Restatement

9 Months Ended

Aug. 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 nine and three-month periods ended August 31, 2013. The restatement resulted in a gain of $656,535 for the nine-month period ended August 31, 2013, or a decrease of $658,013, as compared to a gain of $1,314,548 that had previously been reported, and a loss of $1,019,151 for the three-month period ended August 31, 2013, or a decrease $457,466, as compared to a loss of $561,685 that had previously been reported.

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

	Nine Months Ended August 31, 2013
	As Originally Reported			Adjustments				As Restated
Interest expense	$	587,856		$	1,896,922		(1)	$	2,484,778
(Gain) loss on settlement of liabilities		—			(1,493,608	)	(3)		(1,493,608	)
(Gain) loss on value of derivative liabilities		(185,844	)		254,699		(2)		68,855
Other income		2,162,449			(658,013	)			1,504,436
Net income		1,314,548			(658,013	)			656,535

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 record gain on the settlement of derivative liabilities.

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

	Three Months August 31, 2013
		As Originally Reported			Adjustments				As Restated
Interest expense	$	181,522		$	626,670		(1)	$	808,192
(Gain) loss on settlement of liabilities		—			(149,282	)	(3)		(149,282	)
(Gain) loss on value of derivative liabilities		(60,178	)		(19,922	)	(2)		(80,100	)
Other income		(271,344	)		(457,466	)			(728,810	)
Net income		(561,685	)		(457,466	)			(1,019,151	)

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 record gain on the settlement of derivative liabilities.