--05-31
srci
Sono Resources, Inc.
2011-11-30
0001318196
No
Smaller Reporting Company
No
10-Q
false
36153278
Yes
2012
Q2
0001318196
2012-01-19
0001318196
2011-06-01
2011-11-30
0001318196
2011-11-30
0001318196
2011-05-31
0001318196
2011-09-01
2011-11-30
0001318196
2010-09-01
2010-11-30
0001318196
2010-06-01
2010-11-30
0001318196
2004-04-05
2011-11-30
0001318196
2010-05-31
0001318196
2004-04-04
0001318196
2010-11-30
shares
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<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse;" width="100%">
<tr valign="top">
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">
<b>NOTE 1 –BASIS OF PRESENTATION</b>
</font>
</font>
</td>
</tr>
</table>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">
<b>Basis of Presentation</b>
<br/>
These consolidated financial statements are presented in United States dollars and have been prepared in accordance with generally accepted accounting principles in the United States of America.
</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s May 31, 2011 audited financial statements. The results of operations for the periods ended November 30, 2011 and the same period last year are not necessarily indicative of the operating results for the full years.</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">
<b>Unaudited Consolidated Financial Statements</b>
<br/>
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for financial information and with the instructions to Form 10-Q. They do not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended May 31, 2011 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. The unaudited consolidated financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the six months ended November 30, 2011 are not necessarily indicative of the results that may be expected for the year ending May 31, 2012.
</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">
<b>Going concern</b>
<br/>
To date the Company has generated minimal revenues from its business operations and has incurred operating losses since inception of $11,087,971. As at November 30, 2011, the Company has a working capital deficit of $736,469. The Company requires additional funding to meet its ongoing obligations and to fund anticipated operating losses. The ability of the Company to continue as a going concern is dependent on raising capital to fund its initial business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern. The Company intends to continue to fund its mineral exploration business by way of private placements and advances from related parties as may be required. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.
</font>
</font>
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse;" width="100%">
<tr valign="top">
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">
<b>NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b>
</font>
</font>
</td>
</tr>
</table>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">
<b>Principles of Consolidation</b>
<br/>
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary Bonnyridge (PTY) Ltd., a Botswana company, acquired effective August 2, 2011 (refer to Note 3). All significant inter-company transactions and account balances have been eliminated upon consolidation.
</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">
<b>Use of Estimates and Assumptions</b>
<br/>
Preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the period. Accordingly, actual results could differ from those estimates.
</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">
<b>Mineral Property Expenditures</b>
<br/>
The Company is primarily engaged in the acquisition, exploration and development of mineral properties.
</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">Mineral property acquisition costs are capitalized in accordance with FASB ASC 930-805, “Extractive Activities-Mining,” when management has determined that probable future benefits consisting of a contribution to future cash inflows have been identified and adequate financial resources are available or are expected to be available as required to meet the terms of property acquisition and budgeted exploration and development expenditures. Mineral property acquisition costs are expensed as incurred if the criteria for capitalization are not met. In the event that mineral property acquisition costs are paid with Company shares, those shares are recorded at the estimated fair value at the time the shares are due in accordance with the terms of the property agreements.</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">Mineral property exploration costs are expensed as incurred.</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves and pre-feasibility, the costs incurred to develop such property are capitalized.</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">Estimated future removal and site restoration costs, when determinable are provided over the life of proven reserves on a units-of-production basis. Costs, which include production equipment removal and environmental remediation, are estimated each period by management based on current regulations, actual expenses incurred, and technology and industry standards. Any charge is included in exploration expense or the provision for depletion and depreciation during the period and the actual restoration expenditures are charged to the accumulated provision amounts as incurred.</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">Prior to the date of these consolidated financial statements, the Company has incurred only property option payments and exploration costs which have been expensed.</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">To date the Company has not established any proven or probable reserves on its mineral properties.</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">
<b>Asset Retirement Obligations</b>
<br/>
The Company has adopted the provisions of FASB ASC 410-20 “Asset Retirement and Environmental Obligations,” which establishes standards for the initial measurement and subsequent accounting for obligations associated with the sale, abandonment or other disposal of long-lived tangible assets arising from the acquisition, construction or development and for normal operations of such assets. The adoption of this standard has had no effect on the Company’s financial position or results of operations. As of November 30, 2011, any potential costs relating to the ultimate disposition of the Company’s mineral property interests are not yet determinable.
