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Intelligent Living Corp.
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--05-31
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<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><b>NOTE 1 – BASIS OF PRESENTATION</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Intelligent Living Corp (“ILC”, the “Company”, “we”, “us”) was incorporated in the State of Nevada in 1998 and maintains offices in Vancouver, British Columbia and Phoenix, Arizona. Through its wholly owned subsidiary MCM Integrated Technologies, Ltd. (“MCM”) the Company operates in the green building sector and historically has offered automation technology for single and multi unit new construction and existing buildings. Income was derived from both equipment sales and the provision of installation, repair and maintenance services and customers include residential home owners, developers and builders of single family and multi-unit developments and commercial businesses. MCM was incorporated in 1994, began supplying home automation and energy management solutions in 2003 and was acquired by Intelligent Living in 2006. </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>The Company previously engaged in the import and distribution of home décor products for the North American market. This activity was pursued through its wholly owned subsidiary Cardinal Points Trading Corp. In December 2006 the Company discontinued its activity in the home décor sector and began a process to dispose of assets and obligations and evaluate ways and means to recover costs related to the home décor import and distribution business. This process concluded during the year ended May 31, 2012 and any future impact on ongoing operations is expected to be de minimis.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>In 2008 the Company shifted its focus to the western Canadian housing market. Compared to the US housing market the western Canadian housing market, and in particular the greater Vancouver housing market, has remained relatively stable with new construction and renovation projects. Beginning in the summer of 2012 the Canadian resale market cooled and prices have contracted slightly in most areas. This trend is forecast to continue through the coming quarters as the market rebalances. </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>The market opportunities for the Company’s control and automation services and products and associated project margins are enhanced when combined with building design and construction. Over several quarters the Company has actively evaluated opportunities to expand its business activities vertically within the Company’s current green building, home automation and energy conservation sectors and horizontally within the construction and renovation sectors. </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>During FY 2012 the Company began planning the shift of its activities to design build services targeting small footprint energy efficient smart housing, specific to the needs of North American Indian communities and emergency relief housing, and multi-strata property renovation and development. Projects will incorporate automation and control as standard features. These areas of business capitalize on the Company’s experience designing and supplying environmental control and automation technology and better utilize the Company’s strong in-house engineering, design and project management capabilities. </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Early in the planning process it became clear that restructuring would be required in order for the Company to attract the working capital financing required to support expansion. On October 31, 2011 the Company’s board of directors approved a Consent Resolution amending the Company’s Articles of Incorporation to affect a one for one hundred and fifty reverse split of the Company’s common stock, and adjustment of the Company’s authorized capital to eight hundred million common shares and five million preferred shares. The proposed amendments were approved by a majority of shareholders on November 1, 2011. The Company filed a preliminary Schedule 14C Information Statement outlining proposed amendments to the Company’s Articles of Incorporation on November 9, 2011 and a definitive Schedule 14C Information Statement on November 25, 2011. The Company set November 25, 2011 as the record date for notification to shareholders. The Company filed the amended Articles of Incorporation with the Nevada Secretary of State on December 12, 2011, with an effective posting date of December 22, 2011. The reverse split was approved for trading purposes by the Financial Industry Regulatory Authority [FINRA] on January 18, 2012. </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Restructuring was completed during the year ended May 31, 2012 and the Company has begun implementation of its diversification strategy.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Results from ongoing operations reported for the period ending November 30, 2012 relate to sales of home automation and energy efficiency products and services including system design, equipment supply, installation and support and reflect development expenses related to the Company’s diversification strategy. Results from operations reported for the period ending November 30, 2011 relate to sales of home automation and energy efficiency products and services including system design, equipment supply, installation and support.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>The Company’s year-end is May 31.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>The foregoing unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles for complete financial statements.  These unaudited interim financial statements should be read in conjunction with the audited financial statements for the period ended May 31, 2012. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>The preparation of financial statements in accordance with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company's financial position and results of operations.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has suffered material recurring losses from operations since inception. At November 30, 2012, the Company had a working capital deficit of $1,061,811, an accumulated deficit of $15,305,738 and historically has reported negative cash flows from consolidated operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Continuation of the Company is dependent on achieving sufficiently profitable operations and obtaining additional financing. Management has and is continuing to raise additional capital from various sources. There can be no assurances that the Company will be continue to be successful in raising additional capital. The financial statements do not include any adjustment relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.</p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'><b>NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>This summary of significant accounting policies of Intelligent Living Corp. is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'><u>Earnings per Share</u></p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>The Company has adopted ASC 260 “Earnings per Share”. Basic loss per share is computed using the weighted average number of common shares outstanding. Diluted net loss per share is the same as basic net loss per share, as the inclusion of common stock equivalents would be antidilutive.