Related Party Transactions

3 Months Ended

Feb. 29, 2012

Notes to Financial Statements

Related Party Transactions

Note 12 – Related Party Transactions

In connection with software development costs, we paid fees to a third-party intellectual property development firm (the “Consultant”) for the three-month periods ended February 29, 2012 and February 28, 2011, of $48,000. One of our officers performed work for the Consultant, including the function of distributing such funds to appropriate vendors, for which he was not compensated. The fees for software development services performed by the Consultant were deemed to be operating costs.

At February 29, 2012, we owed our chief executive officer approximately $619,000 for loans he provided to the Company, unpaid salary and unpaid business expenses. During the quarter ended February 29, 2012, we converted debt owed to our chief executive officer of $9,800 into 200,000 shares of our common stock, or $0.049 per share, and $23,000 into 1,150,000 shares of our common stock at a price of $0.02 per share. During the quarter ended February 29, 2012, we converted debt owed to our chief information officer of $9,800 into 200,000 shares of our common stock, or $0.049 per share, and $20,000 into 200,000 shares of our common stock at a price of $0.10 per share.