</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">
<b>Cash and cash equivalents</b>
<br/>
Cash and cash equivalents include highly liquid investments with original maturities of three months or less.
</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">
<b>Net Income (Loss) per Share</b>
<br/>
The Company computes income (loss) per share in accordance with FASB ASC 260-10, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the consolidated statement of operations. Basic income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.
</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">
<b>Foreign Currency Translation</b>
<br/>
The consolidated financial statements are presented in United States dollars. In accordance with FASB ASC 830-10, “Foreign Currency Matters,” foreign denominated monetary assets and liabilities are translated to their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Revenue and expenses are translated at average rates of exchange during the period. Related translation adjustments are reported as a separate component of stockholders’ equity, whereas gains or losses resulting from foreign currency transactions are included in results of operations.
</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">
<b>
Stock-based Compensation
<br/>
</b>
On June 1, 2006, the Company adopted FASB ASC 718-10, “Compensation-Stock Compensation,” under this method, compensation cost recognized for the year ended May 31, 2007 included: a) compensation cost for all share-based payments granted prior to, but not yet vested as of May 31, 2006, based on the grant-date fair value estimated in accordance with the original provisions of SFAS 123, and b) compensation cost for all share-based payments granted subsequent to May 31, 2006, based on the grant-date fair value estimated in accordance with the provisions of FASB ASC 718-10. In addition, deferred stock compensation related to non-vested options is required to be eliminated against additional paid-in capital upon adoption of FASB ASC 718-10. The results for the prior periods were not restated.
</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">
<b>Fair Value of Financial Instruments</b>
<br/>
In accordance with the requirements of FASB ASC 820-10, the Company has determined the estimated fair value of financial instruments using available market information and appropriate valuation methodologies. The fair value of financial instruments classified as current assets or liabilities approximate their carrying value due to the short-term maturity of the instruments.
</font>
</font>
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse;" width="100%">
<tr valign="top">
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"><b>NOTE 3 –MINERAL EXPLORATION PROPERTIES</b> </font> </font></td>
</tr>
</table>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"><b>Botswana leases</b><br />
On March 14, 2011 the Company entered into a formal Share Purchase Agreement (the “Agreement”) with Tignish (PTY) Ltd., a Botswana company (the “Vendor”), to purchase 95 percent of the issued and outstanding shares (the “Shares”) of Bonnyridge (PTY) Ltd., also a Botswana company (“Bonnyridge”), which is the legal and beneficial owner of three mineral license blocks located in Northwestern Botswana, Africa (the “Property”). </font> </font></p>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">In accordance with the terms of the Agreement, and in order to purchase the Shares, the Company was required to provide the Vendor with: (i) an initial cash payment of $200,000 by April 20, 2011 (paid); (ii) a further cash payment of $100,000 on or before closing; and (iii) 6,500,000 restricted common shares of the Company at closing; and which closing was required to occur prior to April 29, 2011 unless otherwise mutually determined. The closing date was subsequently extended to provide adequate time to obtain final regulatory approvals in Botswana. These regulatory approvals were obtained on July 22, 2011. The further cash payment of $100,000 was paid on July 29, 2011 and the 6,500,000 restricted common shares of the Company were issued to the Vendor on August 2, 2011.</font> </font></p>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">In addition to the consideration payable above, under this purchase agreement Sono was required to pay a further $600,000 in cash over a three-year period.</font> </font></p>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">On August 11, 2011 Sono agreed to acquire the remaining 5% Shares of Bonnyridge by paying $100,000 (paid September 23 2011) in cash and issuing 1,000,000 additional restricted common shares from treasury (issued on August 30, 2011); thereby also eliminating the additional cash payments of $600,000 as referred to above.</font> </font></p>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">For the period from August 2, 2001 to August 11, 2011, Bonnyridge had no significant operations or cash flows and accordingly the above transactions have been accounted for as a single business combination effective August 2, 2011 using the purchase method.</font> </font></p>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">The fair value of the assets acquired and liabilities assumed effective August 2, 2011 are as follows:</font> </font></p>
<div align="center">
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse;" width="70%">
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Current assets</font> </font></td>
<td align="left" bgcolor="#e6efff" width="1%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">$</font> </font></td>
