UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q

———————

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~November~~August 3031, ~~2013~~2014

[ ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

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XUN ENERGY, INC.

(Exact name of registrant as specified in its charter)

Nevada		000-53466		2690-~~1616719~~0669916
State or Other Jurisdiction of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

12759 NE Whitaker Way, #C453, Portland, Oregon, 97230

(Address of Principal Executive Offices) (Zip Code)

(775)-200-0505

(Issuer’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was require to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (of for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer [ ]	Accelerated filer [ ]	Non-accelerated filer [ ]	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock as of the latest practicable date: ~~1,445,370,556 shares of common stock are issued and outstanding as of January 21, 2014.~~

7,201,613,163 shares of common stock are issued and outstanding as of October 20, 2014.

XUN ENERGY, INC.

INDEX

	PART I. – FINANCIAL INFORMATION		Page
Item 1.		Financial Statements
		Consolidated Balance Sheets at November 30, 2013 (unaudited) and May 31, 2013 (audited)	3
		Unaudited Consolidated Statement of Operations for the Three and Six Months ended November 30, 2013 and November 30, 2012 and from Inception (December 20, 2007) to November 30, 2013	4
		Consolidated Statements of Stockholders Equity (Deficit) from Inception (December 20, 2007) to November 30, 2013 (unaudited)	5
		Consolidated Statements of Cash Flows for the Six Months Ended November 30, 2013 and November 30, 2012 and Cumulative since Inception to November 30, 2013 (unaudited)	6
		Supplemental Disclosure With Respect To Cash Flows for the Six Months Ended November 30, 2013 and November 30, 2012 and Cumulative since Inception to November 30, 2013 (unaudited)	8
		Notes to Interim Consolidated Financial Statements as of November 30, 2013	9
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operation	35
Item 3.		Quantitative and Qualitative Disclosure About Market Risk	44
Item 4.		Controls and Procedures	44
		PART II. – OTHER INFORMATION
Item 1		Legal Proceedings.	44
Item 1A.		Risk Factors	44
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds.	45
Item 3.		Defaults Upon Senior Securities.	46
Item 4.		Mine Safety Disclosures.	46
Item 5.		Other Information	46
Item 6.		Exhibits	47

ITEM 1. FINANCIAL STATEMENTS

2XUN ENERGY, INC.

~~ITEM 1. FINANCIAL STATEMENTS~~INDEX

XUN ENERGY, INC. AND SUBSIDIARIES (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED BALANCE SHEETS As of NOVEMBER 30, 2013 and MAY 31, 2013 (Expressed in U.S. dollars)


	PART I. – FINANCIAL INFORMATION	Page

Item 1.	Condensed Consolidated Balance Sheets at August 31, 2013 (unaudited) and May 31, 2013 (audited)	3

	Condensed Consolidated Statement of Operations for the Three Months ended August 31, 2014 and August 31, 2013 (unaudited)	4

	Condensed Consolidated Statements of Stockholders Deficit to August 31, 2014 (unaudited)	5

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended August 31, 2014 and August 31, 2013 (unaudited)	6

	Supplemental Disclosure With Respect To Cash Flows for the Three Months Ended August 31, 2014 and August 31, 2013 (unaudited)	7

	Notes to Interim Condensed Consolidated Financial Statements as of August 31, 2014 (unaudited)	8

		November 30, 2013		May 31, 2013
		(Unaudited)		(Audited)
ASSETS
Current Assets:
Cash	$	409	$	23,400
Other Current Assets	$	3,482	$	981,000
Total Current Assets	$	3,891	$	1,004,400
Fixed Assets:
Property, Plant and Equipment		942,250		942,250
Total Property, Plant and Equipment	$	942,250	$	942,250
Other Assets:
Intangible Assets - Legal and Contractual
Rights - Oil and Gas Leases	$	536,250	$	536,250
Incorporation Costs	$	-	$	70
Total Legal and Contractual	$	536,250	$	536,320
Total Intangible Assets	$	536,250	$	536,320
Total Other Assets	$	536,250	$	536,320
Total Assets	$	1,482,391	$	2,482,970
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable and accrued expenses	$	1,871,109	$	2,083,337
Loans payable	$	545,091	$	544,746
Convertible Promissory Notes, net of discount	$	467,477	$	393,818
Total Current Liabilities	$	2,883,677	$	3,021,901
Stockholders' Equity (Deficit):
Preferred Stock, par value $0.0001, 50,000,000 shares authorized,
none issued and outstanding	$	-	$	-
Common Stock, par value $0.0001, 5,000,000,000 shares authorized,
927,373,890 and 385,460,240 shares issued and outstanding, respectively	$	92,737	$	38,546
Paid in Capital	$	2,167,060	$	2,876,422
Accumulated Deficit	$	(3,661,083)	$	(3,453,899)
Total Stockholders' Equity (Deficit)	$	(1,401,286)	$	(538,931)
Total Liabilities and Stockholders' Equity (Deficit)	$	1,482,391	$	2,482,970

~~The~~XUN ~~accompanying~~ENERGY, ~~notes~~INC. ~~are~~AND anSUBSIDIARIES ~~integral~~CONDENSED ~~part~~CONSOLIDATED BALANCE SHEETS As of ~~these~~AUGUST ~~consolidated~~31, ~~financial~~2014 ~~statements~~and MAY 31, 2014 (Expressed in U.S. dollars)


		August 31, 2014		May 31, 2014
		(Unaudited)		(Audited)
ASSETS
Current Assets:
Cash	$	3,216	$	9,213
Accounts Receivable		11,684		-
Other Current Assets		24,167		384,082
Total Current Assets		39,067		393,295

Property, Plant and Equipment, net		517,385		942,250
Total Property, Plant and Equipment		517,385		942,250
Other Assets:
Intangible Assets - Legal and Contractual
Rights - Oil and Gas Leases		-		536,250
Total Legal and Contractual		-		536,250
Total Intangible Assets		-		536,250
Total Other Assets		-		536,250
Total Assets		556,452		1,871,795
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable and accrued expenses		2,513,967		2,396,452
Loans payable		343,707		354,034
Convertible Promissory Notes, net of discount		288,283		295,484
Total Current Liabilities		3,145,957		3,045,970
Stockholders' Deficit:
Preferred Stock, par value $0.0001, 50,000,000 shares authorized,
600,000 Series B issued and outstanding		60		60
Common Stock, par value $0.0001, 15,000,000,000 shares authorized,
7,151,568,163 and 5,790,957,053 shares issued and outstanding, respectively		715,157		579,096
Paid in Capital		2,268,367		2,327,566
Accumulated Deficit		(5,573,089)		(4,080,897)
Total Stockholders' Deficit		(2,589,505)		(1,174,175)
Total Liabilities and Stockholders' Deficit	$	556,452	$	1,871,795

~~XUN~~The ~~ENERGY,~~accompanying ~~INC.~~notes ~~AND~~are ~~SUBSIDIARIES~~an (Aintegral ~~DEVELOPMENT~~part ~~STAGE~~of ~~COMPANY)~~these ~~CONSOLIDATED~~condensed ~~STATEMENTS~~consolidated OFfinancial ~~OPERATIONS FOR THE THREE MONTHS AND SIX MONTHS ENDED NOVEMBER 30, 2013 AND 2012 AND CUMULATIVE FROM INCEPTION (DECEMBER 20, 2007) TO NOVEMBER 30, 2013 (UNAUDITED) (Expressed in U~~statements.~~S. dollars)~~

		For the three months ended November 30, 2013		For the three months ended November 30, 2012		For the six months ended November 30, 2013		For the six months ended November 30, 2012		December 20, 2007 (Inception) To November 30, 2013
Revenue
Revenue - Operations	$	-	$	-	$	-	$	-	$	4,637
Total Revenue	$	-	$	-	$	-	$	-	$	4,637
Cost of Goods Sold	$	-	$	-	$	-	$	-	$	1,653
Gross Profit	$	-	$	-	$	-	$	-	$	2,984
Expenses
General and Administrative	$	(353,170)	$	247,262	$	(51,686)	$	603,030	$	2,841,388
Income (Loss) before income taxes	$	353,170	$	(247,262)	$	51,686	$	(603,030)	$	(2,838,404)
Other income (expense)	$	(121,427)	$	(7,040)	$	(258,869)	$	(16,205)	$	(822,679)
Provision for Income Taxes	$	-	$	-	$	-	$	-	$	-
Net Income (Loss)	$	231,743	$	(254,302)	$	(207,183)	$	(619,235)	$	(3,661,083)
Basic and Diluted
Earnings (Loss) per Common Share		0.00031573		a		a		a
Weighted Average
Number of Common Shares*1		733,981,217		352,781,910		577,085,558		347,037,812
a = Less than ($0.01) per share

~~The~~XUN ~~accompanying~~ENERGY, ~~notes~~INC. ~~are~~AND anSUBSIDIARIES ~~integral~~CONDENSED ~~part~~CONSOLIDATED ofSTATEMENTS ~~these~~OF ~~consolidated~~OPERATIONS ~~financial~~FOR ~~statements~~THE THREE MONTHS ENDED AUGUST 31, 2014 AND AUGUST 31, 2013 (UNAUDITED) (Expressed in U.S. dollars)

4 XUN ENERGY, INC. AND SUBSIDIARIES (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE PERIOD FROM INCEPTION (DECEMBER 20, 2007) TO NOVEMBER 30, 2013 (UNAUDITED) (Expressed in U.S. dollars)


		For the 3 months ended August 31, 2014		For the 3 months ended August 31, 2013

Revenue
Revenue - Operations		24,123		-
Total Revenue	$	24,123	$	-

Lease Operating Expenses		11,736		-

Gross Profit		12,387		-

Expenses
General and Administrative		156,959		301,484
Oil and Gas leases forfeitures		536,250		-
Other Asset Impairment		417,186		-
Other Current Assets Impairment		365,000		-
Total Expenses		1,475,395		301,484
Loss before income taxes		(1,463,008)		(301,484)

Other income (expense)		(29,184)		(137,442)

Provision for Income Taxes		-		-

Net Loss	$	(1,492,192)	$	(438,927)

Basic
Loss per Common Shares		a		a

Fully Diluted
(Loss) per Common Shares		a		a

Weighted Average
Basic Number of Common Shares		6,989,360,571		421,895,286
Fully Diluted Common Shares		6,989,360,571		421,895,286

a = Less than ($0.01) per share

	Common Stock Shares*1		Common Stock Amount		Additional Paid in Capital		Retained Earnings		Total Equity
Inception December 20, 2007	-	$	-	$	-	$	-	$	-
Common stock issued to Directors	400,000,000	$	40,000	$	(35,000)	$	-	$	5,000
Common stock issued - Private Placement	110,416,000	$	11,042	$	44,166	$	-	$	55,208
Net loss for the year	-	$	-	$	-	$	(85)	$	(85)
Balance, May 31, 2008	510,416,000	$	51,042	$	9,166	$	(85)	$	60,123
Net loss for the year	-	$	-	$	-	$	(50,170)	$	(50,170)
Balance, May 31, 2009	510,416,000	$	51,042	$	9,166	$	(50,255)	$	9,953
Net loss for the year	-	$	-	$	-	$	(50,744)	$	(50,744)
Balance, May 31, 2010	510,416,000	$	51,042	$	9,166	$	(100,999)	$	(40,791)
Common stock issued to Directors	75,000	$	7	$	9,243	$	-	$	9,250
Common stock issued - Asset Purchase	1,259,000	$	126	$	62,824	$	-	$	62,950
Common stock issued	741,000	$	74	$	36,976	$	-	$	37,050
Common stock issued to Consultant	10,000	$	1	$	1,099	$	-	$	1,100
Common stock retirement	(200,000,000)	$	(20,000)	$	(105,000)	$	-	$	(125,000)
Net loss for the period	-	$	-	$	-	$	(614,593)	$	(614,593)
Balance, May 31, 2011	312,501,000	$	31,250	$	14,308	$	(715,592)	$	(670,034)
Common stock issued to Directors	142,500	$	14	$	7,373	$	-	$	7,387
Common stock issued to Consultant	18,000,000	$	1,800	$	898,200	$	-	$	900,000
Net loss for the period	-		-		-	$	(985,517)	$	(985,517)
Balance, May 31, 2012	330,643,500	$	33,064	$	919,881	$	(1,701,108)	$	(748,164)
Common stock issued to Directors	211,129	$	21	$	5,409	$	-	$	5,430
Common stock issued for Assets	11,700,000	$	1,170	$	583,830	$	-	$	585,000
Common Stock issued to Consultants	40,281,633	$	4,028	$	1,845,972	$	-	$	1,850,000
Common stock issued to Lenders for Interest	1,165,839	$	117	$	11,369	$	-	$	11,486
Common Stock issued to reduce CPN's	19,458,139	$	1,946	$	28,675	$	-	$	30,622
Common Stock Cancelled - Note 3	(18,000,000)	$	(1,800)	$	(898,200)	$	-	$	(900,000)
Discount on CPN's	-	$	-	$	379,486	$	-	$	379,486
Net loss for the period	-	$	-	$	-	$	(1,752,791)	$	(1,752,791)
Balance, May 31, 2013	385,460,240	$	38,546	$	2,876,422	$	(3,453,899)	$	(538,931)
Common Stock issued to reduce CPN's	128,305,789	$	12,831	$	101,519	$	-	$	114,350
Common stock issued to Lenders for Interest	1,363,636	$	136	$	1,364	$	-	$	1,500
Discount on CPN's	-	$	-	$	55,109	$	-	$	55,109
Net loss for the period	-	$	-	$	-	$	(438,927)	$	(438,927)
Balance, August 31, 2013	515,129,665	$	51,513	$	3,034,414	$	(3,892,826)	$	(806,899)
Common Stock issued to reduce CPN's	418,145,389	$	41,814	$	58,416	$	-	$	100,230
Common stock issued to Lenders for Interest	14,008,836	$	1,401	$	4,516	$	-	$	5,917
Discount on CPN's	-	$	-	$	67,609	$	-	$	67,609
Common stock issued to Directors	90,000	$	9	$	105	$	-	$	114
Common Stock cancelled Consultants	(20,000,000)	$	(2,000)	$	(998,000)	$	-	$	(1,000,000)
Net income for the period	-	$	-	$	-	$	231,743	$	231,743
Balance, November 30, 2013	927,373,890	$	92,737	$	2,167,060	$	(3,661,083)	$	(1,401,286)

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~The accompanying notes are an integral part of these consolidated financial statements.~~4

5XUN ENERGY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT FOR THE THREE MONTHS ENDED AUGUST 31, 2014 AND MAY 31, 2014 (Expressed in U.S. dollars)

XUN ENERGY, INC. AND SUBSIDIARIES


	Preferred Stock Shares			Preferred Stock Amount	Common Stock Shares		Common Stock Amount		Additional Paid in Capital		Retained Earnings		Total Equity
Balance, May 31, 2013		-		-	385,460,240		38,546		2,876,422		(3,453,899)		(538,931)
Common Stock cancelled Consultants	-			-	(20,000,000)		(2,000)		(998,000)		-		(1,000,000)
Common stock issued to Directors	-			-	180,000		18		111		-		129
Common stock issued to Lenders for Interest					357,119,310		35,712		(6,170)		-		29,542
Common Stock issued to reduce CPN's	-			-	5,068,197,503		506,820		(27,215)		-		479,605
Discount on CPN's	-			-	-		-		182,478		-		182,478
Series B Preferred Shares	600,000			60	-		-		299,940		-		300,000
Net loss for the period	-			-	-		-		0		(626,997)		(626,997)
Balance, May 31, 2014	600,000			60	5,790,957,053		579,096		2,327,565		(4,080,897)		(1,174,175)
Common stock issued to Lenders for Interest					320,777,777		32,078		(15,605)		-		16,473
Common Stock issued to reduce CPN's	-			-	1,039,833,333		103,983		(43,593)		-		60,390
Net loss for the period	-			-	-		-		-		(1,492,192)		(1,492,192)
Balance, August 31, 2014, (Unaudited)	600,000		$	60	7,151,568,163	$	715,157	$	2,268,367	$	(5,573,089)	$	(2,589,505)

(AThe ~~DEVELOPMENT~~accompanying ~~STAGE~~notes ~~COMPANY)~~are ~~CONSOLIDATED~~an ~~STATEMENTS~~integral OFpart ~~CASH~~of ~~FLOWS~~these ~~FOR~~condensed ~~THE~~consolidated ~~SIX~~financial ~~MONTHS ENDED NOVEMBER 30, 2013 AND NOVEMBER 30, 2012 AND CUMULATIVE FROM INCEPTION (DECEMBER 20, 2007) TO NOVEMBER 30, 2013 (UNAUDITED)~~statements.

~~(Expressed in U.S. dollars)~~5

		For the six months ended November, 2013		For the six months ended November, 2012		December 20, 2007 (Inception) to November 30, 2013
Net Cash Provided by (Used in) Operating Activities
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$	(207,184)	$	(619,235)	$	(3,661,083)
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities
Adjustments, Noncash Items, to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities
Share based - compensation	$	114	$	3,921	$	23,281
Share based - interest	$	9,917	$	6,077	$	21,402
Share based - financial services	$	(1,000,000)	$	455,000	$	25,000
Non-cash amortization - debt discount	$	114,454	$	3,141	$	231,404
Non-cash - Inventory	$	-	$	-	$	283
Non-cash - Interest-discount	$	116,768	$	-	$	116,768
Gain on debt extinguishment	$	-	$	-	$	(30,000)
Corporate Overhead allocated to Fixed Assets	$	-	$	(58,500)	$	(60,822)
Depletion	$	-	$	-	$	835
Other Current Assets	$	977,518	$	5,446	$	421,775
Accrued Interest	$	20,081	$	15,799	$	54,595
Adjustments, Noncash Items, to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities	$	238,852	$	430,884	$	804,521
Increase (Decrease) in Operating Capital
Increase (Decrease) in Operating Assets
Accounts receivable and accrued receivables	$	-	$	-	$	18,840
Oil and Gas leases impairment	$	-	$	-	$	5,583
Oil and Gas leases forfeitures	$	-	$	-	$	399,742
Other Asset Impairment	$	70	$	-	$	190
Bonds	$	-	$	500	$	500
Increase (Decrease) in Operating Assets	$	70	$	500	$	424,855
Increase (Decrease) in Operating Liabilities	$		$		$
Accounts payable and accrued liabilities	$	(212,228)	$	(315,861)	$	1,871,109
Increase (Decrease) in Operating Liabilities	$	(212,228)	$	(315,861)	$	1,871,109
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities	$	26,694	$	115,523	$	3,100,485
Net Cash Provided by (Used in) Operating Activities	$	(180,490)	$	(503,712)	$	(560,598)

XUN ENERGY, INC. AND SUBSIDIARIES

~~The~~CONDENSED ~~accompanying~~CONSOLIDATED ~~notes~~STATEMENTS ~~are~~OF anCASH ~~integral~~FLOWS ~~part~~FOR ofTHE ~~these~~YEARS ~~consolidated~~ENDED ~~financial~~MAY ~~statements.~~31, 2014 AND MAY 31, 2013 (UNAUDITED)

6(Expressed in U.S. dollars)

XUN ENERGY, INC. AND SUBSIDIARIES


		For the 3 months ended August 31, 2014		For the 3 months ended August 31, 2013

Net Cash Used in Operating Activities
Net Loss	$	(1,492,192)	$	(438,927)
Adjustments to Reconcile Net Loss to Cash Used in Operating Activities
Adjustments, Noncash Items, to Reconcile Net Loss to Cash Used in Operating Activities
Share based – interest		16,472		1,500
Non-cash amortization - debt discount		22,095		52,142
Non-cash Oil and Gas leases forfeitures		536,250		-
Non-cash Other Asset Impairment		417,186		-
Non-cash Other Current Assets		365,000		-
Non-cash - Interest-discount		-		72,717
Depletion		7,680		-
Adjustments, Noncash Items, to Reconcile Net Loss to Cash Used in Operating Activities		1,364,683		126,359
(Increase) Decrease in Operating Assets
Accounts receivable and accrued receivables		(11,684)		-
Other Current Assets		(5,084)		128,753
(Increase) Decrease in Operating Assets		(16,768)		128,753
Increase (Decrease) in Operating Liabilities
Accrued Interest		(11,484)		12,183
Accounts payable and accrued liabilities		117,515		79,175
Increase (Decrease) in Operating Liabilities		106,031		91,358
Adjustments to Reconcile Net Loss to Cash Used in Operating Activities		1,453,946		346,470
Net Cash Used in Operating Activities		(38,246)		(92,457)
Net Cash Used in Investing Activities
Payments to Acquire Intangible Assets		-		(125)
Net Cash Used in Investing Activities		-		(125)
Net Cash Provided by Financing Activities
Repayments of Short-term Debt		(10,500)		-
Proceeds from Short-term Debt		42,750		72,500
Net Cash Provided by Financing Activities		32,250		72,500
Cash, Period Decrease		(5,996)		(20,082)
Cash, beginning of period		9,213		23,400
Cash, at end of period	$	3,216	$	3,318

~~(Expressed in U.S. dollars)~~6

		For the six months ended November, 2013		For the six months ended November, 2012		December 20, 2007 (Inception) to November 30, 2013
Net Cash Provided by (Used in) Operating Activities	$	(180,490)	$	(503,712)	$	(560,598)
Net Cash Provided by (Used in) Investing Activities
Payments to Acquire Property, Plant, and Equipment	$	-	$	-	$	(852,637)
Payments to Acquire Intangible Assets	$	-	$	-	$	(5,772)
Payments to Acquire Other Productive Assets	$	-	$	-	$	(500)
Net Cash Provided by (Used in) Investing Activities	$	-	$	-	$	(858,909)
Net Cash Provided by (Used in) Financing Activities
Proceeds from issuance of common stock	$	-	$	10,000	$	160,208
Repayments of Short-term Debt	$	-	$	(20,500)	$	(127,142)
Proceeds from Short-term Debt	$	157,500	$	522,809	$	1,386,850
Net Cash Provided by (Used in) Financing Activities	$	157,500	$	512,309	$	1,419,916
Cash, Period Increase (Decrease)	$	(22,990)	$	8,597	$	409
Cash, beginning of period	$	23,400	$	-	$	-
Cash, at end of period	$	409	$	8,597	$	409

XUN ENERGY, INC. AND SUBSIDIARIES

7 (Expressed in U.S. dollars)

XUN ENERGY, INC. AND SUBSIDIARIES


		For the 3 months ended August 31, 2014		For the 3 months ended August 31, 2013
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS:
Cash paid for income taxes	$	-	$	-
Cash paid for interest		-		-
NON-CASH FINANCING AND INVESTING ACTIVITIES:
Debt Discount - non cash capitalization, net		-		55,109
Common Stock issued for repayment of loans	$	60,390	$	114,350

~~(Expressed in U.S. dollars)~~7

		For the six months ended November, 2013		For the six months ended November, 2012		December 20, 2007 (Inception) to November 30, 2013
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS:
Cash paid for income taxes	$	-	$	-	$	-
Cash paid for interest	$	-	$	-	$	222
NON-CASH FINANCING AND INVESTING ACTIVITIES:
Convertible Promissory Note - non-cash capitalization	$	-	$	10,000	$	51,879
Prepaid Expenses - non-cash capitalization	$	-	$	910,000	$	1,850,000
Purchase of Intangible Assets - non-cash capitalization	$	-	$	585,000	$	585,000
Debt Discount - non cash capitalization, net	$	122,718	$	61,107	$	450,326
Common Stock issued for repayment of loans	$	214,580	$	-	$	297,080

XUN ENERGY, INC. AND SUBSIDIARIES

~~The~~NOTES ~~accompanying~~TO ~~notes~~CONDENSED ~~are~~CONSOLIDATED anFINANCIAL ~~integral part of these consolidated financial statements.~~STATEMENTS

8(UNAUDITED)

~~XUN~~AUGUST ~~ENERGY~~31, ~~INC. AND SUBSIDIARIES~~2014

(ANOTE ~~DEVELOPMENT~~1: ~~STAGE~~ORGANIZATION, ~~COMPANY)~~CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS

~~NOTES~~NATURE TOOF ~~CONSOLIDATED FINANCIAL STATEMENTS~~BUSINESS

~~NOVEMBER~~The 30Company is engaged primarily in the acquisition, ~~2013~~work-over development, and production of oil and gas properties. Such activities are concentrated in North America onshore, primarily in the United States in the State of Pennsylvania. The Company plans to acquire producing or near producing oil and gas properties that will provide cash flow and an upside for future development. We will be scouting for additional properties in and around Texas, Oklahoma, Pennsylvania, Kansas and in Canada.

