9. SUBSEQUENT EVENTS:

The Company has evaluated events that occurred subsequent to September 30, 2016 for recognition and disclosure in the financial statements and notes to the financial statements.

From October 1, 2016 through November 11, 2016, the Company has issued 2,137 shares of the Company’s common shares to an employee for services valued at approximately $2,000.

On October 10, 2016, the Company:

a) approved the cancellation the 117,500 outstanding contingent stock bonus shares and replaced the cancelled contingent stock bonuses with 109,500 fully vested options to purchase shares of the Company’s common shares at an exercise price of $1.00 per share until December 31, 2020.

b) approved the modification of certain stock options to certain employees and consultants which will reduce the exercise prices to such options to $1.50 per share.

c) granted 125,000 bonus shares, in aggregate, to certain employees and consultants with various issuance dates from January 15, 2017 to January 15, 2020.

d) granted 75,000 options to purchase shares of the Company’s common shares at an exercise price of $1.00 per share with vesting occurring from December 31, 2016 through December 31, 2017.

e) approved a month to month contract extension with Smith which includes provisions for i) issuance of 25,000 bonus shares of the Company’s common shares on January 15, 2017, ii) grant of 75,000 options to purchase shares of the Company’s common shares at $0.90 per share with expiry date of December 31, 2020, which options are subject to the exercise/extension bonus, iii) a monthly deferred salary of $18,000 effective October 1, 2016, iv) the right to convert up to $125,000 of his deferred compensation, at his sole election, at $0.75 per share, until March 15, 2018, and v) the right to convert his deferred compensation in whole or in part, at his sole election, at any time in any amount at “market” or into securities sold in the Company’s current/most recent private offering at the price of such offering to third parties.

f) modified 60,000 outstanding warrants owned by Bassani to make them subject to the exercise/extension bonus applicable to his other warrants/options and granted Bassani the right to convert up to $125,000 of his deferred compensation, at his sole election, at $0.75 per share, until March 15, 2018.

g) issued 25,000 warrants to purchase the Company’s common shares at $0.90 per share, expiring on December 31, 2019 to a consultant for services.

Effective October 12, 2016, the Company agreed to cancel 650,000 bonus shares due to be issued to employees during January 2017, of which 600,000 were bonus shares due to Bassani and 25,000 bonus shares were due to Smith.

On November 9, 2016, the Company’s Board of Directors ratified:

	a)	the sale to Smith, effective November 9, 2016, of warrants to purchase 40,000 shares of the Company’s common stock exercisable at $1.00 per share until December 31, 2021 (which warrants are subject to an exercise bonus) at the purchase price of $.05 per warrant ($2,000, in aggregate) which was paid by reduction of Smith’s accrued deferred compensation.

	b)	the sale to Bassani, effective November 9, 2016, of warrants to purchase 800,000 shares of the Company’s common stock exercisable at a price of $1.00 per share until December 31, 2021 (which warrants are subject to an augmented exercise bonus), at a purchase price of $.05 per warrant ($40,000, in aggregate) which was paid by a note from Bassani due November 15, 2017.

	c)	the sale to an employee, effective November 9, 2016, of warrants to purchase 40,000 shares of the Company’s common stock exercisable at $1.00 per share until December 31, 2021 (which warrants are subject to an exercise bonus) at the purchase price of $.05 per warrant ($2,000, in aggregate) which was paid by reduction of the employee’s accrued deferred compensation.