6. Stock Options

3 Months Ended

Aug. 31, 2012

Text Block [Abstract]

6. Stock Options

On December 21, 2010, the Company adopted its 2010 Stock Option Plan pursuant to which it may grant stock options to acquire up to a total of 8,500,000 shares of its common stock. The Board of Directors currently acts as the plan administrator of this plan. On January 21, 2011, 1,400,000 options were granted pursuant to the plan with 400,000 such options granted to consultants with an exercise of $0.20 per share, vested over 2 years and mature on January 19, 2014 and 1,000,000 such options granted to the new president of the Company with an exercise price of $0.20 per share, vested over 5 years and mature on January 21, 2016. During the nine months ended August 31, 2012, the Company recorded stock based compensation of $17,173 in connection with the stock options granted during the period.

A summary of the changes in stock options for the period ended August 31, 2012 is presented below:

	Options Outstanding
			Weighted
	Number of		Average
	Shares		Exercise
			Price
Balance, November 30, 2011		1,400,000	$	0.20
Granted		0	$	0
Balance, August 31, 2012		1,400,000	$	0.20

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

	August 31, 2012
Expected volatility	167.15% - 185.32%
Risk-free interest rate	1.185% - 2.05%
Expected life	3 – 5 years
Dividend yield	0.0%

A summary of weighted average fair value of stock options granted during the period ended August 31, 2012 as follows:

	Weighted		Weighted
	Average		Average
	Exercise		Fair
August 31, 2012	Price		Value
Exercise price is greater than market price at grant date:	$	0.20	$	0.15

The Company has the following options outstanding and exercisable:

August 31, 2012		Options outstanding
				Weighted
				Average	Weighted
				Remaining	average
Range of		Number		contractual	exercise
exercise prices		of shares		life	price
$	0.20		1,400,000	2.53 years		0.20

As at August 31, 2012, 500,000 stock options are exercisable.