~~NOTE~~The 1:Company ~~ORGANIZATION~~was incorporated under the laws of the state of Nevada on December 20, ~~CONSOLIDATION~~2007 ~~AND~~as ~~PRESENTATION~~Real OFValue ~~FINANCIAL~~Estates, ~~STATEMENTS~~Inc. On July 20, 2010, the Company changed its name to Xun Energy, Inc.

~~NATURE~~The OFCompany ~~BUSINESS~~commenced operations on March 16, 2011 commencing with a workover program on one of its oil wells in Kentucky.

~~The~~On ~~Company~~February ~~is engaged primarily in the acquisition~~6, ~~work-over development~~2012, ~~and~~the ~~production~~Company ofestablished ~~oil~~a ~~and~~subsidiary ~~gas properties. Such activities are concentrated~~ in ~~North American onshore, primarily in~~ the ~~United States in the~~ State of ~~Pennsylvania~~Florida. The Company plans to acquire producing or near producing oil and gas properties that will provide cash flow and an upside for future development. We will be scouting for additional properties in and around Texas, Oklahoma, Pennsylvania, Kansas and in Canada.

~~The~~On August 31, 2012, the Company ~~was~~acquired ~~incorporated~~30 ~~under~~oil ~~the~~and ~~laws~~gas ofwell locations in Venango County, Pennsylvania with an option to acquire an additional 15 oil and gas locations. Work commenced on the ~~state~~first of5 ~~Nevada~~oil well locations on ~~December~~the 20Rice lease in Venango, ~~2007~~County, Pennsylvania, USA in March 2013 and as ~~Real~~of ~~Value~~May ~~Estates~~31, ~~Inc~~2014 the roads and drill pads were constructed, and Rice #15 was drilled to a target depth of 1,050'. Drilling samples and observations confirmed intersecting oil bearing lenses. On ~~July~~September 2016, ~~2010,~~2013 the Company's ~~changed~~operator, ~~its~~Vencedor ~~name~~Energy toPartners ~~Xun~~(VEP), completed the nuclear wire line log on Rice #15 on the Rice Lease, in Venango County, PA. Verbal reports from the logging crew and staff on site were very positive when the logging tool pulled out of the well bore was covered with crude oil. On September 25, 2013 the Company's operator, Vencedor Energy Partners (VEP), ~~Inc~~reported the analysis of the wire-line log on Rice #15 on the Rice Lease, Venango County, PA. VEP reported the following:

On1. ~~February~~The Venango-First has two separated lenses, one is about 6 feet, ~~2012~~762'-766', and another 9 foot section, 788'-797', and both have decent porosity. The sand thickness has developed at this location along with its oil saturations. The upper and lower lenses both have a fair to good oil show. 2. The Venango-Second has 16 feet of formation on the ~~Company~~bottom ~~established~~lens, 916'-932', with good porosity and saturation and another 4 feet above it, 908'-912' that's producible with lesser values. The porosity on the lower lens has a ~~subsidiary~~fair to excellent show of oil with a poorer oil show in the ~~State~~upper lens portion. 3. VEP recommended the balance of ~~Florida~~the infrastructure on the Rice Lease be completed first. After the infrastructure is installed, then Rice #15 well should be completed for production.

On ~~August~~June 312, ~~2012~~2014, the Company ~~acquired~~completed 30Rice #15 oil ~~and gas~~ well ~~locations~~ in ~~Venango County,~~ Pennsylvania ~~with an option to acquire an additional 15 oil~~ and ~~gas~~began ~~locations.~~production ~~Work~~of ~~commenced on~~ the ~~first~~Rice 5#15 crude oil well. ~~locations~~By onAugust ~~the Rice lease in Venango~~31, ~~County~~2014, ~~Pennsylvania, USA in March 2013 and as of November 30, 2013 the roads and drill pads were constructed, and~~ Rice #15 ~~was~~produced ~~drilled~~369.5 tobarrels ~~a target depth~~ of ~~1,050'.~~crude ~~Drilling~~oil ~~samples~~since ~~and observations confirmed intersecting~~ oil ~~bearing~~began ~~lenses.~~streaming Onon ~~September~~June 16, ~~2013~~2014. ~~the~~The ~~Company's operator, Vencedor Energy Partners (VEP), completed the nuclear wire line log on~~ Rice #15 onhas ~~the~~settled ~~Rise Lease,~~ in ~~Venango~~and ~~County,~~is ~~PA.~~producing ~~Verbal~~between ~~reports~~1 ~~from~~and ~~the~~2 ~~logging~~barrels ~~crew~~of ~~and~~oil ~~staff~~per onday ~~site~~with ~~were~~water ~~very~~production ~~positive~~between ~~when~~4 ~~the~~to ~~logging~~6 ~~tool~~barrels ~~pulled out~~ of ~~the~~water ~~well~~per ~~bore was covered with crude oil~~day. OnDuring ~~September 25, 2013~~ the ~~Company's~~3 ~~operator,~~month ~~Vencedor~~period ~~Energy~~ending ~~Partners~~August ~~(VEP)~~31, ~~reported~~2014, ~~the~~296 ~~analysis~~gross barrels of ~~the~~crude ~~wire-line~~oil ~~log~~were ~~on Rice #15 on the Rise Lease~~sold, ~~Venango~~net ~~County,~~243 ~~PA.~~barrels ~~VEP~~of ~~reported~~crude ~~the following:~~oil.

1.On ~~The~~August ~~Venango-First~~31, ~~has two separated lenses~~2014, ~~one~~the isCompany ~~about~~forfeited 6its ~~feet,~~rights ~~762'-766',~~to ~~and~~drill ~~another~~on 9the ~~foot~~Corse ~~section, 788'-797',~~ and ~~both~~Lalley ~~have decent porosity. The sand thickness has developed at this location along with its~~ oil ~~saturations. The upper~~ and ~~lower~~gas ~~lenses~~leases ~~both~~in ~~have~~Venango aCounty, ~~fair to good oil show~~Pennsylvania. 2. The ~~Venango-Second~~Company ~~has~~retains 16its ~~feet~~drilling ofrights ~~formation~~ on the ~~bottom~~Rice ~~lens~~3, ~~916'-932',~~Rice ~~with good porosity and saturation and another~~ 4 ~~feet above it~~, ~~908'-912'~~Rice ~~that's~~6 ~~producible~~and ~~with~~Rice ~~lesser~~14 ~~values.~~by ~~The~~"Held ~~porosity~~By onProduction" ~~the~~and ~~lower~~drilling ~~lens~~permits ~~has~~which aexpire ~~fair to excellent show of oil with a poorer oil show in the upper lens portion. 3. VEP recommended the balance of the infrastructure~~ on ~~the~~April ~~Rice Lease be completed first. After the infrastructure is installed~~28, ~~then Rice #15 well should be completed for production~~2015.

On June 25, 2013, the Company incorporated a wholly owned subsidiary, Xun Oil of Pennsylvania Corporation, in the Commonwealth of Pennsylvania, USA.

~~OPERATING~~NOTE 2: ~~COMPANY~~SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

OnFISCAL April 18, 2011, the Company filed a Form 8-K with the United States Securities and Exchange Commission (“SEC”) disclosing that the Company is no longer considered a shell and has completed a workover program on one of its wells. Subsequent to filing of the Form 8-K with the SEC, the Company has filed its required four quarterly filings to "cure" itself of "shell status". The Company operations are extensively involved in oil and gas operations even though the Company has had limited revenue from the oil and gas operations.YEAR

~~NOTE 2:~~The ~~SUMMARY~~Company’s OFfinancial ~~SIGNIFICANT~~statements ~~ACCOUNTING~~are ~~PRACTICES~~prepared using the accrual method of accounting. The Company has elected a May 31 fiscal year end.

~~FISCAL YEAR~~8

~~The~~PRINCIPLES ~~Company’s~~OF ~~financial statements are prepared using the accrual method of accounting. The Company has elected a May 31 fiscal year end.~~CONSOLIDATION

9The Consolidated Financial Statements include the accounts of Xun Energy, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. The consolidated financial statements are presented in accordance with the accounting principles generally accepted in the United States (USA GAAP).

~~PRINCIPLES~~UNAUDITED OFINTERIM ~~CONSOLIDATION~~CONSOLIDATED FINANCIAL STATEMENTS

The ~~Consolidated~~interim ~~Financial~~consolidated ~~Statements~~financial ~~include~~statements of Xun Energy, Inc. as of August 31, 2014, and for the ~~accounts~~three months then ended are unaudited. However, in the opinion of management, the interim consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly Xun Energy, Inc.’s consolidated financial position as of August 31, 2014, and the results of its ~~subsidiaries.~~consolidated ~~All~~operations ~~significant~~and ~~intercompany~~its ~~accounts~~cash flows for the three months ended August 31, 2014, and ~~transactions~~2013. ~~have~~These ~~been~~results ~~eliminated~~are not necessarily indicative of the results expected for the fiscal year ending May 31, 2015. The accompanying consolidated financial statements ~~are~~and ~~presented~~notes inthereto ~~accordance~~do ~~with~~not ~~the~~reflect all disclosures required under accounting principles generally accepted in the United States of America. These financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended May 31, 2014.

~~UNAUDITED~~EARLY ~~INTERIM~~ADOPTION ~~CONSOLIDATED~~OF ~~FINANCIAL~~ASU ~~STATEMENTS~~2014-10

~~The~~During ~~interim~~the ~~consolidated~~year ~~financial~~ended ~~statements~~May ~~of Xun Energy~~31, ~~Inc. as of November 30~~2014, ~~2013, and for~~ the ~~six~~Company ~~months~~has ~~then~~elected ~~ended,~~to ~~and~~early ~~cumulative~~adopt ~~from~~Accounting ~~inception,~~Standards ~~are~~Update ~~unaudited~~No. ~~However~~2014-10, inDevelopment ~~the~~Stage ~~opinion~~Entities of(Topic ~~management,~~915): ~~the~~Elimination ~~interim consolidated financial statements include all adjustments, consisting only~~ of ~~normal~~Certain ~~recurring~~Financial ~~adjustments,~~Reporting ~~necessary to present fairly Xun Energy, Inc~~Requirements.’s ~~consolidated~~The ~~financial~~adoption ~~position as~~ of ~~November~~this ~~30,~~ASU ~~2013,~~allows ~~and~~ the ~~results~~Company ofto ~~its~~remove ~~consolidated operations and its consolidated cash flows for~~ the ~~six months ended November 30, 2013, and 2012, and cumulative from~~ inception. ~~These~~to ~~results~~date ~~are~~information ~~not necessarily indicative of the results expected for the calendar year ending May 31, 2014. The accompanying consolidated financial statements~~ and ~~notes thereto do not reflect~~ all ~~disclosures~~references ~~required under accounting principles generally accepted in the United States of America (GAAP). Refer~~ to ~~the~~development ~~Company’s audited financial statements as of May 31, 2013, filed with the SEC for additional information, including significant accounting policies~~stage.

~~INTERNATIONAL~~USE ~~FINANCIAL~~OF ~~REPORTING STANDARDS (IFRS)~~ESTIMATES

The ~~Company~~preparation ~~has~~of ~~adopted~~financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the ~~International~~reported ~~Financial~~amounts ~~Reporting~~of ~~Standards~~assets ~~code~~and liabilities and disclosure of ~~accounts.~~contingent ~~However,~~assets and liabilities at the ~~Company’s~~date ~~consolidated~~of the financial statements, ~~are~~and ~~completed~~the ~~using~~reported ~~USA~~amounts ~~GAAP~~of revenues and expenses during the reporting period. Actual amounts could differ from these estimates, and changes in these estimates are recorded when known. Significant items subject to such estimates and assumptions include, but are not limited to, the following:

~~USE~~· OFEstimates ~~ESTIMATES~~of proved reserves and related estimates of the present value of future net revenues; · Carrying value of oil and gas properties; · Income taxes; · Asset retirement obligations; · Legal contingencies and environmental risks and exposures.

~~The~~EARNINGS ~~preparation~~PER of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from these estimates, and changes in these estimates are recorded when known. Significant items subject to such estimates and assumptions include, but are not limited to, the following:SHARE

·Basic ~~Estimates~~earnings ofper ~~proved~~share ~~reserves~~amounts ~~and~~are ~~related~~computed ~~estimates~~by ofdividing the ~~present~~net ~~value~~income (loss) by the weighted average number of ~~future~~common ~~net~~shares ~~revenues;~~outstanding. ·Diluted ~~Carrying~~earnings ~~value~~(loss) ofper ~~oil~~share ~~and~~are ~~gas~~computed ~~properties;~~by ·dividing ~~Estimates~~the ofnet income (loss) by the ~~fair~~weighted ~~value~~average number of ~~reporting~~common ~~units~~shares outstanding and ~~related~~the ~~assessment~~weighted average number of ~~goodwill~~preferred ~~for~~shares ~~impairment;~~outstanding ·fully ~~Income~~converted. ~~taxes;~~The ·fully ~~Asset~~diluted ~~retirement~~weighted ~~obligations;~~average ·common ~~Legal~~shares ~~contingencies~~does ~~and~~not ~~environmental~~include ~~risks~~potential ~~and~~dilution ~~exposures~~of convertible promissory notes.

~~EARNINGS~~CASH ~~PER SHARE~~EQUIVALENTS

~~Basic~~The ~~earnings~~Company ~~per~~may, ~~share~~from ~~amounts~~time ~~are~~to ~~computed~~time, byinvest ~~dividing~~cash ~~the~~in ~~net~~excess ~~income~~of ~~(loss)~~our byimmediate ~~the~~operating ~~weighted~~requirements ~~average~~in ~~number~~short-term oftime ~~common~~deposits ~~shares~~and ~~outstanding.~~money ~~Diluted~~market ~~earnings~~instruments ~~(loss)~~generally ~~per~~with ~~share~~original ~~are~~maturities at the ~~same~~date asof ~~basic~~purchase ~~earnings~~of ~~(loss)~~three ~~per~~months ~~share~~or ~~due~~less. toThe ~~the~~Company ~~lack~~considers all liquid investments with an original maturity of ~~antidilutive~~three ~~items~~months inor ~~the~~less ~~Company.~~when purchased to be cash equivalents.

~~CASH~~PROPERTY ~~EQUIVALENTS~~AND EQUIPMENT

The Company ~~may,~~follows ~~from~~the ~~time~~successful toefforts ~~time,~~(“SE”) ~~invest~~cost ~~cash~~method ~~in excess~~ of ~~our~~accounting ~~immediate~~for ~~operating~~its ~~requirements~~oil inand ~~short-term~~gas ~~time~~properties. ~~deposits~~Accordingly, ~~and~~only ~~money~~those ~~market~~expenses ~~instruments~~associated ~~generally~~ with ~~original~~successfully ~~maturities~~locating atnew ~~the~~oil ~~date~~and ofnatural ~~purchase~~gas ofreserves ~~three~~are ~~months or less~~capitalized. ~~The~~For ~~Company~~unsuccessful ~~considers~~(or ~~all~~"dry ~~liquid~~hole") ~~investments~~results, ~~with~~the ~~maturity~~associated ofoperating ~~three~~costs ~~months~~are orimmediately ~~less~~charged ~~when~~to ~~purchased~~operating toexpenses befor ~~cash~~that ~~equivalents~~period.

~~PROPERTY~~All costs incidental to the acquisition, exploration, and development of oil and gas properties, including costs of undeveloped leasehold, leasehold equipment, tangible and intangible costs are capitalized. Please refer to INTANGIBLE ASSETS - LEGAL AND ~~EQUIPMENT~~CONTRACTUAL - RIGHTS in this NOTE for further detail.

~~The~~Tangible ~~Company~~costs ~~follows~~include ~~the~~but ~~successful~~are ~~efforts~~not ~~(“SE”)~~limited ~~cost~~to: ~~method~~leasehold ofcosts ~~accounting~~(location ~~for~~fees); ~~its~~well ~~oil~~head; ~~and~~pump ~~gas~~jacks ~~properties.~~with ~~Accordingly~~gear box, ~~only~~skid ~~those~~and ~~expenses~~motor; ~~associated~~polish ~~with~~rod, ~~successfully~~brass ~~locating~~liners; ~~new~~ oil ~~and~~tanks, ~~natural~~brine ~~gas~~tanks; ~~reserves~~tank ~~are~~battery ~~capitalized.~~plumbing; ~~For~~oil ~~unsuccessful~~separator ~~(or~~and ~~"dry~~pipelines; tubing; rods; bottom hole") ~~results,~~pump ~~the~~assemblies; ~~associated~~fencing ~~operating~~and ~~costs~~gates; ~~are~~and ~~immediately~~miscellaneous ~~charged~~fixtures ~~against~~and ~~revenues~~fittings for ~~that~~each ~~period~~well.

~~All~~Intangible costs ~~incidental~~includes tobut ~~the~~are ~~acquisition,~~not ~~exploration,~~limited ~~and~~to: ~~development~~management ofcosts; ~~oil~~site ~~and~~permits; ~~gas~~site ~~properties,~~survey ~~including~~and ~~costs~~staking oflocations; ~~undeveloped~~road ~~leasehold,~~excavation and ~~leasehold~~preparation; ~~equipment,~~location ~~are~~excavation ~~capitalized. Please~~and ~~refer~~stoning towell ~~INTANGIBLE~~locations; ~~ASSETS~~tank -battery ~~LEGAL~~excavation ~~AND~~and ~~CONTRACTUAL~~stoning; -pipeline ~~RIGHTS~~installation inlabor; ~~this~~drilling ~~NOTE for further detail.~~

109

~~Internal~~services; service rig costs; ~~incurred~~surface ~~that~~casing; ~~are~~cement ~~directly~~casing; ~~identified~~nuclear ~~with~~logging; ~~acquisition,~~notching; ~~exploration~~engineering; hydrofacing; waste water disposal and ~~development~~treatment; ~~activities~~site ~~undertaken~~remediation; byand ~~the~~various ~~Company~~services ~~for~~and ~~its~~rentals ~~own~~necessary ~~account,~~to drill and ~~that~~complete ~~are~~an ~~not~~oil ~~related~~or togas ~~production,~~well ~~general~~to ~~corporate~~bring ~~overhead~~it orinto ~~similar~~production ~~activities,~~including ~~are~~testing ~~also~~and ~~capitalized~~commissioning.

~~Interest~~Internal costs incurred ~~and~~that ~~attributable~~are todirectly ~~unproved~~identified ~~oil~~with ~~and~~acquisition, ~~gas~~exploration ~~properties~~and ~~under~~development ~~current~~activities ~~evaluation~~undertaken ~~and~~by ~~major~~the ~~development~~Company ~~projects~~for ofits ~~oil~~own account, and ~~gas~~that ~~properties~~ are ~~also~~not ~~capitalized. All costs~~ related to production ~~activities~~, ~~including~~general ~~workover~~corporate ~~costs~~overhead ~~incurred solely to maintain~~ or ~~increase~~similar ~~levels of production from an existing completion interval~~activities, are ~~charged~~also ~~to expense as incurred~~capitalized.

~~Indirect~~Interest costs, ~~such~~incurred asand ~~General~~attributable ~~and~~to ~~Administrative~~unproved ~~costs,~~oil ~~are~~and ~~allocated~~gas toproperties ~~capital~~under ~~costs~~current atevaluation aand ~~rate~~major ofdevelopment ~~10%~~projects of ~~the~~oil ~~direct~~and gas properties are also capitalized. All costs ~~associated~~related ~~with~~to ~~the~~production ~~acquisition~~activities, ~~exploration,~~including ~~and~~workover ~~development~~costs ~~activities~~incurred ~~undertaken~~solely byto ~~the~~maintain ~~Company~~or ~~for~~increase ~~its~~levels ~~own~~of ~~account~~production from an existing completion interval, are charged to expense as incurred.

~~Capitalized~~Indirect costs, ~~are~~such ~~depleted~~as byGeneral anand ~~equivalent~~Administrative ~~unit-of-production cost method~~costs, ~~converting~~are ~~gas~~allocated to ~~oil~~capital costs at ~~the~~a ~~ratio~~rate of ~~six~~10% ~~thousand cubic feet~~ of ~~gas~~the todirect ~~one~~costs ~~barrel~~associated ofwith ~~oil. Depletion is calculated using~~ the ~~capitalized~~acquisition, ~~costs~~exploration, ~~including~~and ~~estimated~~development ~~asset~~activities ~~retirement~~undertaken ~~costs,~~by ~~plus~~ the ~~estimated~~Company ~~future~~for ~~expenditures~~its ~~(based~~own ~~on current costs) to be incurred in developing or working over an oil or gas well, proved reserves, net of estimated salvage values~~account.

