EARNINGS PER SHARE

3 Months Ended

Aug. 31, 2011

NOTE 10. EARNINGS PER SHARE

Basic income or loss per common share is net income or loss available to common stockholders divided by the weighted average of common shares outstanding during the period. Diluted income or loss per common share is calculated in the same manner, but also considers the impact to net income and common shares outstanding for the potential dilution from in-the-money common stock options and warrants, and convertible debentures and preferred stock.

We have issued potentially dilutive instruments in the form of restricted common stock granted and not yet issued and common stock warrants. The total number of potentially dilutive securities at August 31, 2011 was 3,557,896. There were no potentially dilutive securities outstanding at August 31, 2010. We did not include the potentially dilutive securities in our calculation of diluted loss per share during the current period becase to include them would be anti-dilutive due to our net loss during this period.

The following table summarizes the types of potentially dilutive securities outstanding as of August 31, 2011 and 2010:

	8/31/2011		8/31/2010
Broker Warrants		592,500		-
Warrant Liability		2,727,273		-
Unissued Common Stock		238,123		-
Total Potentially Dilutive Securities		3,557,896		-