Equity Transactions

6 Months Ended

Nov. 30, 2017

Notes to Financial Statements

Note 6 - Equity Transactions

Preferred Stock

Series A Preferred Stock

The Company is authorized to issue 2,000,000 shares of series A Preferred Stock at a par value of $0.0001. The Series A Preferred Stock has voting rights equal to 1,000 votes for each 1 share of common stock owned. The Series A Preferred Stock shall have no liquidation preference over any other class of stock and there will be no dividends due or payable on the Series A Preferred Stock.

There were no issuances of the Series A Preferred Stock during the six months ended November 30, 2017.

Series B Convertible Preferred Stock

The Company is authorized to issue 150,000 shares of Series B Preferred Stock at a par value of $0.0001. The Series B Preferred Stock shall have no liquidation preference over any other class of stock and there will be no dividends due or payable on the Series B Preferred Stock. The Series B Preferred converts into Common Stock at a ratio of 1:1,000. However, the Series B may not be converted for a period of 12 months.

There were no issuances of the Series B Preferred Stock during the six months ended November 30, 2017.

Series C Convertible Preferred Stock

The Company is authorized to issue 250,000 shares of Series C Preferred Stock at a par value of $1. The Series C Preferred Stock shall have no liquidation preference over any other class of stock and there will be no dividends due or payable on the Series C Preferred Stock, The Preferred Stock can be converted to common stock, at a conversion rate of 66 common shares for each preferred share owned. The Company evaluated the conversion feature and concluded that it did not qualify as a derivative transaction. The Company evaluated the convertible preferred stock under FASB ACS 470-20-30 and determined it does not contain a beneficial conversion feature.

There were no issuances of the Series C Preferred Stock during the sic months ended November 30, 2017.

Series D Convertible Preferred Stock

On June 13, 2016, pursuant to its Articles of Incorporation and Bylaws, the Board of Directors of the Company, unanimously approved the designation of a new series of preferred stock, "Series D Convertible Preferred Stock.

The Company is authorized to issue 10,000,000 shares of Series D Preferred Stock at a par value of $0.0001.

The Series D Preferred Stock shall have no liquidation preference over any other class of stock and there will be no dividends due or payable on the Series D Preferred Stock,

Beginning January 1, 2017, each holder of shares of Series D Preferred Stock may, at any time and from time to time, convert each of its shares of Series D Preferred Stock into a 15 fully paid and nonassessable shares of common stock.

Beginning January 1, 2018, the Company may convert shares of Series D Preferred Stock at any time and from time to time, each of its shares of Series D Preferred Stock into 15 of fully paid and nonassessable shares of common stock.

There were no issuances of the Series D Preferred Stock during the six months ended November 30, 2017.

Series E Preferred Stock

The Company is authorized to issue 15,000,000 shares of Series E Preferred Stock at a par value of $0.0001. The Series E Preferred Stock shall have no liquidation preference over any other class of stock and there will be no dividends due or payable on the Series E Preferred Stock. Beginning October 1, 2016, each share of Series E Preferred Stock is convertible into ten (10) shares of common stock. From October 1, 2016 to October 1, 2018, holders of Series E Preferred Stock may at any time convert to shares of common stock, thereafter, the Company may elect to convert any outstanding stock at any time without notice to the shareholders. The Company evaluated the conversion feature and concluded that it did not qualify as a derivative transaction. The Company evaluated the convertible preferred stock under FASB ACS 470-20-30 and determined it does not contain a beneficial conversion feature.

There were no issuances of the Series E Preferred Stock during the six months ended November 30, 2017.

Common stock

During the six months ended November 30, 2017, the Company issued common stock as follows,

· 98,887,236 common shares for the conversion of debt and accrued interest of $36,440.

· 27,575,932 common shares for the True-Up conversion.

As of November 30, 2017 and May 31, 2017, 507,669,616 and 381,206,448 shares of common stock were issued and outstanding, respectively.

Warrants

On September 29, 2015, the Company granted 1,000,000 warrants to Vista Capital Investments, LLC, in exchange for interest owed of $12,222, and recognized a loss on debt settlement of $16,778. Warrants were originally exercisable into 1,000,000 shares of common stock, for a period of five years from issuance, at a price of $0.05 per share, with multiple reset provisions when the share price is below $0.05. As a result of these reset features, additional warrants were issued and became exercisable into 36,933,026 shares of common stock at $0.00028 per share. Each warrant is exercisable into one share of common stock.

The following table summarizes information relating to outstanding and exercisable warrants as of November 30, 2017:

Warrants Outstanding				Warrants Exercisable
Number of Shares	Weighted Average Remaining Contractual life (in years)	Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
36,933,026	2.83 years	$	0.0003		36,933,026	$	0.0003

The following table summarizes warrant activity for the six months ended November 30, 2017:

	Number of shares		Weighted Average Exercise Price		Weighted Average Life (years)
Outstanding, May 31, 2017		15,388,761	$	0.0007	3.33 years
Reset features		21,544,265		0.0003	3.08 years
Forfeited		-		-		-
Exercised		-		-		-
Outstanding, November 30, 2017		36,933,026	$	0.0003	2.83 years

Aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company's stock exceeded the exercise price of the stock options at November 30, 2017, for those stock options for which the quoted market price was in excess of the exercise price ("in-the-money options"). As of November 30, 2017, the aggregate intrinsic value of options outstanding was approximately $52,630 based on the closing market price of $0.001 on November 30, 2017.