="1%">$</td>
<td align="right" width="12%">
216,684
</td>
<td align="left" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
<u>Stock Options:</u>
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
On October 20, 2015, the board of directors granted
1,350,000
options to directors and officers and
325,000
options to consultants to acquire a total of
1,675,000
common shares. These options were issued at an exercise price of $0.29
(CAD $0.38) per share and vest immediately with an expiry term of five years. The fair value of each option used for the purpose of estimating the stock compensation is calculated using the Black-Scholes option pricing model with the following assumptions:
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">Risk free rate</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="12%">
2.00%
</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">Expected dividends</td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
0%
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Forfeiture rate</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0%
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Volatility</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
134.39%
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Market price of Company’s common stock on date of grant of options</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0.29
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Stock-based compensation cost</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
422,459
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
As of November 30, 2015, there was $Nil
of unrecognized expense related to non-vested stock-based compensation arrangements granted.
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">Risk free rate</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="12%">
2.00%
</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">Expected dividends</td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
0%
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Forfeiture rate</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0%
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
101.25% to
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Volatility</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
150.29%
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Warrant modification expense</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
49,912
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
0.0200
0.00
0.00
1.0125
1.5029
49912
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">Risk free rate</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="12%">
2.00%
</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">Expected dividends</td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
0%
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Forfeiture rate</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0%
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Volatility</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
163.68%
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Market price of Company’s common stock on date of grant of options</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0.11
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Stock-based compensation cost</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
2,574
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
0.0200
0.00
0.00
1.6368
0.11
2574
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">Risk free rate</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="15%">
2.00%
</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">Expected dividends</td>
<td align="right" nowrap="nowrap" valign="bottom" width="15%">
0%
</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Forfeiture rate</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="15%">
0%
</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Volatility</td>
<td align="right" valign="bottom" width="15%">
149.08%
</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Market price of Company’s common stock on date of grant of options</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="15%">
$0.08
</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Stock-based compensation cost</td>
<td align="right" valign="bottom" width="15%">
$25,450
</td>
</tr>
</table>
0.0200
0.00
0.00
1.4908
0.08
25450
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Risk free rate</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
2.00%
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Expected dividends</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
0%
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Forfeiture rate</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
0%
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
17.29% to
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Volatility</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
134.39%
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Warrant modification expense</td>
<td align="left" width="1%">$</td>
<td align="right" width="12%">
216,684
</td>
<td align="left" width="2%"> </td>
</tr>
</table>
0.0200
0.00
0.00
0.1729
1.3439
216684
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">Risk free rate</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="12%">
2.00%
</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">Expected dividends</td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
0%
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Forfeiture rate</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0%
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Volatility</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
134.39%
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Market price of Company’s common stock on date of grant of options</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0.29
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Stock-based compensation cost</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
422,459
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
0.0200
0.00
0.00
1.3439
0.29
422459
12
0.02
12
0.02
12
0.10
12
0.10
400000
0.20
400000
49912
25000
0.11
0.14
350000
0.08
0.11
0
572000
0.20
1470000
35000
0.13
2077000
216684
1350000
325000
1675000
0.29
0.38
0
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">7.</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">STOCK PURCHASE OPTIONS AND WARRANTS</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">a)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">OPTIONS</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">The following table summarizes the options outstanding under the Stock Option Plan:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="27%">Number of options</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2016</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2015</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="bottom"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Outstanding, beginning of year</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
4,750,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
3,360,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Granted</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
375,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
1,675,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Expired</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(100,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(200,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Exercised</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(35,000
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Forfeited</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Cancelled</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(400,000
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(50,000
</td>
<td align="left" valign="bottom" width="2%">
<u>)</u>
</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Outstanding, end of year</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
4,625,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
4,750,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Exercisable, end of year</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
4,625,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
4,750,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">
<u>Year 2016</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">Number of</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">Option price</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">options</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">
<u>Expiry date</u>
</td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">per share</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2016</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">March 18, 2017</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0.31
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
350,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">August 5, 2017</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
0.32
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
150,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">May 8, 2019</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0.32
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
600,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">September 10, 2019</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
0.36
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
1,625,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">October 19, 2020</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0.29
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,525,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">August 17, 2021</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
0.11
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
25,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">October 19, 2021</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0.08
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
350,000
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">TOTAL</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
4,625,000
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Weighted average exercise price:</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Options outstanding at end of year</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%">                                   </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
0.30
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Options granted during the year</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
0.08
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Options exercised during the year</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Options expired during the year</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
0.45
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Options cancelled during the year</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
0.33
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">
<u>Year 2015</u>
</td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">Number of</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">Option price</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">options</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">
<u>Expiry date</u>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">per share</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2015</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">October 25, 2016</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">
<u>$</u>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
 
0.45
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
100,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">March 18, 2017</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
0.31
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
350,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">August 5, 2017</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0.32
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
150,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">May 8, 2019</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
0.32
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
600,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">September 10, 2019</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0.36
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,875,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">October 19, 2020</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
0.29
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
1,675,000
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">TOTAL</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
4,750,000
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Weighted average exercise price:</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Options outstanding at end of year</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
0.33
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Options granted during the year</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
0.29
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Options exercised during the year</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
0.20
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Options expired during the year</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
0.42
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Options cancelled during the year</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
0.31
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">The share options outstanding at the end of the year had a weighted average remaining contractual life as follows:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2016</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2015</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">(Years)</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">(Years)</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Total outstanding options</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
2.8
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
3.8
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Total exercisable options</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
2.8
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
3.8
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">b)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">WARRANTS</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">Number of</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">Warrants</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">Exercise</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">Expiry</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">Granted</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">Prices</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">Date</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
<td align="left" width="1%">$</td>
<td align="right" width="10%"> </td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Outstanding at November 30, 2014 and average exercise price</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
4,794,545
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
0.24
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Granted in year 2015</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
-
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
-
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Exercised</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
(27,500
</td>
<td align="left" bgcolor="#e6efff" width="2%">)</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
0.20
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Exercised</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
(68,750
</td>
<td align="left" width="2%">)</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
0.13
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Exercised</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
(9,350
</td>
<td align="left" bgcolor="#e6efff" width="2%">)</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
0.25
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Forfeited</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
-
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
-
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Expired</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
(622,500
</td>
<td align="left" bgcolor="#e6efff" width="2%">)</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
0.20
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Expired</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
(75,000
</td>
<td align="left" width="2%">)</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
0.42
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Expired</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
(1,223,645
</td>
<td align="left" bgcolor="#e6efff" width="2%">)</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
0.47
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Cancelled</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%">
-
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%">
-
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Outstanding at November 30, 2015 and average exercise price*</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
2,767,800
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
0.17
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Granted in year 2016</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
-
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
-
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Exercised</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Expired</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
(131,250
</td>
<td align="left" width="2%">)</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
0.13
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Expired</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
(151,900
</td>
<td align="left" bgcolor="#e6efff" width="2%">)</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
0.45
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Cancelled</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%">
-
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%">
-
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Outstanding at November 30, 2016 and average exercise price*</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
2,484,650
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
0.16
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Exercisable at November 30, 2016</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
2,484,650
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
0.16
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Exercisable at November 30, 2015</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
2,767,800
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
0.17
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
</table>
<br/>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
* On September 24, 2015, the board of directors extended the expiry dates of
572,000
warrants issued in 2010 and
1,505,000
warrants issued in 2012. In addition, on June 9, 2016, the board of directors extended the expiry of
400,000
warrants issued in 2012 by an additional
4
years (refer to note 6)
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">The warrants outstanding at the end of the year had a weighted average remaining contractual life as follows:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td align="left" nowrap="nowrap"> </td>