~~Depletion~~Capitalized iscosts ~~charged~~are ~~for~~depleted ~~each~~by ~~barrel~~an ~~of oil~~ equivalent ~~until~~unit-of-production ~~the~~cost ~~oil~~method, orconverting gas ~~well~~to isoil noat ~~longer~~the ~~deemed~~ratio ~~economical~~of ~~for~~six ~~production~~thousand ofcubic ~~oil~~feet orof gas. Anto ~~over~~one ~~recovery~~barrel of ~~depletion~~oil. byDepletion ~~the~~is ~~Company~~calculated ~~may~~using ~~result~~the ~~from~~capitalized ~~oil~~costs, ~~and~~including ~~gas~~estimated ~~wells~~asset ~~producing~~retirement ~~more~~costs, ~~oil~~plus ~~and gas than~~ the ~~reserve reports~~ estimated. ~~The~~future ~~over-recovery~~expenditures ~~will~~(based ~~be charged to income~~ on acurrent ~~quarterly~~costs) ~~basis~~to ~~after~~be ~~the~~incurred ~~Company~~in ~~reviews~~developing ~~the~~or working over~~-recovery~~ ~~and deducts~~ an ~~allowance~~oil ~~for~~or ~~remediation,~~gas well, ~~capping~~proved ~~and~~reserves, ~~abandonment~~net ~~and~~of ~~future~~estimated ~~maintenance~~salvage ~~or workover costs~~values.

~~Costs~~Depletion ~~associated~~is ~~with~~charged ~~unproved~~for ~~properties~~each ~~are~~barrel ~~excluded~~of ~~from~~oil equivalent until the ~~depletion~~oil ~~calculation~~or ~~until~~gas itwell is ~~determined~~no ~~whether~~longer deemed economical for production of oil or ~~not~~gas. ~~proved~~An ~~reserves~~over ~~can~~recovery beof ~~assigned~~depletion toby ~~such~~the ~~properties~~Company may result from oil and gas wells producing more oil and gas than the reserve reports estimated. The over-recovery will be charged to income on a quarterly basis after the Company ~~assesses~~reviews ~~its~~the ~~unproved~~over-recovery ~~properties~~and deducts an allowance for ~~impairment~~remediation, ~~quarterly.~~well ~~Significant~~capping ~~unproved~~and ~~properties~~abandonment ~~are~~and ~~assessed~~future ~~individually.~~maintenance or workover costs.

NoCosts ~~gain~~associated orwith ~~loss~~unproved properties are excluded from the depletion calculation until it is ~~recognized~~determined ~~upon~~whether ~~disposal~~or ofnot ~~oil~~proved ~~and~~reserves ~~gas~~can ~~properties~~be ~~unless~~assigned to such ~~disposal~~properties. ~~significantly~~The ~~alters~~Company ~~the~~assesses ~~relationship~~its ~~between~~unproved ~~capitalized~~properties ~~costs~~for ~~and~~impairment ~~proved~~quarterly. ~~reserves~~Significant unproved properties are assessed individually.

Depreciation and amortization of other property and equipment, including corporate and other midstream assets and leasehold improvements, are provided using the straight-line method based on estimated useful lives ranging from three to 39 years. Interest costs incurred and attributable to major midstream and corporate construction projects are also capitalized.

The Company recognizes liabilities for retirement obligations associated with tangible long-lived assets, such as producing well sites, when there is a legal obligation associated with the retirement of such assets and the amount can be reasonably estimated. The initial measurement of an asset retirement obligation is recorded as a liability at its fair value, with an offsetting asset retirement cost recorded as an increase to the associated property and equipment on the consolidated balance sheet. If the fair value of a recorded asset retirement obligation changes, a revision is recorded to both the asset retirement obligation and the asset retirement cost. The asset retirement cost is depreciated using a systematic and rational method similar to that used for the associated property and equipment.

The Schedule of ~~Plant,~~ Property and Equipment details are as follows:

Schedule of Plant, Property and Equipment
Description		~~November~~August 3031, ~~2013~~2014 (Unaudited)		May 31, ~~2013~~2014
Work in Progress-Intangible	$	~~942~~208,~~250~~472	$	694,035
Work in Progress-Tangible	$	-42,343	$	140,965
Rights (leases)	$	-85,800	$	107,250
Subtotal	$	-336,614	$	942,250
Depletion	$	942,250	$	0
Rice #15		188,450		0
Depreciation	$	-	$	0
Depletion and Depreciation		-7,680		0
Net Plant - Oil Wells, End of period	$	-517,385	$	942,250

11OIL AND GAS EXPLORATION

~~OIL~~The ~~AND~~Company ~~GAS~~does ~~EXPLORATION~~not explore for oil and gas deposits. The Company may drill a new well, which is categorized as an offset well to an existing well that is producing oil or gas. The Company’s current business model does not include “wild cat” or exploratory drilling.

The Company does not explore for oil and gas deposits. The Company may drill a new well, which is categorized as an offset well to an existing well that is producing oil or gas. The Company’s current business model does not include “wild cat” or exploratory drilling.10

OIL AND GAS DEVELOPMENT - OFFSET DRILLING

The Company's development - offset drilling program consists of drilling new wells within a proven and producing property. Well locations are selected by geologists based on known and historical data from producing oil and gas wells within the property or adjoining properties. All costs of drilling a new offset well are capitalized and amortized (depletion) on a per-unit of barrel equivalent of production.

OIL AND GAS DEVELOPMENT - NON-PRODUCING OIL AND GAS WELL WORKOVER PROGRAM

The Company may acquire oil and gas leases that have non-producing (abandoned) oil and gas wells and decide to place the oil and gas well intro production. The Company’s ~~development~~Development - workover program consists of re-entering or completing a ~~workover~~workovers on an oil or gas well that has a historical evidence of oil or gas production or that is currently producing oil and gas at a fractional output compared to when the oil and gas wells first came into production. Workover activities include one or more of a variety of remedial operations on a producing well or inactive well to try to increase production. All costs of a workover are capitalized and amortized (depletion) on a per-unit of barrel equivalent of production based on a new proven reserves study. Workover Development programs that do not establish a proven reserve will have the workover costs charged to operating expenses.

OIL AND GAS RESERVES

The Company does not have proven reserves of oil or gas on its current oil and gas leases.

INTANGIBLE ASSETS - LEGAL AND CONTRACTUAL -– RIGHTS

The Company capitalizes the expenses incurred for acquiring oil and gas leases. The oil and gas leases are contracts between mineral owner, otherwise known as the lessor and the Company or working interest owner, otherwise known as the lessee in which the lessor grants the lessee the rights to explore, drill and produce oil, gas and other minerals for a specified primary term and thereafter as long as oil, gas, or other minerals are being produced in paying quantities. This lease gives the lessee a working interest. The oil and gas lease is granted in exchange for royalty payments to the lessor.

The capitalized costs include but are not limited to: the acquisition cost of the oil and gas leases, legal, travel, consultant studies, reserve reports, financing charges including an overhead allocation on closing. Many of the oil and gas leases have production covenants, which if not complied with during the term of the lease, the Company may forfeit the oil and gas lease. On a yearly basis, the oil and gas leases are reviewed for expiry and or non performance by the Company of any of the covenants in the oil and gas leases.

On August 31, 2014, the Company forfeited its rights to drill on the Corse and Lalley oil and gas leases in Venango County, Pennsylvania. The ~~Schedule~~Company ofretains ~~Oil~~its drilling rights on the Rice 3, Rice 4, Rice 6 and ~~Gas~~Rice ~~Rights~~14 ~~are~~by as"Held ~~follows:~~By Production" and drilling permits which expire on April 28, 2015. The Company has impaired $536,250, the cost of the leases forfeited, for the three months ending August 31, 2014.

Schedule of Oil and Gas Rights
Description		November 30, 2013		May 31, 2013
Acquisitions/Work in Progress	$	643,500	$	643,500
Capitalized as Fixed Assets	$	(107,250)	$	(107,250)
Forfeitures during the period	$	0	$	0
Impairments during the period	$	0	$	0
Oil and Gas Leases, End of period	$	536,250	$	536,250

The Schedule of Oil and Gas Rights are as follows:

OIL AND GAS REVENUE RECOGNITION


Schedule of Oil and Gas Rights

Description		August 31, 2014 (Unaudited)		May 31, 2014
Acquisitions/Work in Progress	$	536,250	$	536,250
Capitalized as Fixed Assets		0		0
Forfeitures during the period		536,250		0
Impairments during the period		0		0
Oil and Gas Leases, End of period	$	0	$	536,250

~~Oil~~OIL ~~and~~AND ~~gas~~GAS ~~sales~~REVENUE are recognized when production is sold to a purchaser at a fixed or determinable price, delivery has occurred, title has transferred, and collectability of the revenue is probable. Delivery occurs and title is transferred when production has been delivered to a pipeline, railcar, truck, or a tanker lifting has occurred. Cash received relating to future production is deferred and recognized when all revenue recognition criteria are met. Taxes assessed by governmental authorities on oil and gas sales are included in the Cost of Goods in the accompanying Consolidated Statements of Operations.RECOGNITION

12Oil and gas sales are recognized when production is sold to a purchaser at a fixed or determinable price, delivery has occurred, title has transferred, and collectability of the revenue is probable. Delivery occurs and title is transferred when production has been delivered to a pipeline, railcar, truck, or a tanker lifting has occurred. Cash received relating to future production is deferred and recognized when all revenue recognition criteria are met. Taxes assessed by governmental authorities on oil and gas sales are included in the Lease Operating Expenses in the accompanying Consolidated Statements of Operations.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses are reported net of amounts reimbursed by working interest owners of the oil and gas properties operated by the Company.

~~ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS~~11

~~The~~ESTIMATED ~~carrying~~FAIR ~~value~~VALUE ofOF ~~the~~FINANCIAL Company’s financial instruments, consisting of accounts payable and accrued liabilities approximate their fair value due to the short-term maturity of such instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency, or credit risks arising from these financial statements.INSTRUMENTS

~~INCOME~~The ~~TAX~~carrying ~~POLICY~~value of the Company’s financial instruments, consisting of accounts payable, short term loans, convertible promissory notes and accrued liabilities approximate their fair value due to the short-term maturity of such instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency, or credit risks arising from these financial statements.

~~Income~~INCOME ~~taxes~~TAX are provided in accordance with FASB ASC 740. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.POLICY

~~Deferred~~Income ~~tax~~taxes ~~assets~~ are ~~reduced~~provided byin aaccordance ~~valuation~~with ~~allowance~~FASB ~~when,~~ASC in740. ~~the~~A ~~opinion~~deferred oftax ~~management,~~asset itor liability is ~~more~~recorded ~~likely~~for ~~than~~all ~~not~~temporary ~~that~~differences ~~some~~between ~~portion~~financial ofand ~~all~~tax ofreporting ~~the~~and ~~deferred~~net ~~tax~~operating ~~assets~~loss ~~will~~carry ~~be realized~~forwards. Deferred tax ~~assets~~expense ~~and~~(benefit) ~~liabilities~~results ~~are~~from ~~adjusted~~the ~~for~~net change during the ~~effects~~year of ~~changes~~deferred in tax ~~laws~~assets and ~~rates on the date of enactment~~liabilities.

~~NOTE~~Deferred 3:tax ~~OTHER~~assets ~~CURRENT~~are ~~ASSETS~~reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

~~The~~NOTE ~~Other~~3: ~~Current~~OTHER ~~Assets~~CURRENT account consists of inventory and prepaid expenses. On August 31, 2012, the Company entered into consulting contract is with Prodigy Asset Management, Inc. (PAM) is for $1,000,000 for a 24 month period effective August 31, 2012. As one of the considerations for the services to be provided by PAM, the Company paid PAM 20 Million shares of the Company on execution of the agreement. The Company charged $1,000,000 as a prepaid financial services expense and is amortizing the prepaid expense over 24 months. On October 31, 2013 the Company and PAM mutually agreed to terminate the August 31, 2012 Financing Facilities Consulting Agreement and cancelled the 20 million shares issued to PAM and unwound the associated costs including $500,000 included as Other Current Assets. ASSETS

On May 15, 2014, the Company entered into two Secured Loan and Coupon Agreements (SLCA) to complete the Rice #15 oil well. The ~~Schedule~~SLCA requires the Company to pay interest at a fixed amount of ~~Other~~$15,600 ~~Current~~(Coupon) ~~Assets~~due ~~are~~immediately upon execution of the SLCA, payable from the net proceeds of the production of crude oil from the Rice #15 oil well. Based on a $100 crude oil price, it is expected the SLCA's will be paid off from the first 1,300 barrels of crude oil produced. The Coupon will be amortized at the rate of $12 per barrel of crude oil produced as ~~follows~~interest expense, refer to NOTE 13: LOANS PAYABLE, Short Term Loans, for additional detail.

Schedule of Other Current Assets
Other Current Assets		November 30, 2013		May 31, 2013
Other Current Assets, Beginning Balance	$	981,000	$	833,274
Prepaid Legal	$	(4,018)	$	(3,274)
Prepaid Financial Services	$	(973,500)	$	1,336,000
Less: Amortization		0		(1,185,000)
Other Current Assets, Balance end of period	$	3,482	$	981,000

The Company had 74 barrels of crude oil inventory from the Rice #15 oil well on August 31, 2014 with a cost of $2,916, $40 per barrel, which is lower than market. The Company values the inventory on a moving average basis based on direct costs incurred during the production period including Depletion and Depreciation.

NOTE 4: OTHER ASSETS


Schedule of Other Current Assets

Other Current Assets		August 31, 2014 (Unaudited)		May 31, 2014
Other Current Assets, Beginning Balance	$	384,082	$	981,000
Prepaid Legal		-982		(4,018)
Financial Services		-365,000		(608,500)
Crude Oil Inventory		2,916		0
Prepaid Interest - SCLA Coupons		-2,100		15,600
Refundable Advance		5,000		0
Cash Deposits		250		0
Other Current Assets, Balance end of period	$	24,166	$	384,082

The ~~Schedule~~Company charged to operating expenses $365,000 of ~~Other~~prepaid ~~Assets~~financial ~~are~~services asduring ~~follows~~the 3 month period ending August 31, 2014 relating to the Company seeking a 3(a)10 exemption relating to a debt settlement claim, refer to NOTE 23: DEBT SETTLEMENT CLAIM, for additional information.

Schedule of Other Assets
Description - Other Assets		November 30, 2013		May 31, 2013
Rights - Oil and Gas Leases	$	536,320	$	536,250
Trademarks	$	0	$	0
Incorporation Costs	$	-70	$	70
Bonds	$	0	$	0
Total Other Assets	$	536,250	$	536,320

NOTE 4: OTHER ASSETS

13The Schedule of Other Assets are as follows:

NOTE 5. ADVERTISING


Schedule of Other Assets

Description - Other Assets		August 31, 2014 (Unaudited)		May 31, 2014
Rights - Oil and Gas Leases	$	0	$	536,250
Incorporation Costs		0		70
Total Other Assets	$	0	$	536,320

~~The~~On ~~Company’s~~August ~~policy~~31, ~~regarding~~2014, ~~advertising~~the isCompany forfeited its rights to ~~expense~~drill ~~advertising~~on ~~when~~the ~~incurred~~Corse and Lalley oil and gas leases in Venango County, Pennsylvania. The Company ~~had~~retains ~~not incurred~~its ~~any~~drilling ~~advertising~~rights ~~expense~~on asthe Rice 3, Rice 4, Rice 6 and Rice 14 by "Held By Production" and drilling permits which expire on April 28, 2015. The Company has impaired $536,250, the cost of ~~November~~the 30leases forfeited, ~~2013~~for the three months ending August 31, 2014.

~~NOTE 6. GOING CONCERN~~12

~~The~~NOTE ~~accompanying financial statements have been prepared assuming that the Company will continue as a going concern~~5. The Company has net losses for the period from inception (December 20, 2007) to November 30, 2013. This condition raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.ADVERTISING

~~Management~~The isCompany’s ~~planning~~policy toregarding ~~raise~~advertising ~~additional~~is ~~funds~~to ~~through~~expense ~~debt~~advertising orwhen ~~equity offerings~~incurred. ~~There~~The ~~is no guarantee that the~~ Company ~~will~~had ~~be successful in these efforts. There is~~ no ~~guarantee~~advertising ~~that~~expenses for the ~~Company~~year ~~will~~ending beAugust ~~successful~~31, ~~generating~~2014 ~~profits from its oil~~ and ~~gas operations. There is~~ no ~~guarantee~~advertising ~~that~~expenses ~~the~~for ~~Company will be able to drawdown on~~ the ~~$15~~year ~~Million~~ending ~~Reserve~~May ~~Equity Financing Agreement with AGS Capital Group~~31, ~~LLC~~2014.

NOTE 7:6. ~~RELATED~~GOING ~~PARTY TRANSACTIONS~~CONCERN

The ~~officers~~accompanying ~~and~~financial ~~directors~~statements ofhave been prepared assuming that the Company ~~are~~will ~~involved~~continue inas ~~other~~a ~~business~~going ~~activities~~concern. ~~and~~The ~~may~~Company has continued net losses from inception (December 20, in2007) ~~the~~to ~~future~~August 31, ~~become~~2014. ~~involved~~This incondition ~~other~~raises ~~business~~substantial ~~opportunities~~doubt about the Company’s ability to continue as a going concern. IfThe Company’s continuation as a ~~specific~~going ~~business~~concern ~~opportunity~~is ~~becomes~~dependent ~~available,~~on ~~such~~its ~~persons~~ability ~~may~~to ~~face~~meet aits ~~conflict~~obligations, into ~~selecting~~obtain ~~between~~additional ~~the~~financing ~~Company~~as may be required and ~~their~~ultimately ~~other~~to ~~business~~attain ~~interests~~profitability. The ~~Company~~financial ~~has~~statements do not ~~formulated~~include aany ~~policy~~adjustments ~~for~~that might result from the ~~resolution~~outcome of ~~such~~this ~~conflicts~~uncertainty.

OnManagement ~~December~~is ~~20,~~planning ~~2007, pursuant~~ to ~~the~~raise ~~terms~~additional offunds athrough ~~subscription~~debt ~~agreement,~~or ~~the~~equity ~~Company~~offerings. ~~sold~~There ~~80,000,000~~is ~~(post~~no ~~forward~~guarantee ~~split)~~that ~~shares of common stock to Ms. Marina Karpilovski,~~ the Company's ~~former~~will ~~President~~be ~~and~~successful ain ~~director,~~these ~~for cash payment of $1,000~~efforts. ~~The~~There ~~issuance~~ is ~~deemed~~no toguarantee bethat ~~exempt~~the ~~under~~Company ~~Regulation~~will Sbe ofsuccessful ~~the~~generating ~~Securities~~profits ~~Act,~~from asits nooil ~~advertising~~and orgas ~~general~~operations. ~~solicitation~~There ~~was~~is ~~employed~~no inguarantee ~~offering~~that the ~~securities,~~Company ~~the~~will ~~offering~~be ~~and~~able ~~sale was made only~~ to ~~Ms.~~drawdown ~~Karpilovski~~on ~~who~~the is$15 aMillion ~~non-U.S.~~Reserve ~~citizen,~~Equity ~~and~~Financing ~~transfer~~Agreement ~~was~~with ~~restricted~~AGS byCapital ~~the~~Group, ~~Company~~LLC, inrefer ~~accordance~~to ~~with~~NOTE ~~the~~21: ~~requirements~~FINANCING ofAGREEMENTS ~~the~~for ~~Securities~~additional ~~Act~~detail.

OnNOTE ~~December~~7: ~~20,~~RELATED ~~2007~~PARTY pursuant to the terms of a subscription agreement, the Company sold 320,000,000 (post forward split) shares of common stock to Mr. Michael Zazkis, the Company's former Secretary, Treasurer and a director, for cash payment of $4,000. The issuance is deemed to be exempt under Regulation S of the Securities Act, as no advertising or general solicitation was employed in offering the securities, the offering and sale was made only to Mr. Zazkis who is a non-U.S. citizen, and transfer was restricted by the Company in accordance with the requirements of the Securities Act. TRANSACTIONS

OnThe ~~March~~officers ~~28,~~and ~~2011,~~directors of the Company ~~entered~~are ~~into~~involved ~~Redemption~~in ~~Agreement~~other ~~with~~business ~~Peter~~activities ~~Matousek~~and may, in the ~~Company’s president and director~~future, ~~which~~become ~~provides~~involved in ~~part~~other ~~for~~business ~~the~~opportunities. ~~Company~~If toa ~~redeem~~specific ~~from~~business ~~Mr.~~opportunity ~~Matousek~~becomes ~~140million~~available, ~~shares~~such ofpersons ~~the~~may ~~Company’s~~face ~~common~~a ~~stock~~conflict atin aselecting ~~price~~between ofthe ~~$87,500~~Company orand ~~$0.000625~~their ~~per~~other ~~share~~business interests. OnThe ~~May~~Company ~~31,~~has ~~2011,~~not ~~Mr.~~formulated ~~Matousek~~a ~~assigned~~policy for the ~~Note~~resolution ~~Payable~~of tosuch ~~Comtax Services, Inc~~conflicts.

~~Prior~~The ~~to June 1, 2011, our President, CEO and Director, Jerry G. Mikolajczyk, performed services for the~~ Company onissued a consulting contract through a consulting agency, Comtax Services, Inc. (Comtax). From April 1, 2010 to February 28, 2011, Comtax charged a fixed monthly fee of $2,500, a minimum of 10 hours per month for Mr. Mikolajczyk, an aggregate of ~~$27~~180,~~500~~000 ~~for~~shares ~~the 11 months~~ for ~~Mr. Mikolajczyk’s services to~~ the ~~Company.~~twelve ~~For~~month ~~the~~ period ~~March~~ending ~~1, 2011 to~~ May 31, ~~2011,~~2013 ~~Comtax~~with ~~charged the Company~~ an ~~aggregate~~average ofprice ~~$387,275 (1,106.5 hours) for the services~~ of ~~Mr. Mikolajczyk plus~~ $~~10,974 in travel expenses Mr~~0.01846 ~~Mikolajczyk~~per ~~incurred~~share onto ~~behalf of~~ the ~~Company.~~Board Onpursuant ~~October~~to ~~31,~~Board ~~2012,~~Member ~~Comtax~~Compensation ~~assigned~~Agreements ~~the~~with ~~trade payables to~~ Mr. ~~Mikolajczyk~~Peter ~~d/b/a/ Lighthouse Investments~~Matousek, ~~as unsecured Promissory Notes~~Mr. ~~The~~Jerry ~~Promissory Notes, an aggregate of $398,249, are non-interest bearing with no due date~~G. ~~Mr.~~ Mikolajczyk ~~was an officer of Comtax until his resignation on May 31~~, ~~2011~~ and ~~terminated~~Dr. ~~his~~William ~~consulting~~D. ~~contract with Comtax as of May 31~~Spier, ~~2011~~refer ~~prior~~ to ~~accepting~~NOTE ~~his~~17: ~~executive~~EXECUTIVE ~~and~~AND ~~director~~BOARD ~~positions~~COMPENSATION ~~with~~for ~~the~~additional ~~Company~~detail.