<td align="right" bgcolor="#e6efff" width="22%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"> -</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Mineral properties</font> </font></td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="22%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">4,600,630</font> </font></td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
</tr>
<tr>
<td bgcolor="#e6efff">
</td>
<td bgcolor="#e6efff" width="1%">
</td>
<td bgcolor="#e6efff" width="22%">
</td>
<td bgcolor="#e6efff" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Total assets acquired</font> </font></td>
<td align="left" width="1%">
</td>
<td align="right" width="22%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">4,600,630</font> </font></td>
<td align="left" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Less: liabilities assumed</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="22%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">289,370</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
</tr>
<tr>
<td>
</td>
<td width="1%">
</td>
<td width="22%">
</td>
<td width="2%">
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Net assets acquired = purchase price</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">$</font> </font></td>
<td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="22%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"> 4,890,000</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="2%">
</td>
</tr>
<tr>
<td>
</td>
<td width="1%">
</td>
<td width="22%">
</td>
<td width="2%">
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Purchase price made up as follows:</font> </font></td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="left" bgcolor="#e6efff" width="22%">
</td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"> 6,500,000 common shares at $0.60 per share</font> </font></td>
<td align="left" width="1%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">$</font> </font></td>
<td align="right" width="22%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"> 3,900,000</font> </font></td>
<td align="left" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"> 1,000,000 common shares at $0.59 per share</font> </font></td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="22%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">590,000</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"> Cash paid as of November 30, 2011</font> </font></td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="22%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">400,000</font> </font></td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
</tr>
<tr>
<td bgcolor="#e6efff">
</td>
<td bgcolor="#e6efff" width="1%">
</td>
<td bgcolor="#e6efff" width="22%">
</td>
<td bgcolor="#e6efff" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left">
</td>
<td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">$</font> </font></td>
<td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" width="22%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"> 4,890,000</font> </font></td>
<td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" width="2%">
</td>
</tr>
</table>
</div>
<p>
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">The results of operations and cash flows presented include those of the Company for all periods presented and those of Bonnyridge for all periods subsequent to August 2, 2011. </font></font></p>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"><b>Botswana Licenses Purchase and Sale Agreement</b> </font> </font></p>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">During the period ended November 30, 2011 we entered into a Purchase and Sale Agreement (the “Agreement”), dated effective September 14, 2011, with Pinette (Proprietary) Limited (“Pinette”), a company incorporated under the laws of the Republic of Botswana and Marc Paul Lindsay, the principal and sole shareholder of Pinette. The Agreement provides for the acquisition by our Company from Pinette of three mineral exploration licenses in northwest Botswana totalling 1872.7 square kilometers <font color="#262626"> (the “Licenses”). </font> </font> </font></p>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Pursuant to the terms of the Agreement, the consideration to be paid by our Company to Pinette for the Licenses shall consist of a cash payment of CDN$100,000 ( US$98,000) together with 250,000 shares of our Company’s common stock, payable as: (i) a refundable deposit of CDN$50,000 ( US$49,000) payable within 10 business days of execution of the Agreement ( paid); (ii) CDN$50,000 US$49,000) payable on Closing (which shall be October 15, 2011 unless otherwise agreed to by the parties. The parties agreed to extend the Closing Date to February 15, 2012 to allow adequate time to obtain regulatory approvals); and (iii) 250,000 common shares of the Company to be issued to Pinette on Closing. As of November 30, 2011, the Company has paid US$50,000 in cash payment for the refundable deposit.</font> </font> </font></p>
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<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"><b>NOTE 4 – STOCKHOLDERS’ EQUITY</b> </font> </font></td>
</tr>
</table>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"><b>(a)</b> <b> <b>Capital Stock</b> </b></font> <b> </b></font> <b> </b></p>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">On August 2, 2011, the Company issued 6,500,000 common shares at $0.60 per share totalling $3,900,000, for the purchase of 95% of the shares of Bonnyridge Pty (Note 3).</font> </font></p>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">On August 30, 2011, the Company issued 1,000,000 common shares at $0.59 per share totalling $590,000, for the purchase of the remaining 5% shares of Bonnyridge Pty (Note 3).</font> </font></p>
