Convertible Note

9 Months Ended

May 31, 2014

Notes to Financial Statements

Note 3 - Convertible Note

During the nine months ending May 31, 2014 the Company entered into a convertible debt agreement with Mill City Ventures for $500,000. Terms of this transaction include annual interest rate of 12% due February 6, 2014, the option to convert debt into equity at $0.36 per share, and 1,600,000 warrants.  The warrants were valued using the Black Scholes valuation method at $196,835 and the beneficial conversion factor was valued at $194,445.