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<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; text-decoration: underline;">NOTE A – ORGANIZATION, DESCRIPTION OF COMPANY'S BUSINESS AND BASIS OF PRESENTATION</font></font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Surge Components, Inc. (“Surge”) was incorporated in the State of New York and commenced operations on November 24, 1981 as an importer of electronic products, primarily capacitors and discrete semi-conductors selling to customers located principally throughout North America. On June 24, 1988, Surge formed Challenge/Surge Inc. (“Challenge”), a wholly-owned subsidiary to engage in the sale of electronic component products and sounding devices from established brand manufacturers to customers located principally throughout North America.</font></div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In May 2002, Surge and an officer of Surge founded and became sole owners of Surge Components, Limited (“Surge Limited”), a Hong Kong corporation. Under current Hong Kong law, Surge Limited is required to have at least two shareholders. Surge owns 999 shares of the outstanding common stock and the officer of Surge owns 1 share of the outstanding common stock. The officer of Surge has assigned his rights regarding his 1 share to Surge. Surge Limited started doing business in July 2002. Surge Limited operations have been consolidated with the Company.  Surge Limited is responsible for the sale of Surge’s products to customers located in Asia.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 9pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">On August 31, 2010, the Company changed its corporate domicile by merging into a newly-formed corporation, Surge Components, Inc. (Nevada), which was formed in the State of Nevada for that purpose.  Surge Components Inc. is the surviving entity. The number of common stock shares authorized for issuance was increased to 75,000,000 shares.</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; text-decoration: underline;">NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</font></font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">[1] <font style="display: inline; text-decoration: underline;">Principles of Consolidation</font>:</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The consolidated financial statements include the accounts of Surge, Challenge, and Surge Limited (collectively the “Company”).  All material intercompany balances and transactions have been eliminated in consolidation.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The accompanying interim consolidated financial statements have been prepared, without audit, in accordance with the instructions to Form 10-Q for interim financial reporting pursuant to the rules and regulations of the Securities and Exchange Commission.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The results and trends in these interim consolidated financial statements for the six months ended May 31, 2012 and May 31,  2011 may not be representative of those for the full fiscal year or any future periods.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 24.3pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(2)<font style="display: inline; text-decoration: underline;"> Accounts Receivable:</font></font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Trade accounts receivable are recorded at the net invoice value and are not interest bearing. The Company considers receivables past due based on the payment terms. The Company reviews its exposure to amounts receivable and reserves specific amounts if collectability is no longer reasonably assured. The Company also reserves a percentage of its trade receivable balance based on collection history and current economic trends that might impact the level of future credit losses. The Company re-evaluates such reserves on a regular basis and adjusts its reserves as needed. Based on the Company’s operating history and customer base, bad debts to date have not been material.</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(3) <font style="display: inline; text-decoration: underline;">Revenue Recognition</font>:</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Revenue is recognized for products sold by the Company when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed and determinable, collectability is reasonably assured and title and risk of loss have been transferred to the customer. This occurs when product is shipped from the Company's warehouse. </font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">For direct shipments, revenue is recognized when product is shipped from the Company’s supplier. The Company has a long term supply agreement with one of our suppliers. The Company purchases the merchandise from the supplier and has the supplier directly ship to the customer through a freight forwarder.  Title passes to customer upon the merchandise being received by a freight forwarder. Direct shipments were approximately $1,422,000 and $1,693,000 for the six months ended May 31, 2012 and May 31, 2011 respectively.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company also acts as a sales agent to certain customers in North America for one of its suppliers. The Company reports these commissions as revenues in the period earned. Commission revenue totaled $205,964 and $199,562 for the six months ended May 31, 2012 and May 31, 2011 respectively.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company performs ongoing credit evaluations of its customers and maintains reserves for potential credit losses. </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company and its subsidiaries currently have agreements with several
distributors.    Some of these agreements allow for the return of up to 10% of certain product sales for the previous 6 month period.  The Company does not recognize this portion of the revenues, or the related costs of the sale, until the right of return has expired.    There are no provisions for the granting of price concessions in any of the agreements.  Revenues under these distribution agreements were approximately $2,119,000 and $2,492,000 for the six months ended May 31, 2012 and May 31, 2011 respectively.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(4) <font style="display: inline; text-decoration: underline;">Inventories</font>:</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Inventories, which consist solely of products held for resale, are stated at the lower of cost (first-in, first-out method) or market.  Products are included in inventory when the Company obtains title and risk of loss on the products, primarily when shipped from the supplier. Inventory in transit principally from foreign suppliers at May 31, 2012 approximated $1,340,000. The Company, at May 31, 2012, has a reserve against slow moving and obsolete inventory of $911,353. From time to time the Company’s products are subject to legislation from various authorities on environmental matters.</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(5) <font style="display: inline; text-decoration: underline;">Depreciation and Amortization</font>:</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Fixed assets are recorded at cost.  Depreciation is generally calculated on a straight line method and amortization of leasehold improvements is provided for on the straight-line method over the estimated useful lives of the various assets as follows:</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="left">
<table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0">
<tr bgcolor="#cceeff">
<td valign="top">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Furniture, fixtures and equipment</font></div>
</div>
</td>
<td valign="top">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">5 - 7 years</font></div>
</div>
</td>
</tr>
<tr bgcolor="white">
