NOTE 6 - CONVERTIBLE NOTES PAYABLE

3 Months Ended

Aug. 31, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

NOTE 6 – CONVERTIBLE NOTES PAYABLE

During the three month period ending August 31, 2015, the Company received the proceeds of loans which some are convertible at amount lesser of 55% to 70% of the lowest trading price of 20 to 25 preceding days of the common shares of the Company at the time of conversion and a fixed price, and one is at market price. The loans bear interest at 8% to 12% per annum. The convertible notes become due between October 2015 and August 2017. The amount received during the three month period ending August 31, 2015 and year ended May 31, 2015 were $404,750 and $562,596, respectively.

	Loans
	2015		Maturity

Convertible note 4		105,000	October, 2015
Convertible note 1		89,250	November, 2015
Convertible note 10		25,000	November, 2015
Convertible note 8		150,000	February, 2016
Convertible note 3		84,263	April, 2016
Convertible note 6		110,500	June, 2016
Convertible note 7		100,000	July, 2016
Convertible note 2		93,333	April, 2017
Convertible note 5		110,000	April, 2017
Convertible note 9		100,000	August, 2017
		967,346

The convertible feature of these loans, due to their potential settlement in an indeterminable number of shares of the Company's common stock has been identified as a derivative. The derivative component is fair value at the date of issuance of the obligation and this amount is allocated between the derivative and the underlying obligation. The difference is recorded as a debt discount and amortized over the life of the debt.

The Company has determined that the conversion feature embedded in the notes constitutes a derivative and has been bifurcated from the note and recorded as a derivative liability, with a corresponding discount recorded to the associated debt, on the accompanying balance sheet, and revalued to fair market value at each reporting period.

A summary of the amounts outstanding is as follows:

	August 31, 2015						Balance
	Face amount		Debt discount		Carrying value		May 31, 2015

Convertible note 1		89,250		36,268		52,982		89,242
Convertible note 2		93,333		47,015		46,318		23,433
Convertible note 3		84,263		49,049		35,214		12,073
Convertible note 4		105,000		61,746		43,254		14,418
Convertible note 5		110,000		67,313		42,687		12,478
Convertible note 6		110,500		90,340		20,160		-
Convertible note 7		100,000		90,746		9,254		-
Convertible note 8		150,000		142,388		7,612		-
Convertible note 9		100,000		96,120		3,880		-
Convertible note 10		25,000		24,701		299		-
	$	967,346	$	705,686	$	261,660	$	151,644

- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

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