Annual report pursuant to Section 13 and 15(d)

Stock Options

v2.4.0.6
Stock Options
 12 Months Ended
Oct. 31, 2012
Stock Options [Text Block]
9.

Stock Options

On July 11, 2011, the Company granted 700,000 stock options to directors and officers of the Company with an exercise price of $0.35 per share, vested immediately and expiring on July 11, 2016.

On November 15, 2011, the Company granted 40,000 stock options to consultants of the Company with an exercise price of $0.30 per share, vested immediately and expiring on November 15, 2016. The options have been cancelled as of October 31, 2012.

On September 28, 2012, the Company granted 25,000 stock options to Directors and Officers of the Company with an exercise price of $0.20 per share, vested immediately and expiring on September 28, 2017.

For the stock options granted during the year, the exercise price is greater than the market price at grant date and the weighted average exercise price $0.26 (2011: $0.35) and the weighted average fair value is $0.17 (2011:$0.26) .

For the year ended October 31, 2012, the Company recorded a total of $11,336 (2011: $179,789) for stock based compensation expenses.

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:

    Year ended October 31, 2012 Year ended October 31, 2011
  Expected volatility 129.14%-152.92% 131.14%
  Risk-free interest rate 2.75% 2.75%
  Expected life 5 years 5 years
  Dividend yield 0.0% 0.0%

A summary of the stock options for the year ended October 31, 2012 is presented below:

      Options Outstanding  
            Weighted Average  
      Number of Shares     Exercise Price  
  Balance, October 31, 2010   1,525,000   $ 0.20  
  Granted   700,000     0.35  
  Exercised   (225,000 )   0.20  
  Expired   (300,000 )   0.20  
  Balance, October 31, 2011   1,700,000   $   0.26  
  Granted   65,000     0.25  
  Expired   (40,000 )   0.30  
  Balance, October 31, 2012   1,725,000   $   0.26  

The Company has the following options outstanding and exercisable:

  October 31, 2012         Options outstanding     Options exercisable  
                                 
            Weighted     Weighted           Weighted  
            average     Average           Average  
  Range of   Number     remaining     Exercise     Number     Exercise  
  Exercise prices   of shares     contractual life     Price     of shares     Price  
  $0.20   150,000     2.80 years   $ 0.20     150,000   $ 0.20  
  $0.20   850,000     2.23 years   $ 0.20     850,000   $ 0.20  
  $0.35   700,000     3.70 years   $ 0.35     700,000   $ 0.35  
  $0.20   25,000     4.91 years   $ 0.20     25,000   $ 0.25  
  Total   1,725,000     2.91 years   $ 0.26     1,725,000   $ 0.26