<td valign="top">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Computer equipment</font></div>
</div>
</td>
<td valign="top">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">5 years</font></div>
</div>
</td>
</tr>
<tr bgcolor="#cceeff">
<td valign="top">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Leasehold Improvements</font></div>
</div>
</td>
<td valign="top">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Estimated useful</font></div>
</div>
</td>
</tr>
<tr bgcolor="white">
<td valign="top"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">life or lease</font></div>
</div>
</td>
</tr>
<tr bgcolor="#cceeff">
<td valign="top"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">term, whichever is</font></div>
</div>
</td>
</tr>
<tr bgcolor="white">
<td valign="top"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">shorter</font></div>
</div>
</td>
</tr>
</table>
</div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Maintenance and repairs are expensed as incurred while renewals and betterments are capitalized.</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right:
3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(6) <font style="display: inline; text-decoration: underline;">Concentration of Credit Risk</font>:</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of accounts receivable.  The Company maintains substantially all of its cash balances in two financial institutions.   At May 31, 2012 and November 30, 2011, the Company's uninsured cash balances totaled approximately $1,413,000 and $586,000, respectively.</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(7) <font style="display: inline; text-decoration: underline;">Income Taxes</font>:</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company's deferred income taxes arise primarily from the differences in the recording of net operating losses, allowances for bad debts, inventory reserves and depreciation expense for financial reporting and income tax purposes.  A valuation allowance is provided when it has been determined to be more likely than not that the likelihood of the realization of deferred tax assets will not be realized. See Note G.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company follows the provisions of the Accounting Standards Codification topic, ASC 740, “Income Taxes” (ASC 740). There have been no unrecognized tax benefits and, accordingly, there has been no effect on the Company’s financial condition or results of operations as a result of ASC 740.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company is no longer subject to U.S. federal tax examinations for years before fiscal years ending November 30, 2008, and state tax examinations for years before fiscal years ending November 30, 2007. Management does not believe there will be any material changes in our unrecognized tax positions over the next twelve months.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of the date of adoption of ASC 740, there was no accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the six months ended May 31, 2012 and May 31, 2011.</font></div>
<div style="text-indent: 0pt; display: block;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div style="text-indent: 0pt; display: block;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(8) <font style="display: inline; text-decoration: underline;">Cash Equivalents</font>:</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(9) <font style="display: inline; text-decoration: underline;">Use of Estimates</font>:</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.  Actual results could differ from those estimates.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 38.7pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(10)<font style="display: inline; text-decoration: underline;"> Marketing and promotional costs:</font></font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Marketing and promotional costs are expensed as incurred and have not been material to date. The Company has contractual arrangements with several of its distributors which provide for cooperative advertising rights to the distributor as a percentage of sales. Cooperative advertising is reflected as a reduction in revenues and has not been material to
date.</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(11) <font style="display: inline; text-decoration: underline;">Fair Value of Financial Instruments</font>:</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The carrying amount of cash balances, accounts receivable, accounts payable and accrued expenses approximate their fair value based on the nature of those items. Estimated fair values of financial instruments are determined using available market information and appropriate valuation methodologies.  Considerable judgment is required to interpret the market data used to develop the estimates of fair value, and accordingly, the estimates are not necessarily indicative of the amounts that could be realized in a current market exchange.</font></div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(12) <font style="display: inline; text-decoration: underline;">Shipping Costs</font></font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 17.1pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company classifies shipping costs as a component of selling expenses.  Shipping costs totaled $7,809 and $8,276 for the six months ended May 31, 2012 and May 31, 2011 respectively.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 17.1pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(13) <font style="display: inline; text-decoration: underline;">Earnings Per Share</font></font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 17.1pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Basic earnings per share includes no dilution and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. The difference between reported basic and diluted weighted-average common shares results from the assumption that all dilutive stock options and convertible preferred stock exercised into common stock. Total potentially dilutive shares excluded from diluted weighted shares outstanding at May 31, 2012 and 2011 totaled 273,424 and 405,910, respectively.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(14) Stock Based Compensation to Employees</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company accounts for its stock-based compensation for employees in accordance with Accounting Standards Codification (“ASC”) 718.   The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees over the related vesting period.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Stock Based Compensation to Other than Employees</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC 718. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably determinable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(15) <font style="display: inline; text-decoration: underline;">Recent Accounting Standards:</font></font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="font-style: italic; display: inline;">Comprehensive Income</font> — In June 2011, the Financial Accounting Standards Board (“FASB”) issued new guidance on the presentation of comprehensive income. Specifically, the new guidance allows an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements. The new guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. While the new guidance changes the presentation of comprehensive income, there are no changes