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p><u><font style='font-weight:normal'>Fair Value of Financial Instruments</font></u></p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>On July 1, 2008, the Company adopted Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures (“Topic 820”). Topic 820 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;text-indent:-13.5pt;margin:0in 0in 0pt 0.5in'>* Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. </p> <p style='text-align:justify;text-indent:-13.5pt;margin:0in 0in 0pt 0.5in'>* Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. </p> <p style='text-align:justify;text-indent:-13.5pt;margin:0in 0in 0pt 0.5in'>* Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement. </p> <p align="left" style='text-align:left;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>The following table represents our assets and liabilities by level measured at fair value on a recurring basis at November 30, 2012</p> <p align="left" style='text-align:left;margin:0in 0in 0pt'> </p> <p align="left" style='text-align:left;margin:0in 0in 0pt'> </p> <div align="center"> <table border="1" cellspacing="0" cellpadding="0" style='border-bottom:medium none;border-left:medium none;border-collapse:collapse;margin-left:59.4pt;border-top:medium none;border-right:medium none'> <tr align="left"> <td valign="top" width="96" style='border-bottom:windowtext 1pt solid;border-left:medium none;padding-bottom:0in;padding-left:5.4pt;width:1in;padding-right:5.4pt;border-top:medium none;border-right:medium none;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>Description</p></td> <td valign="top" width="96" style='border-bottom:windowtext 1pt solid;border-left:medium none;padding-bottom:0in;padding-left:5.4pt;width:1in;padding-right:5.4pt;border-top:medium none;border-right:medium none;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>Level 1</p></td> <td valign="top" width="96" style='border-bottom:windowtext 1pt solid;border-left:medium none;padding-bottom:0in;padding-left:5.4pt;width:1in;padding-right:5.4pt;border-top:medium none;border-right:medium none;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>Level 2</p></td> <td valign="top" width="96" style='border-bottom:windowtext 1pt solid;border-left:medium none;padding-bottom:0in;padding-left:5.4pt;width:1in;padding-right:5.4pt;border-top:medium none;border-right:medium none;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>Level 3</p></td></tr> <tr align="left"> <td valign="top" width="96" style='border-bottom:medium none;border-left:medium none;padding-bottom:0in;padding-left:5.4pt;width:1in;padding-right:5.4pt;border-top:medium none;border-right:medium none;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'> </p></td> <td valign="top" width="96" style='border-bottom:medium none;border-left:medium none;padding-bottom:0in;padding-left:5.4pt;width:1in;padding-right:5.4pt;border-top:medium none;border-right:medium none;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>None</p></td> <td valign="top" width="96" style='border-bottom:medium none;border-left:medium none;padding-bottom:0in;padding-left:5.4pt;width:1in;padding-right:5.4pt;border-top:medium none;border-right:medium none;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>None</p></td> <td valign="top" width="96" style='border-bottom:medium none;border-left:medium none;padding-bottom:0in;padding-left:5.4pt;width:1in;padding-right:5.4pt;border-top:medium none;border-right:medium none;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>none</p></td></tr></table></div> <p align="left" style='text-align:left;margin:0in 0in 0pt'> </p> <p align="left" style='text-align:left;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>The adoption of this standard did not have a material effect on the Company’s financial position, results of operations or cash flows.</p> <p align="left" style='text-align:left;margin:0in 0in 0pt'> </p> <p><u><font style='font-weight:normal'>Beneficial Conversion Feature of Debentures and Convertible Notes Payable</font></u></p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>In accordance with FASB ASC 470-20, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, we recognize the advantageous value of conversion rights attached to such types of convertible debt. Such rights give the debt holder the ability to convert their debt into common stock at a price per share that is less than the trading price to the public on the day the loan is made to us. The beneficial value is calculated as the intrinsic value (the market price of the stock at the commitment date in excess of the conversion rate) of the beneficial conversion feature of the debentures and related accruing interest, and is recorded as a discount to the related debt and an addition to additional paid in capital. The discount is amortized over the remaining outstanding period of related debt using the straight line method.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'><u>Recent Accounting Pronouncements</u></p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, ''Technical Corrections and Improvements" in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations. </p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>In August 2012, the FASB issued ASU 2012-03, "Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)" in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations. </p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>In July 2012, the FASB issued ASU 2012-02, "Intangibles -Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment" in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles -Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles -Goodwill and Other -General Intangibles Other than Goodwill. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity's financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>In December 2011, the FASB issued ASU No. 2011-11, “Disclosures about Offsetting Assets and Liabilities”. Under ASU 2011-11 disclosures are required to provide information to help reconcile differences in the offsetting requirements under U.S. GAAP and IFRS. The new disclosure requirements mandate that entities disclose both gross and net information about instruments and transactions eligible for offset in the statement of financial position as well as instruments and transactions subject to an agreement similar to a master netting arrangement. In addition, the ASU requires disclosure of collateral received and posted in connection with master netting agreements or similar arrangements. The guidance is effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>In September 2011, the FASB issued ASU No. 2011-08, “Testing Goodwill for Impairment (the revised standard)”. Under ASU No. 2011-08 companies have the option to perform a qualitative assessment that may allow them to skip the annual two-step test and reduce costs. The guidance is effective for fiscal years beginning after December 15, 2011 and earlier adoption is permitted.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>In June 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income.” The guidance improves the comparability of financial reporting and facilitates the convergence of U.S. GAAP and IFRS be amending the guidance in ASC 220, Comprehensive Income. Under the amended guidance, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, the entity is required to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the components of net income and the components of other comprehensive income are presented. This guidance is effective retrospectively for annual and interim periods beginning after December 15, 2011. The adoption of the guidance is not expected to have a material impact on the Company's Consolidated Financial Statements or the Notes thereto.</p> <p style='margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations, or cash flows.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><b>NOTE 3 - COMMON STOCK </b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>During the six months ended November 30, 2012 the Company issued 300,000 shares of its unregistered common stock for conversion of $9,000 of debt principal. The conversion was made in accordance with the terms of the underlying agreement.</p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><b>NOTE 4 – RELATED PARTIES</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>The Company had short-term loans outstanding to corporate officers at May 31, 2012 in the amount of $350,232. They are unsecured, due on demand and bear interest at an average rate of 9.7%. Accrued interest to May 31, 2012 was $785.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>During the quarter ended November 30, 2011, the Company converted $122,000 of accrued liabilities, into a new related party debenture in the same amount and re-classified and converted a $30,267 short term non-interest bearing note into a new related party debenture. The debentures bear interest at 6% and mature on June 1, 2014. The debentures are convertible into shares of common stock at a conversion price equal to the lowest closing price per share of the Company’s common stock for the 20 trading days immediately preceding the date of conversion or at a price of $0.0005 per share whichever is greater. The Company determined that there was no derivative liability or beneficial conversion associated with the new debentures.