<p align="justify">
<b><font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"><b>Private Placement</b><br />
</font></font></b><font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">On November 15, 2011, the Company closed a private placement of 2,480,000 units of the Company (each, a “Unit”) at US$0.50 per Unit, for total gross proceeds of US$1,064,925, net of offering cost. Each Unit consists of one common share and one share purchase warrant of the Company, with each warrant exercisable to purchase one additional common share at US$0.75 per share for a period of 24 months from closing. The Company issued 2,480,000 common shares at $0.50 per share. </font> </font></p>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">On November 15, 2011, in connection with the closing of the above private placement, and in accordance with the terms of an agency agreement between the Company and an agent (the “Agent”), the Company issued to the Agent 248,000 Options (“Agent’s Options”) exercisable into 248,000 units (each, an “Agent’s Units”) at a price of $0.50 per Agent’s Unit for a period of 24 months from closing. Each Agent’s Unit is comprised of one common share and one warrant (“Agent’s Warrant”), with each Agent’s Warrant being exercisable for one additional common share (each an “Agent’s Warrant Share”) at an exercise price of $0.75 per Agent’s Warrant Share for a period of 24 months from closing. As of November 30, 2011, the 248,000 Agent’s Options remain outstanding and unexercised. Please see Note 4 (c) for additional information.</font> </font></p>
<p align="justify">
<b><font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"><b>(b) </b> <b> </b> <b>Warrants</b> </font> </font> </b></p>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">The Company’s share purchase warrant activity for the period ended November 30, 2011 is summarized as follows:</font> </font></p>
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</td>
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</td>
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<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Weighted average exercise</font> </font></td>
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</td>
<td align="center" nowrap="nowrap" width="1%">
</td>
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<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Weighted average remaining</font> </font></td>
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</td>
</tr>
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</td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Number of Warrants</font> </font></td>
<td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
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</td>
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<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Price per share</font> </font></td>
<td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
<td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">In contractual life (in years)</font> </font></td>
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</td>
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</td>
<td width="1%">
</td>
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<td width="2%">
</td>
<td width="1%">
</td>
<td width="19%">
</td>
<td width="2%">
</td>
<td width="1%">
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</td>
<td width="2%">
</td>
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<td align="left" bgcolor="#e6efff">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Balance, May 31, 2010</font> </font></td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
<td align="left" bgcolor="#e6efff" width="1%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">$</font> </font></td>
<td align="right" bgcolor="#e6efff" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"> -</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Issued</font> </font></td>
<td align="left" width="1%">
</td>
<td align="right" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" width="2%">
</td>
<td align="left" width="1%">
</td>
<td align="right" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" width="2%">
</td>
<td align="left" width="1%">
</td>
<td align="right" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Exercised</font> </font></td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Expired / cancelled</font> </font></td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
</tr>
<tr>
<td bgcolor="#e6efff">
</td>
<td bgcolor="#e6efff" width="1%">
</td>
<td bgcolor="#e6efff" width="19%">
</td>
<td bgcolor="#e6efff" width="2%">
</td>
<td bgcolor="#e6efff" width="1%">
</td>
<td bgcolor="#e6efff" width="19%">
</td>
<td bgcolor="#e6efff" width="2%">
</td>
<td bgcolor="#e6efff" width="1%">
</td>
<td bgcolor="#e6efff" width="19%">
</td>
<td bgcolor="#e6efff" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Balance, May 31, 2011</font> </font></td>
<td align="left" width="1%">
</td>
<td align="right" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" width="2%">
</td>
<td align="left" width="1%">
</td>
<td align="right" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" width="2%">
</td>
<td align="left" width="1%">
</td>
<td align="right" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Issued</font> </font></td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">2,480,000</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">0.75</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Exercised</font> </font></td>
<td align="left" width="1%">
</td>