to the components that are recognized in net income or other comprehensive income under current accounting guidance. This new guidance is effective for fiscal years and interim periods beginning after December 15, 2011. We do not believe our adoption of the new guidance in the first quarter of fiscal 2013 will have an impact on our consolidated financial position, results of operations or cash flows.</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> <font style="font-style: italic; display: inline;">Fair Value Measurement</font> — In April 2011, the FASB issued new guidance to achieve common fair value measurement and disclosure requirements between GAAP and International Financial Reporting Standards. This new guidance amends current fair value measurement and disclosure guidance to include increased transparency around valuation inputs and investment categorization. This new guidance is effective for fiscal years and interim periods beginning after December 15, 2011. We do not believe our adoption of the new guidance in the first quarter of fiscal 2013 will have an impact on our consolidated financial position, results of operations or cash flows.</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(16) <font style="display: inline; text-decoration: underline;">Reclassifications:</font></font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Certain amounts included in 2011 financial statements have been reclassified to conform to the 2012 presentation.</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 8.1pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; text-decoration: underline;">NOTE C - FIXED ASSETS</font></font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 8.1pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Fixed assets consist of the following:</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 8.1pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="left">
<table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0">
<tr>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">May 31,</font></div>
</td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">November 30,</font></div>
</td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></div>
</td>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2011</font></div>
</td>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Furniture and Fixtures</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div>
</div>
</td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">321,099</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div>
</div>
</td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">350,563</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Leasehold Improvements</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size:
10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">909,014</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">906,449</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Computer Equipment</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">966,631</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">930,575</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td style="padding-bottom: 2px;" valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Less-Accumulated Depreciation</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(2,096,876</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="bottom" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">)</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(2,069,538</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="bottom" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">)</font></div>
</div>
</td>
</tr>
<tr bgcolor="#cceeff">
<td style="padding-bottom: 4px;" valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net Fixed Assets</font></div>
</div>
</td>
<td style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 4px double;" valign="bottom" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div>
</div>
</td>
<td style="border-bottom: black 4px double;" valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">99,868</font></div>
</div>
</td>
<td style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline;
font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 4px double;" valign="bottom" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div>
</div>
</td>
<td style="border-bottom: black 4px double;" valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">118,049</font></div>
</div>
</td>
<td style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
</table>
</div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 8.1pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Depreciation and amortization expense for the six months ended May 31, 2012 and May 31, 2011 was $27,338 and $44,473, respectively.</font></div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; text-decoration: underline;">NOTE D -  ACCRUED EXPENSES</font></font></div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Accrued expenses consist of the following:</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="left">
<table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0">
<tr>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">May 31,</font></div>
</td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 8.1pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">November 30,</font></div>
</td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></div>
</td>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 8.1pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2011</font></div>
</td>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Commissions</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div>
</div>
</td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">228,877</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div>
</div>
</td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">211,789</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Preferred Stock Dividends</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new
roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">170,932</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">165,007</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Interest</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">102,399</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">102,399</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td style="padding-bottom: 2px;" valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Other accrued expenses</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">147,088</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">190,754</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td style="padding-bottom: 4px;" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 4px double;" valign="bottom" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block;
margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div>
</div>
</td>
<td style="border-bottom: black 4px double;" valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">649,296</font></div>
</div>
</td>
<td style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 4px double;" valign="bottom" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div>
</div>
</td>
<td style="border-bottom: black 4px double;" valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">669,949</font></div>
</div>
</td>
<td style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
</table>
