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## DIVERSIFIED ROYALTY CORP . 

Notes toConsolidatedFinancial Statements 

(Unaudited) 

(Expressed in Canadian dollars) 

Year ended December 31, 2014 

## 12. Share-based payment(continued): 

The fair value of each option grant was estimated using the Black -Scholes option pricing model using the following weighted average assumptions: 

<img src='content_image/163042.jpg'>

The total fair value of the options granted in 2013 was $575,060 or $0.32 per option. Other  than the 500,000 options issued to the Company’s new President and CEO in 2013, which vested immediately, the balance of the options (1,284,400) issued were set to vest once certain performance criteria weremet. 

During theyearended December 31, 2014, total stock compensation expense was $ 280,461 (2013 - $413,236). 

## 13. Income (loss) per share: 

The reconciliation of the loss for the year and weighted average number of common shares used to calculate basic and diluted earnings per share is as follows: 

<img src='content_image/163043.jpg'>

