Restatement

6 Months Ended

May. 31, 2015

Notes to Financial Statements

Restatement

Note 15 – Restatement

During 2015, 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-month period ended May 31, 2014. The restatement resulted in a decrease in beginning Retained Deficit at December 1, 2013 of $132,826, and a loss of $372,151 for the six-month period ended May 31, 2014, or a decrease of $29,866, as compared to a loss of $342,285 that had previously been reported. The Company also reclassified deferred financing costs of $42,725 from selling, general and administrative costs, to other expense.

The Company restated its consolidated financial statements as of and for the six months ended May 31, 2014 as follows:

	Six Months Ended May 31, 2014
	As Originally Reported			Adjustments				As Restated
Selling, general and administrative costs	$	722,063		$	(42,725	)	(1)	$	679,338
Other expense – deferred finance costs		—			42,725		(1)		17,829
(Gain) loss on value of derivative liabilities		(43,938	)		29,866		(2)		(14,072	)

Adjustments to consolidated financial statements:

(1) To reclassify deferred finance expense to other expenses.

(2) To record gain on the settlement of derivative liabilities.

For the six-months ended May 31, 2014, the restatement increased income from continuing operations by $42,725, decreased net income by $29,866, and had no effect on earnings per share, which remained at $0.00.