</div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In March 2000, the Company completed a $7,000,000 private placement.  The entire note balance was converted into common stock in July 2001 pursuant to the automatic conversion provisions of the notes.  The interest accrued on the notes required approval by the holder in order to convert to common stock.  The accrued interest in the Company’s disclosures relate to the portion of the interest which was not converted.  No additional interest accrues on these amounts and none of this interest was repaid during any of the periods presented.</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 29.7pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; text-decoration: underline;">NOTE E – RETIREMENT PLAN</font></font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 9pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In June 1997, the Company adopted a qualified 401(k) retirement plan for all full-time employees who are twenty-one years of age and have completed twelve months of service.  The plan allows total employee contributions of up to fifteen percent (15%) of the eligible employee’s salary through salary reduction. The Company makes a matching contribution of twenty percent (20%) of each employee’s contribution for each dollar of employee deferral up to five percent (5%) of the employee’s salary.  Net assets for the plan, as estimated by Union Central, Inc., which maintains the plan’s records, were approximately $770,000 at November 30, 2011. Pension expense for the six months ended May 31, 2012 and May 31, 2011 was $1,197 and $2,757, respectively.</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 29.7pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; text-decoration: underline;">NOTE F – SHAREHOLDERS’ EQUITY</font></font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 29.7pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">[1] <font style="display: inline; text-decoration: underline;">Preferred Stock</font>:</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 9pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In February 1996, the Company amended its Certificate of Incorporation to authorize the issuance of 1,000,000 shares of preferred stock in one or more series. In August 2010, the number of preferred shares authorized for issuance was increased to 5,000,000 shares.</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 9pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 9pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In January 2000, the Company authorized 260,000 shares of preferred stock as Non-Voting Redeemable Convertible Series A Preferred Stock (“Series A Preferred”). None of the Series A preferred stock is outstanding as of May 31, 2012.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 9pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In November 2000, the Company authorized 200,000 shares of preferred stock as Voting Redeemable Convertible Series B Preferred Stock (“Series B Preferred”). None of the  Series B Preferred Stock is outstanding as of May 31, 2012.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 9pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In November 2000, the Company authorized 100,000 shares of preferred stock as Non-Voting Redeemable Convertible Series C Preferred Stock (“Series C Preferred”). Each share of Series C Preferred is automatically convertible into 10 shares of the Company’s Common Stock upon shareholder approval.  If the Series C Preferred were converted into common stock on or before April 15, 2001, these shares were entitled to cumulative dividends at the rate of $.50 per share per annum commencing April 15, 2001 payable on June 30 and December 31 of each year.  In November 2000, 70,000 shares of the Series C Preferred were issued in payment of financial consulting services to its investment banker and a shareholder of the Company.  In April 2001, 8,000 shares of the Series C Preferred were repurchased and cancelled.  Dividends aggregating $170,932 have not been declared or paid for the semiannual periods ended December 31, 2001 through the semiannual payment due December 31, 2011.  The Company has accrued these dividends.  The December 31, 2011 dividend of $5,925 has not been declared or paid.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 17.1pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In April 2002, in connection with a Mutual Release, Settlement, Standstill and Non-Disparagement Agreement and among other provisions, certain investors transferred back to the Company 252,000 shares of common stock, 19,300 shares of Series C preferred stock, and certain warrants, in exchange for $225,000. These repurchased shares were cancelled.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 9pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In February 2006, the Company settled with a shareholder to repurchase 10,000 shares of Series C Preferred plus accrued dividends for $50,000.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 9pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Pursuant to exchange agreements dated as of March 14, 2011, 9,000 shares of Series C Preferred were returned to the Company for cancellation in exchange for 112,500 shares of common stock.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 9pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">At May 31, 2012 there are 23,700 shares of Series C Preferred issued and outstanding.</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 9pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">[2] <font style="display: inline; text-decoration: underline;">2010 Incentive Stock Plan</font></font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In March 2010, the Company adopted, and in April 2010 the shareholders ratified, the 2010 Incentive Stock Plan (“Stock Plan”).  The plan provides for the grant of options to officers, employees or consultants to the Company to purchase an aggregate of 1,500,000 common shares.</font></div>
<div style="text-indent: 0pt; display: block;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div style="text-indent: 0pt; display: block;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Stock option incentive plan activity for the six months ended
May 31, 2012 is summarized as follows:</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="left">
<table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0">
<tr>
<td valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: left;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Weighted</font></div>
</td>
<td style="text-align: left;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
</tr>
<tr>
<td valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: left;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Average</font></div>
</td>
<td style="text-align: left;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
</tr>
<tr>
<td style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Shares</font></div>
</td>
<td style="text-align: left; padding-bottom: 2px;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Exercise Price</font></div>
</td>
<td style="text-align: left; padding-bottom: 2px;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
</tr>
<tr>
<td valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: left;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: left;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
</tr>
<tr bgcolor="#cceeff">
<td align="left" valign="bottom" width="76%">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Options outstanding December 1, 2011</font></div>
</td>
<td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">685,000</font></td>
<td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td>
<td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.25</font></td>
<td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
</tr>
<tr bgcolor="white">
<td align="left" valign="bottom" width="76%">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Options exercised in May 2012</font></div>
</td>
<td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline;
font-family: times new roman; font-size: 10pt;">(25,000</font></td>
<td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">)</font></td>
<td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td>
<td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.25</font></td>
<td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
</tr>
<tr bgcolor="#cceeff">
<td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Options cancelled in May 2012</font></div>
</td>
<td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 2px solid; text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 2px solid; text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(1,000</font></td>
<td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">)</font></td>
