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<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> Note 2 </td> <td align="left" width="90%"> Significant Accounting Policies </td> </tr> <tr> <td> </td> <td width="90%">   </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="90%"> These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America and are stated in U.S. dollars except where otherwise disclosed. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for the period necessarily involves the use of estimates, which have been made using careful judgment. Actual results may vary from these estimates. </td> </tr> <tr> <td> </td> <td width="90%">   </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="90%"> These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities and commitments in the normal course of business. </td> </tr> </table>   <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr> <td width="10%"> </td> <td valign="top" width="5%">a)</td> <td> Basis of Presentation </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, CounterPath Technologies Inc., a company existing under the laws of the province of British Columbia, Canada, and BridgePort Networks, Inc. incorporated under the laws of the state of Delaware. The results of NewHeights Software Corporation (which subsequently was amalgamated with another subsidiary to become CounterPath Technologies Inc.) are included from August 2, 2007, the date of acquisition. The results of FirstHand Technologies Inc. (which subsequently was amalgamated with CounterPath Technologies Inc.) and BridgePort Networks, Inc. are included from February 1, 2008, the date of acquisition. All inter-company transactions and balances have been eliminated. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td valign="top" width="5%">b)</td> <td> Significant Accounting Policies </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Revenue Recognition: </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> The Company recognizes revenue in accordance with the ASC 985-605 (prior authoritative literature: American Institute of Certified Public Accountants (AICPA) Statement of Position (“SOP”) 97-2) “Software Revenue Recognition”, as amended by SOP 98-9, “Modification of SOP 97-2, Software Revenue Recognition with Respect to Certain Transactions”. In accordance with these standards, revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collection of the related accounts receivable is deemed probable. In making these judgments, management evaluates these criteria as follows: </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td width="15%"> </td> <td align="left">•</td> <td align="left" width="80%"> Persuasive evidence of an arrangement. The Company considers a noncancelable agreement signed by the Company and the customer to be representative of persuasive evidence of an arrangement. </td> </tr> <tr> <td width="15%"> </td> <td> </td> <td width="80%">   </td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left">•</td> <td align="left" width="80%"> Delivery has occurred. The Company considers delivery to have occurred when the product has been delivered to the customer and no post-delivery obligations exist. In instances where customer acceptance is required, delivery is deemed to have occurred when customer acceptance has been achieved. </td> </tr> <tr> <td width="15%"> </td> <td> </td> <td width="80%">   </td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left">•</td> <td align="left" width="80%"> Fees are fixed or determinable. The Company considers the fee to be fixed or determinable unless the fee is subject to refund or adjustment or is not payable within normal payment terms. If the fee is subject to refund or adjustment, the Company recognizes revenue when the refund or adjustment right lapses. If offered payment terms exceed the Company’s normal terms, the Company recognizes revenue as the amounts become due and payable or upon the receipt of cash when extended payment terms beyond 180 days are offered. </td> </tr> <tr> <td width="15%"> </td> <td> </td> <td width="80%">   </td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left">•</td> <td align="left" width="80%"> Collection is deemed probable. Collection is deemed probable if, based upon the Company’s evaluation, the Company expects that the customer will be able to pay amounts under the arrangement as payments become due. If the Company determines that collection is not probable, revenue is deferred and recognized upon the receipt of cash. </td> </tr> </table> A substantial amount of the Company’s sales involve multiple element arrangements, such as products, support, professional services, and training. When arrangements include multiple elements, the Company allocates the total fee among the various elements using the residual method. Under the residual method, revenue is recognized when vendor specific objective evidence (VSOE) of fair value exists for all of the undelivered elements of the arrangement, but does not exist for one or more of the delivered elements of the arrangement. Each arrangement requires the Company to analyze the individual elements in the transaction and to estimate the fair value of each undelivered element, which typically represents support services.   <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Revenue is allocated to each of the undelivered elements based on its respective fair value. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> For contracts with elements related to customized network solutions and certain network build-outs, for transactions accounted for as sales of products or services, we apply FASB Accounting Standards Codification (“ASC”) Subtopic 605-25 (Prior authoritative literature: Emerging Issues Task Force Issue No. 00-21, "Revenue Arrangements with Multiple Deliverables") and revenues are recognized under ASC 605-35, for long-term transactions entered to supply software, or software systems, that require significant modification or customization (prior authoritative literature: SOP 81-1, "Accounting for Performance of Construction-Type and Certain Production-Type Contracts"), generally using the percentage-of-completion method. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> In using the percentage-of-completion method, revenues are generally recorded based on completion of milestones as described in the agreement. Profit estimates on long-term contracts are revised periodically based on changes in circumstances and any losses on contracts are recognized in the period that such losses become known. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Service revenue includes sales of support and other services, including professional services, training, and reimbursable travel. Support services include telephone support, e-mail support and unspecified rights to product updates and upgrades, and are recognized ratably over the term of the service period, which is generally 12 months. Support revenue is generally deferred until the related product has been accepted and all other revenue recognition criteria have been met. Professional services and training revenue is recognized as the related service has been performed. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Stock-Based Compensation : </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> The Company adopted ASC 718 (prior authoritative literature: Statement of Financial Accounting Standards (“SFAS”) No. 123R, “Accounting for Stock-Based Compensation”), using the modified prospective method on May 1, 2006. Under this application, the Company is required to record compensation expense, based on the fair value of the awards, for all awards granted after the date of adoption and for the unvested portion of previously granted awards that remain outstanding as at the date of adoption. In accordance with ASC 718, the compensation expense is amortized on a straight-line basis over the requisite service period which approximates the vesting period. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Stock options granted to non-employees were accounted for in accordance with ASC 718 and ASC 505-50 (prior authoritative literature: EITF No. 96-18, "Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction With Selling Goods or Services") and were measured at the fair value of the options as determined by an option pricing model on the measurement date and compensation expense is amortized over the vesting period or, if none exists, over the service period. Compensation expense for unvested options to non-employees is revalued at each balance sheet date and is being amortized over the vesting period of the options. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> With the adoption of ASC 718, the Company has elected to use the Black-Scholes option pricing model to determine the fair value of stock options granted. The Company has estimated the fair value of option awards to employees and non-employees for the years ended April 30, 2012 and April 30, 2011 using the assumptions more fully described in Note 8. </td> </tr> </table>   <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Use of Estimates: </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires the Company’s management to make estimates and assumptions which affect the amounts reported in these consolidated financial statements, the notes thereto, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Equipment and Amortization: </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Equipment is recorded at cost. Depreciation is provided for using the straight-line method over the estimated useful lives as follows: </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td width="15%"> </td> <td align="left" bgcolor="#e6efff">Computer hardware</td> <td align="left" bgcolor="#e6efff" width="50%">Two years</td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left">Computer software</td> <td align="left" width="50%">Two years</td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left" bgcolor="#e6efff">Leasehold improvements</td> <td align="left" bgcolor="#e6efff" width="50%">Shorter of lease term or estimated economic life</td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left">Office furniture</td> <td align="left" width="50%">Five years</td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left" bgcolor="#e6efff">Website</td> <td align="left" bgcolor="#e6efff" width="50%">Three years</td> </tr> </table> Research and Development: Research and development expense includes costs incurred to develop intellectual property. The costs for the development of new software and substantial enhancements to existing software are expensed as incurred until technological feasibility has been established, at which time any additional costs would be capitalized. Management has determined that technological feasibility is established at the time a working model of software is completed. Because management believes that the current process for developing software will be essentially completed concurrently with the establishment of technological feasibility, no costs have been capitalized to date. Website Development Costs: The Company recognizes the costs associated with developing a website in accordance with ACS Topic 350-40 (prior authoritative literature: the American Institute of Certified Public Accountants (“AICPA”) Statement of Position (“SOP”) No. 