~~The~~On ~~Company~~May ~~issued~~1, an2013, ~~aggregate of 142~~President,~~500~~ ~~shares~~CEO ~~for~~and ~~the period ending May 31~~Director, ~~2012~~Jerry ~~with an average price of $0~~G.~~0518~~ ~~per~~Mikolajczyk, ~~share~~loaned to the ~~Executive~~Company ~~and~~$20,000 ~~Board pursuant~~ to abe ~~Management~~applied ~~and~~against ~~Financial~~the ~~Service~~purchase ~~Agreement~~of ~~with~~Series ~~Mr.~~B ~~Peter~~Preferred ~~Matousek and a Board Member Compensation Agreement with Mr~~Shares. ~~Peter~~The ~~Matousek,~~loan ~~Mr.~~is ~~Donald~~unsecured ~~Lynch, Mr. Kevin M. Grapes, Mr. Jerry G. Mikolajczyk,~~ and ~~Dr.~~non-interest ~~William D~~bearing. ~~Spier, refer to NOTE 17: EXECUTIVE AND BOARD COMPENSATION for additional detail.~~

The Company issued an aggregate of ~~180~~90,000 shares for the six month period ending ~~May~~November 3130, 2013 with an average price of $0.~~01846~~001267 per share on November 27, 2013 to the Board pursuant to Board Member Compensation Agreements with Mr. Peter Matousek, Mr. Jerry G. Mikolajczyk, and Dr. William D. Spier, refer to NOTE 17: EXECUTIVE AND BOARD COMPENSATION for additional detail.

14On January 22, 2014, President, CEO and Director, Jerry G. Mikolajczyk, loaned the Company $5,000 to be applied against the purchase of Series B Preferred Shares. The loan is unsecured and non-interest bearing.

On ~~May~~March 120, ~~2013~~2014, President, CEO and Director, Jerry G. Mikolajczyk, loaned to the Company $205,000 to be applied against the purchase of Series B Preferred Shares. The loan is unsecured and non-interest bearing.

~~The~~On ~~Company~~May ~~issued~~6, an2014, ~~aggregate of 90~~President,~~000~~ ~~shares~~CEO ~~for~~and ~~the six month period ending November 30~~Director, ~~2013~~Jerry ~~with an average price of $0~~G.~~001267~~ ~~per~~Mikolajczyk, ~~share~~loaned onthe ~~November~~Company 27$5,000 ~~2013~~ to ~~the~~be ~~Board~~applied ~~pursuant~~against tothe ~~Board~~purchase ~~Member~~of ~~Compensation~~Series ~~Agreements~~B ~~with~~Preferred MrShares. ~~Peter~~The ~~Matousek,~~loan ~~Mr.~~is ~~Jerry~~unsecured ~~G. Mikolajczyk,~~ and ~~Dr.~~non-interest ~~William D~~bearing. ~~Spier, refer to NOTE 17: EXECUTIVE AND BOARD COMPENSATION for additional detail.~~

OnThe ~~May~~Company 1,issued ~~2013,~~an ~~President~~aggregate of 45,000 ~~CEO~~shares ~~and~~for ~~Director~~the three month period ending February 28, ~~Jerry~~2014 Gwith an average price of $0.000153 ~~Mikolajczyk~~per share on May 13, ~~loaned~~2014 to the ~~Company~~Board ~~$20,000~~pursuant to beBoard ~~applied~~Member ~~against~~Compensation ~~the~~Agreements ~~purchase~~with ofMr. ~~Series~~Peter BMatousek, ~~Preferred~~Mr. ~~Shares~~Jerry G. ~~The~~Mikolajczyk, ~~loan~~and isDr. ~~unsecured~~William ~~and~~D. ~~non-interest~~Spier, ~~bearing~~refer to NOTE 17: EXECUTIVE AND BOARD COMPENSATION for additional detail.

~~NOTE~~The 8Company issued 600,000 Series B Preferred shares on May 13, 2014 to President, CEO and Director, Jerry G. ~~INCOME~~ ~~TAXES~~Mikolajczyk, for $300,000. The unsecured loans for $35,000 with Jerry G. Mikolajczyk and a $265,000 reduction in the short term loan to Jerry G. Mikolajczyk d/b/a Lighthouse Investments was applied against the purchase of the Series B Preferred Shares.

The Company ~~uses~~issued ~~the~~an ~~liability~~aggregate ~~method~~of 45,000 ~~where~~shares ~~deferred~~for ~~tax assets and liabilities are determined based on~~ the ~~expected~~three ~~future~~month ~~tax~~period ~~consequences~~ending ofMay ~~temporary~~31, ~~differences~~2014 ~~between~~with ~~the~~an ~~carrying~~average ~~amounts~~price of ~~assets and liabilities for financial and income tax reporting purposes~~$0.000173 ~~During~~per ~~each~~share ~~fiscal~~on ~~year~~May ~~from~~30, ~~2008 thru~~ 2014, to the ~~Company~~Board ~~incurred~~pursuant ~~net~~to ~~losses~~Board ~~and,~~Member ~~therefore,~~Compensation ~~has~~Agreements nowith ~~tax liability~~Mr. ~~The~~Peter ~~net~~Matousek, ~~deferred~~Mr. ~~tax~~Jerry ~~asset~~G. ~~of approximately $1~~Mikolajczyk,~~281,379 (assuming~~ aand ~~35%~~Dr. ~~effective~~William ~~tax~~D. ~~rate)~~Spier, ~~generated~~refer byto ~~the~~NOTE ~~loss~~17: ~~carry-forward~~EXECUTIVE ~~has~~AND ~~been~~BOARD ~~fully~~COMPENSATION ~~reserved~~for asadditional ~~of November 30, 2013~~detail.

~~The Company files income tax returns in the United States, the states of Florida and Pennsylvania.~~13

~~The~~NOTE ~~Company did not identify any material uncertain tax positions on tax returns filed~~8. INCOME ~~The Company did not recognize any interest or penalties for unrecognized tax benefits.~~TAXES

~~NOTE~~The 9Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes. ~~NET~~During ~~OPERATING~~each ~~LOSSES~~fiscal year from 2008 thru 2015, the Company incurred net losses and, therefore, has no tax liability. The net deferred tax asset of approximately $1,641,687 (assuming a 35% effective tax rate) generated by the loss carry-forward has been fully reserved as of August 31, 2014 and $1,127,171 as of May 31, 2014.

AsThe ~~of November 30, 2013, the~~ Company files federal ~~has~~income atax ~~net~~returns ~~operating~~in ~~loss~~the United ~~carry-forward of $3~~States,~~661,083,~~ ~~which~~and ~~will~~state ~~expire~~income 20tax ~~years~~returns ~~from~~in the ~~date~~states ~~the~~of ~~loss~~Florida ~~was~~and ~~incurred~~Pennsylvania.

~~NOTE~~The ~~10:~~Company ~~STOCKHOLDERS’~~did ~~EQUITY~~not identify any material uncertain tax positions on tax returns filed as of August 31, 2014 and as of May 31, 2014. The Company did not recognize any interest or penalties for unrecognized tax benefits as of August 31, 2014 and as of May 31, 2014.

~~AUTHORIZED~~NOTE 9. NET OPERATING LOSSES

The Company ishas ~~authorized~~a tonet ~~issue~~operating ~~5,000,000,000~~loss ~~shares~~carry-forward of $~~0.0001 par value common stock and 50~~4,~~000~~690,~~000~~535 ~~shares~~as of ~~preferred~~August ~~stock~~31, ~~par~~2014 ~~value~~and $~~0.0001. All common stock shares have equal voting rights~~3, ~~are non-assessable and have one vote per share. Voting rights are not cumulative and~~220,489 ~~therefore,~~as ~~the holders~~ of ~~more~~May ~~than 50% of the common stock could~~31, if2014. ~~they~~The ~~choose~~NOL tois doa ~~so,~~tax ~~elect~~operating ~~all~~loss ofwhich ~~the~~will ~~directors~~expire of20 ~~the~~years ~~Company.~~from ~~Preferred Stock or series thereof, if provided, by~~ the ~~Board~~date ~~of Directors of~~ the ~~Company,~~loss ~~shall~~was ~~have~~incurred. ~~voting~~The ~~rights,~~accumulated ~~such~~NOL ~~Preferred~~are ~~Stock~~temporary ordifferences ~~series~~between ~~shall~~reporting ~~vote~~financial ~~only~~income on(losses) aand ~~share~~taxable ~~for~~income ~~share~~and ~~basis~~does ~~with~~not ~~the~~contain ~~Common Stock on~~ any ~~matter,~~components ~~including but not limited to the election~~ of ~~directors,~~permanent ~~for~~tax ~~which such Preferred Stock or series has such rights~~differences.

On July 20, 2010, the Company filed a Certificate of Amendment to the Company’s certificate of incorporation with the Nevada Secretary of State, which increased the Company’s authorization to issue 5,000,000,000 shares of $0.0001 par value common stock, refer to NOTE 1510: ~~CORPORATE~~STOCKHOLDERS’ ~~ACTIONS.~~ DEFICIT

OnAUTHORIZED November 30, 2011 and January 12, 2013, the Board of Directors of the Company approved the allocation of 4,000,000 of the 50,000,000 authorized Preferred Shares of the Company as Series A Preferred Shares with the following rights:

·The ~~Convertible~~Company is authorized to ~~one~~issue ~~hundred~~15,000,000,000 ~~(100)~~shares of $0.0001 par value common stock and 50,000,000 shares of ~~the~~preferred ~~Company~~stock, ~~for~~par ~~each~~value ~~one~~$0.0001. ~~(1)~~All ~~Series~~common Astock ~~Preferred~~shares ~~Share~~have ·equal voting rights, are non-assessable and have one vote per share. Voting rights ~~equal~~are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to ~~one~~do ~~hundred~~so, ~~(100)~~elect ~~votes~~all ~~for~~of ~~each~~the ~~Series~~directors Aof ~~Preferred~~the ~~Share~~Company.

The ~~consideration~~Preferred ~~for~~Stock ~~one~~may ~~(1)~~be ~~Series~~divided Ainto and issued in series. The Board of Directors of the Corporation is authorized to divide the authorized shares of Preferred ~~Share~~Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes. The Board of Directors of the Corporation is authorized, within ~~set~~any atlimitations prescribed by $0law and this Article, to fix and determine the designations, rights, qualifications, preferences, limitations and terms of the shares of any series of Preferred Stock.~~50.~~

On ~~April~~November 2930, 2011 and January 12, 2013, the Board of Directors of the Company approved the ~~authorization~~allocation of ~~seven~~4,000,000 ~~hundred~~of ~~fifty~~the ~~thousand (750~~50,000~~) Preferred Shares~~,000 ~~designated~~authorized ~~as Series B~~ Preferred Shares ~~(Series B Shares), with a value~~ of ~~fifty~~the ~~cents~~Company ~~($0.50)~~as ~~per~~ Series BA Preferred ~~Share,~~Shares ~~each~~ with the following rights:

· Convertible to one hundred (100) common shares of the Company for each one (1.) Series A Preferred Share · Voting rights equal to one hundred (100) votes for each Series A Preferred Share

~~May be converted by the holder into Company common stock.~~ The ~~conversion~~consideration ~~ratio~~for isone ~~such~~(1) ~~that if the full 750,000~~ Series BA ~~Shares~~Preferred ~~are~~Share ~~issued,~~is ~~convert~~set ~~into~~at Company common shares representing 70% of the fully diluted outstanding common shares outstanding after the conversion (which includes all common shares outstanding plus all common shares potentially issuable upon the conversion of all derivative securities not held by the holder)$0.50.

15On April 29, 2013, the Board of Directors of the Company approved the authorization of seven hundred fifty thousand (750,000) Preferred Shares, designated as Series B Preferred Shares (Series B Shares), with a sale price of fifty cents ($0.50) per Series B Preferred Share, each with the following rights:

21.

IfMay be converted by the ~~full~~holder ~~750,000~~into ~~Series~~Company Bcommon ~~Shares~~stock. ~~are~~The ~~not~~conversion ~~issued,~~ratio is such that if the ~~issued~~full 750,000 Series B Shares ~~divided~~are ~~by 750~~issued,~~000~~ ~~multiplied~~convert byinto ~~70%~~Company ~~will~~common ~~represent~~shares ~~the~~representing ~~percentage~~70% of the fully diluted outstanding common shares outstanding after the conversion (which includes all common shares outstanding plus all common shares potentially issuable upon the conversion of all derivative securities not held by the holder). ~~For example: 500,000 Series B Shares issued will result in the holder having 46.67% (500,000/750,000 X 70% = 46.67%) of the fully diluted outstanding common shares.~~

32.

~~The~~If ~~holder~~the offull 750,000 Series B Shares ~~may~~are ~~cast~~not issued, the ~~number~~issued ofSeries ~~votes~~B atShares adivided ~~shareholders~~by ~~meeting~~750,000 ormultiplied by ~~written~~70% ~~consent~~will ~~that~~represent ~~equals~~ the ~~number~~percentage of the fully diluted outstanding common shares ~~into~~outstanding after the conversion (which includes all common shares outstanding plus all common shares potentially issuable upon the conversion of all derivative securities not held by the holder). For example: 500,000 Series B Shares ~~are~~issued will ~~convertible~~result onin the ~~record~~holder ~~date~~having ~~for~~46.67% (500,000/750,000 X 70% = 46.67%) of the ~~shareholder~~fully ~~action~~diluted outstanding common shares.

43.

InThe ~~the~~holder ~~event~~of ~~the~~Series ~~Board~~B ofShares ~~Directors~~may ~~declares~~cast athe ~~dividend~~number ~~payable~~of tovotes ~~Company~~at ~~common~~a shareholders, ~~the~~meeting ~~holders~~or ofby ~~Series~~written Bconsent ~~Shares~~that ~~will~~equals ~~receive~~ the ~~dividend~~number ~~that~~of ~~would~~common beshares ~~payable~~into ifwhich the Series B Shares ~~were~~are ~~converted~~convertible ~~into~~on ~~Company~~the ~~common~~record ~~shares~~date ~~prior~~for to the ~~dividend~~shareholder action.

54.

In the event the Board of Directors declares a ~~liquidation~~dividend ofpayable ~~the~~to Company common shareholders, the holders of Series B Shares will receive athe ~~preferential~~dividend ~~distribution~~that ofwould ~~$0.001~~be ~~per~~payable ~~share, and will share in the distribution as~~ if the Series B Shares ~~had~~were ~~been~~ converted into Company common shares prior to the dividend.

The Series B Preferred Shares would be offered by the discretion of the President to existing shareholders holding more than 10% of the issued and outstanding shares of the Company or to directors of the Company5. The subscribers for the Series B Shares will agree to execute a Series B Shares Unanimous Shareholders Agreement which will include right of first refusal to buy or sell the Series B Shares between the Series B Share holders or directors of the Company.

~~ISSUED~~In ~~AND~~the ~~OUTSTANDING~~event of a liquidation of the Company, the holders of Series B Shares will receive a preferential distribution of $0.001 per share, and will share in the distribution as if the Series B Shares had been converted into common shares.

~~On December 20, 2007, the Company issued 400,000,000 (post forward split) common shares to its Directors for cash of $5,000.~~14

~~Since~~The ~~inception~~Series ~~(December~~B ~~20,~~Preferred ~~2007)~~Shares towould ~~November~~be ~~30,~~offered ~~2009,~~by the ~~Company~~discretion ~~accepted~~of ~~subscriptions~~the ~~for~~President ~~110,416,000~~to ~~(post~~existing ~~forward~~shareholders ~~split)~~holding ~~common~~more ~~shares~~than ~~from~~10% 37of ~~investors~~the ~~under~~issued aand ~~private~~outstanding ~~placement~~shares ~~which~~of ~~closed~~the onCompany ~~March~~or ~~31,~~to ~~2008~~directors of the Company. The ~~private~~subscribers ~~placement~~for ~~was~~the ~~not~~Series ~~subject~~B Shares will agree to ~~any~~execute ~~minimum~~a ~~investment~~Series ~~and~~B ~~was~~Shares ~~priced~~Unanimous atShareholders ~~$0.0005~~Agreement ~~per~~which ~~share~~will ~~(post~~include ~~forward~~right ~~split).~~of ~~The~~first ~~Company~~refusal ~~accepted~~to buy or sell the ~~subscriptions~~Series onB ~~various~~Shares ~~dates~~between ~~throughout~~the Series B Shareholders or directors of the ~~year~~Company.

~~The~~On ~~Company~~May ~~issued~~5, 12014,~~259,000~~ ~~common~~the ~~shares~~Board onof ~~November~~Directors ~~30,~~of ~~2010~~the ~~for~~Company ~~$62,950~~amended ~~for~~Item ~~Accounts~~3 ~~Receivable~~of ~~assignment.~~the rights of the Series B Preferred Shares (Series B Shares) as follows:

~~The Company issued 741,000 common shares on November 30, 2010 for $37,050 cash in a negotiated transaction with an investor to fund the ongoing operations of the Company~~3.

The ~~Company~~holder ~~issued~~of ~~10,000~~Series ~~common~~B ~~shares~~Shares onmay ~~February~~cast ~~28,~~the ~~2011~~number ~~for~~of ~~$1,100~~votes ~~pursuant~~at a shareholders meeting or by written consent that equals to ana ~~Oil~~vote ~~and~~of ~~Gas~~0.000093333% ~~Field~~for ~~Operations~~each ~~Services~~Series ~~agreement~~B ~~with~~Share held relative to the ~~Company~~holders of common stock on a fully dilutive basis.

~~The~~On ~~Company~~May ~~redeemed on March 28~~12, ~~2011~~2014, ~~140 million shares of~~ the Company’s ~~common~~filed ~~stock at~~ a ~~price~~Certificate of ~~$87,500~~Designation orfor ~~$0.000625 per share from Peter Matousek~~750,000 ~~the~~Series ~~Company’s~~B ~~president~~Preferred ~~and~~Shares ~~director,~~with at the ~~time.~~Nevada ~~Also~~Secretary ~~on March 28, 2011, the Company redeemed 60 million shares~~ of ~~the Company’s common stock from four shareholders. The purchase price for the 60 million totaled $37~~State,~~500~~ orrefer ~~$0.000625 per share. With the redemption of the 200 million shares, the Company reduced its issued and outstanding shares~~ to ~~312,501,000~~NOTE ~~shares~~15: ofCORPORATE ~~common stock as of March 28, 2011~~ACTIONS.

~~The~~On ~~Company~~May ~~authorized~~15, ~~and approved an aggregate of 112~~2014,~~500~~ ~~shares for~~ the ~~period~~Company ~~ending~~filed ~~May~~a ~~31,~~Certificate ~~2011 with an average price~~ of ~~$0.1263~~Amendment ~~per share~~ to the ~~Executive~~Company’s ~~and~~certificate ~~Board~~of ~~pursuant~~incorporation ~~to a Management and Financial Service Agreement~~ with ~~Mr.~~the ~~Peter~~Nevada ~~Matousek~~Secretary ~~and~~of aState, ~~Board~~which ~~Member~~increased ~~Compensation Agreement with Mr. Peter Matousek and Mr. Donald Lynch. During~~ the ~~fiscal~~Company’s ~~year~~authorization ~~ending~~to ~~May~~issue 3115, ~~2011~~000, ~~the Company issued 75~~000,000 ~~of the 112,500~~ shares toof ~~the~~$0.0001 ~~Executive~~par ~~and~~value ~~Board~~common ~~with the remaining 37~~stock,~~500~~ ~~shares~~refer ~~issued~~to onNOTE ~~June~~15: 6,CORPORATE ~~2011~~ACTIONS.

~~The~~ISSUED ~~Company~~AND issued 18 Million shares on April 12, 2012 for $900,000 pursuant to a twenty-four month agreement with Charles Morgan Securities Inc. On September 20, 2012, the Company and CMS mutually agreed to terminate the IBA agreement between the Company and CMS and the 18 Million shares were cancelled.OUSTANDING

~~The~~As ~~Company authorized and approved an aggregate~~ of ~~136,129~~August ~~shares for the period ended May~~ 31, ~~2012~~2014, ~~with~~the anCompany ~~average~~had ~~price~~issued ~~of $0.0333 per share to the Executive~~ and ~~Board~~outstanding ~~pursuant to Board Member Compensation Agreements with Mr. Peter Matousek~~7, ~~Mr. Donald Lynch~~151, ~~Mr. Jerry G. Mikolajczyk~~568,163 ~~Mr.~~common ~~Kevin~~stock M.shares ~~Grapes~~ and ~~Dr. William D. Spier~~600, ~~refer to NOTE 17: EXECUTIVE AND BOARD COMPENSATION for additional detail. The Company issued 105,~~000 ofSeries ~~the~~B ~~136,129~~preferred ~~shares~~stock ~~to the Board as of May 31, 2012. The balance, 31,129~~ shares~~, cost of $2,106 for the period March 1, 2012 to May 31, 2012, were issued to the Board on June 25, 2012~~.

~~The~~For ~~Company~~the ~~issued~~3 20month ~~Million~~period ~~shares~~ending onthe August 31, ~~2012 for $1~~2014,~~000,000~~ ~~pursuant~~the toCompany aissued ~~twenty-four~~the ~~month~~following ~~agreement~~common ~~with~~stock ~~Prodigy Asset Management, LLC.~~shares:

16The Company issued 24,166,666 shares on June 3, 2014 for $1,450 pursuant to the conversion of a Convertible Promissory Note dated July 2, 2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued ~~11.7~~21,666,667 ~~Million~~ shares on ~~August~~June 313, ~~2012~~2014 for $~~585~~1,~~000~~300 for interest pursuant to the conversion of a ~~Purchase~~Convertible ~~and~~Promissory ~~Sales~~Note ~~agreement~~dated ~~with~~July ~~Vencedor~~2, ~~Energy~~2013. ~~Partners~~The ~~for~~issuance of the ~~acquisition~~common ofstock 30was ~~oil~~exempt ~~and~~from ~~gas~~registration ~~well~~under ~~locations~~Section in3(a)(9) ~~Venango~~of ~~County,~~the ~~Pennsylvania~~Securities Act.