<td align="right" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" width="2%">
</td>
<td align="left" width="1%">
</td>
<td align="right" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" width="2%">
</td>
<td align="left" width="1%">
</td>
<td align="right" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Expired/cancelled</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
</tr>
<tr>
<td>
</td>
<td width="1%">
</td>
<td width="19%">
</td>
<td width="2%">
</td>
<td width="1%">
</td>
<td width="19%">
</td>
<td width="2%">
</td>
<td width="1%">
</td>
<td width="19%">
</td>
<td width="2%">
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Balance, November 30, 2011</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">
</td>
<td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">2,480,000</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="2%">
</td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">$</font> </font></td>
<td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"> 0.75</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="2%">
</td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">
</td>
<td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">1.96</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="2%">
</td>
</tr>
</table>
<p align="justify">
<b><font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"><b>(c)</b> <b> </b> <b>Stock options</b> </font> </font> </b></p>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">On September 17, 2011, the Company granted 2,275,000 stock options to officers and directors of the Company at $0.50 per share. The term of these options are ten years. The total fair value of these options at the date of grant was $1,296,750 and was estimated using the Black-Scholes option pricing model with an expected life of 10 years, a risk free interest rate of 2.08%, a dividend yield of 0%, and expected volatility of 260%.</font> </font></p>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">On November 30, 2011, the Company granted 300,000 stock options to consultants at $0.50 per share. The term of these options are five years. The total fair value of these options at the date of grant was $123,000 and was estimated using the Black-Scholes option pricing model with an expected life of 5 years, a risk free interest rate of 2.08%, a dividend yield of 0%, and expected volatility of 260%.</font> </font></p>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">On November 15, 2011, in connection with the closing of the above private placement, and in accordance with the terms of an agency agreement between the Company and an agent (the “Agent”), the Company issued to the Agent 248,000 Options (“Agent’s Options”) exercisable into 248,000 units (each, an “Agent’s Units”) at a price of $0.50 per Agent’s Unit for a period of 24 months from closing. The total fair value of these options at the date of grant was $121,520 and since the options have been accounted for as the offering costs related to the private placement and reduction of the equity, the impact on the financial statement is nil.</font> </font></p>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">The Company’s stock option activity for the period ended November 30, 2011 is summarized as follows:</font> </font></p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse;" width="100%">
<tr valign="top">
<td align="left">
</td>
<td align="left" width="1%">
</td>
<td align="center" nowrap="nowrap" width="19%">
</td>
<td align="center" nowrap="nowrap" width="2%">
</td>
<td align="center" nowrap="nowrap" width="1%">
</td>
<td align="center" nowrap="nowrap" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Weighted average exercise</font> </font></td>
<td align="center" nowrap="nowrap" width="2%">
</td>
<td align="center" nowrap="nowrap" width="1%">
</td>
<td align="center" nowrap="nowrap" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Weighted average remaining</font> </font></td>
<td align="left" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);">
</td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Number of Options</font> </font></td>
<td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
<td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Price per share</font> </font></td>
<td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
<td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">In contractual life (in years)</font> </font></td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
</tr>
<tr>
<td>
</td>
<td width="1%">
</td>
<td width="19%">
</td>
<td width="2%">
</td>
<td width="1%">
</td>
<td width="19%">
</td>
<td width="2%">
</td>
<td width="1%">
</td>
<td width="19%">
</td>
<td width="2%">
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Balance, May 31, 2010</font> </font></td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">462,500</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
<td align="left" bgcolor="#e6efff" width="1%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">$</font> </font></td>
<td align="right" bgcolor="#e6efff" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"> 4.15</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">7.12</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Granted</font> </font></td>
<td align="left" width="1%">
</td>
<td align="right" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" width="2%">
</td>
<td align="left" width="1%">
</td>
<td align="right" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" width="2%">
</td>
<td align="left" width="1%">
</td>