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”). Relating to website development costs, the Company follows the guidance pursuant to ASC Topic 350-50 (prior authoritative literature: Emerging Issues Task Force (EITF) No. 00-2, “Accounting for Website Development Costs”). Internal and external costs incurred during the preliminary project stage are expensed as they are incurred. Internal and external costs incurred to develop internal-use computer software during the application development stage are capitalized. Training costs are not internal-use software development costs and, if incurred during this stage, are expensed as incurred. These capitalized costs are amortized based on their estimated useful life over three years. Payroll and other related costs are not capitalized, as the amounts principally relate to maintenance. <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Impairment of Long-Lived Assets: </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> In accordance with ASC Topic 360-10-15 (prior authoritative literature: Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”), the carrying value of intangible assets and other long-lived assets are reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value. Intangible assets include the intangibles purchased in connection with the acquisition of NewHeights on August 2, 2007, and FirstHand and BridgePort on February 1, 2008. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> The intangible assets of NewHeights are reported at acquisition cost and include amounts initially allocated to acquired technologies of $3,454,839 (CDN$3,678,100) and customer assets of $2,283,908 (CDN$2,431,500). The acquired technologies are amortized based on their estimated useful life of four years and the customer asset is amortized on the basis of management’s estimate of the future cash flows from this asset over approximately five years, which is management’s estimate of the useful life of the customer asset. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> The intangible assets of FirstHand are reported at acquisition cost and include amounts initially allocated to acquired technologies of $2,804,700 (CDN$2,804,700) and customer asset of $587,000 (CDN$587,000). The acquired technologies are amortized based on their estimated useful life of four years and the customer asset is amortized on the basis of management’s estimate of the future cash flows from this asset over approximately five years, which is management’s estimate of the useful life of the customer asset. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> The intangible assets of BridgePort are being carried and reported at acquisition cost and include amounts initially allocated to acquired technologies of $476,703 and customer asset of $43,594. The acquired technologies are amortized based on their estimated useful life of four years and the customer asset is amortized on the basis of management’s estimate of the future cash flows from this asset over approximately five years, which is management’s estimate of the useful life of the customer asset. The expected amortization to be recorded for year ended April 30, 2013, of the acquired technologies and customer asset is as follows: </td> </tr> </table> <div align="right"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="85%"> <tr valign="top"> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);"> Fiscal Year </td> <td align="center" width="1%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="16%"> NewHeights </td> <td align="center" width="1%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="16%"> FirstHand </td> <td align="center" width="1%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="16%"> BridgePort </td> <td align="center" width="1%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="16%"> Total </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">2013</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="16%"> 38,853 </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="16%">−</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="16%">−</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="16%"> 38,853 </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> </tr> </table> </div> The above intangible assets are expected to be fully amortized as at April 30, 2013. In accordance with ASC Topic 360-10-15 (prior authoritative literature: SFAS 144), the Company performed an assessment as of April 30, 2012 and determined that there was no impairment of its intangible assets (2011 - $nil). The Company performed its assessment at the asset group level which represented the lowest level of cash flows that are largely independent of cash flows of other assets and liabilities. For the Company, this asset grouping is deemed to be at the reporting unit level and consists of acquired technology and customer relationships (which were recorded as a result of the acquisitions of FirstHand and NewHeights), and equipment. When performing this test at the reporting unit level, goodwill is included in the carrying value of the asset group. The Company assessed the recoverability of the carrying value of its long-lived assets based on estimated undiscounted cash flows to be generated from such assets. For the year ended April 30, 2012, the carrying value of the asset group was less than the undiscounted cash flows, indicating no impairment (2011 - $nil).   <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> A summary of the Company’s intangible assets, net, at April 30, 2012, is as follows: </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td width="15%"> </td> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" width="12%"> </td> <td align="center" width="2%"> </td> <td align="center" width="1%"> </td> <td align="center" width="12%"> Accumulated </td> <td align="center" width="2%"> </td> <td align="center" width="1%"> </td> <td align="center" width="12%"> Impairment </td> <td align="center" width="2%"> </td> <td align="center" width="1%"> </td> <td align="center" width="12%"> Net Carrying </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> Cost </td> <td align="center" width="2%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> Amortization </td> <td align="center" width="2%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> Charge </td> <td align="center" width="2%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> Amount </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left" bgcolor="#e6efff">Acquired technologies</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 6,306,336 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 4,417,678 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 1,888,658 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left">Customer assets</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 2,727,485 </td> <td align="left" width="2%"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 1,472,604 </td> <td align="left" width="2%"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 1,216,028 </td> <td align="left" width="2%"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 38,853 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left" bgcolor="#e6efff">Intangible assets, April 30, 2012</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%"> 9,033,821 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%"> 5,890,282 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%"> 3,104,686 </td> <td align="left" bgcolor="#e6efff" 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="12%"> 38,853 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> </table> A summary of the Company’s intangible assets, net at April 30, 2011 is as follows: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td width="15%"> </td> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" width="12%"> </td> <td align="center" width="2%"> </td> <td align="center" width="1%"> </td> <td align="center" width="12%"> Accumulated </td> <td align="center" width="2%"> </td> <td align="center" width="1%"> </td> <td align="center" width="12%"> Impairment </td> <td align="center" width="2%"> </td> <td align="center" width="1%"> </td> <td align="center" width="12%"> Net Carrying </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> Cost </td> <td align="center" width="2%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> Amortization </td> <td align="center" width="2%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> Charge </td> <td align="center" width="2%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> Amount </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left" bgcolor="#e6efff">Acquired technologies</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 6,314,811 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 4,038,003 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 1,888,658 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 388,150 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left">Customer assets</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 2,747,117 </td> <td align="left" width="2%"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 1,059,575 </td> <td align="left" width="2%"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 1,216,028 </td> <td align="left" width="2%"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 471,514 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left" bgcolor="#e6efff">Intangible assets, April 30, 2011</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%"> 9,061,928 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%"> 5,097,578 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%"> 3,104,686 </td> <td align="left" bgcolor="#e6efff" 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="12%"> 859,664 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> </table> Accounts Receivable and Allowance for Doubtful Accounts: Accounts receivable are presented net of an allowance for doubtful accounts. The allowance was $334,294 at April 30, 2012 (2011 - $49,883). Bad debt expense for the year ended April 30, 2012, was $169,736 (2011 - $183,893). The Company evaluates, on a periodic basis, the collectability of its accounts receivable balances on an individual customer basis considering a number of factors including the length of time accounts receivable are beyond the contractual payment terms, the Company’s previous loss history with