The Company issued 1110,~~428~~000,~~571~~000 shares on ~~October~~June 223, ~~2012~~2014 for $56,~~000~~600 pursuant to the conversion of a Convertible Promissory Note dated ~~October~~August 1929, ~~2012~~2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued ~~16.2~~177,444,444 ~~Million~~ shares on ~~October~~June 2610, ~~2012~~2014 for $~~810~~8,~~000~~872 for interest pursuant to athe ~~twelve~~conversion ~~month~~of ~~Financial~~a ~~Consulting~~Convertible ~~Services~~Promissory ~~Agreement~~Note ~~with~~dated ~~Vaquero~~June ~~Private Capital~~5, ~~Inc~~2013. ~~effective~~The asissuance of ~~June~~the 1,common ~~2012~~stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued ~~243~~273,~~103~~ 333,333 shares on ~~October~~June 2616, ~~2012~~2014 for $616,~~077~~400 ~~for~~pursuant ~~interest~~to ~~and~~the ~~penalties~~conversion toof a ~~3rd~~Convertible ~~party~~Promissory ~~lender~~Note dated August 29, 2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company ~~authorized~~issued ~~and approved 45~~158,~~000~~333,333 shares ~~for~~on ~~the~~July ~~period ended August 31~~7, ~~2012~~2014 ~~with~~for ~~an average price of~~ $~~0.04033~~9,500 ~~per~~pursuant ~~share~~ to the ~~Board~~conversion ~~pursuant~~of toa ~~Board~~Convertible ~~Member~~Promissory ~~Compensation~~Note ~~Agreements~~dated ~~with~~August ~~Mr. Jerry G. Mikolajczyk~~29, Mr2013. ~~Peter~~The ~~Matousek~~issuance ~~and~~of ~~Dr.~~the ~~William~~common D.stock ~~Spier,~~was ~~refer~~exempt tofrom ~~NOTE~~registration ~~17:~~under ~~EXECUTIVE~~Section ~~AND~~3(a)(9) ~~BOARD~~of ~~COMPENSATION for additional detail. The 45,000 shares were issued to~~ the ~~Board~~Securities ~~on October 26, 2012~~Act.

The Company issued 121,~~162~~666,~~790~~667 shares on ~~November~~July 127, ~~2012~~2014 for $51,~~000~~300 for interest pursuant to the conversion of a Convertible Promissory Note dated ~~October~~August 1929, ~~2012~~2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company ~~authorized~~issued ~~and approved 45~~274,000,000 shares ~~for~~on ~~the~~July ~~period ended November~~ 30, ~~2012~~2014 ~~with~~for ~~an average price of~~ $~~0.012167~~16,640 ~~per~~pursuant ~~share~~ to the ~~Board~~conversion ~~pursuant~~of toa ~~Board~~Convertible ~~Member~~Promissory ~~Compensation~~Note ~~Agreements~~dated ~~with~~September ~~Mr. Jerry G. Mikolajczyk~~30, Mr2013. ~~Peter~~The ~~Matousek~~issuance ~~and~~of ~~Dr.~~the ~~William~~common D.stock ~~Spier,~~was ~~refer~~exempt tofrom ~~NOTE~~registration ~~17:~~under ~~EXECUTIVE~~Section ~~AND~~3(a)(9) ~~BOARD~~of ~~COMPENSATION for additional detail. The 45,000 shares were issued to~~ the ~~Board~~Securities ~~on December 18, 2012~~Act.

The Company issued 54300,~~322~~ 000,000 shares on ~~December~~August 1819, ~~2012~~2014 for $115,~~880~~000 ~~for~~pursuant ~~interest~~to the conversion of a Convertible Promissory Note and ~~penalties~~interest topayable dated February 12, 2014. The issuance of the common stock was exempt from registration under Section 3(a)(9) ~~3rd~~of ~~party~~the ~~lender~~Securities Act.

~~The Company issued 423,728 shares on April 17, 2013 for $2,500 pursuant to the conversion of a Convertible Promissory Note dated October 19, 2012.~~ 15

The Company issued 45,000 shares on April 30, 2013 for the period ended February 28, 2013 with an average price of $0.0109267 per share for Board Member Compensation Agreements with Mr. Peter Matousek, Mr. Jerry G. Mikolajczyk, and Dr. William D. Spier.


Schedule Of Stock Issued for the 3 month Period ending August 31, 2014

Date	Common Stock Shares	Common Stock issued to reduce CPN's	CPN Amount	Common Stock issued for interest	Interest Amount
Balance on May 31, 2014	5,790,957,053
June 3, 2014	45,833,333	24,166,666	$ 1,450	21,666,667	$ 1,300
June 3, 2014	110,000,000	110,000,000	$ 6,600
June 10, 2014	177,444,444	-	$ 0	177,444,444	$ 8,872
June 16, 2014	273,333,333	273,333,333	$ 16,400
July 7, 2014	180,000,000	158,333,333	$ 9,500	21,666,667	$ 1,300
July 30, 2014	274,000,000	274,000,000	$ 16,440
August 19, 2014	300,000,000	200,000,000	$ 10,000	100,000,000	$ 5,000
3 months ending August 31, 2014	1,360,611,110	1,039,833,333	$ 60,390	320,777,777	$ 16,472
Balance as of August 31, 2014	7,151,568,163

~~The~~NOTE ~~Company~~11: ~~issued~~RECENT ~~4,081,633~~ACCOUNTING ~~shares on April 30, 2013 for $40,000 as incentive to enter into a reserve equity financing agreement dated May 7, 2013.~~ PRONOUNCEMENTS

~~The~~During ~~Company~~the ~~issued~~year 2ended May 31,~~061~~ 2014,~~855~~ ~~shares~~the onCompany ~~April~~has ~~30,~~elected ~~2013~~to ~~for~~early $adopt Accounting Standards Update No. 2014-10,~~000~~ ~~pursuant~~Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the Company to remove the ~~conversion~~inception ofto adate ~~Convertible~~information ~~Promissory~~and ~~Note~~all ~~dated~~references ~~October~~to ~~19,~~development ~~2012~~stage.

~~The~~There ~~Company~~were ~~issued~~various ~~2,857,143~~updates ~~shares~~recently onissued, ~~May~~most 2,of ~~2013~~which ~~for~~represented ~~$12,000~~technical ~~pursuant~~corrections to the ~~conversion~~accounting literature or application to specific industries. None of the updates are expected to a ~~Convertible~~have ~~Promissory~~a ~~Note~~material ~~dated~~impact ~~October~~on 26the Company's financial position, ~~2012.~~results of operations or cash flows.

~~The~~NOTE ~~Company~~12: ~~issued~~CHANGE ~~2,222,222~~OF ~~shares on May 8, 2013 for $10,000 pursuant to the conversion of a Convertible Promissory Note dated October 19, 2012.~~ CONTROL

~~The~~On May 31, 2011, Mr. Jerry G. Mikolajczyk, the Company's ~~issued~~President, 3CEO and Director,~~658~~ acquired 180,~~537~~000,000 common shares onof ~~May~~the 9,Company ~~2013~~from ~~for~~Mr. ~~$15~~Peter Matousek,~~000 pursuant~~ former President, CEO and Director of the Company. The acquisition by Mr. Mikolajczyk gave him control of 57.6% of the issued and outstanding shares of the Company. Subsequent to May 31, 2011, Mr. Mikolajczyk acquired additional shares directly and indirectly in the ~~conversion~~Company. As of aMr. ~~Convertible~~Mikolajczyk’s ~~Promissory~~last ~~Note~~Form ~~dated~~4 filed with the SEC on October 1, 2014, Mr. Mikolajczyk is beneficial owner of 188,636,421 (3.26%) of the issued and outstanding shares of the Company and 600,000 ~~2012~~Series B Preferred Shares as of August 31, 2014. The Series B Preferred Shares provides Mr. Mikolajczyk voting rights equal to 56% on a fully dilutive basis.

~~The~~NOTE ~~Company~~13: ~~issued~~LOANS ~~1,700,000 shares on May 10, 2013 for $6,800 including $1,300 for interest pursuant to the conversion of a Convertible Promissory Note dated October 26, 2012.~~ PAYABLE

~~The~~SHORT ~~Company~~TERM ~~issued 4,811,707 shares on May 13, 2013 for $19,728 including $2,228 for interest pursuant to the conversion of a Convertible Promissory Note dated October 19, 2012.~~ LOANS

The Company ~~issued~~has ~~45,000~~loans ~~shares~~in onthe ~~May~~amount 31of $133,249, ~~2013 for~~non-interest ~~the~~bearing ~~period~~and ~~ended May 31~~unsecured, ~~2013~~ with anour ~~average~~President, ~~price~~CEO ofand $0Director, Jerry G.~~010333~~ ~~per~~Mikolajczyk ~~share~~d/b/a ~~for~~Lighthouse ~~Board~~Investments. ~~Member~~The ~~Compensation~~loan ~~Agreements~~has ~~with~~no Mrdue date. ~~Peter~~The ~~Matousek,~~Company ~~Mr.~~accrued ~~Jerry~~$0 G.interest ~~Mikolajczyk,~~as ~~and~~of ~~Dr.~~August ~~William~~31, D2014. ~~Spier.~~

~~The~~On March 28, 2011, the Company ~~issued~~entered 5into Redemption Agreement with Peter Matousek,~~714~~ the Company’s former president,~~286~~ ~~shares~~currently onvice ~~June~~president 13of investors relations and director, ~~2013~~which provides in part for ~~$12,000~~the ~~pursuant~~Company to ~~the~~redeem ~~conversion~~from ofMr. Matousek a ~~Convertible~~total ~~Promissory~~of ~~Note~~140 ~~dated~~million ~~December~~shares 6of the Company’s common stock at a price of $87,500 ~~2012~~or $0.000625 per share.

17The stock redemption agreement is a non-callable 3-year note. The principal will accrue interest at the rate of 0.55% (IRS Short Term AFR – April 2011) per annum, until March 31, 2014 (the “Maturity Date”). Principal plus all accrued interest will be due on the Maturity Date. On May 31, 2011, Mr. Matousek assigned the unsecured Note Payable of $87,500 plus accrued interest to Comtax Services, Inc. The Company has defaulted on the payment of the principal and accrued interest due on March 31, 2014. There are no penalties or default provisions in the redemption agreement. The Company accrued $1,651 interest as of August 31, 2014.

~~The~~On March 28, 2011, the Company ~~issued~~entered 5into redemption agreements with four shareholders,~~000,000~~ which in total provided for the redemption of 60 million shares onof ~~June~~the 17Company’s common stock. The purchase price for the 60 million shares totaled $37,500 ~~2013~~or $0.000625 per share. The terms of the stock redemption, agreement is a non-callable 3-year note (Notes). The principal will accrue interest at the rate of 0.55% (IRS Short Term AFR – April 2011) per annum, until March 31, 2014 (the “Maturity Date”). Principal plus all accrued interest will be due on the Maturity Date. The maturity date has passed on the Stock Redemption Agreements. Three of the four redemption agreements are to 3rd party shareholders for an aggregate of $1328,~~750~~125. ~~pursuant~~The Company has defaulted on the payment of the principal and accrued interest due on March 31, 2014 to the ~~conversion~~four redemption agreements. There are no penalties or default provisions in the redemption agreements. The Company accrued $531 interest as of aAugust ~~Convertible~~31, ~~Promissory~~2014 ~~Note~~for ~~dated~~the ~~October~~three 193rd party Notes with the fourth Stock Redemption Agreement holder being our President, ~~2012~~CEO and Director, Jerry G. Mikolajczyk.

~~The~~On ~~Company~~July ~~issued~~15, 72011,~~380~~ our President,~~952~~ ~~shares~~CEO onand ~~June~~Director, 19Jerry G. Mikolajczyk, ~~2013~~acquired ~~for~~100% interest in Womack Holdings, Inc. Womack Holdings, Inc. holds one of the four Notes payable, $159,~~500~~375, ~~pursuant~~by tothe Company. The Company has defaulted on the ~~conversion~~payment of athe ~~Convertible~~principal ~~Promissory~~and ~~Note~~accrued ~~dated~~interest ~~December~~due 6on March 31, ~~2012~~2014. There are no penalties or default provisions in the redemption agreement. The Company accrued $177 interest as of August 31, 2014 for the Womack Holdings, Inc. Note.

~~The Company issued 4,000,000 shares on July 8, 2013 for $4,600 pursuant to the conversion of a Convertible Promissory Note dated October 19, 2012.~~ 16

~~The~~SCLA ~~Company~~#1 ~~issued~~- 9On May 15,~~090~~ 2014,~~909~~ ~~shares~~the onCompany ~~July~~entered ~~15,~~into ~~2013~~a Secured Loan and Coupon Agreement (SLCA#1) with a 3rd party for $1031,000 and ~~1,363,636~~a ~~shares~~fixed interest coupon of $6,200 for an aggregate of $37,200. The SLCA #1is secured with the crude oil production of the Rice #15 oil well. The repayment terms of SCLA#1 are from the net proceeds of the Rice #15 oil well,~~500~~ less 15% for general lease operating expenses. SCLA#1 has first charge on the net revenue production of Rice #15. SLCA#1 requires the Company to pay interest at a fixed amount of $6,200 ~~both~~(Coupon), ~~pursuant~~due toimmediately upon execution of SLCA#1, from the ~~conversion~~net proceeds of athe ~~Convertible~~production ~~Promissory~~of ~~Note~~crude ~~dated~~oil ~~December~~from 6the Rice #15 oil well. Based on $100 crude oil price, ~~2012~~it is expected that SLCA#1 should be paid off from the first 517 barrels of crude oil produced. The Coupon is amortized on a prorated basis as interest expense as SCLA#1 is paid. As of August 31, 2014, the Company has a liability of $26,700 for SCLA#1.

~~The~~SCLA ~~Company~~#2 ~~issued~~- 12On May 15,~~195~~ 2014,~~121~~ ~~shares~~the onCompany ~~July~~entered ~~22,~~into ~~2013~~a Secured Loan and Coupon Agreement (SLCA#2) with a 3rd party for $1047,000 ~~pursuant~~and toa fixed interest coupon of $9,400 for an aggregate of $56,400. The SLCA#2 is secured with the ~~conversion~~crude oil production of the Rice #15 oil well. The repayment terms of SCLA#2 are from the net proceeds of the Rice #15 oil well, less 15% for general lease operating expenses. SCLA#2 has second charge on the net revenue production of Rice #15, after SCLA#1 until the loan and coupon is discharged. SLCA#2 requires the Company to pay interest at a ~~Convertible~~fixed ~~Promissory~~amount ~~Note~~of ~~dated~~$9,400 ~~October~~(Coupon), 19due immediately upon execution of SLCA#2, ~~2012~~from the net proceeds of the production of crude oil from the Rice #15 oil well. Based on a $100 crude oil price, it is expected that SLCA#2 should be paid off from approximately 783 barrels of crude oil produced after SCLA#1 is paid off. The Coupon will be amortized on a prorated basis as interest expense as SCLA#2 is paid. As of August 31, 2014, the Company has a liability of $56,400 for SCLA#2.

The Company issued 14,285,714 shares on August 9, 2013 for $10,000 pursuant to the conversion of a Convertible Promissory Note dated October 19, 2012.


Schedule of Short Terms Loans
	August 31, 2014
Short Term Loan	Loan	Interest	Total Loan Due
Mikolajczyk, Jerry - assigned from Comtax Services, Inc.	$ 133,249	$ 0	$ 133,249
Stock Redemption - Mikolajczyk acquisition	9,375	177	9,552
Stock Redemption - 3rd party - assigned from Matousek	87,500	1,651	89,151
Stock Redemption - 3rd party	9,375	177	9,552
Stock Redemption - 3rd party	9,375	177	9,552
Stock Redemption - 3rd party	9,375	177	9,552
SCLA #1	22,600	4,100	26,700
SCLA #2	47,000	9,400	56,400
Total Short Terms Loans	$ 327,849	$ 15,858	$ 343,707

~~The~~CONVERTIBLE ~~Company~~PROMISSORY ~~issued~~NOTES ~~20,689,655 shares on August 20, 2013 for $12,000 pursuant to the Stock and Securities Exchange Agreement for a Convertible Promissory Note dated October 19, 2012.~~ (CPN)

CPN#4 - The Company ~~issued~~has 16loans in the amount of $231,~~949~~160,~~152~~ ~~shares~~non-interest onbearing, ~~August~~with 26Comtax Services, ~~2013~~Inc. ~~for~~The ~~$10~~loans from Comtax Services,~~000~~ ~~pursuant~~Inc. have been provided to the ~~conversion~~Company ofas aworking capital. On January 12, 2013 the Company amended the Promissory Notes with Comtax Services, Inc. and issued an unsecured one year 10% Convertible Promissory Note ~~dated~~(CPN#4) effective October 19, 2012 due on October 18, 2013 for $231,160. The principal and accrued interest is convertible up to 509,520 Series A Preferred Shares at a strike price of $0.50 per Series A Preferred Share with the following rights:

~~The~~1. ~~Company~~Convertible ~~issued~~to ~~33,000,000~~one ~~shares~~hundred on(100) ~~August~~common ~~27,~~shares ~~2013~~of the Company for ~~$16,500~~each ~~pursuant~~one (1) Series A Preferred Share; and 2. Voting rights equal to aone ~~Convertible~~hundred ~~Promissory~~(100) ~~Note~~votes ~~dated~~for ~~October~~each ~~19,~~Series ~~2012.~~A Preferred Share.

~~The~~On ~~Company~~April ~~issued~~30, 202013,~~408~~ Comtax Services,~~163~~ ~~shares~~Inc. onassigned ~~September~~$75,000 of the principal of CPN#4 to a third party, ~~2013~~CPN#8, ~~for~~reducing the Company's obligations on CPN#4 to $10156,160. CPN#8, $75,000, ~~pursuant~~was converted to acommon ~~Convertible~~stock ~~Promissory~~by the Note ~~dated~~holder, ~~October~~refer 19to NOTE 10: STOCKHOLDERS' DEFICIT, for ~~2012.~~additional detail.

~~The~~On ~~Company~~August ~~issued~~15, 192013,~~186,046~~ ~~shares~~Comtax onServices, ~~September~~Inc. 9,assigned ~~2013~~their ~~for~~interest in $845,~~250~~000 ~~pursuant~~of the principal of CPN#4 to a ~~Convertible~~third ~~Promissory~~party, ~~Note~~CPN#4A ~~dated~~reducing ~~October~~the 19Company's obligations to Comtax Services, ~~2012~~Inc. to $111,160 with an option for the Assignee to acquire an additional $45,505 in principal of CPN#4 plus accrued interest.

~~The~~On ~~Company~~September ~~issued~~20, 272013,~~500~~ Comtax Services,~~000~~ ~~shares~~Inc. onassigned ~~September~~their 16interest in $45,505 ~~2013~~of ~~for~~the principal and $87,~~250~~136 ~~pursuant~~of to the ~~conversion~~accrued interest of CPN#4 to a ~~Convertible~~third ~~Promissory~~party, ~~Note~~CPN#4A ~~dated~~reducing ~~October~~the 19Company's obligations to Comtax Services, ~~2012~~Inc. to $65,655.

~~The~~CPN#4A, ~~Company issued 26~~$95,~~950,185~~505 ~~shares~~plus onaccrued ~~September 17~~interest, ~~2013~~was ~~for~~converted ~~$11,319~~to ~~pursuant~~common tostock by the ~~conversion~~Note ofholder, arefer ~~Convertible~~to ~~Promissory~~NOTE ~~Note~~10: ~~dated~~STOCKHOLDERS' ~~October 19~~DEFICIT, for ~~2012~~additional detail.

~~The Company issued 33,300,000 shares on September 20, 2013 for $10,000 pursuant to the conversion of a Convertible Promissory Note dated October 19, 2012.~~17

~~The~~On ~~Company~~October ~~issued~~18, 272013,~~272,727~~ ~~shares~~the onCompany ~~September~~amended 25CPN#4, ~~2013~~amending ~~for~~the ~~$9,000~~Maturity ~~pursuant~~Date of CPN#4 to be October 18, 2014 with the ~~conversion~~rest and remainder of athe ~~Convertible~~terms ~~Promissory~~and ~~Note~~conditions ~~dated~~of ~~January~~CPN#4 1,remaining ~~2013~~in full force and effect without change or modification.

~~The~~CPN#4B - On February 7, 2014, the Company negotiated an ASSIGNMENT AND ASSUMPTION AGREEMENT (AAA) for $29,300 plus accrued interest of $4,200, 10% Convertible Promissory Note (CPN#4B), previously issued 20on October 19,~~833~~ 2012,~~333~~ ~~shares~~assigned from CPN#4, due on October 18, 2014, reducing its obligations on CPN#4 to $36,355 ~~2013~~plus ~~for~~accrued interest. CPN#4B, $533,~~000~~500 was ~~pursuant~~converted to ~~the~~common ~~conversion~~stock ofby athe ~~Convertible~~Note ~~Promissory~~holder, ~~Note~~refer ~~dated~~to ~~January~~NOTE 110: STOCKHOLDERS' DEFICIT, ~~2013~~for additional detail.

~~The~~On ~~Company~~May ~~issued~~5, 372014,~~500,000~~ ~~shares~~the onCompany ~~October~~negotiated ~~11,~~an ~~2013~~ASSIGNMENT AND ASSUMPTION AGREEMENT (AAA) for $730,~~500~~200 ~~pursuant~~plus toaccrued ~~the~~interest ~~conversion~~ of a$4,617, 10% Convertible Promissory Note ~~dated~~(CPN#18), previously issued on October 19, 2012, assigned from CPN#4, due on October 18, 2014, reducing its obligations on CPN#4 to $6,155 plus accrued interest, refer to NOTE 13: LOANS PAYABLE, CPN#18, for additional detail.

~~The~~As ~~Company~~of ~~issued~~August 2031,~~090~~ 2014,~~864~~ ~~shares~~the onCompany ~~October~~has ~~11,~~a ~~2013~~liability ~~for~~of $56,~~331~~155 ~~and~~plus ~~7,589,856~~accrued ~~shares~~interest ~~for~~of $24,~~014~~173 for ~~interest, both pursuant to the conversion of a Convertible Promissory Note dated October 19, 2012~~CPN#4.

CPN#5 - The Company ~~issued~~has 34a loan in the amount of $62,~~090~~000,~~909~~ ~~shares~~non-interest onbearing, ~~October~~with 17Comtax Services, Inc. The loan from Comtax Services, Inc. was provided to the Company as working capital. On January 12, 2013 the Company amended the Promissory Notes for $762,~~500~~000 ~~pursuant~~with toComtax ~~the~~Services, ~~conversion~~Inc. ofand aissued an unsecured one year 10% Convertible Promissory Note ~~dated~~(CPN#5) ~~January~~effective December 1, 2012 due on November 30, 2013 for $62,000. The principal and accrued interest is convertible up to 136,400 Series A Preferred Shares at a strike price of $0.50 per Series A Preferred Share with the following rights:

~~The~~1. ~~Company~~Convertible ~~issued~~to ~~29,411,764~~one ~~shares~~hundred on(100) ~~October~~common ~~31,~~shares ~~2013~~of the Company for ~~$5,000~~each ~~pursuant~~one to(1) ~~the~~Series ~~conversion~~A ofPreferred aShare; ~~Convertible~~and ~~Promissory~~2. ~~Note~~Voting ~~dated~~rights ~~January~~equal 1,to ~~2013~~one hundred (100) votes for each Series A Preferred Share.

