Related Party Transactions

9 Months Ended

Aug. 31, 2011

Notes to Financial Statements

Related Party Transactions

In connection with software development costs, we paid fees to a third-party intellectual property development firm (the “Consultant”) for the nine-month periods ended August 31, 2011 and 2010, of $144,000 and $189,000, respectively. One of our officers performed work for the Consultant, including the function of distributing such funds to appropriate vendors. Our officer received fees from the Consultant of $45,000 and $15,000 during the nine-month and three-month periods ended August 31, 2010. No fees were paid in fiscal 2011. The fees for software development services performed by the Consultant were deemed to be operating costs.

At August 31, 2011, we owed our chief executive officer approximately $713,000 for loans he provided to the Company, unpaid salary and unpaid business expenses. Our chief executive officer also participated in private placements to purchase 1,900,000 shares of common stock and warrants to purchase 3,800,000 shares of common stock at a price of $0.10 per share, for an aggregate purchase price of $190,000, during the period from January 2011 to May 2011.