<td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 2px solid; text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td>
<td style="border-bottom: black 2px solid; text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1.15</font></td>
<td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
</tr>
<tr bgcolor="white">
<td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Options outstanding May 31, 2012</font></div>
</td>
<td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 2px solid; text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 2px solid; text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">659,000</font></td>
<td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 2px solid; text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td>
<td style="border-bottom: black 2px solid; text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.39</font></td>
<td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
</tr>
<tr bgcolor="#cceeff">
<td align="left" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
</tr>
<tr bgcolor="white">
<td align="left" style="padding-bottom: 4px;" valign="bottom" width="76%">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Options exercisable May 31,2012</font></div>
</td>
<td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 4px double; text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 4px double; text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">603,000</font></td>
<td style="text-align: left; padding-bottom: 4px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display:
inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 4px double; text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td>
<td style="border-bottom: black 4px double; text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.29</font></td>
<td style="text-align: left; padding-bottom: 4px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
</tr>
</table>
</div>
<div style="text-indent: 0pt; display: block;"> </div>
<div style="text-indent: 0pt; display: block;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; text-decoration: underline;">Stock Compensation</font></font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The fair values of stock options are estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions during 2010: expected volatility of 60% (based on stock volatility of public company industry peers); average risk-free interest rate of 2.31% (the five year treasury note rate on the date of the grant); initial expected life of 5 years (based on the term of the options); no expected dividend yield; and amortized over the vesting period for a year.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">On February 25, 2011, the Company granted stock options to employees to purchase 85,000 shares of the Company’s common stock at an exercise price of $1.15, the value of the common stock on the date of the grant.  These options vest over a three year period and expire in ten years.  The fair values of these stock options are estimated at the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: expected volatility of 60% (based on stock volatility of public company industry peers); average risk-free interest rate of 3.42% (the ten year treasury note rate on the date of the grant); initial expected life of 10 years (based on the term of the options); no expected dividend yield; and amortized over the vesting period.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The weighted average grant date fair value of the stock options granted during the year ended November 30, 2011 was $0.82.  During the six months ended May 31, 2012, the Company recorded stock based compensation totaling $11,622 as a result of these stock option grants.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The intrinsic value of the exercisable options at May 31, 2012 totaled $132,660.  At May 31, 2012 the weighted average remaining life of the stock options is 3.74 years.  At May 31, 2012, there was $40,672 of total unrecognized compensation cost related to the stock options granted under the plan.  This cost is expected to be recognized over a weighted average period of .999 years.</font></div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">[3] <font style="display: inline; text-decoration: underline;">Authorized Repurchase</font>:</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In November 2002, the Board of Directors authorized the repurchase of up to 1,000,000 Common Shares at a price between $.04 and $.045. The Company has not repurchased any shares to date pursuant to such authority.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">[4] <font style="display: inline; text-decoration: underline;">Compensation of Directors</font></font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In May 2010, the Company issued 12,000 shares of its common stock to each non-officer director as compensation for services on the Board of Directors. These shares were valued at $0.18 per share, the closing price of the common stock on the over-the-counter market. Starting April 1, 2012, the amount directors each receive for their services on the Board of Directors was increased from $200 a month to $2,000 a month. In May 2010, options were granted to each non-officer director to purchase 25,000 shares of common stock at an exercise price of $0.25.  (See Note F[2] for disclosure on the valuation and terms of these options). In May 2012, one non-officer director exercised an option and acquired 25,000 shares of common stock for $6,250.</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; text-decoration: underline;">NOTE G – INCOME TAXES</font></font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes using the enacted tax rates in effect in the years in which the differences are expected to reverse.  </font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company’s deferred income taxes are comprised of the following:</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="left">
<table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0">
<tr>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">May 31</font></div>
</td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">November 30,</font></div>
</td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></div>
</td>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2011</font></div>
</td>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr>
<td align="left" valign="bottom">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Deferred Tax Assets</font></div>
</td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">    Net operating loss</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div>
</div>
</td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">5,200,256</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size:
10pt;">$</font></div>
</div>
</td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">5,345,554</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">    Allowance for bad debts</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">13,850</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">7,793</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">    Inventory</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">442,366</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">498,220</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">    Deferred Rent</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">9,020</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">985</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td style="padding-bottom: 2px;" valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">    Depreciation</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size:
