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In February 2009, the Company issued CAN$14 million in 10% subordinated unsecured convertible redeemable debentures (the "Debentures") maturing February 2014. The interest is 10% annually, paid quarterly in arrears. At any time after February 20, 2009, each Debenture may be converted by the holder into units of the Company, each unit consisting of one common share of the Company and one half of a common share purchase warrant at a conversion price of CAN$1.90 per unit. Each full share purchase warrant will entitle the holder to purchase one common share at an exercise price of CAN$2.05 for up to 5 years from conversion. A total of 7,364,736 common shares are issuable upon conversion. Subsequent to July 26, 2010, each Debenture can be redeemed by the Company for cash, plus a redemption fee of 7%, provided the closing share price is greater than CAN$2.85 for thirty consecutive days. The Company incurred placement fee totaling CAN$1,081,000 offsetting proceeds, and issued 644,414 share purchase warrants exercisable at CAN$1.90 for five years.
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