SETTLEMENT OF PRIOR LIABILITIES

12 Months Ended

Aug. 31, 2012

Notes to Financial Statements

NOTE 3 - SETTLEMENT OF PRIOR LIABILITIES

We have settled certain payables to reflect the acceptance by these creditors of lesser amounts. Accordingly, amounts accrued with respect to these account holders have been reduced to $-0- from $508,457, and we have recognized other income in that amount in the consolidated statement of operations for the year ended August 31, 2011, and $538,277 for the period from inception (January 31, 2007) through August 31, 2012.