<td align="left" nowrap="nowrap"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2016</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2015</td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" nowrap="nowrap"> </td>
<td align="left" nowrap="nowrap"> </td>
<td align="left" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">(Years)</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">(Years)</td>
<td align="left" nowrap="nowrap" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left"> </td>
<td align="left" bgcolor="#e6efff">Total outstanding warrants</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
3.25
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
2.87
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left"> </td>
<td align="left">Total exercisable warrants</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
3.25
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
2.87
</td>
<td align="left" width="2%"> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="27%">Number of options</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2016</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2015</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="bottom"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Outstanding, beginning of year</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
4,750,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
3,360,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Granted</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
375,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
1,675,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Expired</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(100,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(200,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Exercised</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(35,000
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Forfeited</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Cancelled</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(400,000
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(50,000
</td>
<td align="left" valign="bottom" width="2%">
<u>)</u>
</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Outstanding, end of year</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
4,625,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
4,750,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Exercisable, end of year</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
4,625,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
4,750,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
4750000
3360000
375000
1675000
-100000
-200000
0
-35000
0
0
-400000
-50000
4625000
4750000
4625000
4750000
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">
<u>Year 2016</u>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">Number of</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">Option price</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">options</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">
<u>Expiry date</u>
</td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">per share</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2016</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">March 18, 2017</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0.31
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
350,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">August 5, 2017</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
0.32
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
150,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">May 8, 2019</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0.32
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
600,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">September 10, 2019</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
0.36
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
1,625,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">October 19, 2020</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0.29
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,525,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">August 17, 2021</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
0.11
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
25,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">October 19, 2021</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0.08
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
350,000
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">TOTAL</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
4,625,000
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Weighted average exercise price:</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Options outstanding at end of year</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%">                                   </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
0.30
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Options granted during the year</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
0.08
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Options exercised during the year</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Options expired during the year</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
0.45
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Options cancelled during the year</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
0.33
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
</table>
0.31
350000
0.32
150000
0.32
600000
0.36
1625000
0.29
1525000
0.11
25000
0.08
350000
4625000
0.30
0.08
0
0.45
0.33
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">
<u>Year 2015</u>
</td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">Number of</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">Option price</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">options</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">
<u>Expiry date</u>
</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">per share</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2015</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">October 25, 2016</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">
<u>$</u>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
 
0.45
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
100,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">March 18, 2017</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
0.31
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
350,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">August 5, 2017</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0.32
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
150,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">May 8, 2019</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
0.32
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
600,000
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">September 10, 2019</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
0.36
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,875,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">October 19, 2020</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
0.29
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
1,675,000
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">TOTAL</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
4,750,000
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Weighted average exercise price:</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Options outstanding at end of year</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
0.33
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Options granted during the year</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
0.29
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Options exercised during the year</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
0.20
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Options expired during the year</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
0.42
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Options cancelled during the year</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
0.31
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
</table>
0.45
100000
0.31
350000
0.32
150000
0.32
600000
0.36
1875000
0.29
1675000
4750000
0.33
0.29
0.20
0.42
0.31
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2016</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2015</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">(Years)</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">(Years)</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Total outstanding options</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
2.8
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
3.8
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Total exercisable options</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
2.8
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
3.8
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
2.8
3.8
2.8
3.8
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">Number of</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">Warrants</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">Exercise</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">Expiry</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">Granted</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">Prices</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">Date</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
<td align="left" width="1%">$</td>
<td align="right" width="10%"> </td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Outstanding at November 30, 2014 and average exercise price</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
4,794,545
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
0.24
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Granted in year 2015</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
-
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
-
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Exercised</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
(27,500
</td>
<td align="left" bgcolor="#e6efff" width="2%">)</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
0.20
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Exercised</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
(68,750
</td>
<td align="left" width="2%">)</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
0.13
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Exercised</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
(9,350
</td>
<td align="left" bgcolor="#e6efff" width="2%">)</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
0.25
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Forfeited</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
-
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
-
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Expired</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
(622,500
</td>
<td align="left" bgcolor="#e6efff" width="2%">)</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
0.20
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Expired</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
(75,000
</td>
<td align="left" width="2%">)</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
0.42
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Expired</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
(1,223,645
</td>
<td align="left" bgcolor="#e6efff" width="2%">)</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
0.47
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Cancelled</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%">
-
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%">
-
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Outstanding at November 30, 2015 and average exercise price*</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
2,767,800
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
0.17
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Granted in year 2016</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
-
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
-
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Exercised</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Expired</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
(131,250
</td>
<td align="left" width="2%">)</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
0.13
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Expired</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
(151,900
</td>
<td align="left" bgcolor="#e6efff" width="2%">)</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
0.45
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Cancelled</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%">
-
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%">
-
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Outstanding at November 30, 2016 and average exercise price*</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
2,484,650
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
0.16
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Exercisable at November 30, 2016</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
2,484,650
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
0.16
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Exercisable at November 30, 2015</td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
2,767,800
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
0.17
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
</table>
4794545
0.24
0
0
-27500
0.20
-68750
0.13
-9350
0.25
0
0
-622500
0.20
-75000
0.42
-1223645
0.47
0
0
2767800
0.17
0
0
0
0
-131250
0.13
-151900
0.45
0
0
2484650
0.16
2484650
0.16
2767800
0.17
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td align="left" nowrap="nowrap"> </td>
<td align="left" nowrap="nowrap"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2016</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2015</td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" nowrap="nowrap"> </td>
<td align="left" nowrap="nowrap"> </td>
<td align="left" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">(Years)</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">(Years)</td>
<td align="left" nowrap="nowrap" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left"> </td>
<td align="left" bgcolor="#e6efff">Total outstanding warrants</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
3.25
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
2.87
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left"> </td>
<td align="left">Total exercisable warrants</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
3.25
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
2.87
</td>
<td align="left" width="2%"> </td>
</tr>
</table>
3.25
2.87
3.25
2.87
572000
1505000
400000
4
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">8.</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">RELATED PARTY TRANSACTIONS</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">The following transactions are in the normal course of operations and are measured at the amount of consideration established and agreed to by the related parties.</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
<u>Year ended November 30, 2016</u>
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The directors were compensated as per their consulting agreements with the Company. The Company expensed a total of $219,000
as management fees to two of its ex-directors in their role as officers in accordance with their consulting contracts, which included $57,600
paid on full and final settlement to one director in his role as CEO on his resignation and termination effective July 15, 2016, and also expensed a total of $5,900
as automobile allowance. In addition, the Company expensed $42,200
as a consulting fee to an independent director for services provided.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
On June 9, 2016, the board of directors extended the expiry dates of
400,000
warrants issued in 2012 to a director at exercise price of $0.20, from original expiry date of August 9, 2016 to August 7, 2020. As a result of these modifications, the fair value of
400,000
warrants increased by $49,912.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
On October 20, 2016, the board of directors granted
350,000
options to a new director. These options were issued at an exercise price of $0.08
(CAD $0.11) per share and vest immediately with an expiry term of five years. The Company expensed stock based compensation cost of $25,450.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
Effective July 21, 2016, Bryan Ganz was elected as a director of the Company. Prior to his appointment, effective May 1, 2016, the Company executed a one-year consulting agreement with a Corporation in which the said director has an ownership interest. The said Corporation was paid cash of $25,000
in May, 2016 and $25,000
in June, 2016. In addition, in September 2016, the Company issued
488,851
shares for services at deemed price of $0.1023
(CAD$0.1322) for a total consideration of $50,000.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The Company expensed $32,000
for services provided by the CFO of the Company and $186,800
for services provided by a Corporation in which the Chief Operating Officer has an ownership interest, in accordance with the consulting contract.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The Company reimbursed $50,780
to directors and officers for travel and entertainment expenses incurred for the Company.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
<u>Year ended November 30, 2015</u>
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
Two non-independent directors were compensated as per their consulting agreements with the Company. The Company expensed a total of $212,505
as management fees to these two directors, in their role as officers in accordance with their consulting contracts and expensed a total of $5,721
as automobile allowance.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
On September 24, 2015, the board of directors extended the expiry dates of
572,000
warrants issued in 2010 to directors and officers at exercise price of $0.20, from original expiry date of September 30, 2015 to September 23, 2019. In addition, on same date, the board of directors extended the expiry dates of
1,470,000
warrants issued to directors and officers in 2012 at exercise price of $0.13, from original expiry date of April 1, 2016 to September 23, 2019. As a result of these modifications, the fair value of
2,042,000
warrants increased by $213,603.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
On October 20, 2015, the board of directors granted
1,350,000
options to directors and officers. These options were issued at an exercise price of $0.29
(CAD $0.38) per share and vest immediately with an expiry term of five years. The Company expensed stock based compensation cost of $340,489
for these
1,325,000
options issued to directors and officers.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The Company expensed $35,717
for services provided by the CFO of the Company and $221,217
for services provided by a Corporation in which the Chief Operating Officer has an ownership interest, in accordance with the consulting contract.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The Company reimbursed $89,538
to directors and officers for travel and entertainment expenses incurred for the Company.