<td align="right" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Exercised</font> </font></td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Expired / cancelled</font> </font></td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">(462,500</font> </font></td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">)</font> </font></td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">4.15</font> </font></td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
</tr>
<tr>
<td bgcolor="#e6efff">
</td>
<td bgcolor="#e6efff" width="1%">
</td>
<td bgcolor="#e6efff" width="19%">
</td>
<td bgcolor="#e6efff" width="2%">
</td>
<td bgcolor="#e6efff" width="1%">
</td>
<td bgcolor="#e6efff" width="19%">
</td>
<td bgcolor="#e6efff" width="2%">
</td>
<td bgcolor="#e6efff" width="1%">
</td>
<td bgcolor="#e6efff" width="19%">
</td>
<td bgcolor="#e6efff" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Balance, May 31, 2011</font> </font></td>
<td align="left" width="1%">
</td>
<td align="right" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" width="2%">
</td>
<td align="left" width="1%">
</td>
<td align="right" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" width="2%">
</td>
<td align="left" width="1%">
</td>
<td align="right" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Granted</font> </font></td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">2,823,000</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">0.50</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Exercised</font> </font></td>
<td align="left" width="1%">
</td>
<td align="right" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" width="2%">
</td>
<td align="left" width="1%">
</td>
<td align="right" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" width="2%">
</td>
<td align="left" width="1%">
</td>
<td align="right" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" width="2%">
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Expired/cancelled</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">
</td>
<td align="right" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">-</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">
</td>
</tr>
<tr>
<td>
</td>
<td width="1%">
</td>
<td width="19%">
</td>
<td width="2%">
</td>
<td width="1%">
</td>
<td width="19%">
</td>
<td width="2%">
</td>
<td width="1%">
</td>
<td width="19%">
</td>
<td width="2%">
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">Balance, November 30, 2011</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">
</td>
<td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">2,823,000</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="2%">
</td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">$</font> </font></td>
<td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"> 0.50</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="2%">
</td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">
</td>
<td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="19%">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;">9.82</font> </font></td>
<td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="2%">
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse;" width="100%">
<tr valign="top">
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">
<b>NOTE 5 – SHAREHOLDER’S LOANS</b>
</font>
</font>
</td>
</tr>
</table>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">During the year ended May 31, 2011 two shareholders advanced the Company $322,500 (net of repayments of $5,000). These amounts were unsecured, bear interest at 5% per annum and have a two year term. Interest and principal are due at the end of the term of the loan. During the six months ended November 30, 2011, a further $490,000 was advanced on the same terms and repayments of $537,500 were made. As of November 30, 2011, a total of $284,962 in principal and accrued interest is due to the shareholders</font>
</font>
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse;" width="100%">
<tr valign="top">
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">
<b>NOTE 6 – RELATED PARTY TRANSACTIONS</b>
</font>
</font>
</td>
</tr>
</table>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">During the year ended May 31, 2011, the Company advanced $6,000 to Morgan Creek Energy Corp., a company with certain directors in common with the Company. These advances are non-interest bearing, unsecured and without specific terms or repayment.</font>
</font>
</p>
<p align="justify">
<font style="font-size: 10pt;">
<font style="font-family: times new roman,times,serif;">During the period ended November, 30, 2011, Bonnyridge has advances from its prior shareholders. These advances are non-interest bearing, unsecured and without specific terms or repayment. As of November 30, 2011, the outstanding balance is $114,994.</font>
</font>
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse;" width="100%">
<tr valign="top">
<td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"><b>NOTE 7 – SUBSEQUENT EVENTS</b> </font> </font></td>
</tr>
</table>
<p align="justify">
<font style="font-size: 10pt;"><font style="font-family: times new roman,times,serif;"><font color="#2a2a2a">At a special meeting of shareholders of the Company held on January 19, 2012, the Company’s shareholders approved a proposal to amend the Company’s Articles of Incorporation to increase the Company’s authorized shares of common stock from 50,000,000 shares of common stock to 1,000,000,000 shares of common stock with the same par value of $0.001 per share. This increase in the Company’s authorized shares of common stock will become effective upon the Company filing a Certificate of Amendment with the Nevada Secretary of State, which the Company anticipates will occur on January 23, 2012.</font> </font> </font></p>