10pt;">187,478</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">183,646</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">    Total deferred tax assets</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">5,852,970</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,036,198</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td style="padding-bottom: 2px;" valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">    Valuation allowance</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(4,573,579</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="bottom" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">)</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(4,567,282</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="bottom" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">)</font></div>
</div>
</td>
</tr>
<tr bgcolor="white">
<td valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td style="padding-bottom: 4px;" valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">        Deferred Tax
Assets</font></div>
</div>
</td>
<td style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 4px double;" valign="bottom" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div>
</div>
</td>
<td style="border-bottom: black 4px double;" valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,279,391</font></div>
</div>
</td>
<td style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 4px double;" valign="bottom" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div>
</div>
</td>
<td style="border-bottom: black 4px double;" valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,468,916</font></div>
</div>
</td>
<td style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
</table>
</div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The valuation allowance for the deferred tax assets relates principally to the uncertainty of the utilization of deferred tax assets and was calculated in accordance with the provisions of ASC 740, which requires that a valuation allowance be established or maintained when it is “more likely than not” that all or a portion of deferred tax assets will not be realized. This valuation is based on management estimates of future taxable income. Although the degree of variability inherent in the estimates of future taxable income is significant and subject to change in the near term, management believes, that the estimate is adequate. The estimated valuation allowance is continually reviewed and as adjustments to the allowance become necessary, such adjustments are reflected in the current operations.</font></div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;" >
<div ><font style="display: inline; font-family: times new roman; font-size: 10pt;">The valuation allowance increased by approximately $6,000 during the six months ended May 31, 2012 and decreased by $2,274,000 during the year ended November 30, 2011, respectively. <font style="background-color: #ffffff; display: inline;">This change in the valuation allowance is based on management estimates of future taxable income. The degree of variability inherent in the estimates of future taxable income is significant and subject to change in the near term. The Company reviews its estimates of future taxable income in each reporting period and adjustments to the valuation allowance are reflected in the current operations.</font></font></div>
</div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company's income tax expense consists of the following:</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="left">
<table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0">
<tr>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="top"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" colspan="7">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Six Months Ended</font></div>
</td>
</tr>
<tr>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" style="padding-bottom: 2px;" valign="top"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">May 31,</font></div>
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></div>
</td>
<td align="left" style="padding-bottom: 2px;" valign="top"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" style="padding-bottom: 2px;" valign="top"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">May 31.</font></div>
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2011</font></div>
</td>
<td
align="left" style="padding-bottom: 2px;" valign="top"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="top"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td align="left" valign="top"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="top"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td align="left" valign="top"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr>
<td valign="bottom">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Current:</font></div>
</div>
</td>
<td valign="top"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td valign="top"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td valign="top"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Federal</font></div>
</div>
</td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div>
</div>
</td>
<td valign="top" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,702</font></div>
</div>
</td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div>
</div>
</td>
<td valign="top" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">16,290</font></div>
</div>
</td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td style="padding-bottom: 2px;" valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">States</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="top" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,248</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="padding-bottom: 2px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="top" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(9,831)</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> 
</font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td style="padding-bottom: 2px;" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="padding-bottom: 2px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="top" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">12,950</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="padding-bottom: 2px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="top" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,459</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Deferred:</font></div>
</div>
</td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Federal</font></div>
</div>
</td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">146,818</font></div>
</div>
</td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">--</font></div>
</div>
</td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td style="padding-bottom: 2px;" valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">States</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="top" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">42,707</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="padding-bottom: 2px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="top" width="1%"><font style="display: inline; font-family:
times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="top" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">        --</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td style="padding-bottom: 2px;" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="padding-bottom: 2px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="top" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">189,525</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="padding-bottom: 2px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="top" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">             --</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td style="padding-bottom: 4px;" valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Provision for income taxes</font></div>
</div>
</td>
<td style="padding-bottom: 4px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 4px double;" valign="top" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div>
