6 - Stock issued for services and cash

On November 14, 2011, the Board approved a private placement to sell up to 2,000,000 shares of the Company’s common stock, no par value, at a price of $1.50 per share. During the three months ended February 29, 2012, 1,997,388 shares were sold for proceeds totaling approximately $2,996,000.

During the fiscal year ended May 31, 2012, the Company issued 72,500 shares of common stock at $2.80 per share to consultants for past services, and recognized $203,000 of stock-based compensation based on the fair market value of the Company’s stock price at the commitment date for the services.

During the fiscal year ended May 31, 2012, the Company issued 16,675 shares of common stock at prices ranging from $2.00 to $2.71 per share to directors for past services, and recognized approximately $35,000 in stock-based compensation.