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2. Summary of Significant Accounting Policies: Prepaid Expenses (Policies)
6 Months Ended
May 31, 2016
Policies  
Prepaid Expenses

Prepaid expenses

 

Prepaid expenses primarily consist of promotion expenses, rent, advertising expenses and licensing fees.

 

Prepaid promotion expenses represent payments made to promotion companies for distributing products to retail stores.  In March 2016, the Company entered into agreements with 4 promotion companies.  Prepaid promotion expenses as of May 31, 2016 and November 30, 2015 were $1,391,200 and $0, respectively.

 

On January 5, 2011, the Company entered into a license agreement for the technology utilized for the manufacture of its products from an unrelated third party for five years from January 2011 to December 2015. On December 30, 2015, the Company renewed the license agreement for another five years to December 2020 at $91,137 (RMB 600,000) each year.  The related prepaid licensing fees of $53,163 and $7,805 were included in prepaid expenses on the balance sheets as of May 31, 2016 and November 30, 2015, respectively.  The license provides for renewal options. Since this agreement requires the advance payment of the annual licensing fee, there were no payments remaining under this agreement as of May 31, 2016 and November 30, 2015.