Restatement

9 Months Ended

Aug. 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 nine-month period ended August 31, 2014. The restatement resulted in a decrease in beginning Retained Deficit at December 1, 2013 of $132,826, and a loss of $445,221 for the nine-month period ended August 31, 2014, or a decrease of $5,824, as compared to a loss of $439,397 that had previously been reported. The Company also reclassified deferred financing costs of $65,692 from selling, general and administrative costs, to other expense.

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

	Nine Months Ended August 31, 2014
	As Originally Reported			Adjustments				As Restated
Selling, general and administrative costs	$	909,876		$	(65,692	)	(1)	$	679,338
Other expense – deferred finance costs		—			65,692		(1)		65,692
(Gain) loss on value of derivative liabilities		(456,915	)		5,824		(2)		(451,091	)

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 nine-months ended August 31, 2014, the restatement increased income from continuing operations by $65,692, decreased net income by $5,824, and had no effect on earnings per share, which remained at $0.00.