</p>
219000
57600
5900
42200
400000
0.20
400000
49912
350000
0.08
0.11
25450
25000
25000
488851
0.1023
0.1322
50000
32000
186800
50780
212505
5721
572000
0.20
1470000
0.13
2042000
213603
1350000
0.29
0.38
340489
1325000
35717
221217
89538
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">9.</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">PROPERTY AND EQUIPMENT</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">Property and equipment are recorded at cost less accumulated depreciation.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">November</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">November</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">30, 2016</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">Accumulated</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">30, 2015</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">Accumulated</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">Cost</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">Depreciation</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">Cost</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">Depreciation</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">$</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">$</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">$</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">$</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Computer equipment</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
37,573
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
35,410
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
37,573
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
34,483
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Furniture and fixtures</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
18,027
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
16,648
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
18,027
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
16,057
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Leasehold Improvements</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
23,721
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
19,338
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
23,721
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
16,244
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Moulds</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
209,515
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
166,944
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
209,515
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
125,041
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
288,836
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
238,340
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
288,836
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
191,825
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Net carrying amount</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="8%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%">$</td>
<td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="8%">
50,496
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="right" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="8%"> </td>
<td align="right" valign="bottom" width="2%"> </td>
<td align="left" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%">$</td>
<td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="8%">
97,011
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Depreciation expense</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="8%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="8%">
46,515
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="8%">
47,165
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">November</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">November</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">30, 2016</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">Accumulated</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">30, 2015</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">Accumulated</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">Cost</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">Depreciation</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">Cost</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">Depreciation</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">$</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">$</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">$</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="10%">$</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Computer equipment</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
37,573
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
35,410
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
37,573
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
34,483
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Furniture and fixtures</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
18,027
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
16,648
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
18,027
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
16,057
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Leasehold Improvements</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
23,721
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
19,338
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
23,721
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
16,244
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Moulds</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
209,515
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
166,944
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
209,515
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
125,041
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
288,836
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
238,340
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
288,836
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
191,825
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Net carrying amount</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="8%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%">$</td>
<td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="8%">
50,496
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="right" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="8%"> </td>
<td align="right" valign="bottom" width="2%"> </td>
<td align="left" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%">$</td>
<td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="8%">
97,011
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Depreciation expense</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="8%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="8%">
46,515
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="8%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="8%">
47,165
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
37573
35410
37573
34483
18027
16648
18027
16057
23721
19338
23721
16244
209515
166944
209515
125041
288836
238340
288836
191825
50496
97011
46515
47165
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">10.</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">INCOME TAXES</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The Company has non-capital losses of approximately $1
available, which can be applied against future taxable income and which expire as follows:
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="10%">
<b>USA</b>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="10%">
<b>Canada</b>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="10%">
<b>Total</b>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">2025</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
188,494
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
188,494
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">2026</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
609,991
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
609,991
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">2027</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,731,495
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,731,495
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">2028</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
3,174,989
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
3,174,989
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">2029</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
2,792,560
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
2,792,560
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">2030</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
2,044,857
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
2,044,857
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">2031</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
854,218
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
854,218
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">2032</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
1,073,610
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
1,073,610
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">2033</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,410,557
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,410,557
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">2034</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
882,513
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
1,089,850
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
1,972,363
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">2035</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
722,853
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,124,876
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,847,729
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">2036</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
600,185
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
963,545
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
1,563,730
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
16,086,322
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
3,178,271
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
19,264,593
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The reconciliation of income taxes at statutory income tax rates (U.S –
35% and Canada –
26.5% on their respective losses) to the income tax expense is as follows:
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">November</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">November</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
30, 2016
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
30, 2015
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="12%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">(Restated)</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">(See Note 17</td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Loss before income taxes</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(1,924,110
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(2,331,734
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Income tax recovery at statutory rate</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(592,327
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(728,692
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Permanent differences</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
49,587
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
245,949
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Tax benefit not recognized</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
542,740
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
482,743
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Income taxes – current and deferred</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
-
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
-
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">Reconciliation of statutory tax rate to the effective income tax rate is as follows:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">Statutory income tax rate – USA</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="12%">
35.0%
</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">Deferred tax asset valuation allowance - USA</td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
(35.0)%
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Statutory income tax rate – Canada</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
26.5%
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Deferred tax asset valuation allowance - Canada</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(26.5)%
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">Deferred tax asset components as of November 30, 2016 and 2015 are as follows:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">2016</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">2015</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">Non capital losses available to offset future income-taxes</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
19,264,593
</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
17,700,863
</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="bottom"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Expected Income tax recovery at statutory rates</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(6,472,455
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(6,007,050
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Valuation Allowance</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
6,472,455
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
6,007,050
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Net deferred tax assets</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
As the Company has recognized substantial cumulative losses from operations and has not earned significant revenues, it has provided a
100
per cent valuation allowance on the net deferred tax asset as of November 30, 2016 and 2015. Management believes the Company has no uncertain tax position.
