ISSUE OF OPTIONS UNDER EQUITY INCENTIVE PLAN

3 Months Ended

Jan. 31, 2013

ISSUE OF OPTIONS UNDER EQUITY INCENTIVE PLAN

(8) ISSUE OF OPTIONS UNDER EQUITY INCENTIVE PLAN

(i) Effective December 13, 2010, the Company issued 2,500,000 options over shares of Common Stock to employees under the 2010 Equity Incentive Plan that has been adopted by the Directors of the Company. The options vested 1/3 on December 13, 2010, 1/3 vested on November 17, 2011 and the balance vested on November 17, 2012. The exercise price of the options is US$1.00 and the latest exercise date for the options is November 17, 2020.

The Company has accounted for all options issued based upon their fair market value using the Binomial pricing model.

An external consultant has calculated the fair value of the 2,500,000 options using the Binomial valuation method using the following inputs:

Grant date	Dec 13, 2010		Dec 13, 2010		Dec 13, 2010
Grant date share price		US$1.10		US$1.10		US$1.10
Vesting date	Dec 13, 2010		Nov 17, 2011		Nov 17, 2012
Expected life in years		4.5		5.0		5.5
Risk-free rate		1.91%		1.91%		1.91%
Volatility		95%		95%		95%
Exercise price		US$1.00		US$1.00		US$1.00
Call option value		US$0.78		US$0.81		US$0.83

	Options		Option Price Per Share US$		Weighted Average Exercise Price US$
Outstanding at November 1, 2010		-		-		-
Granted		2,500,000		1.00		1.00
Forfeited		-		-		-
Outstanding at October 31, 2012 and January 31, 2013		2,500,000		1.00		1.00

The exercise price is US$1.00 per option. The weighted average per option fair value of options granted during fiscal 2011 was US$0.81 and the weighted average remaining contractual life of those options is 7¾ years. At January 31, 2013 there are 2,500,000 options exercisable.

For the three months ended January 31, 2013, the amortization amounted to $40,686.

(ii) In May 2011, the Company issued 750,000 options over shares of Common Stock to employees under the 2010 Equity Incentive Plan that has been adopted by the Directors of the Company. The options vested 1/3 upon grant date, 1/3 vested on February 1, 2012 and the balance will vest on February 1, 2013. The exercise price of the options is US$1.00 and the latest exercise date for the options is February 1, 2018.

The Company has accounted for all options issued based upon their fair market value using the Binomial pricing model.

An external consultant has calculated the fair value of the 750,000 options using the Binomial valuation method using the following inputs:

Grant date	May 1, 2011			May 1, 2011			May 1, 2011
Grant date share price	$	US$1.30		$	US$1.30			US$1.30
Vesting date	May 1, 2011			Feb 1, 2012			Feb 1, 2013
Expected life in years		3.5			4.0			4.5
Risk-free rate		2.02	%		2.02	%		2.02	%
Volatility		100	%		100	%		100	%
Exercise price	$	US1.00		$	US1.00		$	US1.00
Call option value	$	US0.91		$	US0.95		$	US0.99

	Options		Option Price Per Share US$		Weighted Average Exercise Price US$
Outstanding at November 1, 2010		-		-		-
Granted		750,000		1.00		1.00
Forfeited		-		-		-
Outstanding at October 31, 2012 and January 31, 2013		750,000		1.00		1.00

The exercise price is US$1.00 per option. The weighted average per option fair value of options granted during fiscal 2011 was US$0.95 and the weighted average remaining contractual life of those options is 5 years. At January 31, 2013 there are 500,000 options exercisable.

The total value of the outstanding unvested options equates to $386 and is being amortised over the vesting periods.

For the three months ended January 31, 2013, the amortization amounted to $35,468.