</div>
</td>
<td style="border-bottom: black 4px double;" valign="top" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">202,475</font></div>
</div>
</td>
<td style="padding-bottom: 4px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="padding-bottom: 4px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 4px double;" valign="top" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div>
</div>
</td>
<td style="border-bottom: black 4px double;" valign="top" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right:
0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,459</font></div>
</div>
</td>
<td style="padding-bottom: 4px;" valign="top" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
</table>
</div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company files a consolidated income tax return with its wholly-owned subsidiaries and has net operating loss carryforwards of approximately $13,000,000 for federal and state purposes, which expire through 2020. A reconciliation of the difference between the expected income tax rate using the statutory federal tax rate and the Company's effective rate is as follows:</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="left">
<table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0">
<tr>
<td valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td align="left" valign="bottom" colspan="6">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Six Months Ended May 31,</font></div>
</td>
<td style="text-align: left;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
</tr>
<tr>
<td style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></div>
</td>
<td style="text-align: left; padding-bottom: 2px;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2011</font></div>
</td>
<td style="text-align: left; padding-bottom: 2px;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
</tr>
<tr bgcolor="#cceeff">
<td align="left" valign="bottom" width="76%">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">U.S Federal Income tax statutory rate</font></div>
</td>
<td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">34</font></td>
<td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></td>
<td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">34</font></td>
<td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></td>
</tr>
<tr bgcolor="white">
<td align="left" valign="bottom" width="76%">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Valuation allowance</font></div>
</td>
<td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(0</font></td>
<td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">)%</font></td>
<td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(38</font></td>
<td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">)%</font></td>
</tr>
<tr bgcolor="#cceeff">
<td align="left" valign="bottom" width="76%">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">State income taxes</font></div>
</td>
<td align="right" valign="bottom" width="1%"><font style="display: inline; font-family:
times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2</font></td>
<td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></td>
<td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">5</font></td>
<td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></td>
</tr>
<tr bgcolor="white">
<td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Other</font></div>
</td>
<td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 2px solid; text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 2px solid; text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></td>
<td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 2px solid; text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 2px solid; text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></td>
<td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
</tr>
<tr bgcolor="#cceeff">
<td align="left" style="padding-bottom: 4px;" valign="bottom" width="76%">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> Effective tax rate</font></div>
</td>
<td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 4px double; text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 4px double; text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">36</font></td>
<td style="text-align: left; padding-bottom: 4px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></td>
<td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 4px double; text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td style="border-bottom: black 4px double; text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1</font></td>
<td style="text-align: left; padding-bottom: 4px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></td>
</tr>
</table>
</div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; text-decoration: underline;">NOTE H– RENTAL COMMITMENTS</font></font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company leases its office and warehouse space through 2020 from a corporation that is controlled by officers/shareholders of the Company (“Related Company”).  Annual minimum rental payments to the Related Company approximated $156,000 for the Fiscal 2011, and increase at the rate of three per cent per annum throughout the lease term.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Pursuant to the lease, rent expense charged to operations differs from rent paid because of scheduled rent increases.  Accordingly, the Company has recorded deferred rent.  Rent expense is calculated by allocating to rental payments, including those attributable to scheduled rent increases, on a straight line basis, over the lease term.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In June 2010, the Company entered into a lease to rent office space in Hong Kong for two years. Annual minimum rental payments are approximately $20,000.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The future minimum rental commitments at November 30, 2011:</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="center">
<table style="width: 50%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0">
<tr>
<td valign="bottom" width="45%">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Year Ending</font></div>
</td>
<td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom" width="10%" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr>
<td valign="bottom" width="45%">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">November 30,</font></div>
</td>
<td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom" width="10%" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></td>
<td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td valign="bottom" width="45%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">171,103</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td valign="bottom" width="45%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2013</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">162,625</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td valign="bottom" width="45%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2014</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display:
block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">165,878</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td valign="bottom" width="45%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2015</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">169,195</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td valign="bottom" width="45%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2016</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">172,579</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td style="padding-bottom: 2px;" valign="bottom" width="45%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2017 & thereafter</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">693,878</font></div>
</div>
</td>