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="10%">
<b>USA</b>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="10%">
<b>Canada</b>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="10%">
<b>Total</b>
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">2025</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
188,494
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
188,494
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">2026</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
609,991
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
609,991
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">2027</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,731,495
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,731,495
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">2028</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
3,174,989
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
3,174,989
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">2029</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
2,792,560
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
2,792,560
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">2030</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
2,044,857
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
2,044,857
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">2031</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
854,218
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
854,218
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">2032</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
1,073,610
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
1,073,610
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">2033</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,410,557
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,410,557
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">2034</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
882,513
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
1,089,850
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
1,972,363
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">2035</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
722,853
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,124,876
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,847,729
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">2036</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
600,185
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
963,545
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
1,563,730
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
16,086,322
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
3,178,271
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
19,264,593
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
</table>
188494
188494
609991
609991
1731495
1731495
3174989
3174989
2792560
2792560
2044857
2044857
854218
854218
1073610
1073610
1410557
1410557
882513
1089850
1972363
722853
1124876
1847729
600185
963545
1563730
16086322
3178271
19264593
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">November</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">November</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
30, 2016
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
30, 2015
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="12%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">(Restated)</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">(See Note 17</td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Loss before income taxes</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(1,924,110
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(2,331,734
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Income tax recovery at statutory rate</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(592,327
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(728,692
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Permanent differences</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
49,587
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
245,949
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Tax benefit not recognized</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
542,740
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
482,743
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Income taxes – current and deferred</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
-
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
-
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
</table>
30
30
-1924110
-2331734
-592327
-728692
49587
245949
542740
482743
0
0
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">Statutory income tax rate – USA</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="12%">
35.0%
</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">Deferred tax asset valuation allowance - USA</td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
(35.0)%
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Statutory income tax rate – Canada</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
26.5%
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Deferred tax asset valuation allowance - Canada</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(26.5)%
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
0.35
-0.35
0.265
-0.265
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">2016</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">2015</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">Non capital losses available to offset future income-taxes</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
19,264,593
</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
17,700,863
</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="bottom"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Expected Income tax recovery at statutory rates</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(6,472,455
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(6,007,050
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" valign="bottom">Valuation Allowance</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
6,472,455
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
6,007,050
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Net deferred tax assets</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
19264593
17700863
-6472455
-6007050
6472455
6007050
0
0
1
0.35
0.265
1.00
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
11.</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
COMMITMENTS</p>
</td>
</tr>
</table>
<br />
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%">
</td>
<td valign="top" width="5%">
a)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
Consulting agreements:</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The non-independent directors of the Company executed consulting agreements with the company on the following terms:</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
Effective October 1, 2014, SDI executed a renewal agreement with a private company in which the Chief Operating Officer Dean Thrasher has an ownership interest in, for a period which expires on December 31, 2017 for services rendered. The total consulting fees are estimated at $648,000 (CAD$864,000) for the three-year period. In the event of termination without cause due to change in control brought out by sale, lease, merger or transfer, the Company is obligated to pay 18 months’ fees at current rate at time of change in control. SDI paid cash and expensed $221,217 (CAD $230,892) during the year ended November 30, 2015. The company may also accept common shares in lieu of cash. As of November 30, 2016, the company has not exercised its right to accept this compensation in shares. Effective February 1, 2015, the Company and director agreed to reduce the monthly remuneration by 10% to $16,200 (CAD $21,600). This reduction continued until the completion of the next round of financing, which was completed in May 2015. On July 16, 2016, Dean Thrasher was appointed interim CEO and President of the Company. Effective August 1, 2016, the Company and director agreed to reduce the monthly consulting fees to $10,550 (CAD $14,000).</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
Effective July 21, 2016, Bryan Ganz was elected as a director of the Company. Prior to his appointment, effective May 1, 2016, the Company executed a one-year consulting agreement with a Corporation in which the said director has an ownership interest. The said Corporation will assist the Company with sales & marketing, expansion of the Company&#8217;s product range, review of operations, implementation of cost control measures, development of strategic alliances and financial oversight. For the consultant services and subject to TSX Venture Exchange Inc. (the “Stock Exchange”) approval, the consultant was paid cash for $50,000 and issued a value of $200,000 in Company’s stock in four quarterly installments over the 12 -month period ending May 15, 2017. The first quarterly installment was issued in September 2016. The stock will be priced at the volume weighted average trading price per common share over the 20 - day period preceding the due date. (See also note 18 Subsequent events)</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
Effective November 1, 2013, SDI executed an agreement with a non-related consultant to pay compensation of $3,750 (CAD $5,000) per month. The consultant has agreed to provide corporate market advisory services. The agreement is for a period of a minimum of three months and will continue unless otherwise terminated by either party by giving 30 days’ written notice.</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
Effective May 1, 2015, SDI executed an agreement with another non-related consultant to pay compensation of $3,750 (CAD $5,000) per month. The consultant is to assist with sales initiatives, demos and participate in trade shows. The agreement unless renewed by mutual consent expires December 31, 2015. The consultant is also entitled to a 5% cash commission for all completed direct sales to end users and a 2% cash commission for all completed indirect sales. In addition, as a sales incentive, the company may grant stock options at market prices, being 25,000 stock options for every 5,000 rounds sold, to a maximum of 200,000 options. Either party may terminate the consulting agreement by giving 60 days’ written notice. Subsequent to the year this agreement was terminated (refer to Note 18)</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
Effective April 2014, SDI executed an agreement with a non-related consultant to set up its social media sites and optimization of search engines for the Company, at a start- up fee for $2,250 (CAD$3,000) (Phase 1) and payment of $2,250 (CAD$3,000) per month and issued 150,000 stock options at $0.32 (CAD$0.38) when Phase 2 of the project was implemented. Either party can terminate the agreement by giving 30 days’ notice.</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