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>During the six months ended November 30, 2012 the balance sheet liability associated with related party loans and debentures increased by $146,035. These loans are uncollateralized and due on demand. The Company paid the Company’s officers $43,726 of loan principal and $13,099 of interest in cash, and accrued related party interest of $2,857. Total outstanding related party debt [principal plus accrued interest] for the period ended November 30, 2012 and May 31, 2012 was respectively $499,124 and $351,017. </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>The following table summarizes the amounts due to related parties at November 30, 2012:</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" style='border-collapse:collapse'> <tr align="left"> <td width="192" style='width:2.0in;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Related Parties </p> </td> <td width="33" valign="top" style='width:24.65pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'> </p> </td> <td width="144" valign="bottom" style='width:1.5in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Principal Outstanding on November 30, 2012</p> </td> <td width="33" valign="top" style='width:24.65pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'> </p> </td> <td width="144" valign="bottom" style='width:1.5in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Interest Accrued to November 30, 2012</p> </td> </tr> <tr align="left"> <td width="192" valign="top" style='width:2.0in;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Short term notes</p> </td> <td width="33" style='width:24.65pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="144" style='width:1.5in;border:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:17.7pt;text-align:right'>357,000</p> </td> <td width="33" valign="top" style='width:24.65pt;border:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:13.1pt;text-align:right'>$</p> </td> <td width="144" style='width:1.5in;border:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:25.65pt;text-align:right'>1,399</p> </td> </tr> <tr align="left"> <td width="192" valign="top" style='width:2.0in;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Long term debentures</p> </td> <td width="33" valign="top" style='width:24.65pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'> </p> </td> <td width="144" style='width:1.5in;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:17.7pt;text-align:right'>139,267</p> </td> <td width="33" valign="top" style='width:24.65pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:13.1pt;text-align:right'> </p> </td> <td width="144" style='width:1.5in;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:25.65pt;text-align:right'>1,458</p> </td> </tr> <tr align="left"> <td width="192" valign="top" style='width:2.0in;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Total</p> </td> <td width="33" valign="top" style='width:24.65pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="144" style='width:1.5in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:17.7pt;text-align:right'>496,267</p> </td> <td width="33" valign="top" style='width:24.65pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:13.1pt;text-align:right'>$</p> </td> <td width="144" style='width:1.5in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:4.15pt;text-align:right'>2,857</p> </td> </tr> </table> </div> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>The Company shares office space and administrative costs in Vancouver with ScanTech Imaging Corp. (“ScanTech”), a company controlled by Murat Erbatur the Company’s COO. The Company provides technical consulting services to ScanTech and Scan Tech’s clients on an as needed basis. For the period ended November 30, 2012 the total value of services provided was $20,006.</p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><b>NOTE 5 – THIRD PARTY NOTES AND DEBENTURES PAYABLE</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>During the 12 months ended May 31, 2012 the Company reclassified $80,000 of accrued liability into a non interest bearing convertible note maturing on June 1, 2012.  The accrued liability resulted from professional fees payable under a consulting contract dated July 2010.  Pursuant to terms of the consulting contract, the note formalizes the Company’s option to settle the outstanding liability through issuance of common stock and the effective date of the note tacks back to December 2010 reflecting the period in which the Company realized the benefit of the services.  The note is convertible into shares of the Company’s common stock at a conversion price not less than the greater of $0.0005 per share or the lowest closing price of the Company’s Common Stock for any trading day on which a Notice of Conversion is received, or for any of the 20 consecutive days on which shares of the Company traded immediately preceding the date of receipt of each Notice of Conversion.  The Company determined that there was no derivative liability or beneficial conversion associated with the note.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>During the period ended May 31, 2012 the Company converted $18,750 of third party short term note principal into 625,000 shares of common stock at a share price of $0.03 per share. The conversion was made in accordance with the underlying debt agreement. The total short term third party non-interest bearing note principal outstanding on May 31, 2012 was $88,739.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>In the 12 months ended May 31, 2012 the Company converted $37,500 of debenture principal and into 1,250,000 shares of the Company’s common stock. All conversions were within terms of the underlying agreements. The total $730,753 debenture principal outstanding on May 31, 2012 consists of: $75,000 in short term debentures and $655,753 in long term debentures.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>During the 6 months ended November 30, 2012 the Company converted $9,000 of short term note principal into 300,000 shares of the Company’s common stock. The conversion was within the terms of the underlying agreement. </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>During the quarter ended November 30, 2012 the Company negotiated an 8% convertible debenture, principal amount of $42,500, with Asher Enterprises, Inc. The debenture, due in June 2013, is convertible into shares of the Company’s common stock, at the discretion of the holder, commencing 180 days following the date of the debenture at a conversion price per share equal to a discount of 42% from the average of the lowest three closing prices for the Company’s stock during the ten days prior to conversion or $0.00009 per share whichever is greater. The Company determined that there was a beneficial conversion feature associated with the debenture equal to the principal value of the note. An expense equal to the amount of the beneficial conversion feature is being amortized over the life of the note. During the period ended November 30, 2012 the Company recorded expenses of $850 for accrued interest and $12,750 related to amortization of the debenture discount. Pursuant to the terms of the debenture, the Company has instructed its stock transfer agent to reserve an agreed upon number of shares of the Company’s common stock to be issued if the debenture is converted. As of November 30, 2012, 17,500,000 shares have been reserved, but are not considered as issued and outstanding.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>All outstanding notes and debentures were evaluated for embedded derivatives in accordance with ASC 815 and were found to not include any embedded derivatives.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Third party short term principal outstanding on November 30, 2012 was $197,950, consisting of note principal $80,450 and debenture principal $117,500. Total third party long term principal outstanding on November 30, 2012 consisted of debenture principal of $655,753. Total outstanding third party principal outstanding on November 30, 2012 was $853,703. </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>The following tables summarize the outstanding principal and discounts associated with debentures and notes outstanding at May 31, 2012 and November 30, 2012.