"In past years, the Company’s sole realized cash earnings were interest realized from cash reserves deposited infinancial institutions or other loans. During the fiscal quarter ended December 31, 2009, the Company’s realized earnings from those sources totalled $129,620. (2008 - $141,514; 2007- $384,541.) The principal causes for the decrease related both to the significant decrease in the amount of reserves coupled with a general decrease in the market rate of interest paid generally."

"A portion of the Company’s cash reserves in the two most recent fiscal quarters was instead applied to an investment in the stock of the six Canadian banks. During the fiscal quarter ended December 31, 2009, the market value of that stock increased by the amount of $18,201. Another portion of the Company’s cash reserves were

"Cash Expenditures vs. Stock Based Expenditures: Although the Company recorded $1,122,796 in total general and administrative expenditures during the fiscal period ended December 31, 2009, ($857,479- 2008, and $4,561,256 - 2007, less than 35% of that was paid in the form of cash. The remainder ($731,341) was recorded in stock-based expenditures."

"Over the past years, the expenses for three categories of expenditures directly relate to the costs of operations, namely, directors & management stock based compensation, management fees, and professional & consulting services. The total compensation incurred for those categories in the three-month period ended December 31, 2009 was approximately $284,000 for directors & officers stock based compensation, (compared with approximately $444,000 for the same period in 2008 and $2,308,000 for 2007); approximately $64,000 for investor relations (compared with approximately $313,000 for 2008 and $1,428,000 for 2007), and professional fees of approximately $586,000 (compared with approximately $72,000 for fiscal year 2007/2008 and $766,000 for fiscal year 2007).

"Expenditures occurring in each those categories relate, in whole or in part, to stock-based compensation (i.e.incentive stock options). Again in three month period ended December 31, 2009, all of the direct payments to directors and officers (i.e. approximately $284,000) were made in the form of stock-based compensation as was done in the same period of the previous two years. Of the approximately $568,000 paid in professional fees in same three month period ended in 2009, approximately $444,000 or 78% of that amount was paid in the form of stockbased compensation."