Effective July 1, 2016, SDI renewed an agreement with a non-related consultant to pay compensation of $5,250 per month. The consultant is to assist with sales initiatives, demos and participate in trade shows. The agreement unless renewed by mutual consent expires December 31, 2016. The consultant is also entitled to a 5% cash commission for all completed direct sales to end users and a 2% cash commission for all completed indirect sales. The Company agreed to grant 25,000 stock options for every 5,000 rounds sold to a maximum of an additional 175,000 options. Either party may terminate the consulting agreement by giving 30 days’ written notice. Subsequent to the year this agreement was terminated (note 18)</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
Effective September 1, 2016, the Company executed an agreement with a non-related consultant to pay compensation of $12,500 per month. The consultant is to assist with sales initiatives, licensing, DOT testing, distributorship set-up and forecast. The agreement expires December 31, 2016, after which the same may continue at Company discretion on a month to month basis.</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
b) The Company has commitments for leasing office premises in Oakville, Ontario, Canada to April 30, 2018 at a monthly rent of $4,800 (CAD $6,399).</p>
648000
864000
18
221217
230892
0.10
16200
21600
10550
14000
50000
200000
12
20
3750
5000
30
3750
5000
0.05
0.02
25000
5000
200000
60
2250
3000
2250
3000
150000
0.32
0.38
30
5250
0.05
0.02
25000
5000
175000
30
12500
4800
6399
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">12.</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">EXCLUSIVE SUPPLY AGREEMENT</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">The Company entered a Development, Supply and Manufacturing Agreement with the BIP Manufacturer on July 25, 2012. This Agreement provides the Company to order and purchase only from the BIP Manufacturer certain 40MM assemblies and components for use by the Company to produce less-lethal and training projectiles as described in the Agreement. The Agreement is for a term of five years with an automatic extension for an additional year if neither party has given written notice of termination prior to the end of the five-year period.</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">The Company and a division of Abrams Airborne Manufacturing Inc. (AAMI), namely Milkor USA (MUSA), agreed to partner for a joint cross-selling / marketing initiative. This arrangement allows both companies to leverage existing and future sales channels by offering a comprehensive, full-package of Milkor USA’s 40mm Multi-Shot Grenade Launchers in conjunction with SDI’s 40mm Less-Lethal ammunition product-line to end-users globally.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">13.</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">SEGMENT DISCLOSURES</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">The Company is organized on two geographic areas in U.S.A. and Canada respectively. The U.S.A. and Canada operations are our operating segments and reportable segments, and each of those segments are led by our CEO. Performance is assessed and resources are allocated by our CEO, whom we have determined to be our Chief Operating Decision Maker (CODM). Management evaluates the segments based primarily upon revenue and assets. The tables below present segment sales and assets for the fiscal years ended November 30, 2016 and 2015:</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
<u>Year ended November 30, 2016</u>
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:none; border-right-width:medium" valign="bottom" width="10%">SDI</td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:none; border-right-width:medium" valign="bottom" width="10%">SDI Canada</td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">Total</td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Sales</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: 3px double #000000; ; border-right-style:none; border-right-width:medium" valign="bottom" width="10%">
136,230
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: 3px double #000000; ; border-left-style:none; border-left-width:medium" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: 3px double #000000; ; border-right-style:none; border-right-width:medium" valign="bottom" width="10%">
67,432
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: 3px double #000000; ; border-left-style:none; border-left-width:medium" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="10%">
203,662
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
<u>Year ended November 30, 2015</u>
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">SDI</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">SDI Canada</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">Total</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Sales</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="10%">
144,706
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="10%">
72,575
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="10%">
217,280
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2016</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2015</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">Sales</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="12%">
203,662
</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="12%">
217,280
</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">Elimination of intersegment revenue</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(49,647
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(66,275
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr>
<td valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom"> </td>
<td bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">Consolidated sales</td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
154,015
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
151,005
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
<u>Year ended November 30, 2016</u>
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">SDI</td>
<td align="left" nowrap="nowrap" width="2%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">SDI Canada</td>
<td align="left" nowrap="nowrap" width="2%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">Total</td>
<td align="left" nowrap="nowrap" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Assets</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%">
316,461
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%">
89,398
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%">
405,859
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
<u>Year ended November 30, 2015</u>
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td align="left" nowrap="nowrap"> </td>
<td align="left" nowrap="nowrap" width="1%"> </td>
<td align="right" nowrap="nowrap" width="10%">SDI</td>
<td align="left" nowrap="nowrap" width="2%"> </td>
<td align="left" nowrap="nowrap" width="1%"> </td>
<td align="right" nowrap="nowrap" width="10%">SDI Canada</td>
<td align="left" nowrap="nowrap" width="2%"> </td>
<td align="left" nowrap="nowrap" width="1%"> </td>
<td align="right" nowrap="nowrap" width="10%">Total</td>
<td align="left" nowrap="nowrap" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td align="left" nowrap="nowrap"> </td>
<td align="right" nowrap="nowrap" width="1%"> </td>
<td align="right" nowrap="nowrap" width="10%"> </td>
<td align="right" nowrap="nowrap" width="2%"> </td>
<td align="right" nowrap="nowrap" width="1%"> </td>
<td align="right" nowrap="nowrap" width="10%"> </td>
<td align="right" nowrap="nowrap" width="2%"> </td>
<td align="left" nowrap="nowrap" width="1%"> </td>
<td align="right" nowrap="nowrap" width="10%">(Restated)</td>
<td align="left" nowrap="nowrap" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap"> </td>
<td align="left" nowrap="nowrap" width="1%"> </td>
<td align="left" nowrap="nowrap" width="10%"> </td>
<td align="left" nowrap="nowrap" width="2%"> </td>
<td align="left" nowrap="nowrap" width="1%"> </td>
<td align="left" nowrap="nowrap" width="10%"> </td>
<td align="left" nowrap="nowrap" width="2%"> </td>
<td align="left" nowrap="nowrap" width="1%"> </td>
<td align="right" nowrap="nowrap" width="10%">(See Note 17</td>
<td align="left" nowrap="nowrap" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Assets</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%">
2,036,932
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%">
111,348
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%">
2,148,280
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:none; border-right-width:medium" valign="bottom" width="10%">SDI</td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:none; border-right-width:medium" valign="bottom" width="10%">SDI Canada</td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">Total</td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Sales</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: 3px double #000000; ; border-right-style:none; border-right-width:medium" valign="bottom" width="10%">
136,230
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: 3px double #000000; ; border-left-style:none; border-left-width:medium" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: 3px double #000000; ; border-right-style:none; border-right-width:medium" valign="bottom" width="10%">
67,432
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: 3px double #000000; ; border-left-style:none; border-left-width:medium" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="10%">
203,662
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="2%"> </td>
</tr>
</table>
136230
67432
203662
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">SDI</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">SDI Canada</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">Total</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Sales</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="10%">
144,706
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="10%">
72,575
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="10%">
217,280
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
144706
72575
217280
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2016</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">2015</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">Sales</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="12%">
203,662
</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="12%">
217,280
</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">Elimination of intersegment revenue</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(49,647
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(66,275
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr>
<td valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom"> </td>
<td bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">Consolidated sales</td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
154,015
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
151,005
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
203662
217280
-49647
-66275
154015
151005
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">SDI</td>
<td align="left" nowrap="nowrap" width="2%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">SDI Canada</td>
<td align="left" nowrap="nowrap" width="2%"> </td>
<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">Total</td>
<td align="left" nowrap="nowrap" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Assets</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%">
316,461
