Restatement

6 Months Ended

May 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Restatement

Note 15 – Restatement

During 2014, the Company determined that it should have recorded and valued tainted derivatives that had not previously been identified as derivatives. As a result, the Company has restated its previously issued financial statements for the six and three-month periods ended May 31, 2013. The restatement resulted in a gain of $1,675,686 for the six month period ended May 31, 2013, or a decrease of $200,547, as compared to a gain of $1,876,233 that had previously been reported, and a gain of $3,550,400 for the three-month period ended May 31, 2013, or an increase $3,986,766, as compared to a loss of $436,366 that had previously been reported.

The Company restated its consolidated financial statements as of and for the six months ended May 31, 2013 as follows:

	Six Months Ended May 31, 2013
	As Originally
	Reported			Adjustments				As Restated
Debt payable		4,343,495			483,818		(1)		3,859,677
Interest expense		406,334			1,270,252		(1)		1,676,586
Derivative liabilities		453,419			(981,176	)	(2)		1,434,595
Capital in excess of par value		40,158,941			124,385		(2)		40,034,556
Accumulated deficit		(49,750,525	)		372,973		(2)		(50,123,498	)
(Gain) loss on settlement of liabilities					(1,344,326	)	(3)		(1,344,326	)
(Gain) loss on value of derivative liabilities		(125,666	)		274,621		(2)		148,955

Adjustments to consolidated financial statements:

(1) To record debt discount on convertible debentures.

(2) To record derivative liabilities for tainted options and warrants.

(3) To adjust gain on conversion of derivative liabilities to common stock.

The Company restated its consolidated financial statements as of and for the three months ended May 31, 2013 as follows:

	Three Months Ended May 31, 2013
	As Originally
	Reported		Adjustments				As Restated
Interest expense		242,763		317,393		(1)		560,156
(Gain) loss on settlement of liabilities				(1,196,848	)	(3)		(1,196,848	)
(Gain) loss on value of derivative liabilities		179,753		(3,107,411	)	(2)		3,287,164

Adjustments to consolidated financial statements:

(1) To record debt discount on convertible debentures.

(2) To record derivative liabilities for tainted options and warrants.

(3) To adjust gain on conversion of derivative liabilities to common stock.