Stockholders' Equity (Deficiency)

12 Months Ended

Aug. 31, 2013

Notes to Financial Statements

NOTE 5 - STOCKHOLDERS' EQUITY (DEFICIENCY)

(A) COMMON STOCK

On July 24, 2013, the Company issued an aggregate of 798,808 common shares upon the conversion of an aggregate of $41,100 of convertible notes payable. The convertible notes payable were converted at the fixed conversion rate stated in each respective note ranging from $0.03 to $0.08 per share (See Notes 4 and 7).

On July 24, 2013, the Company issued an aggregate of 1,482,000 common shares to settle $21,600 of accrued office sharing expenses and $52,500 of accrued officer’s salary. The accrued expenses were converted at the rate of $0.05 per common share (See Note 7).

(B) STOCK OPTIONS

The Company estimates the fair value of stock-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon several variables such as the expected option term, expected volatility of our stock price over the expected term, expected risk-free interest rate over the expected option term, expected dividend yield rate over the expected option term, and an estimate of expected forfeiture rates. The Company believes this valuation methodology is appropriate for estimating the fair value of stock options granted to employees and directors which are subject to ASC Topic 718 requirements. These amounts are estimates and thus may not be reflective of actual future results, nor amounts ultimately realized by recipients of these grants. The Company recognizes compensation on a straight-line basis over the requisite service period for each award. The Company did not grant any stock options during the years ended August 31, 2013 and 2012.

A summary of the Company’s stock option activity during the year ended August 31, 2013 is presented below:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	No. of			Exercise		Contractual		Intrinsic
	Shares			Price		Term		Value
Balance outstanding at August 31, 2012		360,000		$	0.67
Granted		-
Exercised		-
Forfeited		-
Expired		(30,000	)	$	0.51
Balance outstanding at August 31, 2013		330,000		$	0.68		2.2	$	-
Exercisable at August 31, 2013		330,000		$	0.68		2.2	$	-