Quarterly report pursuant to Section 13 or 15(d)

Stock Options

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Stock Options
 3 Months Ended
Aug. 31, 2015
Stock Options [Text Block]
12.

Stock Options

During the period ended May 31, 2015, 1,425,000 stock options were granted on December 22, 2014 to Directors, Officers and consultants. The exercise price of the stock options is $0.11, 1,125,000 vesting immediately, 100,000 vesting in six months, and 100,000 vesting in 12 months; all expiring on December 22, 2019.

On February 4, 2015, the Company granted 250,000 stock options to consultants with an exercise price of $0.10, vesting immediately, expiring February 3, 2020.

On March 26, 2015, the Company granted 500,000 stock options to an Officer of the Company. The exercise price of the stock options is $0.10, vesting immediately and expiring on March 26, 2020.

For the nine months ended May 31, 2015, the Company recorded $229,702 (May 31, 2014 – $Nil) stock based compensation expenses which has been included in consulting fees.

A summary of the changes in stock options for the nine months ended May 31, 2015 is presented below:

            Options Outstanding  
            Weighted  
            Average  
      Number     Exercise  
      of Shares     Price  
  Balance, August 31, 2014   2,625,000   $ 0.24  
  Expired   (950,000 )   0.20  
  Granted   2,175,000     0.11  
  Balance, May 31, 2015   3,850,000   $ 0.20  

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

      May 31, 2015  
  Expected volatility   243%  
  Risk-free interest rate   1.68-1.47%  
  Expected life   5.00 years  
  Dividend yield   0.00%  
  Estimated fair value per option $ $0.10  

A summary of the stock options as at ended May 31, 2015 is presented below:

  May 31, 2015         Options outstanding     Options exercisable  
                                 
  Range of Exercise   Number of     Weighted average     Weighted average     Number of     Weighted average  
  prices   shares     remaining contractual life     exercise price     shares     exercise price  
  $0.20   150,000     0.21 years   $ 0.20     150,000   $ 0.20  
  $0.35   450,000     1.11years   $ 0.35     450,000   $ 0.35  
  $0.10   400,000     3.05 years   $ 0.20     400,000   $ 0.10  
  $0.60   50,000     3.82 years   $ 0.60     50,000   $ 0.60  
  $0.25   625,000     4.15 years   $ 0.25     625,000   $ 0.25  
  $0.11   1,425,000     4.67 years   $ 0.11     1,225,000   $ 0.11  
  $0.10   250,000     4.68 years   $ 0.10     250,000   $ 0.10  
  $0.10   500,000     4.82 years   $ 0.10     500,000   $ 0.10  
  Total   3,850,000     3.48 years   $ 0.20     3,650,000   $ 0.17