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" style='border-collapse:collapse'> <tr align="left"> <td width="576" colspan="5" valign="bottom" style='width:6.0in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>May 31, 2012</p> </td> </tr> <tr align="left"> <td width="346" colspan="3" valign="bottom" style='width:3.6in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Long and Short Term Debentures</p> </td> <td width="115" valign="bottom" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Notes</p> </td> <td width="115" valign="bottom" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Total </p> </td> </tr> <tr align="left"> <td width="115" valign="bottom" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Principal at end of period</p> </td> <td width="115" valign="bottom" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Remaining Discounts</p> </td> <td width="115" valign="bottom" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Balance Sheet Amount net of discounts</p> </td> <td width="115" valign="bottom" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Principal at end of period</p> </td> <td width="115" valign="bottom" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>End of Period Balance Sheet Amount </p> </td> </tr> <tr align="left"> <td width="115" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:15.1pt;text-align:right'>$730,753</p> </td> <td width="115" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:29.5pt;text-align:right'>nil</p> </td> <td width="115" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:16.9pt;text-align:right'>730,753</p> </td> <td width="115" valign="top" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:13.3pt;text-align:right'>88,739</p> </td> <td width="115" valign="top" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:14.2pt;text-align:right'>819,492</p> </td> </tr> <tr align="left"> <td width="576" colspan="5" valign="bottom" style='width:6.0in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>November 30, 2012</p> </td> </tr> <tr align="left"> <td width="346" colspan="3" valign="bottom" style='width:3.6in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Long and Short Term Debentures</p> </td> <td width="115" valign="bottom" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Notes</p> </td> <td width="115" valign="bottom" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Total </p> </td> </tr> <tr align="left"> <td width="115" valign="bottom" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Principal at end of period</p> </td> <td width="115" valign="bottom" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Remaining Discounts</p> </td> <td width="115" valign="bottom" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Balance Sheet Amount net of discounts</p> </td> <td width="115" valign="bottom" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Principal at end of period</p> </td> <td width="115" valign="bottom" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>End of Period Balance Sheet Amount </p> </td> </tr> <tr align="left"> <td width="115" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:15.1pt;text-align:right'>$773,253</p> </td> <td width="115" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:20.5pt;text-align:right'>$29,750</p> </td> <td width="115" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:16.9pt;text-align:right'>$743,503</p> </td> <td width="115" valign="top" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:13.3pt;text-align:right'>$80,450</p> </td> <td width="115" valign="top" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:14.2pt;text-align:right'>$823,953</p> </td> </tr> </table> </div> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>The principal and accrued interest on notes and debentures as at May 31, 2012 and November 30, 2012 are summarized in the following tables:</p> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'> </p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" style='margin-left:27.1pt;border-collapse:collapse'> <tr align="left"> <td width="168" valign="bottom" style='width:126.1pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Notes and Debentures</p> </td> <td width="36" valign="top" style='width:26.8pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'> </p> </td> <td width="106" valign="bottom" style='width:1.1in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Principal Amount at May 31, 2012</p> </td> <td width="96" valign="bottom" style='width:1.0in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Weighted Average Interest Rate</p> </td> <td width="36" valign="top" style='width:27.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'> </p> </td> <td width="125" valign="bottom" style='width:94.05pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Accrued Interest to May 31, 2012</p> </td> </tr> <tr align="left"> <td width="168" valign="bottom" style='width:126.1pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Third Party Notes </p> </td> <td width="36" valign="top" style='width:26.8pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>$</p> </td> <td width="106" valign="bottom" style='width:1.1in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>88,739</p> </td> <td width="96" valign="bottom" style='width:1.0in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>NIL</p> </td> <td width="36" valign="top" style='width:27.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>$</p> </td> <td width="125" valign="bottom" style='width:94.05pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>NIL</p> </td> </tr> <tr align="left"> <td width="168" valign="bottom" style='width:126.1pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Third Party Debentures</p> </td> <td width="36" valign="top" style='width:26.8pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'> </p> </td> <td width="106" valign="bottom" style='width:1.1in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>730,753</p> </td> <td width="96" valign="bottom" style='width:1.0in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>6.5%</p> </td> <td width="36" valign="top" style='width:27.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'> </p> </td> <td width="125" valign="bottom" style='width:94.05pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>272,672</p> </td> </tr> <tr align="left"> <td width="168" valign="bottom" style='width:126.1pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Total</p> </td> <td width="36" valign="top" style='width:26.8pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>$</p> </td> <td width="106" valign="bottom" style='width:1.1in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>819,492</p> </td> <td width="96" valign="bottom" style='width:1.0in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>5.8%</p> </td> <td width="36" valign="top" style='width:27.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>$</p> </td> <td width="125" valign="bottom" style='width:94.05pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>272,672</p> </td> </tr> </table> </div> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'> </p> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'> </p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" style='margin-left:27.1pt;border-collapse:collapse'> <tr align="left"> <td width="168" valign="bottom" style='width:126.1pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Notes and Debentures</p> </td> <td width="36" valign="top" style='width:26.8pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'> </p> </td> <td width="106" valign="bottom" style='width:1.1in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Principal Amount at Nov 30, 2012</p> </td> <td width="96" valign="top" style='width:1.0in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Weighted Average Interest Rate</p> </td> <td width="36" valign="top" style='width:27.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'> </p> </td> <td width="125" valign="bottom" style='width:94.05pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Accrued Interest Nov 30, 2012</p> </td> </tr> <tr align="left"> <td width="168" valign="top" style='width:126.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Third Party Notes </p> </td> <td width="36" valign="top" style='width:26.8pt;border:none;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="106" style='width:1.1in;border:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:11.25pt;text-align:right'>80,450</p> </td> <td width="96" style='width:1.0in;border:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:20.2pt;text-align:right'>NIL</p> </td> <td width="36" valign="top" style='width:27.0pt;border:none;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="125" valign="top" style='width:94.05pt;border:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:24.3pt;text-align:right'>nil</p> </td> </tr> <tr align="left"> <td width="168" valign="top" style='width:126.1pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Third Party Debentures</p> </td> <td width="36" valign="top" style='width:26.8pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'> </p> </td> <td width="106" style='width:1.1in;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:11.25pt;text-align:right'>773,253</p> </td> <td width="96" style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:20.2pt;text-align:right'>6.1%</p> </td> <td width="36" valign="top" style='width:27.