RELATED PARTY TRANSACTIONS

9 Months Ended

Feb. 28, 2013

RELATED PARTY TRANSACTIONS [Text Block]

NOTE 3 – RELATED PARTY TRANSACTIONS

In 2006, the Company issued a total of 50,000,000 shares of its restricted common stock to two directors ( 25,000,000 to each) for $5,000 ($.0001/share).

Officers contributed administrative services to the Company for certain periods to May 31, 2008. The time and effort was recorded in the accompanying financial statements based on the prevailing rates for such services, which equaled $50 per hour based on the level of services performed. The services were reported as contributed administrative support with a corresponding credit to additional paid-in capital. No contributed administrative costs have been incurred in the current year to date.

On April 16, 2011, a director of the Company, through a wholly owned corporation, loaned the Company $20,000 in exchange for a promissory note. The note carries a five percent interest rate and matured on April 30, 2012; but no demand for collection has been received to date. Accrued interest payable on the note was $2,529 at February 28, 2013.

On December 1, 2010, the Company entered into a consulting agreement with Brent Welke, our president and a director, for a term of 36 months, whereby Mr. Welke agreed to provide the Company with various consulting services. As compensation, the Company agreed to pay Mr. Welke US $1,000 on the first day of each of the 36 months, pursuant to the terms of the consulting agreement and has issued 2,500,000 shares of the Company’s common stock which, for accounting purposes, has been valued at $12,500 which is based on the last issue price of our common stock of $0.005 per share. On August 30, 2012, he resigned as an officer and director of the Company; the agreement was thereby terminated on that date.

On July 1, 2011, the Company entered into a consulting agreement with Gaspar R. Gonzalez, our treasurer, Chief Financial Officer and a director, for a term of 36 months, whereby Mr. Gonzalez agreed to provide the Company with various financial consulting services. As compensation, the Company agreed to pay him US $1,000 on the first day of each of the 36 months, pursuant to the terms of the consulting agreement and issued 2,000,000 shares of the Company’s common stock which, for accounting purposes, was valued at $1,000,000 which is based on the last price at which our common stock traded at the close of business on July 1, 2011 – $0.50 per share. On August 30, 2012, with the resignation of Brent Welke as an officer and director of the Company, Mr. Gonzalez assumed the added positions of President, Secretary and Chief Executive Officer.

During fiscal 2011 - 2012 a director, through a wholly owned corporation loaned $40,000 (of which $20,000 has been repaid) to All American in the form of a promissory note which bears interest at the rate of 5% and was due and payable on April 30, 2012; although the note is currently due, the payee has agreed not to call the note especially in light of the repayment of $20,000 that was made during the previous year. Interest costs of $247 regarding notes payable and advances from officers and other related parties which had been arranged in prior fiscal years as well as the referenced advance were incurred in the current quarter ended February 28, 2013; $250 was incurred for similar period ended February 29, 2012. For the nine-month periods ended February 28, 2013, and February 29, 2012, the comparative values were $379 and $751 respectively. For the period May 17, 2006 (inception), through February 28, 2013, All American has incurred a total of $3,892 on such expenses.

Imputed interest expenses on notes & advances - prior to the current year, a former officer and director had advanced $20,000 in the form of a non-interest bearing promissory note and a non-related party had advanced $10,500 in the form of a non-interest bearing loan. An imputed interest of $1,525 was, therefore, deemed to have been incurred in the fiscal year ended on May 31, 2012, which was calculated using an interest rate of 5% (five percent) which is the interest rate that was payable on comparable notes and advances that we have recently incurred. $376 in such imputed expenses were incurred for the quarter ended February 28, 2013, while no such costs were incurred for the similar period in 2012. For the nine-month periods ended February 28, 2013, and February 29, 2012, the comparative values were $1,128 and $0 (nil) respectively. For the period May 17, 2006 (inception), through February 28, 2013, All American has incurred a total of $2,653 on imputed interest expenses.