18On November 30, 2013, the Company amended CPN#5 amending the Maturity Date of CPN#5 to be November 30, 2014 with the rest and remainder of the terms and conditions of CPN#5 remaining in full force and effect without change or modification.

~~The~~As ~~Company~~of ~~cancelled~~August ~~20 million shares on October~~ 31, ~~2013 issued to Prodigy Asset Management~~2014, ~~LLC pursuant to~~ the ~~mutually~~Company ~~agreed~~accrued ~~termination~~interest of ~~the~~ ~~August 31~~$10, ~~2012 Financing Facilities Consulting Agreement~~854.

~~The~~CPN#6 - On February 14, 2012, the Company issued 7a Promissory Note for $100,~~692~~000 with Altmann Revocable Living Trust,~~308~~ ~~shares~~Rlt. on(ALRT) ~~November~~which 7became due December 31, ~~2013~~2012 ~~for~~with interest calculated at 8% per annum. The Company amended the $1100,000 ~~pursuant~~Promissory toNote ~~the~~plus ~~conversion~~accrued interest of a$7,036 to an unsecured one year 8% Convertible Promissory Note ~~dated~~(CPN#6) effective January 1, 2013 due on January 1, 2014 for $100,000 with accrued interest of $7,036. The principal and accrued interest is convertible into shares of common stock at the discretion of the note holder at the Conversion Price which shall be the greater of: (i) the Variable Conversion Price and (ii) the Fixed Conversion Price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Company relating to the Company's securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price is 80% of the Market Price. "Market Price" means the average of the Closing Prices (as defined below) for the Common Stock during the five (5) Trading Day period ending one Trading Day prior to the date the Conversion Notice is sent by the Holder to the Company via facsimile (the "Conversion Date"). "Closing Price" means, for any security as of any date, the closing price on the OTCQB (or such other OTC Markets or OTC Tiers, stock markets or stock exchange upon which the Company’s common stock is listed or traded). The note holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The Company may prepay CPN#6 in advance in full or in part at any time and from time to time without premium or penalty. "Fixed Conversion Price" shall mean $0.0001. As of August 31, 2014, the Company accrued interest of $20,362.

~~The~~On ~~Company~~January ~~issued~~22, 452014,~~000,000~~ ~~shares~~the onCompany ~~November~~amended 8,CPN#6 ~~2013~~amending ~~for~~the ~~$4,500~~Maturity ~~pursuant~~Date of CPN#6 to be December 31, 2014 with the ~~conversion~~rest and remainder of athe ~~Convertible~~terms ~~Promissory~~and ~~Note~~conditions ~~dated~~of ~~October~~CPN#6 ~~19,~~remaining ~~2012~~in full force and effect without change or modification.

~~The~~CPN#16 - On September 30, 2013, the Company issued 34an unsecured 9 month 8% Convertible Promissory Note (CPN#16) due on July 2,~~454~~ 2014 for $27,~~545~~500. The principal and accrued interest is convertible into shares onof ~~November~~common 14stock at the discretion of the note holder. The Conversion Price shall be the greater of: (i) the Variable Conversion Price and (ii) the Fixed Conversion Price (subject, ~~2013~~in each case, to equitable adjustments for $3stock splits,~~790~~ ~~pursuant~~stock dividends or rights offerings by the Company relating to the ~~conversion~~Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 55% multiplied by the Market Price (representing a ~~Convertible~~discount ~~Promissory~~rate ~~Note~~of ~~dated~~45%). ~~May~~"Market 2Price" means the average of the lowest three (3) Trading Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. "Trading Price" means, ~~2013~~for any security as of any date, the closing bid price on the Over-the-Counter Bulletin Board or applicable trading market as reported by a reliable reporting service designated by the note holder. The note holder is limited to owning 4.99% of the Company’s issued and outstanding shares. Default interest is 22% per annum should the Company default on the CPN#16. The Company may prepay CPN#16 at any time for the period beginning on the date of the CPN#16 and ending on the date which is ninety (90) days following the date of the CPN#16, the CPN#16 may be prepaid by the Company upon payment to the note holder of an amount equal to the

~~The Company issued 34,454,545 shares on November 19, 2013 for $3,790 pursuant to the conversion of a Convertible Promissory Note dated May 2, 2013.~~18

~~The~~outstanding ~~Company~~principal ~~issued~~amount anof ~~aggregate~~the ofCPN#16 ~~90,000~~multiplied ~~shares~~by ~~for~~125% ~~the~~together ~~six~~with ~~month~~accrued and unpaid interest thereon. At any time during the period beginning on the ninety (91) day from the date of the CPN#16 and ending ~~November~~on 30the date which is one hundred twenty (120) days following the date of CPN#16, ~~2013~~the ~~with~~Company may prepay the CPN#16 to the note holder upon payment of an ~~average~~amount ~~price~~equal to the outstanding principal amount of $0the CPN#16 multiplied by 135% together with accrued and unpaid interest thereon.~~001267~~ ~~per~~At ~~share~~any time during the period beginning on ~~November~~the 27date which is one hundred twenty one (121) days from the date of the CPN#16 and ending on one hundred eighty (180) days following the date of this CPN#16, ~~2013~~the Company may prepay the CPN#16 to the ~~Board~~note ~~pursuant~~holder upon payment of an amount equal to ~~Board~~the ~~Member~~outstanding ~~Compensation~~principal ~~Agreements~~amount of the CPN#16 multiplied by 145% together with ~~Mr.~~accrued ~~Peter~~and ~~Matousek,~~unpaid Mrinterest thereon. ~~Jerry~~After G.the ~~Mikolajczyk~~expiration of one hundred eighty (180) days following the date of the CPN#16, ~~and~~the DrCompany shall have no right of prepayment. ~~William~~CPN#16 Dcannot be converted below the fixed price of $0.00005. ~~Spier~~As of August 31, ~~refer~~2014, tothe ~~NOTE~~Company ~~17:~~has ~~EXECUTIVE~~a ~~AND~~liability ~~BOARD~~of ~~COMPENSATION~~$11,060 ~~for~~and ~~additional~~accrued ~~detail~~interest of $1,591 for CPN#16.

~~The~~CPN#18 - On May 5, 2014 the Company issued 6an unsecured 12 month 10% Convertible Promissory Note (CPN#18) due on May 9,~~418~~ 2015 for $34,~~980~~817. The principal and accrued interest is convertible into shares onof ~~November~~common 27stock at the discretion of the note holder. The Conversion Price shall be the greater of: (i) the Variable Conversion Price and (ii) the Fixed Conversion Price (subject, ~~2013~~in each case, to equitable adjustments for $stock splits, stock dividends or rights offerings by the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 55% multiplied by the Market Price (representing a discount rate of 45%). "Market Price" means the average of the lowest three (3) Closing Bid Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. "Trading Price" means,~~903~~ for any security as of any date, the closing bid price on the Over-the-Counter Bulletin Board or applicable trading market as reported by a reliable reporting service designated by the note holder. The note holder is limited to owning 4.99% of the Company’s issued and outstanding shares. Default interest ~~pursuant~~is 22% per annum should the Company default on the CPN#18. The Company may prepay CPN#18 in whole or in part, at any time, and from time to atime, ~~Convertible~~with ~~Promissory~~premium, ~~Note~~where ~~dated~~the ~~January~~Company 1and the note holder have approved the prepayment and premium in writing. CPN#18 cannot be converted below the fixed price of $0.00005. As of August 31, ~~2013~~2014, the Company has a liability of $23,817 and accrued interest of $772 for CPN#18.

~~NOTE 11: RECENT ACCOUNTING PRONOUNCEMENTS~~.

~~There~~CPN#19 ~~were~~- ~~various~~On ~~updates~~May ~~recently~~9, 2014, the Company issued an unsecured 12 month 10% Convertible Promissory Note (CPN#19) due on May 9, ~~most~~2015 for $37,000. The principal and accrued interest is convertible into shares of ~~which~~common ~~represented~~stock ~~technical~~at ~~corrections~~the todiscretion of the ~~accounting~~note ~~literature~~holder. The Conversion Price shall be the greater of: (i) the Variable Conversion Price and (ii) the Fixed Conversion Price (subject, in each case, to equitable adjustments for stock splits, stock dividends or ~~application~~rights offerings by the Company relating to ~~specific~~the ~~industries~~Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). ~~None~~The "Variable Conversion Price" shall mean 55% multiplied by the Market Price (representing a discount rate of 45%). "Market Price" means the ~~updates~~average ~~are~~of ~~expected~~the lowest three (3) Closing Bid Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to athe ~~have~~Conversion aDate. ~~material~~"Trading ~~impact~~Price" means, for any security as of any date, the closing bid price on the Over-the-Counter Bulletin Board or applicable trading market as reported by a reliable reporting service designated by the note holder. The note holder is limited to owning 4.99% of the Company'’s ~~financial~~issued ~~position~~and outstanding shares. Default interest is 22% per annum should the Company default on the CPN#19. The Company may prepay CPN#19 at any time for the period beginning on the date of the CPN#19 and ending on the date which is one hundred eighty (180) days following the date of the CPN#19, ~~results~~the CPN#19 may be prepaid by the Company upon payment to the note holder of ~~operations~~an oramount ~~cash~~equal ~~flows~~to the outstanding principal amount of the CPN#19 multiplied by 135% together with accrued and unpaid interest thereon. After the expiration of one hundred eighty (180) days following the date of the CPN#19, any prepayments must be approved by both parties in writing. CPN#19 cannot be converted below the fixed price of $0.00005.. As of August 31, 2014, the Company accrued interest of $1,125.

~~NOTE~~CPN#20 ~~12:~~- ~~CHANGE~~on OFJune ~~CONTROL~~25, 2014, the Company issued an unsecured 9 month 8% Convertible Promissory Note (CPN#20) due on March 25, 2015 for $42,750. The principal and accrued interest is convertible into shares of common stock at the discretion of the note holder. The conversion price (the “Conversion Price”) shall equal the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 57.5% multiplied by the Market Price (as defined herein) (representing a discount rate of 42.5%). “Market Price” means the average of the lowest three (3) Trading Prices (as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the closing bid price on the Over-the-Counter Bulletin Board (the “OTCQB”), OTCQB or applicable trading market as reported by a reliable reporting service (“Reporting Service”) designated by the Holder or, if the OTCQB is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. In the case that the Company’s Common Stock is not deliverable by DWAC, an additional 5% discount will apply. In the case that the Company’s Common Stock is “chilled” for deposit into the DTC system and only eligible for clearing deposit, an additional 7.5% discount shall apply. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Company and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is

On February 9, 2010 certain shareholders sold and transferred an aggregate of 400,000,000 (post forward split) shares of Common Stock representing approximately 78.37% of the issued and outstanding shares of the Company to certain buyers (“Buyers”), at $0.000625 per share, post forward split, for an aggregate purchase price of $250,000 (the “Purchase Price”). Such transaction is hereinafter referred to as the “Takeover” or the “Transaction”.19

tradable for any period on the OTCQB, OTCQB or on the principal securities exchange or other securities market on which the Common Stock is then being traded. “Fixed Conversion Price” shall mean $0.00005. The ~~table~~Company ~~below~~may ~~represents~~prepay the ~~ownership~~amounts outstanding hereunder pursuant to the following terms and ~~percentage~~conditions: (I) at any time during the period beginning on the Issue Date and ending on the date which is thirty (30) days following the Issue Date, the Company shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of ~~control~~CPN#20 to prepay the outstanding CPN#20 (principal and accrued interest), in full by ~~each~~making a payment to the Holder of an amount in cash equal to 125%, multiplied by the ~~new~~sum ~~shareholders~~of: (w) the then outstanding principal amount of CPN#20 plus (x) accrued and unpaid interest on the unpaid principal amount of CPN#20 plus (y) Default Interest; (II) at any time during the period beginning the day which is thirty one (31) days following the Issue Date and ending on the date which is sixty (60) days following the Issue Date, the Company shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of CPN#20 to prepay the outstanding CPN#20 (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 130%, multiplied by the sum of: (w) the then outstanding principal amount of CPN#20 plus (x) accrued and unpaid interest on the unpaid principal amount of CPN#20 plus (y) Default Interest; (III) at any time during the period beginning the day which is sixty one (61) days following the Issue Date and ending on the date which is ninety(90) days following the Issue Date, the Company shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of CPN#20 to prepay the outstanding CPN#20 (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 135%, multiplied by the sum of: (w) the then outstanding principal amount of CPN#20 plus (x) accrued and unpaid interest on the unpaid principal amount of CPN#20 plus (y) Default Interest; (IV) at any time during the period beginning the day which is ninety one (91) days following the Issue Date and ending on the date which is one hundred twenty (120) days following the Issue Date, the Company shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of CPN#20 to prepay the outstanding CPN#20 (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 140%, multiplied by the sum of: (w) the then outstanding principal amount of CPN#20 plus (x) accrued and unpaid interest on the unpaid principal amount of CPN#20 plus (y) Default Interest; (V) at any time during the period beginning the day which is one hundred twenty one (121) days following the Issue Date and ending on the date which is one hundred fifty (150) days following the Issue Date, the Company shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of CPN#20 to prepay the outstanding CPN#20 (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 145%, multiplied by the sum of: (w) the then outstanding principal amount of CPN#20 plus (x) accrued and unpaid interest on the unpaid principal amount of CPN#20 plus (y) Default Interest; (VI) at any time during the period beginning the day which is one hundred fifty one (151) days following the Issue Date and ending on the date which is one hundred eighty (180) days following the Issue Date, the Company shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of CPN#20 to prepay the outstanding CPN#20 (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 150%, multiplied by the sum of: (w) the then outstanding principal amount of CPN#20 plus (x) accrued and unpaid interest on the unpaid principal amount of CPN#20 plus (y) Default Interest; (VII) after the expiration of one hundred eighty (180) following the date of CPN#20, the Company shall have no right of prepayment. CPN#20 cannot be converted below the fixed price of $0.00005. As of August 31, 2014, the Company accrued interest of $628.

Schedule of Ownership and Percentage of Control
Name of Beneficial Owner	Class of Voting Stock	Number of Shares (Post Forward Split) of Voting Stock Beneficially	Percentage of Class [1]
Donald Lynch	Common Stock	80,000,000	15.67%
Peter Matousek	Common Stock	320,000,000	62.69%
All Officers & Directors As a Group (2 Persons)	Common Stock	400,000,000	78.37% [1]
[1] Note 1 - Based on 510,416,000 (post forward split) shares of Common Stock issued and outstanding.

The Company analyzed the conversion option of the Notes CPN#20 for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instrument should be classified as liabilities once the conversion option becomes effective after 180 days due to ratchet provision of the above conversion options for the Notes issued.

InASC connection with the Agreement, there was a change in the majority of the Company’s Board of Directors. Upon the consummation of the Takeover, Marina Karpilovski, President and Director, and Michael Zazkis, Secretary, Treasurer & Director resigned and Mr. Donald Lynch was appointed as Director and Executive Officer of the Company and Mr. Peter Matousek was appointed as Director and Executive Officer of the Company.DISCLOSURE

OnIn ~~May~~accordance ~~31,~~with ~~2011,~~ASC ~~Mr.~~470-20 ~~Jerry~~Debt G.with ~~Mikolajczyk~~Conversion and Other Options, the Company's ~~President,~~recorded ~~CEO~~total debt discounts of zero, and ~~Director~~$55,109 ~~acquired~~for ~~180~~the variable conversion feature of the convertible debts incurred during the three month period ending August 31,~~000~~ 2014 and August 31,~~000~~ ~~common~~2013, ~~stock~~respectively. ~~shares~~The discount will be amortized to debt discount over the term of the ~~Company~~debentures ~~from~~using Mrthe effective interest method. ~~Peter~~As ~~Matousek,~~of ~~former~~August ~~President~~31, ~~CEO~~2014 and ~~Director~~May 31, 2014, the debt discount (acceleration of the ~~Company.~~discount ~~The~~attributable ~~acquisition~~to bythe ~~Mr.~~conversions ~~Mikolajczyk~~on ~~gave~~the ~~him~~loan) ~~control~~on ofthe CPN's was $57,848 and $56,100 respectively.6% ofThe ~~the~~Company ~~issued~~recorded $22,095 and ~~outstanding~~$52,142 ~~shares~~of debt discount expense pursuant to the amortization of the ~~Company.~~convertible ~~Subsequent~~promissory tonote ~~May~~discounts during the three month period ending August 31, ~~2011~~2014 and August 31, Mr2013, respectively. ~~Mikolajczyk~~The ~~acquired~~Company ~~additional~~recorded ~~shares~~$4,815 ~~directly~~ and ~~indirectly~~$12,010 inof interest expense for convertible promissory notes during the ~~Company.~~three month period ending August 31, 2014 and August 31, 2013, respectively.

19In accordance with ASC 815-15, the Company determined that the variable conversion feature and shares to be issued are not embedded derivative features, and these are included in the Convertible Promissory Notes on the balance sheet.

AsNOTE of14: ~~Mr.~~FAIR ~~Mikolajczyk’s~~VALUE ~~last~~OF ~~Form~~FINANCIAL ~~4 filed with the SEC on December 16, 2013, Mr. Mikolajczyk is beneficial owner of 188,594,421 (20.34%) of the issued and outstanding shares of the Company as of November 30, 2013.~~INSTRUMENTS

~~NOTE~~Under ~~13:~~FASB ~~LOANS~~ASC ~~PAYABLE~~820-10-5, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

~~SHORT TERM LOANS~~20

The Company’s ~~has~~financial ~~loans~~assets ~~in the amount of $398,249, non-interest bearing~~ and ~~unsecured,~~liabilities ~~with~~are ~~our~~measured ~~President,~~using ~~CEO~~inputs ~~and~~from ~~Director,~~the ~~Jerry~~three G.levels ~~Mikolajczyk~~of ~~d/b/a~~the ~~Lighthouse~~fair ~~Investments.~~value ~~The loan has no due date~~hierarchy. The ~~Company~~three ~~accrued~~levels $0are ~~interest~~ as ~~of November 30, 2013.~~follows:

~~The~~Level ~~Company~~1 ~~has~~- aInputs ~~loan~~are inunadjusted ~~the~~quoted ~~amount~~prices ofin ~~$20,000,~~active ismarkets ~~non-interest~~for ~~bearing~~identical ~~and~~assets ~~unsecured,~~or ~~with~~liabilities ~~our~~that ~~President,~~the ~~CEO~~Company ~~and~~has ~~Director,~~the ~~Jerry~~ability G.to ~~Mikolajczyk.~~access ~~The~~at ~~loan~~the ~~has~~measurement ~~no due~~ date. ~~The Company accrued $0 interest as of November 30, 2013.~~

OnLevel ~~March~~2 ~~28,~~- ~~2011,~~Inputs ~~the~~include ~~Company~~quoted ~~entered~~prices ~~into~~for ~~Redemption~~similar ~~Agreement~~assets ~~with~~and ~~Peter~~liabilities ~~Matousek,~~in ~~the~~active ~~Company’s president and director~~markets, ~~which~~quoted ~~provides~~prices ~~in part~~ for ~~the~~identical ~~Company~~or tosimilar ~~redeem~~assets ~~from~~or ~~Mr.~~liabilities ~~Matousek~~in amarkets ~~total~~that ofare ~~140~~not ~~million~~active, ~~shares~~inputs ofother ~~the~~than ~~Company’s~~quoted ~~common~~prices ~~stock~~that atare aobservable ~~price~~for ofthe ~~$87,500~~asset or ~~$0.000625~~liability ~~per share~~(e.g., ~~The~~interest ~~terms~~rates, ofyield ~~the stock redemption~~curves, ~~agreement is a non-callable 3-year note~~etc.), ~~The~~and ~~principal~~inputs ~~will~~that ~~accrue~~are ~~interest~~derived atprincipally ~~the~~from ~~rate~~or ofcorroborated ~~0.55%~~by ~~(IRS~~observable ~~Short~~market ~~Term~~data ~~AFR~~by –correlation ~~April~~or ~~2011)~~other ~~per~~means ~~annum, until March 31, 2014~~ (~~the~~market ~~“Maturity~~corroborated ~~Date”~~inputs). ~~Principal plus all accrued interest will be due on the Maturity Date.~~

OnLevel ~~May~~3 ~~31,~~- ~~2011,~~Unobservable ~~Mr.~~inputs ~~Matousek~~that ~~assigned~~reflect ~~the~~our ~~unsecured~~assumptions ~~Note~~about ~~Payable~~the ofassumptions ~~$87,500~~that ~~plus~~market ~~accrued~~participants ~~interest~~would touse ~~Comtax~~in ~~Services,~~pricing ~~Inc.~~the ~~The~~asset ~~Company~~or ~~accrued $1,290 interest as of November 30, 2013~~liability.

OnThe ~~March 28, 2011, the~~ Company ~~entered~~estimates ~~into redemption agreements with four shareholders, which in total provided for~~ the ~~redemption~~fair ofvalue ~~60 million shares~~ of ~~the~~financial ~~Company’s~~instruments ~~common~~using ~~stock. The purchase price for~~ the 60available ~~million~~market ~~shares~~information ~~totaled~~and ~~$37,500~~valuation ~~or $0~~methods.~~000625~~ ~~per~~Considerable ~~share.~~judgment ~~The terms of the stock redemption, agreement~~ is arequired ~~non-callable~~in ~~3-year~~estimating ~~note~~fair ~~(Notes)~~value. ~~The~~Accordingly, ~~principal will accrue interest at~~ the ~~rate~~estimates of ~~0.55%~~fair ~~(IRS~~value ~~Short~~may ~~Term~~not ~~AFR~~be –indicative ~~April~~of ~~2011)~~the ~~per~~amounts ~~annum, until March 31, 2014 (~~the ~~“Maturity~~Company ~~Date”).~~could ~~Principal~~realize ~~plus~~in ~~all~~a ~~accrued~~current ~~interest~~market ~~will be due on the Maturity Date~~exchange.

OnAs ~~July~~of ~~15,~~August ~~2011~~31, ~~our~~2014 ~~President, CEO~~ and ~~Director,~~May ~~Jerry G. Mikolajczyk~~31, ~~acquired 100% interest in Womack Holdings~~2014, ~~Inc.~~the ~~Womack~~carrying ~~Holdings,~~value ~~Inc. holds one~~ of ~~the~~accounts ~~four Notes~~ payable, ~~$9,375,~~short byterm ~~the~~loans ~~Company.~~and ~~The~~convertible ~~Company~~promissory ~~accrued~~notes ~~$138~~approximated ~~interest~~fair asvalue ofdue ~~November~~to ~~30,~~the ~~2013~~short-term ~~for~~nature ~~the~~and ~~Womack~~maturity ~~Holdings,~~of ~~Inc.~~these ~~Note~~instruments.