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'> </p> </td> <td width="125" valign="top" style='width:94.05pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:24.3pt;text-align:right'>297,294</p> </td> </tr> <tr align="left"> <td width="168" valign="top" style='width:126.1pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Total</p> </td> <td width="36" valign="top" style='width:26.8pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="106" style='width:1.1in;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:11.25pt;text-align:right'>853,703</p> </td> <td width="96" style='width:1.0in;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:20.2pt;text-align:right'>5.7%</p> </td> <td width="36" valign="top" style='width:27.0pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="125" valign="top" style='width:94.05pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:24.3pt;text-align:right'>297,294</p> </td> </tr> </table> </div> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Principal payments on loans and debentures payable in the years ending May 31, 2013 through 2017 are as follows:</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" style='border-collapse:collapse'> <tr align="left"> <td width="58" valign="bottom" style='width:.6in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Fiscal Year</p> </td> <td width="80" valign="bottom" style='width:60.3pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Principal</p> </td> </tr> <tr align="left"> <td width="58" style='width:.6in;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>2013</p> </td> <td width="80" style='width:60.3pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$155,450</p> </td> </tr> <tr align="left"> <td width="58" style='width:.6in;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>2014</p> </td> <td width="80" style='width:60.3pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$274,980</p> </td> </tr> <tr align="left"> <td width="58" style='width:.6in;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>2015</p> </td> <td width="80" style='width:60.3pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$423,273</p> </td> </tr> <tr align="left"> <td width="58" style='width:.6in;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>2016</p> </td> <td width="80" style='width:60.3pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>-</p> </td> </tr> <tr align="left"> <td width="58" style='width:.6in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>2017</p> </td> <td width="80" style='width:60.3pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>-</p> </td> </tr> <tr align="left"> <td width="58" style='width:.6in;border:none;border-bottom:double windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>Total</p> </td> <td width="80" style='width:60.3pt;border:none;border-bottom:double windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$853,703</p> </td> </tr> </table> </div> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left;text-autospace:none'> </p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b>NOTE 6 – DISCONTINUED OPERATIONS</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>In prior periods the Company disposed of all discontinued inventory and fully depreciated all plant and equipment assets. At November 30, 2012, assets from discontinued operations were de minimis.</p> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Liabilities from discontinued operations consisted of:</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" style='border-collapse:collapse'> <tr style='height:12.6pt'> <td width="326" valign="bottom" style='width:244.2pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in 0in;height:12.6pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Description</p> </td> <td width="39" valign="top" style='width:29.45pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0;height:12.6pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'> </p> </td> <td width="86" valign="top" style='width:64.3pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0;height:12.6pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>May 31, 2012</p> </td> <td width="114" colspan="2" valign="bottom" style='width:85.75pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in 0in;height:12.6pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>November 30, 2012</p> </td> </tr> <tr align="left"> <td width="326" style='width:244.2pt;padding:0in .7pt 0in 0in'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-left:10.0pt;text-indent:-10.0pt'>Note Payable</p> </td> <td width="39" style='width:29.45pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="86" style='width:64.3pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:15.2pt;text-align:right'>61,250</p> </td> <td width="31" style='width:23.4pt;padding:0in .7pt 0in 0in'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="83" style='width:62.35pt;padding:0in .7pt 0in 0in'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:19.95pt;text-align:right'>52,250</p> </td> </tr> <tr style='height:13.5pt'> <td width="326" style='width:244.2pt;padding:0in .7pt 0in 0in;height:13.5pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-left:10.0pt;text-indent:-10.0pt'>Total liabilities related to discontinued operations</p> </td> <td width="39" style='width:29.45pt;border:none;border-bottom:double windowtext 1.5pt;padding:0;height:13.5pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="86" style='width:64.3pt;border:none;border-bottom:double windowtext 1.5pt;padding:0;height:13.5pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:15.2pt;text-align:right'>61,250</p> </td> <td width="31" style='width:23.4pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;padding:0in .7pt 0in 0in;height:13.5pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="83" style='width:62.35pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;padding:0;height:13.5pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:19.95pt;text-align:right'>52,250</p> </td> </tr> </table> </div> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p>
<!--egx--><p style='margin:0in 0in 0pt'><b>NOTE 7 – SUBSEQUENT EVENTS</b></p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'><font lang="EN-GB">There were no subsequent events from the end of the quarter to the date of issuance of this filing.</font></p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><u>Earnings per Share</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>The Company has adopted ASC 260 “Earnings per Share”.  Basic loss per share is computed using the weighted average number of common shares outstanding.   Diluted net loss per share is the same as basic net loss per share, as the inclusion of common stock equivalents would be antidilutive.</p>
<!--egx--><p><u><font style='font-weight:normal'>Fair Value of Financial Instruments</font></u></p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>On July 1, 2008, the Company adopted Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures (“Topic 820”). Topic 820 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;text-indent:-13.5pt;margin:0in 0in 0pt 0.5in'>* Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. </p> <p style='text-align:justify;text-indent:-13.5pt;margin:0in 0in 0pt 0.5in'>* Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. </p> <p style='text-align:justify;text-indent:-13.5pt;margin:0in 0in 0pt 0.5in'>* Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement. </p> <p align="left" style='text-align:left;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>The following table represents our assets and liabilities by level measured at fair value on a recurring basis at November 30, 2012</p> <p align="left" style='text-align:left;margin:0in 0in 0pt'> </p> <p align="left" style='text-align:left;margin:0in 0in 0pt'> </p> <div align="center"> <table border="1" cellspacing="0" cellpadding="0" style='border-bottom:medium none;border-left:medium none;border-collapse:collapse;margin-left:59.4pt;border-top:medium none;border-right:medium none'> <tr align="left"> <td valign="top" width="96" style='border-bottom:windowtext 1pt solid;border-left:medium none;padding-bottom:0in;padding-left:5.4pt;width:1in;padding-right:5.4pt;border-top:medium