the customer and the customer’s ability to pay its obligation to the Company. The Company determines the allowance for doubtful debts by considering a number of factors, including the length of time the accounts receivable are beyond the contractual payment terms, previous loss history, and the customer’s current ability to pay its obligation. When the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, the Company records a charge to the allowance to reduce the customer’s related accounts. Foreign Currency Translation: The Company’s functional currency is the U.S. dollar. The Company’s wholly-owned subsidiaries with a functional currency other than the U.S. dollar are translated into amounts to the reporting currency, United States dollars, in accordance with ASC Topic 830 (prior authoritative literature: SFAS No. 52, “Foreign Currency Translation”). At each balance sheet date, assets and liabilities that are denominated in a currency other than U.S. dollars are adjusted to reflect the current exchange rate which may give rise to a foreign currency translation adjustment accounted for as a separate component of stockholders’ equity and included in comprehensive loss. For transactions undertaken by the Company in foreign currencies, monetary assets and liabilities are translated into the functional currency at the exchange rate in effect at the end of the year. Non-monetary assets and liabilities are translated at the exchange rate prevailing when the assets were acquired or the liabilities assumed. Revenues and expenses are translated at the rate approximating the rate of exchange on the transaction date. Exchange gains and losses are included in the determination of net income (loss) for the year.   <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Accrued Warranty: </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> The Company’s warranty policy generally provides for one year of warranty for its products. The Company records a liability for estimated warranty obligations at the date products are sold. The estimated cost of warranty coverage is based on the Company’s actual historical experience with its current products or similar products. For new products, the required reserve is based on historical experience of similar products until such time as sufficient historical data has been collected on the new product. Estimated liabilities for warranty exposures, which relate to normal product warranties and a one-year obligation to provide for potential future liabilities for product sales for the years ended April 30, 2012 and 2011 were as follows: </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td width="15%"> </td> <td align="left"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" colspan="4" style="border-bottom: 1px solid rgb(0, 0, 0);"> Years Ended April 30, </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left"> </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 2012 </td> <td align="center" width="2%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%"> </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 2011 </td> <td align="left" width="2%"> </td> </tr> <tr> <td width="15%"> </td> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left" bgcolor="#e6efff">Balance, beginning of year</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 146,868 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 120,963 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left">Change</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> (61,920 </td> <td align="left" width="2%">)</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 25,905 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td width="15%"> </td> <td align="left" bgcolor="#e6efff">Balance, end of year</td> <td align="left" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%"> 84,948 </td> <td align="left" bgcolor="#e6efff" 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="12%"> 146,868 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> </table> Trademarks: Costs related to trademark applications have been deferred and are included in other assets. Once granted, trademark costs will be amortized over their useful lives. Fair Value of Financial Instruments: The Company’s financial instruments, consist of cash, accounts receivable, accounts payable and accrued liabilities, customer deposits, accrued warranty, and derivative liabilities. The fair value of the financial instruments approximate book value As a basis for considering market participant assumptions in fair value measurements, ASC 820-10 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The fair value hierarchy, as defined by ASC 820-10, contains three levels of inputs that may be used to measure fair value as follows: Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals; and Level 3 inputs are unobservable inputs for the asset or liability which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.   <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> The Company’s derivative financial instruments are valued using observable market-based inputs to industry valuation models. These valuation models require a variety of inputs, including contractual terms, market prices, yield curves, and measures of volatility obtained from various market sources. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> The Company measures certain financial assets, including any foreign currency option or forward contracts at fair value. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Income Taxes: </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> The Company accounts for income taxes by the asset and liability method in accordance with ASC Topic 740 (prior authoritative literature: SFAS 109, “ Accounting for Income Taxes”) . Under this method, current income taxes are recognized for the estimated income taxes payable for the current year. Deferred income tax assets and liabilities are recognized in the current year for temporary differences between the tax and accounting bases of assets and liabilities as well as for the benefit of losses available to be carried forward to future years for tax purposes that are likely to be realized. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> The Company has not recorded a deferred tax liability related to its investment in foreign subsidiaries. The Company has determined that its investment in these subsidiaries is permanent in nature and it does not intend to dispose of these investments in the foreseeable future. The amount of the deferred tax liability related to the Company's investment in foreign subsidiaries is not reasonably determinable. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> On May 1, 2007, the Company adopted Financial Accounting Standards Board (“FASB”) interpretation No. 48 (“FIN 48”), “ Accounting for Uncertainty in Income Taxes ”, (codified in FASB ASC Topic 740). FIN 48 contains a two-step approach to recognizing and measuring uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company recognizes interest and penalties accrued on unrecognized tax benefits within general and administrative expense. To the extent that accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction in general and administrative expenses in the period that such determination is made. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Comprehensive Loss: </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> The Company has adopted ASC Topic 220 (prior authoritative literature: SFAS No. 130 “ Reporting Comprehensive Income ”). Comprehensive loss is comprised of foreign currency translation adjustments. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Basic and Diluted Loss per Share: </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> The Company computes net loss per share in accordance with ASC Topics 260 and ASC 260-10 (prior authoritative literature: SFAS No. 128, "Earnings Per Share", and EITF No. 03-06, “Participating Securities and the Two-Class Method under FASB Statement No. 128”, respectively). </td> </tr> </table>   <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Basic earnings per share is computed based on the weighted average number of ordinary shares outstanding and assumes an allocation of net income to the preferred shares issued from 6789722 Canada Inc., a subsidiary of the Company, that are exchangeable into shares of common stock of the Company (Note 7) for the period or portion of the period that this security is outstanding. There are no exchangeable shares remaining as all have been exchanged into shares of common stock of the Company as of April 30, 2012. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the year. Diluted EPS gives effect to all dilutive potential common shares outstanding during the year including stock options and warrants using the treasury stock method. In computing diluted EPS, the average stock price for the year is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. For the year ended April 30, 2012, loss per share excludes 8,307,148 (April 30, 2011 – 9,054,175) potentially dilutive common shares (related to stock options, deferred share units, warrants, exchangeable shares and convertible debt) as their effect was anti-dilutive. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Investment tax credits: </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Investment tax credits are accounted for under the cost reduction method whereby they are netted against the expense or property and equipment to which they relate. Investment tax credits are recorded when the qualifying expenditures have been incurred and if it is more likely not that the tax credits will be realized. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Goodwill: </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Goodwill represents the excess purchase price over the estimated fair value of net assets acquired as of the acquisition date. ASC Topic 350 (prior authoritative literature: Statement of Financial Accounting Standards No. 142, “ Goodwill and Other Intangible Assets ” (“SFAS No. 142”)). ASC 350 requires goodwill to be tested for impairment annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the Company's business enterprise below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. Recoverability of goodwill is measured at the reporting unit level by comparing the reporting unit’s carrying amount, including goodwill, to the fair value of the reporting unit, which is measured based upon, among other factors, market multiples for comparable companies as well as a discounted cash flow analysis. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Management has determined that the Company currently has a single reporting unit which is CounterPath Corporation. If the recorded value of the assets, including goodwill, and liabilities (“net book value”) of the reporting unit exceeds its fair value, an impairment loss may be required. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Goodwill of $6,339,717 (CDN$6,704,947) and $2,083,960 (CDN$2,083,752) was initially recorded in connection with the acquisition of NewHeights Software Corporation on August 2, 2007 and FirstHand Technologies Inc. on February 1, 2008. Translated to U.S. dollars using the period end rate, the goodwill balance at April 30, 2012 was $6,834,353 (CDN$6,704,947) (April 30, 2011 - $7,055,616) and $2,123,624 (CDN$2,083,752) (April 30, 2011 - $2,192,377), respectively. During the fourth quarter of its fiscal year ended April 30, 2012, the Company performed its annual impairment test. In the first step, Management compared the fair value of the Company to its carrying value based upon an analysis of a number of factors including the market multiples of comparable companies as at April 30, 2012. On this basis Management determined that the Company’s implied fair value exceeded its carrying value and has not recognized any impairment of goodwill in the consolidated financial statements for the year ended April 30, 2012 (2011 - $nil). </td> </tr> </table>   <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> Derivative Instruments and Hedging Activities: </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> The Company accounts for derivative instruments, consisting of foreign currency forward contracts, pursuant to the provisions of Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133” (“SFAS 161”), effective at the beginning of the first quarter of fiscal year 2010. SFAS No. 161 was incorporated into ASC 815, Derivatives and Hedging (“ASC 815”). ASC 815 requires the Company to measure derivative instruments at fair value and record them in the balance sheet as either an asset or liability and expands financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, results of operations and cash flows. The Company does not use derivative instruments for trading purposes. ASC 815 also requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. Following the guidance in ASC 815-40-15, the Company recorded the warrants issued as derivative instruments due to their exercise price being denominated in a currency other than the Company’s U.S.dollar functional currency initially at fair value. Subsequent changes in the fair value of the derivative instruments are recorded as a gain or loss in the Company’s consolidated statements of operations. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> The Company manages foreign currency market risk using option or forward contracts to offset the risk associated with the effects of certain foreign currency exposures primarily related to non-functional currency intercompany loans and advances between our international subsidiaries as well as other balance sheet accounts, particularly accounts receivable, accounts payable and certain accrual accounts. The Company revalues all contracts to their current market value at the end of each reporting period and unrealized gains and losses are included in other comprehensive income (OCI). These gains and losses largely offset gains and losses recorded from the revaluation of our non-functional currency balance sheet exposures. We expect this to mitigate some foreign currency transaction gains or losses in future periods. Our net realized gain or loss with respect to currency fluctuations will depend on the currency exchange rates and other factors in effect as the contracts mature. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> We record our foreign currency forward contracts on our Consolidated Balance Sheets as other current assets or other current liabilities depending on whether the net fair value of such contracts is a net asset or net liability, respectively (see Note 11 “Derivative Instruments and Hedging Activities,” of the Notes to the Consolidated Financial Statements). The Company did not enter into any forward contracts during the year ended April 30, 2012 (2011 none). </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td valign="top" width="5%">c)</td> <td> New Accounting Pronouncements </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> In October 2009, FASB’s Emerging Issues Task Force issued ASU 2009-14 “Certain Revenue Arrangements That Include Software Elements.” ASU 2009-14 addresses certain revenue arrangements that include software elements. This guidance states that tangible products with hardware and software components that work together to deliver the product functionality are considered non-software products, and the accounting guidance under the revenue arrangements with multiple deliverables is to be followed. This guidance is effective for arrangements entered into, or materially modified, in periods beginning on or after June 15, 2010, with earlier adoption permitted, and the Company was required to adopt this guidance in its first quarter of fiscal 2012. The adoption of ASU 2009-14 did not have a material impact on the Company's financial statements. </td> </tr> </table>   <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> In April 2010, the FASB issued Accounting Standards Update(ASU) No. 2010-13, Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades , amends Topic 718 to clarify that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. It is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The amendments should be applied by recording a cumulative-effect adjustment to the opening balance of retained earnings. The cumulative-effect adjustment should be calculated for all awards outstanding as of the beginning of the year in which the amendments are initially applied, as if the amendments had been applied consistently since the inception of the award. The adoption of ASU 2010-13 did not have a material impact on the Company's financial statements. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> In April 2010, the FASB issued Accounting Standards Update No. 2010-17, Revenue Recognition—Milestone Method (Topic 605) – Revenue Recognition (ASU 2010-17). ASU 2010-17 provides guidance on defining the milestone and determining when the use of the milestone method of revenue recognition for research or development transactions is appropriate. It provides criteria for evaluating if the milestone is substantive and clarifies that a vendor can recognize consideration that is contingent upon achievement of a milestone as revenue in the period in which the milestone is achieved, if the milestone meets all the criteria to be considered substantive. ASU 2010-17 is effective for fiscal years and interim periods within those fiscal years, beginning June 15, 2010. The adoption of ASU 2010-17 did not have a material impact on the Company's financial statements. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> In May 2011, the FASB issued Accounting Standards Update (ASU) No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs , which aligns the fair value measurement and disclosure requirements in U.S. GAAP and the International Financial Reporting Standards (IFRSs). Many of the amendments in this ASU will not result in a change in requirements, but simply clarify existing requirements. The amendments in this ASU that do change a principle or requirement for measuring fair value or disclosing information about fair value measurements include the following: (1) the ASU permits an exception for measuring fair value when a reporting entity manages its financial instruments on the basis of its net exposure, rather than gross exposure, to those risks; (2) the ASU clarifies that the application of premiums and discounts in a fair value measurement is related to the unit of account for the asset or liability being measured at fair value; (3) the ASU prohibits blockage discounts for level 2 and 3 investments; and (4) the amendments expand the fair value measurement disclosures. The ASU is to be applied prospectively. For public entities, the ASU is effective during interim and annual periods beginning after December 15, 2011. We early implemented the requirements and present net income and comprehensive income in a single continuous statement. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> In June 2011 the FASB issued Accounting Standards Update (ASU) 2011-05, Presentation of Comprehensive Income , which eliminates the option of presenting the components of other comprehensive income (OCI) as part of the statement of changes in stockholders’ equity. The ASU instead permits an entity to present the total of comprehensive income, the components of net income and the components of OCI either in a single continuous statement of comprehensive income or in two separate but consecutive statements. With either format, the entity is required to present each component of net income along with total net income, each component of OCI along with the total for OCI, and a total amount for comprehensive income. Also, the ASU requires entities to present, for either format, reclassification adjustments for items that are reclassified from OCI to net income in the statement(s) where the components of net income and the components of OCI are presented. This ASU is to be applied retrospectively. For public entities, the ASU is effective for interim and annual periods beginning after December 15, 2011. The Company does not anticipate that the adoption of ASU 2011-05 will have any impact on its consolidated financial statements. </td> </tr> </table>   <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> In May 2011, the FASB issued Accounting Standards Update (ASU) 2011-04, "Fair Value Measurement (Topic 820), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS." There are few differences between the ASU and IFRS 13. While the ASU is largely consistent with existing fair value measurement principles in U.S. GAAP, it expands ASC 820's existing disclosure requirements for fair value measurements and makes other amendments. The amendments in the update became effective for fiscal years and interim periods beginning after December 15, 2011. </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="10%"> </td> <td width="5%"> </td> <td> In September 2011, the FASB issued Accounting Standards Update (ASU) 2011-08 to simplify how tests for potential goodwill impairment are performed. These amended standards permit an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit in which goodwill resides is less than its carrying value. For reporting units in which this assessment concludes it is more likely than not that the fair value is more than its carrying value, these amended standards eliminate the requirement to perform further goodwill impairment testing as required under the previous standards. The ASU is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 31, 2011. Early adoption was permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011 if an entity’s financial statements had not yet been issued. We have early adopted this standard on September 30, 2011, and it did not materially impact our consolidated financial statements. </td> </tr> </table>