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%">
89,398
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%">
405,859
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
</table>
316461
89398
405859
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td align="left" nowrap="nowrap"> </td>
<td align="left" nowrap="nowrap" width="1%"> </td>
<td align="right" nowrap="nowrap" width="10%">SDI</td>
<td align="left" nowrap="nowrap" width="2%"> </td>
<td align="left" nowrap="nowrap" width="1%"> </td>
<td align="right" nowrap="nowrap" width="10%">SDI Canada</td>
<td align="left" nowrap="nowrap" width="2%"> </td>
<td align="left" nowrap="nowrap" width="1%"> </td>
<td align="right" nowrap="nowrap" width="10%">Total</td>
<td align="left" nowrap="nowrap" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td align="left" nowrap="nowrap"> </td>
<td align="right" nowrap="nowrap" width="1%"> </td>
<td align="right" nowrap="nowrap" width="10%"> </td>
<td align="right" nowrap="nowrap" width="2%"> </td>
<td align="right" nowrap="nowrap" width="1%"> </td>
<td align="right" nowrap="nowrap" width="10%"> </td>
<td align="right" nowrap="nowrap" width="2%"> </td>
<td align="left" nowrap="nowrap" width="1%"> </td>
<td align="right" nowrap="nowrap" width="10%">(Restated)</td>
<td align="left" nowrap="nowrap" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" nowrap="nowrap"> </td>
<td align="left" nowrap="nowrap" width="1%"> </td>
<td align="left" nowrap="nowrap" width="10%"> </td>
<td align="left" nowrap="nowrap" width="2%"> </td>
<td align="left" nowrap="nowrap" width="1%"> </td>
<td align="left" nowrap="nowrap" width="10%"> </td>
<td align="left" nowrap="nowrap" width="2%"> </td>
<td align="left" nowrap="nowrap" width="1%"> </td>
<td align="right" nowrap="nowrap" width="10%">(See Note 17</td>
<td align="left" nowrap="nowrap" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Assets</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%">
2,036,932
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%">
111,348
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%">
2,148,280
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
</table>
2036932
111348
2148280
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">14.</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">CONVERTIBLE DEBENTURES AND DEFERRED FINANCING COSTS</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
<b>
<i>
$1,153,540
(CAD $1,549,000) Convertible Debentures
</i>
</b>
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
On August 6, 2014, the Company issued a Canadian $1,549,000
face value
12% convertible debentures with a term to August 6, 2017 (the “Maturity Date”). At any time while the debentures are outstanding, the holder has the option to convert the outstanding principal of the debentures into common shares of the Company at a fixed conversion price of CAD $0.50
per share. At any time after February 6, 2015, the Company has the right to force the conversion of the debentures into common shares at a price of at least CAD$0.65
per common share for a period of at least
20
consecutive trading days. If the common shares do not trade on any trading day and the bid price of the common Shares is CAD $0.65
or greater, the common shares shall be deemed to have traded at a price of at least CAD $0.65
on that trading day. Additionally, the Company has the right to redeem the debentures, in whole or in part, (a) during the
12
months ending August 6, 2015, at a premium of
15% to the principal amount being redeemed plus any accrued interest, (b) during the
12
months ending August 6, 2016, at a premium of
5% to the principal amount being redeemed plus any accrued interest, (c) during the
12
months ending August 6, 2017, at a premium of
2% to the principal amount being redeemed plus any accrued interest. In connection with the financing, the Company issued warrants to placement agents to purchase
151,900
shares of common stock at an exercise price of CAD $0.50
per share. Additionally, the Company incurred $157,293
(CAD $174,209) in financing fees.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">The Company has evaluated the terms and conditions of the convertible debentures and placement agent warrants under the guidance of ASC 815. The conversion feature met the definition of conventional convertible for purposes of applying the conventional convertible exemption. The definition of conventional contemplates a fixed number of shares issuable under the arrangement. The instrument was convertible into a fixed number of shares and there were no down round anti-dilution protection features contained in the contracts. The Company was required to consider whether the hybrid contract embodied a beneficial conversion feature (“BCF”). The debentures did not result in a BCF because the conversion price was not in the money on the inception date. There were no terms or features contained in the warrant agreement that would preclude the warrants from achieving equity classification.</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">The following table reflects the allocation of the purchase on the financing date:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">Convertible Debentures - Face Value</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
1,398,342
</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">Proceeds</td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%">$</td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
(1,279,773
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Deferred financing costs</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(190,876
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">Paid in capital (warrants)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
33,583
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Prepaid expenses</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
16,681
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">Accrued expenses</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
21,793
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Convertible debentures</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
1,398,592
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The warrants were valued at $33,583
and were recorded as a component of deferred financing costs. Interest expense related to the debentures amounted to $232,032
and $231,398
for the years ended November 30, 2016 and 2015 respectively. Of the $232,032
(2015: $231,398) $168,292
(2015: $167,832) related to interest and the remaining $63,740
(2015: $63,566) related to the amortization of deferred financing costs. Deferred financing costs as of November 30, 2016, reflects $35,769
outstanding to be amortized for these convertible debentures. Subsequent to the year there were modifications to the terms of these convertible debentures (refer to note 18)
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
In addition, the Company incurred legal costs for $36,874
during the year ended November 30, 2016, which were costs incurred to raise an additional $1,500,000
of
10% senior secured convertible notes after the year end, and are reflected as deferred financing costs in the balance sheet. (refer to note 18)
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" valign="bottom">Convertible Debentures - Face Value</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
1,398,342
</td>
<td align="left" bgcolor="#e6efff" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" nowrap="nowrap" valign="bottom">Proceeds</td>
<td align="left" nowrap="nowrap" valign="bottom" width="1%">$</td>
<td align="right" nowrap="nowrap" valign="bottom" width="12%">
(1,279,773
</td>
<td align="left" nowrap="nowrap" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Deferred financing costs</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(190,876
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">Paid in capital (warrants)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
33,583
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Prepaid expenses</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
16,681
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom">Accrued expenses</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
21,793
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom">Convertible debentures</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
1,398,592
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="2%"> </td>
</tr>
</table>
1398342
-1279773
-190876
33583
16681
21793
1398592
1153540
1549000
1549000
0.12
0.50
0.65
20
0.65
0.65
12
0.15
12
0.05
12
0.02
151900
0.50
157293
174209
33583
232032
231398
232032
231398
168292
167832
63740
63566
35769
36874
1500000
0.10
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">15.</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">INVENTORY</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
Inventory as of November 30, 2016, consist of finished goods of Blunt Impact Projectiles 40mm for $836
(November 30, 2015: $30,329) and 40mm LMT launchers for $6,487
(November 30, 2015: $13,990) which are held at the BIP manufacturer.
</p>
836
30329
6487
13990
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">16.</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">FINANCIAL INSTRUMENTS</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">The Company is exposed to risks that arise from its use of financial instruments. This note describes the Company’s objectives, policies and processes for managing those risks and the methods used to measure them.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">i)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Currency risk</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The Company held its cash balances within banks in Canada in both United States dollars and Canadian dollars and with banks in United States in United States dollars. The Company’s operations are conducted in USA and its subsidiary operates in Canada. The value of the Canadian dollar against the United States dollar may fluctuate with the changes in economic conditions.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
During the year ended November 30, 2016, the US dollar strengthened in relation to the Canadian dollar and upon the translation of the Company’s subsidiary’s revenue, expenses, assets and liabilities held in Canadian dollars, the Company recorded translation adjustment loss of $10,619
(Prior year- a loss of $15,033), in other comprehensive loss. The Convertible debentures issued by SDI in Canadian currency reflected a currency gain of $18,749
and $179,537
for the years ended November 30, 2016 and 2015 respectively.
</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">
The Company's Canadian subsidiary revenue, costs of sales, operating costs and capital expenditures are denominated in Canadian dollar. Consequently, fluctuations in the U.S. dollar exchange rate against the Canadian dollar increases the volatility of sales, cost of sales and operating costs and overall net earnings when translated into U.S. dollars. The Company is not using any forward and option contracts to fix the foreign exchange rates. Using a
10% fluctuations in the US exchange rate, the impact on the loss and stockholders’ deficiency is not material except the effect on the foreign exchange conversion of the convertible debt issued in Canadian dollars.