<td style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td valign="bottom" width="45%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td style="padding-bottom: 4px;" valign="bottom" width="45%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 4px double;" valign="bottom" width="1%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div>
</div>
</td>
<td style="border-bottom: black 4px double;" valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,535,258</font></div>
</div>
</td>
<td style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
</table>
</div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net rental expense for six months ended May 31, 2012 and May 31, 2011 were $129,595 and $126,229 respectively, of which $112,240 was paid to the Related Company.</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; text-decoration: underline;">NOTE I – EMPLOYMENT AND OTHER AGREEMENTS</font></font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company has employment agreements, with terms through July 30, 2012 (renewable on each July 30th for an additional one year period) with two officers of the Company, which provides each with a base salary of $225,000, subject to certain increases as defined, per annum, plus fringe benefits and bonuses.  The Compensation Committee of the Company’s Board of Directors determines the bonuses.  Bonuses have been accrued to the two officers through May 31, 2012 totaling $200,000.  The agreements also contain provisions prohibiting the officers from engaging in activities which are competitive with those of the Company during employment and for one year following termination.  The agreements further provide that in the event of a change of control, as defined, or a change in ownership of at least 25% of the issued and outstanding stock of the Company, and such issuance was not approved by either officer, or if they are not elected to the Board of Directors of the Company and/or are not elected as an officer of the Company, then the non-approving officer may elect to terminate his employment agreement. If either officer elects to terminate the agreement, he will receive 2.99 times his annual compensation (or such other amount then permitted under the Internal Revenue Code without an excess penalty), in addition to the remainder of his compensation under his existing employment contract.  In addition, if the Company makes or receives a “firm commitment” for a public offering of Common Shares, each officer will receive a warrant to purchase, at a nominal value, up to 9.5% of the Company’s common stock, provided they do not voluntarily terminate employment.</font></div>
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; text-decoration: underline;">NOTE J– MAJOR CUSTOMERS</font></font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company had one customer who accounted for 10% of net sales for the six months ended May 31, 2012 and two customers who accounted for 10% and 13% of net sales for the six months ended May 31, 2011.  The Company had one customer who accounted for 17% and 24% of accounts receivable at May 31, 2012 and November 30, 2011, respectively.</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; text-decoration: underline;">NOTE K- MAJOR SUPPLIERS</font></font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">During the six months ended May 31, 2012 and May 31, 2011 there was one foreign supplier accounting for 27% and 41% of total inventory purchased.</font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company purchases a significant portion of its products overseas.  For the six months ended May 31, 2012, the Company purchased 45% from Taiwan, 21% from Hong Kong, 22% from elsewhere in Asia and less than 1% overseas outside of Asia.</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; text-decoration: underline;">NOTE L - EXPORT SALES</font></font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company’s export sales approximated:</font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"> </font></div>
<div align="left">
<table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0">
<tr>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" colspan="6">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Six Months Ended May 31,</font></div>
</td>
<td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></div>
</td>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td style="border-bottom: black 2px solid;" valign="bottom" colspan="2">
<div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2011</font></div>
</td>
<td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Canada</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,328,258</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,337,341</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">China</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,999,646</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,998,692</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="#cceeff">
<td valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Other Asian Countries</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td
valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">705,717</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,424,348</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
<tr bgcolor="white">
<td valign="bottom" width="76%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Europe</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">67,434</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
<td valign="bottom" width="9%">
<div style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">
<div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">65,741</font></div>
</div>
</td>
<td valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">  </font></td>
</tr>
</table>
</div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 3.6pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Revenues are attributed to countries based on location of customer. </font></div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 5.4pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; text-decoration: underline;">NOTE M – LINE OF CREDIT</font></font></div>
<div style="text-indent: 0pt; display: block;"> </div>
<div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In June 2011, the Company replaced its existing credit line with a line of credit with a new bank totaling $1,000,000.  Borrowings under the line accrue interest at 2.56% over the LIBOR rate. While the credit line was to expire in June 2012, the bank agreed to extend the credit line until September 2012.  The Company plans to renew the credit line by September 2012. The line is collateralized by all the Company’s assets and includes working capital and tangible net worth covenants.  At May 31, 2012, the Company was in compliance with the financial covenants.  As of May 31, 2012, the outstanding balance on the line of credit was zero.</font></div>
5000
6250
5925
8175
<div style="text-indent: 0pt; display: block;">
<div align="justify" style="text-indent: 0pt; margin-right: 5.4pt; margin-left: 0pt; display: block;"><font style="font-family: times new roman; font-size: 10pt; display: inline;"><font style="text-decoration: underline; display: inline;">NOTE N – SUBSEQUENT EVENTS</font></font></div>
</div>
<div align="left" style="text-indent: 0pt; margin-right: 0pt; margin-left: 0pt; display: block;"><font style="font-family: times new roman; font-size: 10pt; display: inline;"> </font></div>
<div align="left" style="text-indent: 0pt; margin-right: 0pt; margin-left: 0pt; display: block;"><font style="font-family: times new roman; font-size: 10pt; display: inline;">On July 11, 2012, the Company granted a stock option to a director to purchase 50,000 shares of the Company's common stock at an exercise price of $0.51, the market price of the common stock on the date of grant. The stock option vested immediately and expires five years from the grant date.</font></div>