<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> Note 8</td> <td align="left" width="90%"> Common Stock </td> </tr> <tr> <td>  </td> <td width="90%">  </td> </tr> <tr valign="top"> <td align="left">  </td> <td align="left" width="90%"> Private Placement</td> </tr> <tr> <td>  </td> <td width="90%">  </td> </tr> <tr valign="top"> <td align="left">  </td> <td align="left" width="90%"> On June 14, 2011, the Company issued an aggregate of 3,145,800 units under a brokered private placement for aggregate gross proceeds of $5,636,170 (CDN$5,505,150) at a price of $1.79 (CDN$1.75) per unit, with each unit consisting of one share of the Company’s common stock and one-half of one common share purchase warrant, with each whole warrant entitling the holder to purchase one additional common share of the Company’s common stock at an exercise price of CDN$2.25 per share until June 14, 2013. In connection with the offering, the Company issued an aggregate of 220,206 broker warrants, with each broker warrant entitling the holder thereof to purchase one common share of the Company at an exercise price of CDN$1.75 per share until December 14, 2012. In addition, the Company incurred $605,922 in share issue costs. </td> </tr> <tr> <td>  </td> <td width="90%">   </td> </tr> <tr valign="top"> <td align="left">  </td> <td align="left" width="90%"> Stock Options </td> </tr> <tr> <td>  </td> <td width="90%">   </td> </tr> <tr valign="top"> <td align="left">  </td> <td align="left" width="90%"> The Company has a stock option plan (the “2010 Stock Option Plan”) under which options to purchase common shares of the Company may be granted to employees, directors and consultants. This plan is effectively a merging of the Company’s 2004 and 2005 stock option plans. Stock options entitle the holder to purchase common stock at a subscription price determined by the Board of Directors of the Company at the time of the grant. The options generally vest in the amount of 12.5% on the date which is six months from the date of grant and then beginning in the seventh month at 1/42 per month for 42 months, at which time the options are fully vested. </td> </tr> <tr> <td>  </td> <td width="90%">   </td> </tr> <tr valign="top"> <td align="left">  </td> <td align="left" width="90%"> The maximum number of shares of common stock authorized by the stockholders and reserved for issuance by the Board of Directors of the Company under the stock option plan is 6,860,000 under the 2010 Stock Option Plan. </td> </tr> <tr> <td>  </td> <td width="90%">   </td> </tr> <tr valign="top"> <td align="left">  </td> <td align="left" width="90%"> The Company uses the Black-Scholes option pricing model to determine the fair value of stock options granted. In accordance with ASC 718 for employees, the compensation expense is amortized on a straight-line basis over the requisite service period which approximates the vesting period. Compensation expense for stock options granted to non-employees is amortized over the vesting period or, if none exists, over the service period. Compensation associated with unvested options granted to non-employees is remeasured on each balance sheet date using the Black-Scholes option pricing model. The expected volatility of options granted has been determined using the method described under ASC 718 using the historical stock price. </td> </tr> <tr> <td>  </td> <td width="90%">   </td> </tr> <tr valign="top"> <td align="left">  </td> <td align="left" width="90%"> The expected term of options granted to employees in the current fiscal year has been determined utilizing the “simplified” method as prescribed by SAB No. 107, Share-Based Payment, as amended by SAB No. 110 on January 1, 2008. The simplified method was used because the Company does not have sufficient detailed information about employee exercise behaviour. For non-employees, the expected term of the options approximates the full term of the options. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options. The Company has not paid and does not anticipate paying dividends on its common stock; therefore, the expected dividend yield is assumed to be zero. In addition, ASC 718 requires companies to utilize an estimated forfeiture rate when calculating the expense for the period, whereas prior to the adoption of ASC 718 the Company recorded forfeitures based on actual forfeitures and recorded a compensation expense recovery in the period when the awards were forfeited. As a result, based on the Company’s experience, the Company applied an estimated forfeiture rate of 15% in fiscal 2012 and 2011 in determining the expense recorded in the accompanying consolidated statement of operations. </td> </tr> </table>   <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left">  </td> <td align="left" width="90%"> The weighted-average fair values of options granted during the year ended April 30, 2012 and 2011 were $0.92 and $1.14 respectively. The weighted-average assumptions utilized to determine such values are presented in the following table: </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" width="1%">  </td> <td align="center" width="12%"> Year Ended</td> <td align="center" width="2%">  </td> <td align="center" width="1%">  </td> <td align="center" width="12%"> Year Ended</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> April 30, 2012</td> <td align="center" width="2%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> April 30, 2011</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Risk-free interest rate</td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> 0.86%</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> 2.00%</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Expected volatility</td> <td align="left" width="1%">  </td> <td align="right" width="12%"> 74.20%</td> <td align="left" width="2%">  </td> <td align="left" width="1%">  </td> <td align="right" width="12%"> 77.5%</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Expected term</td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> 3.7 yrs</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> 3.7 yrs</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Dividend yield</td> <td align="left" width="1%">  </td> <td align="right" width="12%"> 0%</td> <td align="left" width="2%">  </td> <td align="left" width="1%">  </td> <td align="right" width="12%"> 0%</td> <td align="left" width="2%">  </td> </tr> </table> The following is a summary of the status of the Company’s stock options as of April 30, 2012 and the stock option activity during the years ended April 30, 2012 and 2011: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" width="1%">  </td> <td align="center" width="12%"> Number of</td> <td align="left" width="2%">  </td> <td align="center" width="15%"> Weighted-Average</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> Options</td> <td align="left" width="2%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="15%"> Exercise Price per Share</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Outstanding at April 30, 2010</td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> 4,617,707</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" width="15%"> $1.03</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Granted</td> <td align="left" width="1%">  </td> <td align="right" width="12%"> 827,000</td> <td align="left" width="2%">  </td> <td align="center" width="15%"> $1.93</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Exercised</td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> (308,037</td> <td align="left" bgcolor="#e6efff" width="2%"> )</td> <td align="center" bgcolor="#e6efff" width="15%"> $0.47</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Forfeited / Cancelled</td> <td align="left" width="1%">  </td> <td align="right" width="12%"> (1,093,407</td> <td align="left" width="2%"> )</td> <td align="center" width="15%"> $1.80</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Expired</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="12%"> (435,600</td> <td align="left" bgcolor="#e6efff" width="2%"> )</td> <td align="center" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="15%"> $1.76</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Outstanding at April 30, 2011</td> <td align="left" width="1%">  </td> <td align="right" width="12%"> 3,607,663</td> <td align="left" width="2%">  </td> <td align="center" width="15%"> $0.97</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Granted</td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> 1,025,000</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" width="15%"> $1.72</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Exercised</td> <td align="left" width="1%">  </td> <td align="right" width="12%"> (375,844</td> <td align="left" width="2%"> )</td> <td align="center" width="15%"> $0.50</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Forfeited / Cancelled</td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> (317,440</td> <td align="left" bgcolor="#e6efff" width="2%"> )</td> <td align="center" bgcolor="#e6efff" width="15%"> $1.71</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Expired</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="12%"> (13,400</td> <td align="left" width="2%"> )</td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="15%"> $0.47</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Outstanding at April 30, 2012</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="12%"> 3,925,979</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="15%"> $1.15</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr> <td width="10%">  </td> <td>  </td> <td width="1%">  </td> <td width="12%">  </td> <td width="2%">  </td> <td align="center" width="15%">  </td> <td width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Exercisable at April 30, 2012</td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> 2,087,742</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" width="15%"> $0.85</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Exercisable at April 30, 2011</td> <td align="left" width="1%">  </td> <td align="right" width="12%"> 1,930,647</td> <td align="left" width="2%">  </td> <td align="center" width="15%"> $0.78</td> <td align="left" width="2%">  </td> </tr> </table>   <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left">  </td> <td align="left" width="90%"> The following table summarizes information regarding stock options outstanding as of April 30, 2012:</td> </tr> </table> <div align="right"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="90%"> <tr valign="top"> <td align="center">  </td> <td align="center" width="14%"> Number of</td> <td align="center" width="14%"> Aggregate</td> <td align="center" width="25%">  </td> <td align="center" width="14%"> Number of</td> <td align="center" width="14%"> Aggregate</td> </tr> <tr valign="top"> <td align="center"> Exercise</td> <td align="center" width="14%"> Options</td> <td align="center" width="14%"> Intrinsic</td> <td align="center" width="25%">  </td> <td align="center" width="14%"> Options</td> <td align="center" width="14%"> Intrinsic</td> </tr> <tr valign="top"> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);"> Price</td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="14%"> Outstanding</td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="14%"> Value</td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="25%"> Expiry Date</td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="14%"> Exercisable</td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="14%"> Value</td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff"> $0.44</td> <td align="right" bgcolor="#e6efff" width="14%"> 391,591</td> <td align="right" bgcolor="#e6efff" width="14%"> $951,566</td> <td align="right" bgcolor="#e6efff" width="25%"> December 15, 2013</td> <td align="right" bgcolor="#e6efff" width="14%"> 321,910</td> <td align="right" bgcolor="#e6efff" width="14%"> $782,241</td> </tr> <tr valign="top"> <td align="center">  </td> <td align="left" width="14%">  </td> <td align="left" width="14%">  </td> <td align="right" width="25%"> May 1, 2012 to</td> <td align="left" width="14%">  </td> <td align="left" width="14%">  </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff"> $0.47</td> <td align="right" bgcolor="#e6efff" width="14%"> 450,722</td> <td align="right" bgcolor="#e6efff" width="14%"> 1,081,733</td> <td align="right" bgcolor="#e6efff" width="25%"> September 26, 2016</td> <td align="right" bgcolor="#e6efff" width="14%"> 450,305</td> <td align="right" bgcolor="#e6efff" width="14%"> 1,080,732</td> </tr> <tr valign="top"> <td align="center"> $0.60</td> <td align="right" width="14%"> 426,791</td> <td align="right" width="14%"> 968,816</td> <td align="right" width="25%"> December 14, 2014</td> <td align="right" width="14%"> 253,861</td> <td align="right" width="14%"> 576,264</td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff"> $0.62</td> <td align="right" bgcolor="#e6efff" width="14%"> 850,000</td> <td align="right" bgcolor="#e6efff" width="14%"> 1,912,500</td> <td align="right" bgcolor="#e6efff" width="25%"> April 17, 2014</td> <td align="right" bgcolor="#e6efff" width="14%"> 637,500</td> <td align="right" bgcolor="#e6efff" width="14%"> 1,434,375</td> </tr> <tr valign="top"> <td align="center"> $1.70</td> <td align="right" width="14%"> 1,000,000</td> <td align="right" width="14%"> 1,170,000</td> <td align="right" width="25%"> December 14, 2016</td> <td align="right" width="14%"> –</td> <td align="right" width="14%"> –</td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff"> $1.90</td> <td align="right" bgcolor="#e6efff" width="14%"> 421,875</td> <td align="right" bgcolor="#e6efff" width="14%"> 409,218</td> <td align="right" bgcolor="#e6efff" width="25%"> December 14, 2015</td> <td align="right" bgcolor="#e6efff" width="14%"> 138,540</td> <td align="right" bgcolor="#e6efff" width="14%"> 134,384</td> </tr> <tr valign="top"> <td align="center">  </td> <td align="left" width="14%">  </td> <td align="left" width="14%">  </td> <td align="right" width="25%"> October 1, 2012 to</td> <td align="left" width="14%">  </td> <td align="left" width="14%">  </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff"> $2.00</td> <td align="right" bgcolor="#e6efff" width="14%"> 18,000</td> <td align="right" bgcolor="#e6efff" width="14%"> 15,660</td> <td align="right" bgcolor="#e6efff" width="25%"> February 28, 2015</td> <td align="right" bgcolor="#e6efff" width="14%"> 18,000</td> <td align="right" bgcolor="#e6efff" width="14%"> 15,660</td> </tr> <tr valign="top"> <td align="center"> $2.15</td> <td align="right" width="14%"> 240,000</td> <td align="right" width="14%"> 172,800</td> <td align="right" width="25%"> September 7, 2016</td> <td align="right" width="14%"> 240,000</td> <td align="right" width="14%"> 172,800</td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff"> $2.27</td> <td align="right" bgcolor="#e6efff" width="14%"> 102,000</td> <td align="right" bgcolor="#e6efff" width="14%"> 61,200</td> <td align="right" bgcolor="#e6efff" width="25%"> March 10, 2016</td> <td align="right" bgcolor="#e6efff" width="14%"> 27,626</td> <td align="right" bgcolor="#e6efff" width="14%"> 16,576</td> </tr> <tr valign="top"> <td align="center"> $2.55</td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="14%"> 25,000</td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="14%"> 8,000</td> <td align="right" width="25%"> March 8, 2017</td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="14%"> –</td> <td align="right" style="border-bottom: 1px solid rgb(0, 0, 0);" width="14%"> –</td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff"> April 30, 2012</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="14%"> 3,925,979</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="14%"> $6,751,493</td> <td align="left" bgcolor="#e6efff" width="25%">  </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="14%"> 2,087,742</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="14%"> $4,213,032</td> </tr> <tr> <td align="center">  </td> <td width="14%">  </td> <td width="14%">  </td> <td width="25%">  </td> <td width="14%">  </td> <td width="14%">  </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff"> April 30, 2011</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="14%"> 3,607,663</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="14%"> $3,984,765</td> <td align="left" bgcolor="#e6efff" width="25%">  </td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="14%"> 1,930,647</td> <td align="right" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="14%"> $2,485,779</td> </tr> </table> </div> The aggregate intrinsic value in the preceding table represents the total intrinsic value, based on the Company’s closing stock price of $2.87 per share as of April 30, 2012 (April 30, 2011 – $2.06), which would have been received by the option holders had all option holders exercised their options as of that date. The total number of in-the-money options vested and exercisable as of April 30, 2012 was 2,087,742 (April 30, 2011 – 1,690,647). The total intrinsic value of options exercised during the year ended April 30, 2012 was $555,923 (2011 – $488,907). The grant date fair value of options vested during the year ended April 30, 2012 was $345,803 (April 30, 2011 – $302,915). The following table summarizes information regarding the non-vested stock purchase options outstanding as of April 30, 2012: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" width="1%">  </td> <td align="center" width="12%">  </td> <td align="left" width="2%">  </td> <td align="center" width="13%"> Weighted Average</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" width="1%">  </td> <td align="center" width="12%"> Number of</td> <td align="left" width="2%">  </td> <td align="center" width="13%"> Grant-Date Fair</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> Options</td> <td align="left" width="2%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="13%"> Value</td> <td align="left" width="2%">  </td> </tr> <tr> <td width="10%">  </td> <td>  </td> <td width="1%">  </td> <td width="12%">  </td> <td width="2%">  </td> <td align="center" width="13%">  </td> <td width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Non-vested options at April 30, 2010</td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> 2,015,088</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" width="13%"> $0.39</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Granted</td> <td align="left" width="1%">  </td> <td align="right" width="12%"> 827,000</td> <td align="left" width="2%">  </td> <td align="center" width="13%"> $1.14</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Vested</td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> (690,011</td> <td align="left" bgcolor="#e6efff" width="2%"> )</td> <td align="center" bgcolor="#e6efff" width="13%"> $0.44</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Forfeited</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="12%"> (475,061</td> <td align="left" width="2%"> )</td> <td align="center" width="13%"> $0.57</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Non-vested options at April 30, 2011</td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> 1,677,016</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" width="13%"> $0.69</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Granted</td> <td align="left" width="1%">  </td> <td align="right" width="12%"> 1,025,000</td> <td align="left" width="2%">  </td> <td align="center" width="13%"> $0.92</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Vested</td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> (615,699</td> <td align="left" bgcolor="#e6efff" width="2%"> )</td> <td align="center" bgcolor="#e6efff" width="13%"> $0.56</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Forfeited</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="12%"> (248,080</td> <td align="left" width="2%"> )</td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="13%"> $1.01</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Non-vested options at April 30, 2012</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="12%"> 1,838,237</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="13%"> $0.82</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> </table> As of April 30, 2012 there was $1,252,011 of total unrecognized compensation cost related to unvested stock options. This unrecognized compensation cost is expected to be recognized over a weighted average period of 3.08 years.   <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left">  </td> <td align="left" width="90%"> Employee and non-employee stock-based compensation amounts classified in the Company’s consolidated statements of operations for the year ended April 30, 2012 and 2011 are as follows: </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" width="1%">  </td> <td align="center" colspan="4"> Years Ended</td> <td align="center" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">  </td> <td align="center" colspan="4" style="border-bottom: 1px solid rgb(0, 0, 0);"> April 30,</td> <td align="center" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 2012</td> <td align="center" width="2%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 2011</td> <td align="left" width="2%">  </td> </tr> <tr> <td width="10%">  </td> <td>  </td> <td width="1%">  </td> <td width="12%">  </td> <td width="2%">  </td> <td width="1%">  </td> <td width="12%">  </td> <td width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Cost of sales</td> <td align="left" bgcolor="#e6efff" width="1%"> $</td> <td align="right" bgcolor="#e6efff" width="12%"> 35,510</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="left" bgcolor="#e6efff" width="1%"> $</td> <td align="right" bgcolor="#e6efff" width="12%"> 27,399</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Sales and marketing</td> <td align="left" width="1%">  </td> <td align="right" width="12%"> 132,938</td> <td align="left" width="2%">  </td> <td align="left" width="1%">  </td> <td align="right" width="12%"> 111,636</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Research and development</td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> 37,987</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> 35,335</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> General and administrative</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="12%"> 159,223</td> <td align="left" 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="12%"> 165,944</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Total stock-based compensation</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="12%"> 365,658</td> <td align="left" bgcolor="#e6efff" 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="12%"> 340,314</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> </table> Warrants On June 14, 2011, the Company issued an aggregate of 3,145,800 units under a brokered private placement for aggregate gross proceeds of $5,636,170 (CDN$5,505,150) at a price of $1.79 (CDN$1.75) per unit, with each unit consisting of one share of the Company’s common stock and one-half of one common share purchase warrant, with each whole warrant entitling the holder to purchase one additional common share of the Company’s common stock at an exercise price of CDN$2.25 per share until June 14, 2013. In connection with the offering, the Company issued an aggregate of 220,206 broker warrants, with each broker warrant entitling the holder thereof to purchase one common share of the Company at an exercise price of CDN$1.75 per share until December 14, 2012. Following the guidance in ASC 815-40-15, the Company recorded the warrants issued as derivative instruments due to their exercise price being denominated in a currency other than the Company’s U.S. dollar functional currency. The fair value of the derivative instruments are revalued at the end of each reporting period, and the change in fair value of the derivative instruments are recorded as a gain or loss in the Company’s consolidated statements of operations. The warrant liability is accounted for at its fair value as follows: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" width="1%">  </td> <td align="center" width="12%"> April 30,</td> <td align="center" width="2%">  </td> <td align="center" width="1%">  </td> <td align="center" width="12%"> April 30,</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 2012</td> <td align="center" width="2%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 2011</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Fair value of warrant liability, at issuance</td> <td align="left" bgcolor="#e6efff" width="1%"> $</td> <td align="right" bgcolor="#e6efff" width="12%"> 1,311,141</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="left" bgcolor="#e6efff" width="1%"> $</td> <td align="right" bgcolor="#e6efff" width="12%"> –</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Change in fair value of warrant liability for the period</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="12%"> 715,803</td> <td align="left" 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="12%"> –</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Fair value of warrant liability at April 30, 2012</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="12%"> 2,026,944</td> <td align="left" bgcolor="#e6efff" 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="12%"> –</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> </table>   <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left">  </td> <td align="left" width="90%"> The Company uses the Binomial method to estimate the fair value of the warrants with the following assumptions:</td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" width="18%">  </td> <td align="center" width="2%">  </td> <td align="center" width="18%"> As at the date of</td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="center" width="18%"> As at</td> <td align="center" width="2%">  </td> <td align="center" width="18%"> issuance</td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="18%"> April 30, 2012</td> <td align="center" width="2%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="18%"> June 14, 2011</td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Risk-free interest rate</td> <td align="center" bgcolor="#e6efff" width="18%"> 0.19%</td> <td align="center" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" width="18%"> 1.60%</td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Expected volatility</td> <td align="center" width="18%"> 70%</td> <td align="center" width="2%">  </td> <td align="center" width="18%"> 70%</td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Expected term</td> <td align="center" bgcolor="#e6efff" width="18%"> 0.62 years to 1.12 years</td> <td align="center" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" width="18%"> 1.5 years to 2 years</td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Dividend yield</td> <td align="center" width="18%"> 0%</td> <td align="center" width="2%">  </td> <td align="center" width="18%"> 0%</td> </tr> </table> The warrant liability is revalued at the end of each reporting period with the change in the fair value of the derivative instruments recorded as a gain or loss in the Company’s consolidated statement of operations. The fair value of the warrants will continue to be classified as a liability until such time as they are exercised, expire or there is an amendment to the respective agreements that renders these financial instruments to be no longer classified as a liability. At the time of the private placement offering, the Company allocated the proceeds to each of the common shares and the one-half of one common share purchase warrants. Because the warrants were classified as a liability and are subsequently marked to fair value through earnings in each reporting period, the Company allocated the proceeds of $1,311,141 to the warrants at inception with the residual proceeds of $3,773,946 allocated to common stock. During the year ended April 30, 2011, the Company entered into a warrant agreement, as amended, with a customer whereby the Company issued 1,000,000 stock purchase warrants as part of a software licensing contract that the Company entered into with the customer. The warrants enable the holder thereof the right to purchase up to 1,000,000 shares of the Company’s common stock, exercisable for two years at a price of $1.50 per share until July 30, 2012. Under an amendment agreement, 50% of the warrants vest on a proportional basis to invoices delivered by the Company at the rate of one warrant for every $3.00 invoiced and 50% of the warrants vest on a change of control of the Company. As the likelihood of a change of control was not determinable at the time of revenue recognition, the value of the applicable warrants subject to vesting on change of control was deemed to be nil during the year ended April 30, 2012. The warrants are held in trust and delivered once vested and payment, as applicable, has been received by the Company. During the year ended April 30, 2011, the fair value of the 500,000 stock purchase warrants was determined to be $269,633, and this was charged to revenue. The remaining 500,000 warrants will be valued and charged against revenue if and when a change of control of the Company occurs.   <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left">  </td> <td align="left" width="90%"> The following table summarizes information regarding the warrants outstanding as of April 30, 2012 and April 30, 2011.</td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" width="1%">  </td> <td align="center" width="12%">  </td> <td align="center" width="2%">  </td> <td align="center" width="13%"> Weighted</td> <td align="center" width="2%">  </td> <td align="left" width="1%">  </td> <td align="center" width="37%">  </td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" width="1%">  </td> <td align="center" width="12%"> Number of</td> <td align="center" width="2%">  </td> <td align="center" width="13%"> Average</td> <td align="center" width="2%">  </td> <td align="left" width="1%">  </td> <td align="center" width="37%">  </td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <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" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> Warrants</td> <td align="center" width="2%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="13%"> Exercise Price</td> <td align="center" width="2%">  </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="37%"> Expiry Dates</td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Warrants at April 30, 2010</td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> 2,932,088</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" width="13%"> $1.50</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="center" bgcolor="#e6efff" width="37%"> July 31, 2010 to October 29, 2011</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Granted</td> <td align="left" width="1%">  </td> <td align="right" width="12%"> 1,000,000</td> <td align="left" width="2%">  </td> <td align="center" width="13%"> $1.50</td> <td align="left" width="2%">  </td> <td align="left" width="1%">  </td> <td align="center" width="37%"> July 31, 2012</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Expired</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="12%"> (1,265,421</td> <td align="left" bgcolor="#e6efff" width="2%"> )</td> <td align="center" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="13%"> $2.25</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="center" bgcolor="#e6efff" width="37%"> July 31, 2010 to October 28, 2010</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Warrants at April 30, 2011</td> <td align="left" width="1%">  </td> <td align="right" width="12%"> 2,666,667</td> <td align="left" width="2%">  </td> <td align="center" width="13%"> $1.12</td> <td align="left" width="2%">  </td> <td align="left" width="1%">  </td> <td align="center" width="37%"> October 29, 2011 to July 30, 2012</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Granted</td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> 1,793,106</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" width="13%"> $2.19</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="center" bgcolor="#e6efff" width="37%"> December 14, 2012 to June 14, 