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">ii)</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Credit risk and economic dependence</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The financial instruments that potentially subject the Company to credit risk consist of cash and accounts receivable.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The Company maintains cash with high credit quality financial institutions located in Canada.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The Company provides credit to its customers in the normal course of its operations. It carries out, on a continuing basis, credit checks on its customers.</p>
<p align="justify" style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">The Company’s operations rely significantly on one supplier. Notwithstanding the Company has the ability to source alternative suppliers.</p>
10619
15033
18749
179537
0.10
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">17.</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">PRIOR PERIOD RESTATEMENT</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The financial statements as of November 30, 2015 and for the year then ended are restated to record foreign currency translations gains net of tax of $179,537
and $39,167
in fiscal years 2015 and 2014, respectively, following further analysis of convertible debt issued by the Company in Canadian dollars. Accumulated Deficit as of December 1, 2015, has been reduced by $218,704, net of income tax effect of $nil, to correct the cumulative errors for years 2015 and 2014 to include foreign currency translation gain in income statements to conform to generally accepted accounting principles. The analysis was conducted during the preparation of annual financial statements for 2016.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">The effect of changes in the financial statements is summarized as follows:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" valign="bottom" width="13%">Year ended</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" valign="bottom" width="13%">Quarter ended</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" valign="bottom" width="13%">Quarter ended</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" valign="bottom" width="13%">Quarter ended</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" valign="bottom" width="13%">Year ended</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="13%">November 30, 2014</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="13%">February 28, 2015</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="13%">May 31, 2015</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="13%">August 31, 2015</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="13%">November 30, 2015</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">Prior to</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">Prior to</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">Prior to</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">Prior to</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">Prior to</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restatement</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restated</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restatement</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restated</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restatement</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restated</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restatement</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restated</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restatement</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restated</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">$ </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> $</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">$ </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> $</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">$ </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">$ </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> $</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> $</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">$ </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> $</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<u>Consolidated Balance Sheet:</u>
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Deferred financing costs</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
170,674
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
165,230
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
155,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
137,301
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
138,978
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
123,770
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
122,959
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
103,510
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
107,108
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
88,970
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Total Assets</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,557,052
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,551,608
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,011,348
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
993,649
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
3,056,766
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
3,041,558
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
2,545,867
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
2,526,418
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
2,166,418
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
2,148,280
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Convertible Debentures</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,398,592
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,353,981
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,398,592
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,238,890
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,398,592
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,245,551
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,398,592
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,177,395
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,398,592
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,161,750
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Total Liabilities</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,559,997
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,515,386
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,514,011
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,354,309
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,524,026
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,370,985
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,459,190
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,237,993
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,571,921
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,335,079
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Accumulated deficit</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(24,042,769
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(24,003,602
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(24,531,262
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(24,389,259
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(25,000,244
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(24,862,410
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(25,467,782
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(25,266,031
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(26,593,207
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(26,374,503
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr>
<td valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Consolidated Statement of operations
<u>and Comprehensive loss:</u>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Foreign currency translation (gain) loss</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
-
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(39,167
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
-
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(102,836
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
-
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
4,169
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
-
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(63,917
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
-
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(179,537
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Total Operating Expenses</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
2,670,074
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
2,630,907
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
433,120
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
330,284
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
424,010
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
428,179
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
414,490
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
350,573
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
2,354,105
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
2,174,568
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Loss from Operations</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(2,654,917
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(2,615,750
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(431,436
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(328,600
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(410,657
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(414,826
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(409,213
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(345,296
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(2,319,040
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(2,139,503
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Loss before Income Taxes</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,722,412
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,683,245
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(488,493
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(385,657
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(468,982
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(473,151
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(467,538
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(403,621
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,550,438
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,370,901
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Net Loss</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(2,722,412
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(2,683,245
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(488,493
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(385,657
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(468,982
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(473,151
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(467,538
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(403,621
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(2,550,438
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(2,370,901
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Comprehensive Loss</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,754,118
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,714,951
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(499,718
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(396,882
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(464,597
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(468,766
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(469,833
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(405,916
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,565,471
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,385,934
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Loss per share - basic and diluted</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.06
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.06
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.01
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.01
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.01
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.01
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.01
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.01
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.05
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.05
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr>
<td valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr>
<td bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<u>Consolidated Statement of Cash Flows</u>
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Net Loss</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,722,412
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,683,245
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(488,493
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(385,657
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(957,475
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(858,808
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(1,425,013
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(1,262,429
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,550,438
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,370,901
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Adjustment for: Foreign currency translation (gain) loss</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(39,167
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(102,836
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(98,667
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(162,584
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(179,537
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">Net cash used in operating activities</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(1,940,050
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(1,940,050
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(507,246
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(507,246
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(908,650
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(908,650
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(1,417,684
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(1,417,684
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(1,738,824
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(1,738,824
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" valign="bottom" width="13%">Year ended</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" valign="bottom" width="13%">Quarter ended</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" valign="bottom" width="13%">Quarter ended</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" valign="bottom" width="13%">Quarter ended</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" valign="bottom" width="13%">Year ended</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="13%">November 30, 2014</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="13%">February 28, 2015</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="13%">May 31, 2015</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="13%">August 31, 2015</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="13%">November 30, 2015</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">Prior to</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">Prior to</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">Prior to</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">Prior to</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">Prior to</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restatement</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restated</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restatement</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restated</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restatement</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restated</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restatement</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restated</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restatement</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="5%">Restated</td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="center" nowrap="nowrap" valign="bottom"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">$ </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> $</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">$ </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> $</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">$ </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">$ </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> $</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> $</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%">$ </td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="5%"> $</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<u>Consolidated Balance Sheet:</u>
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Deferred financing costs</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
170,674
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
165,230
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
155,000
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
137,301
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
138,978
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
123,770
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
122,959
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
103,510
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
107,108
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
88,970