~~Three~~NOTE of15: ~~the~~CORPORATE ~~four redemption agreements are to 3rd party shareholders for an aggregate of $28,125. The Company accrued $414 interest as of November 30, 2013 for the three 3rd party Notes.~~ ACTION

Schedule of Short Terms Loans
	November 30, 2013
Other Current Asset	Loan	Interest	Total Loan
Mikolajczyk, Jerry - assigned from Comtax Services, Inc.	$ 398,249	$ 0	$ 398,249
Mikolajczyk, Jerry - Deposit on Series B Preferred Stock	$ 20,000	$ 0	$ 20,000
Stock Redemption - Mikolajczyk acquisition	$ 9,375	$ 138	$ 9,513
Stock Redemption - 3rd party - assigned from Matousek	$ 87,500	$ 1,290	$ 88,790
Stock Redemption - 3rd party	$ 9,375	$ 138	$ 9,513
Stock Redemption - 3rd party	$ 9,375	$ 138	$ 9,513
Stock Redemption - 3rd party	$ 9,375	$ 138	$ 9,513
Total Short Terms Loans	$ 543,249	$ 1,842	$ 545,091

On August 3, 2010, the corporate action became effective whereby the 6,380,200 issued and authorized shares of common stock were forward split resulting in 510,416,000 issued and outstanding shares of common stock.

~~CONVERTIBLE~~On ~~PROMISSORY~~May ~~NOTES~~12, ~~(CPN)~~2014, the Company filed a Certificate of Designation for 750,000 Series B Preferred Shares with the Nevada Secretary of State.

~~CPN#4 -~~On ~~The~~May ~~Company~~14, ~~has~~2014, ~~loans in~~ the ~~amount~~shareholders of ~~$231,160,~~the ~~non-interest bearing~~Company, ~~with~~holding ~~Comtax Services, Inc~~57.145% ~~The~~of ~~loans~~the ~~from~~outstanding ~~Comtax~~voting ~~Services,~~power ~~Inc.~~of ~~have been provided to~~ the Company ~~as working capital. On January 12~~, ~~2013~~agreed ~~the~~to ~~Company~~increase ~~amended~~ the ~~Promissory~~authorized ~~Notes~~shares ~~with~~of ~~Comtax~~common ~~Services~~stock, ~~Inc.~~par ~~and~~value ~~issued an unsecured one year 10% Convertible Promissory Note (CPN#4) effective October 19, 2012 due on October 18, 2013 for~~ $~~231,160~~0.0001 ~~The principal and accrued interest is convertible up~~ to ~~509~~15,~~520 Series A Preferred Shares at a strike price of $0~~000,000,000.50 ~~per Series A Preferred Share with the following rights:~~

1On May 15, 2014, the Company filed a Certificate of Amendment to the Company’s certificate of incorporation with the Nevada Secretary of State, which increased the Company’s authorization to issue 15,000,000,000 shares of $0.0001 par value common stock.

~~Convertible~~NOTE to16: ~~one hundred (100) common shares of the Company for each one (1) Series A Preferred Share; and~~COMMITMENTS

2The Company entered into a Management and Financial Service Agreement with Dr. William D. Spier for a 7.25-month period commencing October 23, 2012 and ending May 31, 2013 whereby Dr. Spier was paid $29,032 in cash payments. The agreement was renewed for an additional 12 months at $7,500 per month ending May 31, 2014. The terms and conditions will be renegotiated upon the successful consummation of a Business Combination through the acquisition of, or merger or consolidation with, a company that has substantial additional capital and or operating revenues; or the Company is able to finance operating expenses with additional debt or through equity financing of not less than $5,000,000.

~~Voting~~On ~~rights~~May ~~equal~~30, to2013, ~~one~~the ~~hundred~~Board of Directors renewed the Board Member Compensation Agreement with Dr. William D. Spier as a director of the Company for a term of one (~~100~~1) ~~votes~~year ending May 31, 2014. Mr. Spier will receive 5,000 shares per month of the Company’s common stock in consideration for ~~each~~his ~~Series~~serving Aon ~~Preferred~~the ~~Share~~Company’s Board of Directors.

20On May 30, 2013, the Board of Directors renewed the Board Member Compensation Agreement with Mr. Peter Matousek as a director of the Company for a term of one (1) year ending May 31, 2014. Mr. Matousek will receive 5,000 shares per month of the Company’s common stock in consideration for his serving on the Company’s Board of Directors.

On ~~April~~August 3031, 2013, ~~Comtax~~the ~~Services,~~Board ~~Inc~~of Directors renewed the Board Member Compensation Agreement with Mr. ~~assigned~~Jerry ~~$75,000~~G. Mikolajczyk as a director of the ~~principal~~Company for a term of ~~CPN#4~~one ~~reducing~~(1) year ending August 31, 2014. Mr. Mikolajczyk will receive 5,000 shares per month of the Company'’s ~~obligations~~common stock in consideration for ~~CPN#4~~his toserving ~~$156,160.~~on the Company’s Board of Directors.

On ~~August~~May 1530, ~~2013~~2014, ~~Comtax~~the ~~Services,~~Board ~~Inc~~of Directors renewed the Board Member Compensation Agreement with Dr. ~~assigned~~William ~~their~~D. ~~interest~~Spier inas ~~$45,000~~a director of the ~~principal~~Company offor ~~CPN#4~~a ~~reducing~~term ~~the~~of ~~Company's~~one ~~obligations~~(1) toyear ~~Comtax~~ending ~~Services~~May 31, ~~Inc~~2015. toMr. ~~$111~~Spier will receive 5,~~160~~000 ~~with~~shares anper ~~option~~month ~~for~~of the ~~Assignee~~Company’s tocommon ~~acquire~~stock anin ~~additional~~consideration ~~$45,505~~for inhis ~~principal~~serving ofon ~~CPN#4~~the ~~plus~~Company’s ~~accrued~~Board ~~interest.~~of Directors.

On September 20, 2013, Comtax Services, Inc. assigned their interest in $45,505 of the principal and $7,136 of the accrued interest of CPN#4 reducing the Company's obligations to Comtax Services, Inc. to $65,655. CPN Interest21

AsOn ofMay ~~November~~ 30, ~~2013~~2014, the Board of Directors renewed the Board Member Compensation Agreement with Mr. Peter Matousek as a director of the Company ~~accrued~~for ~~interest~~a term of ~~$12~~one (1) year ending May 31,~~247~~ 2015. Mr. Matousek will receive 5,000 shares per month of the Company’s common stock in consideration for ~~CPN#4~~his serving on the Company’s Board of Directors.

~~CPN#4A~~The -common Onstock ~~August~~will ~~15,~~be ~~2013,~~valued ~~the~~based ~~Company negotiated a Securities Exchange and Settlement Agreement (SESA) for $45,000, 10% Convertible Promissory Note (CPN#4A), previously issued~~ on ~~October 19, 2012, assigned from CPN#4, due on October 19, 2013. On September 20, 2013,~~ the ~~SESA~~average ~~was increased with $45,505~~ of the ~~principal~~5 ~~and~~trading ~~$7,136~~day ofclose ~~the~~price ~~accrued~~prior ~~interest~~to ofeach ~~CPN#4~~month end. ~~The~~This ~~SESA~~amount ~~allows~~includes ~~the~~all ~~Assignee~~costs related to ~~exchange~~his ~~the~~engagement ~~debt~~as ~~obligation~~a ofDirector ~~the Company in exchange for common stock~~ of the Company ~~pursuant~~except to3rd ~~Section~~party ~~3(a)(9)~~or oftravel ~~the~~expenses. ~~Securities~~The ~~Act~~terms and ~~Rule~~conditions ~~144.~~will ~~The~~be ~~SESA~~renegotiated ~~allows~~upon the ~~Assignee~~successful toconsummation ~~exchange the debt obligation~~ of ~~the Company based~~ a ~~discount~~Business ofCombination ~~50%~~through of the ~~average~~acquisition of the lowest three (3) Closing Bid prices ten (10) Trading Days immediately preceding the date upon which Assignee shall have delivered to the Company the Exchange Notice. The Exchange price shall not be below the par value, ~~$0.0001,~~or ofmerger ~~the~~or ~~common~~consolidation ~~stock of the Company~~with, ~~For~~a ~~the~~company ~~period~~that ~~ending~~has ~~November~~substantial ~~30,~~additional ~~2013,~~capital ~~the~~and ~~Assignee~~or ~~exchanged~~operating ~~$67,000~~revenues; ofor ~~debt obligation of~~ the Company ~~for~~is ~~common~~able ~~stock~~to offinance ~~the~~operating ~~Company,~~expenses with ~~principal~~additional ofdebt ~~$23,505~~or ~~and~~through ~~accrued~~equity ~~interest~~financing of ~~$7,682~~not ~~remaining~~less asthan a$5 ~~liability by the Company on CPN#4A~~million.

OnThe ~~October~~Company ~~18,~~renewed ~~2013~~the Management and Financial Service Agreement with Mr. Peter Matousek for a 12 month period commencing June 1, ~~the~~2014 ~~Company~~and ~~amended~~ending ~~CPN#4~~May 31, ~~which~~2015 ~~includes~~whereby ~~CPN#4A~~Mr. Matousek will be paid $90,000 ~~amending~~in cash payments. The terms and conditions will be renegotiated upon the ~~Maturity~~successful ~~Date~~consummation of ~~CPN#4~~a toBusiness beCombination ~~October~~through 18the acquisition of, ~~2014~~or merger or consolidation with, ~~the~~a ~~rest~~company ~~and~~that ~~remainder~~has ofsubstantial ~~the~~additional ~~terms~~capital and ~~conditions~~or ofoperating ~~CPN#4~~revenues; ~~remaining~~or inthe ~~full~~Company ~~force~~is ~~and~~able ~~effect~~to ~~without~~finance ~~change~~operating expenses with additional debt or ~~modification.~~through equity financing of not less than $5,000,000.

~~CPN#5 -~~ The Company ~~has~~renewed ~~a loan in~~ the ~~amount~~Management ofand ~~$62,000,~~Financial ~~non-interest~~Service ~~bearing,~~Agreement with ~~Comtax~~Dr. ~~Services,~~William ~~Inc~~D. ~~The~~Spier ~~loan~~for ~~from~~a ~~Comtax~~12 ~~Services,~~month ~~Inc.~~period ~~was~~commencing ~~provided~~June to1, ~~the~~2014 ~~Company~~and asending ~~working~~May ~~capital. On January 12~~31, ~~2013~~2015 ~~the~~whereby ~~Company~~Dr. ~~amended~~Spier ~~the~~will ~~Promissory~~be ~~Notes~~paid ~~for~~ $6290,000 ~~with~~in ~~Comtax~~cash ~~Services, Inc~~payments. The terms and ~~issued~~conditions anwill ~~unsecured~~be ~~one~~renegotiated ~~year~~upon ~~10%~~the ~~Convertible~~successful ~~Promissory~~consummation ~~Note~~of ~~(CPN#5)~~a ~~effective~~Business ~~December~~Combination 1through the acquisition of, ~~2012~~or ~~due~~merger onor ~~November~~consolidation 30with, ~~2013 for~~a ~~$62,000.~~company ~~The~~that ~~principal~~has ~~and~~substantial ~~accrued~~additional ~~interest~~capital isand ~~convertible~~or upoperating torevenues; ~~136,400~~or ~~Series~~the ACompany ~~Preferred~~is ~~Shares~~able atto afinance ~~strike~~operating ~~price~~expenses ofwith ~~$0.50~~additional ~~per~~debt ~~Series~~or Athrough ~~Preferred~~equity ~~Share~~financing ~~with~~of ~~the~~not ~~following~~less ~~rights:~~ than $5,000,000.

On August 31, 2014, the Board of Directors renewed the Board Member Compensation Agreement with Mr. Jerry G. Mikolajczyk as a director of the Company for a term of one (1) year ending August 31, 2015. Mr. Mikolajczyk will receive 5,000 shares per month of the Company’s common stock in consideration for his serving on the Company’s Board of Directors. The common stock will be valued based on the average of the 5 trading day close price prior to each month end. This amount includes all costs related to his engagement as a Director of the Company except 3rd party or travel expenses. The terms and conditions will be renegotiated upon the successful consummation of a Business Combination through the acquisition of, or merger or consolidation with, a company that has substantial additional capital and or operating revenues; or the Company is able to finance operating expenses with additional debt or through equity financing of not less than $5 million.

~~Convertible~~NOTE to17: ~~one~~EXECUTIVE ~~hundred~~AND ~~(100)~~BOARD ~~common shares of the Company for each one (1) Series A Preferred Share; and~~COMPENSATION

2Mr. Wayne St. Cyr was appointed our Executive Vice President, Marketing and Strategic Development on January 1, 2011. His employment contract terminated on December 31, 2011. The Company has not renewed the contract with Mr. Ct. Cyr and has retained Mr. St. Cyr on a month to month basis. The Company is accruing $10,000 per month for Mr. Wayne St. Cyr's services.

~~Voting~~Mr. ~~rights~~Jerry ~~equal~~G. Mikolajczyk was appointed our President, Chief Executive Officer and Chief Financial Officer on May 31, 2011 effective June 1, 2011. His employment contract terminated on May 31, 2012. The Company has not renewed the contract with Mr. Mikolajczyk and has retained Mr. Mikolajczyk on a month to ~~one~~month ~~hundred~~basis. The ~~(100)~~Company ~~votes~~is ~~for~~accruing ~~each~~$10,000 ~~Series~~per Amonth ~~Preferred~~for ~~Share~~Mr. Mikolajczyk's services.

OnMr. ~~November~~Peter 30Matousek was appointed our Vice President – Investor Relations on May 31, ~~2013~~2011. His employment contract terminated May 31, ~~the~~2012. ~~Company~~Mr. ~~amended~~Matousek ~~CPN#5~~continued ~~amending~~as ~~the~~Vice ~~Maturity~~President ~~Date~~– ofInvestor ~~CPN#5~~Relations tobetween beMay ~~November~~31, 302012 and May 31, 2014 with the ~~rest~~Company ~~and~~accruing ~~remainder~~$7,500 ofper month for Mr. Matousek's services. The Company renewed the Management and Financial Service Agreement with Mr. Peter Matousek for a 12 month period commencing June 1, 2014 and ending May 31, 2015 whereby Mr. Matousek will be paid $90,000 in cash payments. The terms and conditions will be renegotiated upon the successful consummation of ~~CPN#5~~a ~~remaining~~Business inCombination ~~full~~through ~~force~~the acquisition of, or merger or consolidation with, a company that has substantial additional capital and ~~effect~~or ~~without~~operating ~~change~~revenues; or ~~modification~~the Company is able to finance operating expenses with additional debt or through equity financing of not less than $5,000,000. The Company is accruing $7,500 per month for Mr. Matousek's services.

AsOn May 22, 2012, Company entered into a Board Member Compensation Agreement with Dr. William D. Spier as a director of ~~November~~the 30Company for a term of one (1) year ending May 31, 2013. Dr. Spier will receive 5,000 shares per month of the Company’s ~~accrued~~common ~~interest~~stock in consideration for his serving on the Company’s Board of ~~$6,200~~Directors. The common stock will be valued based on the average of the 5 trading day close price prior to each month end. This amount includes all costs related to his engagement as a Director of the Company except 3rd party or travel expenses.

~~CPN#6 -~~ On ~~February~~May 1425, 2012, ~~the~~ Company ~~issued~~entered ainto ~~Promissory Note for $100,000 and is carrying~~ a ~~contingent~~Board ~~liability~~Member ofCompensation ~~$30,000,~~Agreement with ~~Altmann Revocable Living Trust, Rlt~~Mr. ~~(ALRT),~~Peter ~~totaling~~Matousek ~~$130,000~~as ~~which~~a ~~became~~director ~~due~~of ~~December~~the ~~31, 2012 with interest calculated at 8% per annum. The~~ Company ~~amended~~for ~~the~~a ~~$100,000~~term ~~Promissory Note plus accrued interest~~ of ~~$7,036 to an unsecured~~ one ~~year 8% Convertible Promissory Note~~ (~~CPN#6~~1) ~~effective~~year ~~January~~ending 1May 31, 2013. ~~due~~Mr. onMatousek ~~January~~will 1,receive ~~2014 for $100~~5,000 ~~with~~shares ~~accrued~~per ~~interest~~month of ~~$7,036.~~the ~~The~~Company’s ~~principal and accrued interest is convertible into shares of~~ common stock atin ~~the~~consideration ~~discretion of the note holder at the Conversion Price which shall be the greater of: (i) the Variable Conversion Price and (ii) the Fixed Conversion Price (subject to equitable adjustments~~ for ~~stock~~his ~~splits,~~serving ~~stock~~on ~~dividends or rights offerings by~~ the Company ~~relating to the Company'~~’s ~~securities~~Board ~~or the securities~~ of ~~any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events)~~Directors. The ~~"Variable~~common ~~Conversion~~stock ~~Price~~will isbe ~~80%~~valued ofbased ~~the~~on ~~Market Price. "Market Price" means~~ the average of the ~~Closing Prices (as defined below) for the Common Stock during the five (~~5) ~~Trading~~trading ~~Day~~day ~~period~~close ~~ending~~price ~~one Trading Day~~ prior to ~~the~~each ~~date~~month ~~the~~end. ~~Conversion~~This ~~Notice~~amount isincludes ~~sent~~all bycosts ~~the~~related ~~Holder~~ to ~~the~~his ~~Company~~engagement ~~via facsimile (the "Conversion Date"). "Closing Price" means, for any security~~ as ofa ~~any~~Director date, the closing price on the OTCQB (or such other OTC Markets or OTC Tiers, stock markets or stock exchange upon which the Company’s common stock is listed or traded). The note holder is limited to owning 4.99% of the Company’s ~~issued~~except ~~and~~3rd ~~outstanding~~party ~~shares. The Company may prepay CPN#6 in advance in full~~ or intravel ~~part at any time and from time to time without premium or penalty~~expenses. ~~"Fixed Conversion Price" shall mean $0.0001. As of November 30, 2013, the Company accrued interest of $14,356.~~

2122

~~CPN#9 -~~ The Company ~~issued~~authorized ~~an unsecured 9 month 8% Convertible Promissory Note (CPN#9) on May 2, 2013 due on February 6, 2014 for $32,500. The principal~~ and ~~accrued~~approved ~~interest~~an isaggregate ~~convertible into shares~~ of ~~common stock at the discretion of the note holder. The Conversion Price shall be the greater of: (i) the Variable Conversion Price (as defined herein) and (ii) the Fixed Conversion Price (subject~~136,129 inshares ~~each case, to equitable adjustments~~ for ~~stock splits, stock dividends or rights offerings by~~ the ~~Company~~twelve ~~relating~~month toperiod ~~the~~ended ~~Company’s~~May ~~securities or the securities of any subsidiary of the Company~~31, ~~combinations,~~2012 ~~recapitalization,~~with ~~reclassifications,~~an ~~extraordinary~~average ~~distributions~~price ~~and similar events). The "Variable Conversion Price" shall mean 55% multiplied by the Market Price (representing a discount rate~~ of ~~45%)~~$0.0333 ~~"Market~~per ~~Price"~~share ~~means the average of the lowest three (3) Trading Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior~~ to the ~~Conversion Date. "Trading Price" means, for any security as of any date, the closing bid price on the Over-the-Counter Bulletin~~ Board orpursuant ~~applicable~~to ~~trading market as reported by~~ a ~~reliable~~Board ~~reporting~~Member ~~service~~Compensation ~~designated~~Agreements bywith ~~the~~Mr. ~~note~~Jerry ~~holder~~G. ~~The~~Mikolajczyk, ~~note~~Mr. ~~holder~~Kevin isM. ~~limited~~Grapes, ~~to owning 4~~Mr.~~99%~~ ofPeter ~~the~~Matousek ~~Company’s issued~~ and ~~outstanding shares~~Dr. ~~Default~~William ~~interest~~D. ~~is 22% per annum should the Company default on the CPN#9~~Spier. The Company ~~may~~issued ~~prepay~~105,000 ~~CPN#9 at any time for the period beginning on the date~~ of the ~~CPN#9 and ending on the date which is ninety (90) days following the date of the CPN#9~~136,129 ~~the~~shares ~~CPN#9 may be prepaid by the Company upon payment~~ to the ~~note~~Board ~~holder~~as of anMay ~~amount~~31, ~~equal to the outstanding principal amount of the CPN#9 multiplied by 125% together with accrued and unpaid interest thereon~~2012. The Atbalance, 31,129 ~~any~~shares, ~~time~~cost ~~during the period beginning on the ninety (91) day from the date~~ of ~~the CPN#9 and ending on the date which is one hundred twenty (120) days following the date of CPN#9~~$2,106 ~~the~~for ~~Company may prepay~~ the ~~CPN#9 to the note holder upon payment of an amount equal to the outstanding principal amount of the CPN#9 multiplied by 135% together with accrued and unpaid interest thereon. At any time during the~~ period ~~beginning~~March ~~on the date which is one hundred twenty one (121) days from the date of the CPN#9 and ending on one hundred eighty (180) days following the date of this CPN#9~~1, ~~the~~2012 ~~Company may prepay the CPN#9~~ to ~~the~~May ~~note~~31, ~~holder~~2012, were ~~upon~~issued ~~payment of an amount equal~~ to the ~~outstanding~~Board ~~principal~~on ~~amount~~June ~~of the CPN#9 multiplied by 145% together with accrued and unpaid interest thereon. After the expiration of one hundred eighty (180) days following the date of the CPN#9~~25, ~~the Company shall have no right of prepayment~~2012. ~~The floor price of $0.00005. As of November 30, 2013, $24,920 remained outstanding on the CPN and the Company accrued interest of $1,488.~~