2013</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Exercised</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="12%"> (1,666,668</td> <td align="left" width="2%"> )</td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="13%"> $0.90</td> <td align="left" width="2%">  </td> <td align="left" width="1%">  </td> <td align="center" width="37%"> October 29, 2011</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Warrants at April 30, 2012</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="12%"> 2,793,105</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="13%"> $1.94</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="center" bgcolor="#e6efff" width="37%"> July 30, 2012 to June 14, 2013</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> </table> Employee Share Purchase Plan Under the terms of the ESPP all regular salaried (non-probationary) employees can purchase up to 6% of their base salary in common shares of the Company at market price. The Company will match 50% of the shares purchased by issuing or purchasing in the market up to 3% of the respective employee’s base salary in shares. During the year ended April 30, 2012, the Company matched $36,303 (2011 - $25,327) in shares purchased by employees under the ESSP. A total of 700,000 shares have been reserved for issuance under the ESPP. As of April 30, 2012, a total of 556,401 shares were available for issuance under the ESPP. During the years ended April 30, 2012, 55,571 (2011 – 55,571) shares were sold or issued to employees under the ESPP. Deferred Share Unit Plan Under the terms of the DSUP which is effective as at October 22, 2009, each deferred share unit is equivalent to one share of common stock. The maximum number of shares of common stock that may be reserved for issuance to any one participant pursuant to deferred share units granted under the DSUP and any share compensation arrangement is 5% of the number of shares of common stock of the Company outstanding at the time of reservation and, as applicable, any grants of deferred share units to any one participant may not exceed a value of $100,000 per annum on the date of grant. A deferred share unit (DSU) granted to a participant who is a director of the board of the Company shall vest immediately on the award date. A deferred share unit granted to a participant other than a director will generally vest as to one-third (1/3) of the number of deferred share units granted on the first, second and third anniversaries of the award date. Fair value of the DSU’s, which is based on the closing price of the Company’s common stock on the date of grant, is recorded as compensation expense over the vesting period. A total of 2,000,000 shares have been reserved for issuance under the DSUP. During the year ended April 30, 2012, 201,351 (2011 – 866,552) deferred share units were issued under the DSUP, of which 108,108 were granted to officers and 93,243 were granted to directors. For the year ended April 30, 2012, a total of 411,936 shares were available for issuance under the DSUP.   <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left">  </td> <td align="left" width="90%"> The following table summarizes the Company’s outstanding deferred share unit (DSU) awards as of April 30, 2012, and changes during the period then ended: </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" width="1%">  </td> <td align="left" nowrap="nowrap" width="12%">  </td> <td align="left" nowrap="nowrap" width="2%">  </td> <td align="center" nowrap="nowrap" width="13%"> Weighted Average</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" width="1%">  </td> <td align="left" nowrap="nowrap" width="12%">  </td> <td align="left" nowrap="nowrap" width="2%">  </td> <td align="center" nowrap="nowrap" width="13%"> Grant Date Fair</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" nowrap="nowrap">  </td> <td align="left" 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="12%"> Number of DSU’s</td> <td align="left" nowrap="nowrap" width="2%">  </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="13%"> Value per Unit</td> <td align="left" width="2%">  </td> </tr> <tr> <td width="10%">  </td> <td>  </td> <td width="1%">  </td> <td width="12%">  </td> <td width="2%">  </td> <td align="center" width="13%">  </td> <td width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> DSU’s at April 30, 2010</td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> 520,161</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" width="13%"> $0.60</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Granted</td> <td align="left" width="1%">  </td> <td align="right" width="12%"> 866,552</td> <td align="left" width="2%">  </td> <td align="center" width="13%"> $0.96</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Conversions</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="12%"> –</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="13%"> $–</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> DSU’s at April 30, 2011</td> <td align="left" width="1%">  </td> <td align="right" width="12%"> 1,386,713</td> <td align="left" width="2%">  </td> <td align="center" width="13%"> $0.83</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Granted</td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> 201,351</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" width="13%"> $1.85</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Conversions</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="12%"> –</td> <td align="left" width="2%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="13%"> $–</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Outstanding at April 30, 2012</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="12%"> 1,588,064</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="13%"> $0.83</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> </table> As of April 30, 2012 there was $308,812 (2011 – $309,459) of total unrecognized compensation cost related to unvested deferred share units awards. This unrecognized compensation cost is expected to be recognized over a weighted average period of 1.84 years (2011 – 1.38) . The total fair value of DSUs that vested during the year was $307,856 (2011 - $313,906). Employee and non-employee deferred share unit based compensation amounts classified in the Company’s consolidated statements of operations for the year ended April 30, 2012 and 2011 are as follows: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" width="1%">  </td> <td align="center" colspan="4"> Year Ended</td> <td align="center" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">  </td> <td align="center" colspan="4" style="border-bottom: 1px solid rgb(0, 0, 0);"> April 3 0,</td> <td align="center" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 2012</td> <td align="center" width="2%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="1%">  </td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="12%"> 2011</td> <td align="left" width="2%">  </td> </tr> <tr> <td width="10%">  </td> <td>  </td> <td width="1%">  </td> <td width="12%">  </td> <td width="2%">  </td> <td width="1%">  </td> <td width="12%">  </td> <td width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> General and administrative</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="12%"> 373,145</td> <td align="left" bgcolor="#e6efff" 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="12%"> 472,171</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Total deferred share unit-based compensation</td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%"> $</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%"> 373,145</td> <td align="left" width="2%">  </td> <td align="left" style="border-bottom: 3px double rgb(0, 0, 0);" width="1%"> $</td> <td align="right" style="border-bottom: 3px double rgb(0, 0, 0);" width="12%"> 472,171</td> <td align="left" width="2%">  </td> </tr> </table> The following table summarizes information regarding the non-vested deferred share units outstanding as of April 30, 2012: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" width="1%">  </td> <td align="left" width="12%">  </td> <td align="left" width="2%">  </td> <td align="center" nowrap="nowrap" width="13%"> Weighted Average</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left">  </td> <td align="left" width="1%">  </td> <td align="left" width="12%">  </td> <td align="left" width="2%">  </td> <td align="center" nowrap="nowrap" width="13%"> Grant Date Fair</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" nowrap="nowrap">  </td> <td align="left" 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="12%"> Number of DSU’s</td> <td align="left" nowrap="nowrap" width="2%">  </td> <td align="center" nowrap="nowrap" style="border-bottom: 1px solid rgb(0, 0, 0);" width="13%"> Value per Unit</td> <td align="left" width="2%">  </td> </tr> <tr> <td width="10%">  </td> <td>  </td> <td width="1%">  </td> <td width="12%">  </td> <td width="2%">  </td> <td align="center" width="13%">  </td> <td width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Non-vested DSU’s at April 30, 2010</td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> 241,935</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" width="13%"> $0.60</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Granted</td> <td align="left" width="1%">  </td> <td align="right" width="12%"> 866,552</td> <td align="left" width="2%">  </td> <td align="center" width="13%"> $0.96</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Vested</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="12%"> (682,404</td> <td align="left" bgcolor="#e6efff" width="2%"> )</td> <td align="center" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="13%"> $0.46</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Non-vested DSU’s at April 30, 2011</td> <td align="left" width="1%">  </td> <td align="right" width="12%"> 426,083</td> <td align="left" width="2%">  </td> <td align="center" width="13%"> $0.89</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Granted</td> <td align="left" bgcolor="#e6efff" width="1%">  </td> <td align="right" bgcolor="#e6efff" width="12%"> 201,351</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" width="13%"> $1.85</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left"> Vested</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="12%"> (293,097</td> <td align="left" width="2%"> )</td> <td align="center" style="border-bottom: 1px solid rgb(0, 0, 0);" width="13%"> $1.05</td> <td align="left" width="2%">  </td> </tr> <tr valign="top"> <td width="10%">  </td> <td align="left" bgcolor="#e6efff"> Non-vested DSU’s at April 30, 2012</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="12%"> 334,337</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> <td align="center" bgcolor="#e6efff" style="border-bottom: 3px double rgb(0, 0, 0);" width="13%"> $1.33</td> <td align="left" bgcolor="#e6efff" width="2%">  </td> </tr> </table>