8. STOCK-BASED COMPENSATION

6 Months Ended

May 31, 2013

Equity [Abstract]

8. STOCK-BASED COMPENSATION

NOTE 8 - STOCK-BASED COMPENSATION

2008 Option Plan:

The Company's Amended and Restated 2008 Directors, Officers and Employees Stock Option Plan, which was originally approved by stockholders at the annual general meeting of the Company held on December 5, 2007, and subsequently amended by the stockholders on July 23, 2008. This plan was established to enable the Company to attract and retain the services of highly qualified and experienced directors, officers, employees and consultants and to give such persons an interest in the success of the Company and its subsidiaries. The total number of shares currently authorized under the plan is 391,134. The options and awards will be granted at the direction of the Board of Directors. Options issued under the plan that are deemed to be incentive stock options will be priced at not less than 100 percent of the fair market value of the shares of Common Stock underlying the options at the date of the grant, subject to certain limitations for 10 percent stockholders. The fair value of each option granted during the three months ended May 31, 2012 and 2013 was estimated at the time of grant using the Black-Scholes option pricing model and are as follows:

Three Months Ended	May 31, 2012		May 31, 2013
Exercise price ($)		7.67		N/A
Risk-free interest rate	1.92%			N/A
Expected term (Years)		10		N/A
Expected volatility	100%			N/A
Expected dividend yield		0%		N/A
Fair value of option ($)	6.86			N/A
Expected forfeiture rate	Nil			N/A

All the grants vest quarterly over a two year period and expire on the tenth anniversary of the grant date. The following table summarizes the stock option activities of the Company.

	Number of options
Outstanding as of November 30, 2011		338,983
Granted		44,327
Exercised		—
Cancelled/forfeited		—
Outstanding as of May 31, 2012, November 30, 2012 and May 31, 2013		383,310

The share-based compensation for the three and six months ended May 31, 2013 was $28,150 and $66,632, respectively (three and six months ended May 31, 2012 - $53,899 and $122,567, respectively). The Company recorded this in general and administrative expenses with a corresponding credit to additional paid-in capital.

As of November 30, 2012 the Company has granted a total of 383,310 options to purchase Common Stock to employees, directors and advisory board members, all of which are currently outstanding and of which 350,716 are vested and exercisable. All of these outstanding stock options have an exercise price above the fair market price on the grant dates. As of November 30, 2012, the total fair value of the options granted to employees at the respective grant dates was $1,458,698, of which the unrecognized portion of $107,882 related to the unvested shares associated with these stock option grants will be recognized over a period of two years from the respective grant dates.

As of May 31, 2013 the Company has granted a total of 383,310 options to purchase Common Stock to employees, directors and advisory board members, all of which are currently outstanding and of which 377,117 are vested and exercisable. All of these outstanding stock options have an exercise price above the fair market price on the grant dates. As of May 31, 2013, the total fair value of the options granted to employees at the respective grant dates was $1,458,698, of which the unrecognized portion of $41,250 related to the unvested shares associated with these stock option grants will be recognized over a period of two years from the respective grant dates.

2012 Option Plan:

Under the Company’s 2012 Directors, Officers and Employees Stock Option Plan the company granted a total of 100,000 options to purchase Common Stock to its four directors and chief financial officer on April 2, 2013.  The total number of shares currently authorized under the plan is 400,000.  The options and awards will be granted at the direction of the Board of Directors. Options issued under the plan that are deemed to be incentive stock options will be priced at not less than 100 percent of the fair market value of the shares of Common Stock underlying the options at the date of the grant, subject to certain limitations for 10 percent stockholders. The fair value of each option granted during the three months ended May 31, 2012 and 2013 was estimated at the time of grant using the Black-Scholes option pricing model and are as follows:

Three Months Ended	May 31, 2012		May 31, 2013
Exercise price ($)		N/A		3.94
Risk-free interest rate	N/A			0.78%
Expected term (Years)		N/A		5
Expected volatility	N/A			100%
Expected dividend yield		N/A		0%
Fair value of option ($)	N/A			2.92
Expected forfeiture rate	N/A			Nil

All the grants vest yearly at the rate of 1/3 starting on the first year anniversary of the grant date and expire on the fifth anniversary of the grant date. The following table summarizes the stock option activities of the Company.

	Number of options
Outstanding as of November 30, 2012		—
Granted		100,000
Exercised		—
Cancelled/forfeited		—
Outstanding as of May 31, 2013		100,000

The share-based compensation for the three and six months ended May 31, 2013 was $nil in each period (three and six months ended May 31, 2012 - $nil in each period).

As of May 31, 2013 the Company granted options to purchase a total of 100,000 shares of Common Stock at an exercise price of $3.94 per share, to its four independent directors and chief financial officer, all of which are currently outstanding and of which none are vested and exercisable. All of these outstanding stock options have an exercise price equal to the fair market price on the date of grant. As of May 31, 2013, the total fair value of the options granted to the independent directors and chief financial officer at the respective grant dates was $292,174, of which the unrecognized portion of $292,174 related to the unvested shares associated with these stock option grants will be recognized over a period of three years.