none;border-right:medium none;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>Description</p></td> <td valign="top" width="96" style='border-bottom:windowtext 1pt solid;border-left:medium none;padding-bottom:0in;padding-left:5.4pt;width:1in;padding-right:5.4pt;border-top:medium none;border-right:medium none;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>Level 1</p></td> <td valign="top" width="96" style='border-bottom:windowtext 1pt solid;border-left:medium none;padding-bottom:0in;padding-left:5.4pt;width:1in;padding-right:5.4pt;border-top:medium none;border-right:medium none;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>Level 2</p></td> <td valign="top" width="96" style='border-bottom:windowtext 1pt solid;border-left:medium none;padding-bottom:0in;padding-left:5.4pt;width:1in;padding-right:5.4pt;border-top:medium none;border-right:medium none;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>Level 3</p></td></tr> <tr align="left"> <td valign="top" width="96" style='border-bottom:medium none;border-left:medium none;padding-bottom:0in;padding-left:5.4pt;width:1in;padding-right:5.4pt;border-top:medium none;border-right:medium none;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'> </p></td> <td valign="top" width="96" style='border-bottom:medium none;border-left:medium none;padding-bottom:0in;padding-left:5.4pt;width:1in;padding-right:5.4pt;border-top:medium none;border-right:medium none;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>None</p></td> <td valign="top" width="96" style='border-bottom:medium none;border-left:medium none;padding-bottom:0in;padding-left:5.4pt;width:1in;padding-right:5.4pt;border-top:medium none;border-right:medium none;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>None</p></td> <td valign="top" width="96" style='border-bottom:medium none;border-left:medium none;padding-bottom:0in;padding-left:5.4pt;width:1in;padding-right:5.4pt;border-top:medium none;border-right:medium none;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>none</p></td></tr></table></div> <p align="left" style='text-align:left;margin:0in 0in 0pt'> </p> <p align="left" style='text-align:left;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>The adoption of this standard did not have a material effect on the Company’s financial position, results of operations or cash flows.</p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" style='border-collapse:collapse'> <tr align="left"> <td width="192" style='width:2.0in;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Related Parties </p> </td> <td width="33" valign="top" style='width:24.65pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'> </p> </td> <td width="144" valign="bottom" style='width:1.5in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Principal Outstanding on November 30, 2012</p> </td> <td width="33" valign="top" style='width:24.65pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'> </p> </td> <td width="144" valign="bottom" style='width:1.5in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Interest Accrued to November 30, 2012</p> </td> </tr> <tr align="left"> <td width="192" valign="top" style='width:2.0in;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Short term notes</p> </td> <td width="33" style='width:24.65pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="144" style='width:1.5in;border:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:17.7pt;text-align:right'>357,000</p> </td> <td width="33" valign="top" style='width:24.65pt;border:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:13.1pt;text-align:right'>$</p> </td> <td width="144" style='width:1.5in;border:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:25.65pt;text-align:right'>1,399</p> </td> </tr> <tr align="left"> <td width="192" valign="top" style='width:2.0in;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Long term debentures</p> </td> <td width="33" valign="top" style='width:24.65pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'> </p> </td> <td width="144" style='width:1.5in;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:17.7pt;text-align:right'>139,267</p> </td> <td width="33" valign="top" style='width:24.65pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:13.1pt;text-align:right'> </p> </td> <td width="144" style='width:1.5in;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:25.65pt;text-align:right'>1,458</p> </td> </tr> <tr align="left"> <td width="192" valign="top" style='width:2.0in;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Total</p> </td> <td width="33" valign="top" style='width:24.65pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="144" style='width:1.5in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:17.7pt;text-align:right'>496,267</p> </td> <td width="33" valign="top" style='width:24.65pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:13.1pt;text-align:right'>$</p> </td> <td width="144" style='width:1.5in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:4.15pt;text-align:right'>2,857</p> </td> </tr> </table> </div>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" style='border-collapse:collapse'> <tr align="left"> <td width="576" colspan="5" valign="bottom" style='width:6.0in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>May 31, 2012</p> </td> </tr> <tr align="left"> <td width="346" colspan="3" valign="bottom" style='width:3.6in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Long and Short Term Debentures</p> </td> <td width="115" valign="bottom" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Notes</p> </td> <td width="115" valign="bottom" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Total </p> </td> </tr> <tr align="left"> <td width="115" valign="bottom" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Principal at end of period</p> </td> <td width="115" valign="bottom" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Remaining Discounts</p> </td> <td width="115" valign="bottom" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Balance Sheet Amount net of discounts</p> </td> <td width="115" valign="bottom" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Principal at end of period</p> </td> <td width="115" valign="bottom" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>End of Period Balance Sheet Amount </p> </td> </tr> <tr align="left"> <td width="115" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:15.1pt;text-align:right'>$730,753</p> </td> <td width="115" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:29.5pt;text-align:right'>nil</p> </td> <td width="115" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:16.9pt;text-align:right'>730,753</p> </td> <td width="115" valign="top" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:13.3pt;text-align:right'>88,739</p> </td> <td width="115" valign="top" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:14.2pt;text-align:right'>819,492</p> </td> </tr> <tr align="left"> <td width="576" colspan="5" valign="bottom" style='width:6.0in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>November 30, 2012</p> </td> </tr> <tr align="left"> <td width="346" colspan="3" valign="bottom" style='width:3.6in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Long and Short Term Debentures</p> </td> <td width="115" valign="bottom" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Notes</p> </td> <td width="115" valign="bottom" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Total </p> </td> </tr> <tr align="left"> <td width="115" valign="bottom" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Principal at end of period</p> </td> <td width="115" valign="bottom" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Remaining Discounts</p> </td> <td width="115" valign="bottom" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Balance Sheet Amount net of discounts</p> </td> <td width="115" valign="bottom" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Principal at end of period</p> </td> <td width="115" valign="bottom" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>End of Period Balance Sheet Amount </p> </td> </tr> <tr align="left"> <td width="115" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:15.1pt;text-align:right'>$773,253</p> </td> <td width="115" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:20.5pt;text-align:right'>$29,750</p> </td> <td width="115" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:16.9pt;text-align:right'>$743,503</p> </td> <td width="115" valign="top" style='width:1.2in;border-top:none;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:13.3pt;text-align:right'>$80,450</p> </td> <td width="115" valign="top" style='width:1.2in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:14.2pt;text-align:right'>$823,953</p> </td> </tr> </table> </div>