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Total Assets</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,557,052
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,551,608
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,011,348
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
993,649
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
3,056,766
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
3,041,558
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
2,545,867
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
2,526,418
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
2,166,418
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
2,148,280
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Convertible Debentures</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,398,592
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,353,981
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,398,592
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,238,890
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,398,592
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,245,551
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,398,592
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,177,395
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,398,592
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
1,161,750
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Total Liabilities</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,559,997
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,515,386
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,514,011
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,354,309
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,524,026
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,370,985
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,459,190
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,237,993
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,571,921
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
1,335,079
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Accumulated deficit</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(24,042,769
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(24,003,602
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(24,531,262
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(24,389,259
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(25,000,244
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(24,862,410
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(25,467,782
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(25,266,031
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(26,593,207
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(26,374,503
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr>
<td valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Consolidated Statement of operations
<u>and Comprehensive loss:</u>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Foreign currency translation (gain) loss</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
-
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(39,167
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
-
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(102,836
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
-
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
4,169
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
-
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(63,917
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
-
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(179,537
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Total Operating Expenses</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
2,670,074
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
2,630,907
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
433,120
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
330,284
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
424,010
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
428,179
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
414,490
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
350,573
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
2,354,105
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
2,174,568
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Loss from Operations</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(2,654,917
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(2,615,750
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(431,436
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(328,600
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(410,657
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(414,826
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(409,213
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(345,296
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(2,319,040
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(2,139,503
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Loss before Income Taxes</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,722,412
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,683,245
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(488,493
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(385,657
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(468,982
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(473,151
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(467,538
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(403,621
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,550,438
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,370,901
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Net Loss</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(2,722,412
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(2,683,245
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(488,493
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(385,657
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(468,982
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(473,151
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(467,538
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(403,621
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(2,550,438
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(2,370,901
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Comprehensive Loss</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,754,118
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,714,951
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(499,718
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(396,882
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(464,597
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(468,766
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(469,833
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(405,916
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,565,471
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,385,934
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Loss per share - basic and diluted</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.06
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.06
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.01
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.01
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.01
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.01
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.01
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.01
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.05
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(0.05
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr>
<td valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="5%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr>
<td bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<u>Consolidated Statement of Cash Flows</u>
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="5%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Net Loss</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,722,412
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,683,245
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(488,493
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(385,657
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(957,475
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(858,808
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(1,425,013
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(1,262,429
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,550,438
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(2,370,901
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" valign="bottom">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Adjustment for: Foreign currency translation (gain) loss</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(39,167
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(102,836
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(98,667
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(162,584
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="5%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="5%">
(179,537
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td align="left" valign="bottom">Net cash used in operating activities</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(1,940,050
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(1,940,050
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(507,246
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(507,246
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(908,650
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(908,650
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(1,417,684
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(1,417,684
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(1,738,824
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="5%">
(1,738,824
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
</table>
170674
165230
155000
137301
138978
123770
122959
103510
107108
88970
1557052
1551608
1011348
993649
3056766
3041558
2545867
2526418
2166418
2148280
1398592
1353981
1398592
1238890
1398592
1245551
1398592
1177395
1398592
1161750
1559997
1515386
1514011
1354309
1524026
1370985
1459190
1237993
1571921
1335079
-24042769
-24003602
-24531262
-24389259
-25000244
-24862410
-25467782
-25266031
-26593207
-26374503
0
-39167
0
-102836
0
4169
0
-63917
0
-179537
2670074
2630907
433120
330284
424010
428179
414490
350573
2354105
2174568
-2654917
-2615750
-431436
-328600
-410657
-414826
-409213
-345296
-2319040
-2139503
-2722412
-2683245
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-2385934
-0.06
-0.06
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-0.01
-0.01
-0.01
-0.01
-0.01
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-0.05
-2722412
-2683245
-488493
-385657
-957475
-858808
-1425013
-1262429
-2550438
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-98667
-162584
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-1940050
-507246
-507246
-908650
-908650
-1417684
-1417684
-1738824
-1738824
179537
39167
218704
0
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">18.</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">SUBSEQUENT EVENTS</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
a) On December 7, 2016, the Company entered a Securities Purchase Agreement (the “Agreement”) with several accredited investors (the “Purchasers”) and Northeast Industrial Partners, LLC as collateral agent for the Purchasers (the “Collateral Agent”) to sell $1,500,000
of
10% senior secured convertible notes (the “Secured Notes”), convertible into shares of the Company’s common stock, in a private placement pursuant to Regulation D under the Securities Act of
1933
(the “Securities Act”). The sale of the Secured Notes was closed on December 7, 2016.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
A condition to the sale of the Secured Notes was the exchange of at least
80% in principal amount of the Company’s outstanding
12% Unsecured Debentures, which mature on August 6, 2017 (the “Unsecured Debentures”) for an equal principal amount of Subordinate Secured Debentures. Concurrent with the sale of the Secured Notes, CAD$1,364,000
of the Company’s outstanding Unsecured Debentures, which represented approximately
88% of the outstanding Unsecured Debentures, were exchanged for an equal principal amount of the Subordinate Secured Debentures and an additional CAD$37,000
of Subordinated Secured Debentures were issued in satisfaction of a portion of the accrued interest on the Unsecured Debentures.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The outstanding principal amount of the Secured Notes accrues interest at a rate of
10% per annum, provided that, in the event of default on the Secured Notes, the interest rate will be
15.0% during the period of default. The maturity date of the Secured Notes is June 6, 2019, which date is subject to optional extension by each Purchaser if a change of control of the Company is announced prior to such date. Interest on the Secured Notes is payable in arrears on the last day of each May and November while the Secured Notes are outstanding. The Company has the option to redeem the Secured Notes by paying the Purchaser, the Optional Redemption Price as described in the Secured Notes.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
Each Secured Note is convertible into common stock, at the option of the Purchaser. Upon such optional conversion, the outstanding principal amount of the Secured Note converts into shares of Common Stock at a conversion price of $0.24
per share, subject to adjustment as set forth in the Secured Notes (the “Note Conversion Price”). The Company is not required to convert any portion of a Secured Note if doing so, results in the Purchaser beneficially owning more than
4.99% of the outstanding Common Stock after giving effect to such conversion, provided that on sixty (60) days’ prior written notice from the Purchaser to the Company, that percentage will increase to
19.99% .
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The CAD$1,364,000
of Subordinate Secured Debentures were issued pursuant to the Indenture in exchange for the Unsecured Debentures in equal principal amount and CAD$37,000
of Subordinate Secured Debentures were issued pursuant to the Indenture in payment of accrued interest. The Subordinate Secured Debentures mature on June 6, 2019 and bear interest at
12% per annum payable, semiannually. The Subordinate Secured Debentures are convertible into common shares of the Company’s Common Stock at the Note Conversion Price so long as any Secured Notes are outstanding, and thereafter, subject to adjustment as set forth in the Indenture.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The Company paid to persons who were instrumental in arranging accepted subscription agreements for the Subordinate Secured Debentures, cash compensation equal to
2% of the principal amount of the Subordinate Secured Debentures arranged by such persons.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
b) In January 2017, the Company made the second share issuance to Northeast Industrial Partners under the consulting agreement announced on June 20, 2016. The Company issued
589,414
common shares at a deemed price of $0.1142
per share to satisfy the payment of USD $50,000
due on November 15, 2016. The shares are subject to a four-month hold period expiring on May 14, 2017. The issuance of shares to Northeast Industrial Partners is the second of four such issuances to occur over the period ending May 15, 2017. Northeast Industrial Partners is controlled by Bryan Ganz, who was appointed to the board of directors of SDI after the consulting agreement was entered.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
c) Effective January 1, 2017, the Company executed a one-year service agreement with Northeast Industrial Partners, LLC (“NEIP”) a Corporation in which Bryan Ganz, Director has an ownership interest to pay compensation of $7,500
per month. The said Corporation will assist the Company with administrative services which will include accounting, production, inventory management and human resources. The agreement is for a period of one year and can be terminated by either party by giving
60
days’ notice in writing.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
d) Effective January 1, 2017, the Company executed a commercial lease for leasing warehouse space in Perry, Florida. The lease is for an initial three-year term at a monthly lease payment of $3,250. The said lease can be renewed for an additional three-year term with a
10% increase.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
e) Effective January 1, 2017, the Company terminated the agreement executed on July 1, 2016 with a non-related consultant to pay compensation of $5,250
per month (refer to Note11)
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
f) Effective January 27, 2017, the Company terminated the agreement executed on May 1, 2015 with a non-related consultant to pay compensation of $3,750
(CAD $5,000) per month (refer to Note11)
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
g) In March 2017, the Company made a third share issuance to Northeast Industrial Partners under the consulting agreement announced on June 20, 2016. The Company issued
503,251
common shares at a deemed price of $0.99
per share to satisfy the payment of $50,000
due on February 15, 2017. The shares are subject to a four-month hold period expiring on July 3, 2017. The issuance of shares to Northeast Industrial Partners is the third of four such issuances to occur over the period ending May 15, 2017. Northeast Industrial Partners is controlled by Bryan Ganz, who was appointed to the board of directors of SDI after the consulting agreement was entered.
</p>
1500000
0.10
1933
0.80
0.12
1364000
0.88
37000
0.10
0.15
0.24
0.0499
0.1999
1364000
37000
0.12
0.02
589414
0.1142
50000
7500
60
3250
0.10
5250
3750
5000
503251
0.99
50000