Financial Information

5. INTANGIBLE ASSETS

Intangible assets include the gross up of the future tax liability pertaining to these assets, and consist of the following:

	2008 $	2007 $
Franchise rights	7,482,551	7,482,551
Less: Accumulated amortization	4,404,317	3,537,996
	3,078,234	3,944,555

6. LONG-TERM DEBT

	2008 $	2007 $
Fixed rate term loan	870,834	970,834
Revolving term loans	583,333	838,535
	1,454,167	1,759,369
Less: Current portion:	305,202	305,202
	1,154,167	1,454,167

The following are the details of the above loans:

(1) Fixed rate term loan in the amount of $1,000,000 was acquired in 2006 to finance the acquisition of property consisting of land and building. The loan is repayable (principal and interest) in monthly repayments of $4,167 bearing an interest rate of 5.58% per annum. The loan is due March 2016.

(2) Revolving term loan in the amount of $1,000,000 was acquired in March 2007 to finance the purchase of franchise rights. The loan is repayable (principal and interest) in monthly instalments of $20,833 over a period of 48 months at a bank rate of prime rate plus 0.25% per annum. The prime rate was 4.25% as at October 31, 2008. A general assignment of book debts, a general security agreement, and an assignment of the proceeds of a $300,000 life insurance policy have been pledged as collateral.

The Company has total credit facilities in the amount of approximately $5,800,000, of which $5,200,000 is available (2007 - $4,900,000).

Future minimum payments are due as follows:

	Total $
2009	300,000
2010	300,000
2011	133,333
2012	50,000
2013	50,000
2014 onwards	670,834
	1,454,167

7. SHARE CAPITAL

The Company is authorized to issue an unlimited number of common shares.

The changes in the issued common shares of the Company during 2008 and 2007 are as follows:

	Number of Shares	Value $
Balance, October 31, 2006	12,088,788	12,145,585
For cash pursuant to option plan	10,000	37,800
Balance, October 31, 2007	12,098,788	12,183,385
Issued during the year ended October 31, 2008:
For cash pursuant to stock option plan	35,000	132,300
Balance, October 31, 2008	12,133,788	12,315,685

Stock Option Plan

The Company has an incentive stock option plan in place for its directors, officers and employees. Options may be granted for a period not exceeding five years at an option price not less than the market price of the shares at the time the option is granted. The maximum number of common shares which may be set aside for issuance under the plan is 2,250,000, provided that, from time to time, such number may be increased subject to approval of the shareholders of the Company. The maximum number of common shares that may be reserved for issuance to any one person under the plan is 5% of the common shares outstanding at the time of the grant, less the number of shares reserved for issuance to such person.

The changes in the outstanding stock options of the Company during 2008 and 2007 are as follows:

	Number of Options	October 31, 2008 Weighted average exercise price $	Number of Options	October 31, 2007 Weighted average exercise price
Balance, beginning of period	190,000	$3.78	200,000	$3.78
Granted	Nill		Nill
Exercised	(35,000)	$3.78	(10,000)	$3.78
Cancelled	Nill		Nill
Balance, end of period (i)	155,000	$3.78	190,000	$3.78
Less options not vested (ii)	Nill		Nill
Exercisable, end of period	155,000		190,000