<!--egx--><p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'> </p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" style='margin-left:27.1pt;border-collapse:collapse'> <tr align="left"> <td width="168" valign="bottom" style='width:126.1pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Notes and Debentures</p> </td> <td width="36" valign="top" style='width:26.8pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'> </p> </td> <td width="106" valign="bottom" style='width:1.1in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Principal Amount at May 31, 2012</p> </td> <td width="96" valign="bottom" style='width:1.0in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Weighted Average Interest Rate</p> </td> <td width="36" valign="top" style='width:27.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'> </p> </td> <td width="125" valign="bottom" style='width:94.05pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Accrued Interest to May 31, 2012</p> </td> </tr> <tr align="left"> <td width="168" valign="bottom" style='width:126.1pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Third Party Notes </p> </td> <td width="36" valign="top" style='width:26.8pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>$</p> </td> <td width="106" valign="bottom" style='width:1.1in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>88,739</p> </td> <td width="96" valign="bottom" style='width:1.0in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>NIL</p> </td> <td width="36" valign="top" style='width:27.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>$</p> </td> <td width="125" valign="bottom" style='width:94.05pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>NIL</p> </td> </tr> <tr align="left"> <td width="168" valign="bottom" style='width:126.1pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Third Party Debentures</p> </td> <td width="36" valign="top" style='width:26.8pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'> </p> </td> <td width="106" valign="bottom" style='width:1.1in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>730,753</p> </td> <td width="96" valign="bottom" style='width:1.0in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>6.5%</p> </td> <td width="36" valign="top" style='width:27.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'> </p> </td> <td width="125" valign="bottom" style='width:94.05pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>272,672</p> </td> </tr> <tr align="left"> <td width="168" valign="bottom" style='width:126.1pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>Total</p> </td> <td width="36" valign="top" style='width:26.8pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>$</p> </td> <td width="106" valign="bottom" style='width:1.1in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>819,492</p> </td> <td width="96" valign="bottom" style='width:1.0in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>5.8%</p> </td> <td width="36" valign="top" style='width:27.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>$</p> </td> <td width="125" valign="bottom" style='width:94.05pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'>272,672</p> </td> </tr> </table> </div>
<!--egx--><p align="left" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:left'> </p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" style='margin-left:27.1pt;border-collapse:collapse'> <tr align="left"> <td width="168" valign="bottom" style='width:126.1pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Notes and Debentures</p> </td> <td width="36" valign="top" style='width:26.8pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'> </p> </td> <td width="106" valign="bottom" style='width:1.1in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Principal Amount at Nov 30, 2012</p> </td> <td width="96" valign="top" style='width:1.0in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Weighted Average Interest Rate</p> </td> <td width="36" valign="top" style='width:27.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'> </p> </td> <td width="125" valign="bottom" style='width:94.05pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Accrued Interest Nov 30, 2012</p> </td> </tr> <tr align="left"> <td width="168" valign="top" style='width:126.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Third Party Notes </p> </td> <td width="36" valign="top" style='width:26.8pt;border:none;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="106" style='width:1.1in;border:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:11.25pt;text-align:right'>80,450</p> </td> <td width="96" style='width:1.0in;border:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:20.2pt;text-align:right'>NIL</p> </td> <td width="36" valign="top" style='width:27.0pt;border:none;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="125" valign="top" style='width:94.05pt;border:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:24.3pt;text-align:right'>nil</p> </td> </tr> <tr align="left"> <td width="168" valign="top" style='width:126.1pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Third Party Debentures</p> </td> <td width="36" valign="top" style='width:26.8pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'> </p> </td> <td width="106" style='width:1.1in;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:11.25pt;text-align:right'>773,253</p> </td> <td width="96" style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:20.2pt;text-align:right'>6.1%</p> </td> <td width="36" valign="top" style='width:27.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'> </p> </td> <td width="125" valign="top" style='width:94.05pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:24.3pt;text-align:right'>297,294</p> </td> </tr> <tr align="left"> <td width="168" valign="top" style='width:126.1pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Total</p> </td> <td width="36" valign="top" style='width:26.8pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="106" style='width:1.1in;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:11.25pt;text-align:right'>853,703</p> </td> <td width="96" style='width:1.0in;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:20.2pt;text-align:right'>5.7%</p> </td> <td width="36" valign="top" style='width:27.0pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="125" valign="top" style='width:94.05pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:24.3pt;text-align:right'>297,294</p> </td> </tr> </table> </div>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" style='border-collapse:collapse'> <tr align="left"> <td width="58" valign="bottom" style='width:.6in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Fiscal Year</p> </td> <td width="80" valign="bottom" style='width:60.3pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>Principal</p> </td> </tr> <tr align="left"> <td width="58" style='width:.6in;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>2013</p> </td> <td width="80" style='width:60.3pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$155,450</p> </td> </tr> <tr align="left"> <td width="58" style='width:.6in;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>2014</p> </td> <td width="80" style='width:60.3pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$274,980</p> </td> </tr> <tr align="left"> <td width="58" style='width:.6in;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>2015</p> </td> <td width="80" style='width:60.3pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$423,273</p> </td> </tr> <tr align="left"> <td width="58" style='width:.6in;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>2016</p> </td> <td width="80" style='width:60.3pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>-</p> </td> </tr> <tr align="left"> <td width="58" style='width:.6in;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>2017</p> </td> <td width="80" style='width:60.3pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>-</p> </td> </tr> <tr align="left"> <td width="58" style='width:.6in;border:none;border-bottom:double windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>Total</p> </td> <td width="80" style='width:60.3pt;border:none;border-bottom:double windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:right'>$853,703</p> </td> </tr> </table> </div>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify'> </p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" style='border-collapse:collapse'> <tr style='height:12.6pt'> <td width="326" valign="bottom" style='width:244.2pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in 0in;height:12.6pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'>Description</p> </td> <td width="39" valign="top" style='width:29.45pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0;height:12.6pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'> </p> </td> <td width="86" valign="top" style='width:64.3pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0;height:12.6pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>May 31, 2012</p> </td> <td width="114" colspan="2" valign="bottom" style='width:85.75pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in 0in;height:12.6pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>November 30, 2012</p> </td> </tr> <tr align="left"> <td width="326" style='width:244.2pt;padding:0in .7pt 0in 0in'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-left:10.0pt;text-indent:-10.0pt'>Note Payable</p> </td> <td width="39" style='width:29.45pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="86" style='width:64.3pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:15.2pt;text-align:right'>61,250</p> </td> <td width="31" style='width:23.4pt;padding:0in .7pt 0in 0in'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="83" style='width:62.35pt;padding:0in .7pt 0in 0in'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:19.95pt;text-align:right'>52,250</p> </td> </tr> <tr style='height:13.5pt'> <td width="326" style='width:244.2pt;padding:0in .7pt 0in 0in;height:13.5pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-left:10.0pt;text-indent:-10.0pt'>Total liabilities related to discontinued operations</p> </td> <td width="39" style='width:29.45pt;border:none;border-bottom:double windowtext 1.5pt;padding:0;height:13.5pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="86" style='width:64.3pt;border:none;border-bottom:double windowtext 1.5pt;padding:0;height:13.5pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:15.2pt;text-align:right'>61,250</p> </td> <td width="31" style='width:23.4pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;padding:0in .7pt 0in 0in;height:13.5pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-align:center'>$</p> </td> <td width="83" style='width:62.35pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;padding:0;height:13.5pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:justify;margin-right:19.95pt;text-align:right'>52,250</p> </td> </tr> </table> </div>
State of Nevada
Results from ongoing operations reported for the period ending November 30, 2012 relate to sales of home automation and energy efficiency products and services including system design, equipment supply, installation and support and reflect development expenses related to the Company’s diversification strategy. Results from operations reported for the period ending November 30, 2011 relate to sales of home automation and energy efficiency products and services including system design, equipment supply, installation and support.
The foregoing unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles for complete financial statements. These unaudited interim financial statements should be read in conjunction with the audited financial statements for the period ended May 31, 2012. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented. The preparation of financial statements in accordance with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company's financial position and results of operations.
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has suffered material recurring losses from operations since inception. At November 30, 2012, the Company had a working capital deficit of $1,061,811, an accumulated deficit of $15,305,738 and historically has reported negative cash flows from consolidated operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Continuation of the Company is dependent on achieving sufficiently profitable operations and obtaining additional financing. Management has and is continuing to raise additional capital from various sources. There can be no assurances that the Company will be continue to be successful in raising additional capital. The financial statements do not include any adjustment relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.
Beneficial Conversion Feature of Debentures and Convertible Notes Payable In accordance with FASB ASC 470-20, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, we recognize the advantageous value of conversion rights attached to such types of convertible debt. Such rights give the debt holder the ability to convert their debt into common stock at a price per share that is less than the trading price to the public on the day the loan is made to us. The beneficial value is calculated as the intrinsic value (the market price of the stock at the commitment date in excess of the conversion rate) of the beneficial conversion feature of the debentures and related accruing interest, and is recorded as a discount to the related debt and an addition to additional paid in capital. The discount is amortized over the remaining outstanding period of related debt using the straight line method.
<!--egx--><p>Recent Accounting Pronouncements In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, ''Technical Corrections and Improvements' in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations. </p> <p> </p> <p>In August 2012, the FASB issued ASU 2012-03, 'Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)' in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations. </p> <p> </p> <p>In July 2012, the FASB issued ASU 2012-02, 'Intangibles -Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment' in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles -Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles -Goodwill and Other -General Intangibles Other than Goodwill. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity's financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations. </p> <p> </p> <p>In December 2011, the FASB issued ASU No. 2011-11, “Disclosures about Offsetting Assets and Liabilities”. Under ASU 2011-11 disclosures are required to provide information to help reconcile differences in the offsetting requirements under U.S. GAAP and IFRS. The new disclosure requirements mandate that entities disclose both gross and net information about instruments and transactions eligible for offset in the statement of financial position as well as instruments and transactions subject to an agreement similar to a master netting arrangement. In addition, the ASU requires disclosure of collateral received and posted in connection with master netting agreements or similar arrangements. The guidance is effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. </p> <p> </p> <p>In September 2011, the FASB issued ASU No. 2011-08, “Testing Goodwill for Impairment (the revised standard)”. Under ASU No. 2011-08 companies have the option to perform a qualitative assessment that may allow them to skip the annual two-step test and reduce costs. The guidance is effective for fiscal years beginning after December 15, 2011 and earlier adoption is permitted. </p> <p> </p> <p>In June 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income.” The guidance improves the comparability of financial reporting and facilitates the convergence of U.S. GAAP and IFRS be amending the guidance in ASC 220, Comprehensive Income. Under the amended guidance, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, the entity is required to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the components of net income and the components of other comprehensive income are presented. This guidance is effective retrospectively for annual and interim periods beginning after December 15, 2011. The adoption of the guidance is not expected to have a material impact on the Company's Consolidated Financial Statements or the Notes thereto. </p> <p> </p> <p>The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations, or cash flows.</p>
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The Company shares office space and administrative costs in Vancouver with ScanTech Imaging Corp. (“ScanTech”), a company controlled by Murat Erbatur the Company’s COO. The Company provides technical consulting services to ScanTech and Scan Tech’s clients on an as needed basis.
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iso4217:USD
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