~~CPN#10 -~~ The Company ~~issued~~authorized ~~an unsecured 9 month 8% Convertible Promissory Note (CPN#10) on May 13, 2013 due on February 17, 2014 for $42,500. The principal~~ and ~~accrued~~approved ~~interest~~an isaggregate ~~convertible into shares~~ of ~~common stock at the discretion of the note holder. The Conversion Price shall be the greater of: (i) the Variable Conversion Price and (ii) the Fixed Conversion Price (subject~~45,000 inshares ~~each case, to equitable adjustments~~ for ~~stock splits, stock dividends or rights offerings by~~ the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 55% multiplied by the Market Price (representing a discount rate of 45%). "Market Price" means the average of the lowest three ~~(3)~~month ~~Trading Prices for the Common Stock during the ten (10) Trading Day~~ period ~~ending~~ended onAugust ~~the latest complete Trading Day prior to the Conversion Date. "Trading Price" means~~31, ~~for~~2012 ~~any~~with ~~security~~an asaverage ~~of any date, the closing bid~~ price ~~on the Over-the-Counter Bulletin Board or applicable trading market as reported by a reliable reporting service designated by the note holder. The note holder is limited to owning 4.99%~~ of ~~the Company’s issued and outstanding shares~~$0.040333 ~~Default interest is 22%~~ per ~~annum~~share should the Company default on the CPN#10. The Company may prepay CPN#10 at any time for the period beginning on the date of the CPN#10 and ending on the date which is ninety (90) days following the date of the CPN#10, the CPN#10 may be prepaid by the Company upon payment to the ~~note~~Board ~~holder~~pursuant ~~of an amount equal~~ to ~~the~~Board ~~outstanding~~Member ~~principal~~Compensation ~~amount~~Agreements ~~of the CPN#10 multiplied by 125% together~~ with ~~accrued~~Mr. ~~and~~Jerry ~~unpaid interest thereon~~G. ~~At any time during the period beginning on the ninety (91) day from the date of the CPN#10 and ending on the date which is one hundred twenty (120) days following the date of CPN#10~~Mikolajczyk, ~~the~~Mr. ~~Company~~Peter ~~may~~Matousek ~~prepay the CPN#10 to the note holder upon payment of an amount equal to the outstanding principal amount of the CPN#10 multiplied by 135% together with accrued~~ and ~~unpaid~~Dr. ~~interest~~William ~~thereon~~D. AtSpier. ~~any~~The ~~time during the period beginning on the date which is one hundred twenty one (121) days from the date of the CPN#10 and ending on one hundred eighty (180) days following the date of this CPN#10~~45,000 ~~the~~shares ~~Company~~were ~~may~~issued ~~prepay the CPN#10~~ to the ~~note~~Board ~~holder~~on ~~upon~~October payment of an amount equal to the outstanding principal amount of the CPN#10 multiplied by 145% together with accrued and unpaid interest thereon. After the expiration of one hundred eighty (180) days following the date of the CPN#1026, ~~the Company shall have no right of prepayment~~2012. ~~The floor price of $0.00005. As of November 30, 2013, the Company accrued interest of $1,872.~~

~~CPN#11~~On -August ~~The Company issued an unsecured 9 month 8% Convertible Promissory Note (CPN#11) on May 29~~31, ~~2013 due on March 1~~2012, ~~2014~~Jerry ~~for $37,750~~G. ~~The~~Mikolajczyk ~~principal~~was ~~and~~re-appointed ~~accrued~~as ~~interest~~a isdirector ~~convertible~~by ~~into shares of common stock at~~ the ~~discretion~~Board of ~~the~~Directors ~~note holder. The conversion price (the “Conversion Price”) shall equal the greater~~ of ~~(i)~~ the ~~Variable~~Company ~~Conversion~~for ~~Price~~another ~~and~~one-year ~~(ii)~~term ~~the~~ending ~~Fixed~~August ~~Conversion~~31, ~~Price~~2013. In ~~(subject~~consideration tofor ~~equitable~~Mr. ~~adjustments~~Mikolajczyk’s ~~for~~service ~~stock~~as ~~splits~~director, ~~stock dividends or rights offerings by~~ the Company ~~relating~~will toissue ~~the~~5,000 ~~Company’s~~shares ~~securities~~per ormonth ~~the securities~~ of ~~any subsidiary of~~ the Company,’s ~~combinations~~stock, ~~recapitalization,~~which ~~reclassifications,~~will ~~extraordinary~~be ~~distributions~~valued ~~and~~based ~~similar~~on ~~events). The "Variable Conversion Price" shall mean 57.5% multiplied by~~ the ~~Market Price (as defined herein) (representing a discount rate of 42.5%). “Market Price” means the~~ average of the ~~lowest~~five ~~three~~trading ~~(3)~~day ~~Trading~~close ~~Prices~~price ~~(as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day~~ prior to ~~the~~each ~~Conversion~~month ~~Date~~end. ~~“Trading~~In ~~Price” means~~addition, ~~for any security as of any date,~~ the ~~closing~~Company ~~bid~~will ~~price~~reimburse onMr. ~~the~~Mikolajczyk ~~Over-the-Counter~~for ~~Bulletin Board (~~the ~~“OTCQB”),~~preapproved ~~OTCQB~~cost orof ~~applicable trading market as reported by a reliable reporting service (“Reporting Service”) designated by the Holder or~~airfare, iftravel ~~the~~expenses ~~OTCQB~~and isdisbursements ~~not~~made ~~the~~on ~~principal~~behalf ~~trading market for such security, the closing bid price~~ of ~~such security on~~ the ~~principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security~~ Company.

22The Company authorized and approved an aggregate of 45,000 shares for the three month period ended November 30, 2012 with an average price of $0.012282 per share to the Board pursuant to Board Member Compensation Agreements with Mr. Jerry G. Mikolajczyk, Mr. Peter Matousek and Dr. William D. Spier.

is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. In the case that the Company’s Common Stock is not deliverable by DWAC, an additional 5% discount will apply. In the case that the Company’s Common Stock is “chilled” for deposit into the DTC system and only eligible for clearing deposit, an additional 7.5% discount shall apply. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Company and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTCQB, OTCQB or on the principal securities exchange or other securities market on which the Common Stock is then being traded. “Fixed Conversion Price” shall mean $0.00005. The Company ~~may~~authorized ~~prepay the amounts outstanding hereunder pursuant to the following terms~~ and ~~conditions: (I)~~approved at any time during the period beginning on the Issue Date and ending on the date which is thirty (30) days following the Issue Date, the Company shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of CPN#11 to prepay the outstanding CPN#11 (principal and accrued interest), in full by making a payment to the Holder of an ~~amount~~aggregate ~~in cash equal to 125%, multiplied by the sum~~ of: (w) the then outstanding principal amount of CPN#11 plus (x) accrued and unpaid interest on the unpaid principal amount of CPN#11 plus (y) Default Interest; (II) at any time during the period beginning the day which is thirty one (31) days following the Issue Date and ending on the date which is sixty (60) days following the Issue Date45,000 ~~the~~shares ~~Company~~for ~~shall have~~ the ~~right, exercisable on not less than~~ three ~~(3)~~month Trading Days prior written notice to the Holder of CPN#11 to prepay the outstanding CPN#11 (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 130%, multiplied by the sum of: (w) the then outstanding principal amount of CPN#11 plus (x) accrued and unpaid interest on the unpaid principal amount of CPN#11 plus (y) Default Interest; (III) at any time during the period ~~beginning~~ended ~~the~~February ~~day which is sixty one (61) days following the Issue Date and ending on the date which is ninety(90) days following the Issue Date~~28, ~~the~~2013 ~~Company~~with shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of CPN#11 to prepay the outstanding CPN#11 (principal and accrued interest), in full by making a payment to the Holder of an ~~amount~~average inprice ~~cash equal to 135%, multiplied by the sum~~ of: ~~(w)~~$0.010927 ~~the~~per ~~then~~share outstanding principal amount of CPN#11 plus (x) accrued and unpaid interest on the unpaid principal amount of CPN#11 plus (y) Default Interest; (IV) at any time during the period beginning the day which is ninety one (91) days following the Issue Date and ending on the date which is one hundred twenty (120) days following the Issue Date, the Company shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the ~~Holder~~Board ofpursuant ~~CPN#11~~ to ~~prepay~~Board ~~the~~Member ~~outstanding~~Compensation ~~CPN#11~~Agreements ~~(principal~~with ~~and~~Mr. ~~accrued~~Jerry ~~interest),~~G. ~~in full by making a payment to the Holder of an amount in cash equal to 140%~~Mikolajczyk, ~~multiplied~~Mr. byPeter ~~the~~Matousek ~~sum of: (w) the then outstanding principal amount of CPN#11 plus (x) accrued~~ and ~~unpaid~~Dr. ~~interest~~William on the unpaid principal amount of CPN#11 plus (y) Default Interest; (V) at any time during the period beginning the day which is one hundred twenty one (121) days following the Issue Date and ending on the date which is one hundred fifty (150) days following the Issue Date, the Company shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of CPN#11 to prepay the outstanding CPN#11 (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 145%, multiplied by the sum of: (w) the then outstanding principal amount of CPN#11 plus (x) accrued and unpaid interest on the unpaid principal amount of CPN#11 plus (y) Default Interest; (VI) at any time during the period beginning the day which is one hundred fifty one (151) days following the Issue Date and ending on the date which is one hundred eighty (180) days following the Issue Date, the Company shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of CPN#11 to prepay the outstanding CPN#11 (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 150%, multiplied by the sum of: (w) the then outstanding principal amount of CPN#11 plus (x) accrued and unpaid interest on the unpaid principal amount of CPN#11 plus (y) Default Interest; (VII) after the expiration of one hundred eighty (180) following the date of CPN#11, the Company shall have no right of prepaymentD. ~~As of November 30, 2013, the Company accrued interest of $1,531~~Spier.

~~CPN#12 -~~ On ~~June~~May 530, 2013, the ~~Company~~Board ~~issued~~of anDirectors ~~unsecured~~renewed ~~Convertible~~the ~~Promissory~~Board ~~Note~~Member ~~(CPN#12)~~Compensation ~~for~~Agreement ~~$250,000~~with ~~plus~~Dr. ~~accrued~~William ~~and~~D. ~~unpaid~~Spier ~~interest~~as ~~and other fees with~~ a ~~$25,000~~director ~~original~~of ~~issue discount (~~the ~~“OID”).~~Company ~~The~~for ~~Note~~a ~~Holder~~term ~~paid $25,000 consideration on closing~~ of ~~CPN#12~~one (~~CPN#12A~~1). Onyear ~~September~~ending ~~26,~~May ~~2013~~31, ~~the~~2014. ~~Company~~Mr. ~~drew~~Spier ~~down~~will anreceive ~~additional $25~~5,000 onshares ~~CPN#12.~~per ~~The~~month ~~Note~~of ~~Holder may pay additional consideration to~~ the Company’s incommon ~~such~~stock ~~amounts and at such dates as Note Holder may choose~~ in ~~its~~consideration ~~sole~~for ~~discretion.~~his ~~The~~serving ~~Maturity~~on ~~Date is one year from~~ the ~~effective~~Company’s ~~date~~Board of ~~each payment (the “Maturity Date”) and is the date upon which the Principal Sum of the Note, as well as any unpaid interest and other fees, shall be due and payable~~Directors. The ~~Conversion~~common ~~Price~~stock iswill ~~the~~be ~~lesser~~valued ofbased ~~$0.006~~on ~~or 60% of~~ the average of the ~~two~~5 ~~lowest~~trading ~~trade~~day ~~prices~~close inprice ~~the~~prior ~~25 trading days previous~~ to ~~the~~each ~~conversion,~~month ~~but no lower than $0~~end.~~00005~~ ~~(in~~This ~~the~~amount ~~case~~includes ~~that~~all ~~conversion~~costs ~~shares~~related ~~are~~to ~~not~~his ~~deliverable~~engagement byas ~~DWAC~~a anDirector ~~additional~~of ~~10% discount will apply; and if~~ the ~~shares~~Company ~~are~~except ~~ineligible~~3rd ~~for~~party ~~deposit~~or ~~into~~travel ~~the~~expenses. ~~DTC~~The ~~system~~terms and ~~only~~conditions ~~eligible~~will ~~for~~be ~~Xclearing~~renegotiated ~~deposit~~upon ~~an additional 5% discount shall apply; in~~ the ~~case~~successful ofconsummation ~~both an additional cumulative 15% discount shall apply). Unless otherwise agreed in writing by both parties, at no time will the Note Holder convert any amount~~ of ~~the~~a ~~Note~~Business ~~into~~Combination ~~common~~through ~~stock that would result in~~ the ~~Note~~acquisition ~~Holder owning more than 4.99%~~ of, ~~the~~or ~~common~~merger ~~stock outstanding. The Company may repay the CPN at any time on~~ or ~~before~~consolidation ~~90 days from the effective date~~with, ~~after~~a ~~which~~company ~~the~~that ~~Company~~has ~~may~~substantial ~~not~~additional ~~make~~capital ~~further~~and ~~payments~~or onoperating ~~the~~revenues; ~~CPN prior to the Maturity Date without written approval from Note Holder. If the Company repays the CPN on~~ or ~~before 90 days from~~ the ~~effective date, the Interest Rate shall be zero percent (0%). If the~~ Company ~~does not repay the CPN on or before 90 days from the effective date, a one-time Interest charge of 12% shall be applied to the Principal Sum. Any interest payable~~ is inable ~~addition~~ to ~~the~~finance ~~OID,~~operating ~~and~~expenses ~~that~~with ~~OID~~additional (debt or ~~prorated~~through ~~OID,~~equity iffinancing ~~applicable) remains payable regardless~~ of ~~time~~not ~~and~~less ~~manner~~than of$5 ~~payment by Borrower~~million.

23On May 30, 2013, the Board of Directors renewed the Board Member Compensation Agreement with Mr. Peter Matousek as a director of the Company for a term of one (1) year ending May 31, 2014. Mr. Matousek will receive 5,000 shares per month of the Company’s common stock in consideration for his serving on the Company’s Board of Directors. The common stock will be valued based on the average of the 5 trading day close price prior to each month end. This amount includes all costs related to his engagement as a Director of the Company except 3rd party or travel expenses. The terms and conditions will be renegotiated upon the successful consummation of a Business Combination through the acquisition of, or merger or consolidation with, a company that has substantial additional capital and or operating revenues; or the Company is able to finance operating expenses with additional debt or through equity financing of not less than $5 million.

~~CPN#12~~On isMay ~~structured~~31, to2013, bethe ~~advanced~~Company toentered ~~the~~into ~~Company~~a atManagement ~~the~~and ~~discretion~~Financial ofService ~~the~~Agreement ~~Note~~with ~~Holder~~Dr. ~~The~~William ~~Company~~D. ~~has~~Spier ~~drawn~~as ~~down~~Treasurer ~~$50,000~~ of the ~~$225,000~~Company ~~allowable,~~for isa ~~obligated~~12-month toperiod ~~pay~~commencing $5June 1,~~556~~ of2013 ~~the~~and ~~OID~~ending ~~($50~~May 31,~~000/$225,000~~ x2014 whereby Dr. Spier will be paid $2590,000 ~~(OID))~~in ~~and~~cash apayments. ~~one~~The ~~time~~terms ~~interest~~and ~~$3,333~~conditions ~~fee~~will ~~for~~be anrenegotiated ~~aggregate~~upon ofthe ~~$58,889.~~successful Asconsummation of ~~November~~a ~~30,~~Business ~~2013,~~Combination through the ~~Company~~acquisition ~~expensed~~of, ~~interest~~or ofmerger $2or consolidation with,~~006~~ ofa company that has substantial additional capital and or operating revenues; or the ~~prepaid~~Company ~~interest~~is ofable ~~$2,778~~to finance operating expenses with aadditional ~~remaining~~debt ~~prepaid~~or ~~interest~~through equity financing of (not less than $~~772)~~5 million.

~~CPN#13~~The ~~- On July 2, 2013, the~~ Company ~~issued~~authorized ~~an unsecured 9 month 8% Convertible Promissory Note (CPN#13) due on April 8, 2014 for $32,500. The principal~~ and ~~accrued~~approved ~~interest~~an isaggregate ~~convertible into shares~~ of ~~common stock at the discretion of the note holder. The Conversion Price shall be the greater of: (i) the Variable Conversion Price and (ii) the Fixed Conversion Price (subject~~45,000 inshares ~~each case, to equitable adjustments~~ for ~~stock splits, stock dividends or rights offerings by~~ the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 55% multiplied by the Market Price (representing a discount rate of 45%). "Market Price" means the average of the lowest three ~~(3)~~month ~~Trading Prices for the Common Stock during the ten (10) Trading Day~~ period ~~ending~~ended onMay ~~the latest complete Trading Day prior to the Conversion Date. "Trading Price" means~~31, ~~for~~2013 ~~any~~with ~~security~~an asaverage ~~of any date, the closing bid~~ price ~~on the Over-the-Counter Bulletin Board or applicable trading market as reported by a reliable reporting service designated by the note holder. The note holder is limited to owning 4.99%~~ of ~~the Company’s issued and outstanding shares~~$0.010333 ~~Default interest is 22%~~ per ~~annum~~share should the Company default on the CPN#13. The Company may prepay CPN#13 at any time for the period beginning on the date of the CPN#13 and ending on the date which is ninety (90) days following the date of the CPN#13, the CPN#13 may be prepaid by the Company upon payment to the ~~note~~Board ~~holder~~pursuant ~~of an amount equal~~ to ~~the~~Board ~~outstanding~~Member ~~principal~~Compensation ~~amount~~Agreements ~~of the CPN#13 multiplied by 125% together~~ with ~~accrued~~Mr. ~~and~~Jerry ~~unpaid interest thereon~~G. ~~At any time during the period beginning on the ninety (91) day from the date of the CPN#13 and ending on the date which is one hundred twenty (120) days following the date of CPN#13~~Mikolajczyk, the Company may prepay the CPN#13 to the note holder upon payment of an amount equal to the outstanding principal amount of the CPN#13 multiplied by 135% together with accrued and unpaid interest thereonMr. AtPeter ~~any~~Matousek ~~time during the period beginning on the date which is one hundred twenty one (121) days from the date of the CPN#13~~ and ending on one hundred eighty (180) days following the date of this CPN#13, the Company may prepay the CPN#13 to the note holder upon payment of an amount equal to the outstanding principal amount of the CPN#13 multiplied by 145% together with accrued and unpaid interest thereonDr. ~~After~~William ~~the expiration of one hundred eighty (180) days following the date of the CPN#13, the Company shall have no right of prepayment~~D. ~~The floor price of $0~~Spier.~~00005. As of November 30, 2013, the Company accrued interest of $1,076.~~

~~CPN#14 -~~ On August 131, 2013, the ~~Company~~Board ~~issued~~of anDirectors ~~unsecured~~renewed 7the ~~month~~Board 8%Member ~~Convertible~~Compensation ~~Promissory~~Agreement ~~Note~~with ~~(CPN#14)~~Mr. ~~due~~Jerry onG. ~~March~~Mikolajczyk 1,as ~~2014~~a ~~for~~director ~~$15,000~~of ~~for~~the ~~value~~Company offor ~~services~~a ~~rendered.~~term ~~The~~of ~~principal~~one ~~and~~(1) ~~accrued~~year ~~interest~~ending isAugust ~~convertible~~31, ~~into~~2014. ~~shares~~Mr. ofMikolajczyk ~~common~~will ~~stock~~receive at5,000 ~~the~~shares ~~discretion~~per month of the ~~note~~Company’s ~~holder.~~common ~~The~~stock ~~note~~in ~~holder~~consideration ~~may~~for ~~convert~~his ~~all~~serving oron ~~a portion of~~ the ~~principal~~Company’s ~~amount~~Board of ~~CPN#14~~Directors. ~~into~~The ~~shares~~common ofstock ~~Common~~will ~~Stock~~be atvalued abased ~~Conversion~~on ~~Price~~the ~~for~~average ~~each~~of ~~share~~the of5 ~~Common~~trading ~~Stock~~day ~~equal~~close toprice ~~the~~prior ~~higher~~to ofeach ~~(a)~~month $0end.~~0001~~ ~~subject~~This toamount ~~adjustment~~includes ~~for~~all ~~any~~costs ~~future~~related ~~stock~~to ~~splits,~~his ~~reverse~~engagement ~~stock~~as ~~split,~~a ~~stock~~Director ~~dividend,~~of ~~etc., or (b)~~ the ~~Current~~Company ~~Market~~except ~~Price~~3rd ~~multiplied~~party byor ~~sixty~~travel ~~percent~~expenses. ~~(60%)~~The ~~(the~~terms ~~"Conversion~~and ~~Price").~~conditions ~~"Current~~will ~~Market~~be ~~Price"~~renegotiated ~~means~~upon the ~~average~~successful consummation of ~~the~~a ~~three~~Business ~~lowest~~Combination ~~closing~~through ~~bid price for~~ the ~~Common~~acquisition ~~Stock as reported by Bloomberg~~of, LP or, ifmerger ~~not~~or soconsolidation ~~reported~~with, asa ~~reported~~company onthat ~~the~~has ~~over-the-counter~~substantial ~~market,~~additional ~~for~~capital ~~the~~and ~~five~~or ~~(5)~~operating ~~trading~~revenues; ~~days~~or ~~ending on~~ the ~~trading~~Company ~~day~~is ~~immediately~~able ~~before~~to ~~the~~finance ~~relevant~~operating ~~Conversion~~expenses ~~Date.~~with ~~The~~additional ~~Company~~debt ~~may~~or ~~prepay~~through ~~CPN#14~~equity ~~without~~financing ~~any penalty. As~~ of ~~November~~not ~~30,~~less ~~2013,~~than ~~the Company accrued interest of~~ $~~398~~5 million.

CPN#15 - On August 29, 2013, the Company issued an unsecured 9 month 8% Convertible Promissory Note (CPN#15) due on June 3, 2014 for $32,500. The funds were deposited on September 12, 2013. The principal and accrued interest is convertible into shares of common stock at the discretion of the note holder. The Conversion Price shall be the greater of: (i) the Variable Conversion Price and (ii) the Fixed Conversion Price (subject, in each case, to equitable adjustments for stock splits, stock dividends or rights offerings by the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 55% multiplied by the Market Price (representing a discount rate of 45%). "Market Price" means the average of the lowest three (3) Trading Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. "Trading Price" means, for any security as of any date, the closing bid price on the Over-the-Counter Bulletin Board or applicable trading market as reported by a reliable reporting service designated by the note holder. The note holder is limited to owning 4.99% of the Company’s issued and outstanding shares. Default interest is 22% per annum should the Company default on the CPN#15. The Company may prepay CPN#15 at any time for the period beginning on the date of the CPN#15 and ending on the date which is ninety (90) days following the date of the CPN#15, the CPN#15 may be prepaid by the Company upon payment to the note holder of an amount equal to the outstanding principal amount of the CPN#15 multiplied by 125% together with accrued and unpaid interest thereon. At any time during the period beginning on the ninety (91) day from the date of the CPN#15 and ending on the date which is one hundred twenty (120) days following the date of CPN#15, the Company may prepay the CPN#15 to the note holder upon payment of an amount equal to the outstanding principal amount of the CPN#15 multiplied by 135% together with accrued and unpaid interest thereon. At any time during the period beginning on the date which is one hundred twenty one (121) days from the date of the CPN#15 and ending on one hundred eighty (180) days following the date of this CPN#15, the Company may prepay the CPN#15 to the note holder upon payment of an amount equal to the outstanding principal amount of the CPN#15 multiplied by 145% together with accrued and unpaid interest thereon. After the expiration of one hundred eighty (180) days following the date of the CPN#15, the Company shall have no right of prepayment. The floor price of $0.00005. As of November 30, 2013, the Company accrued interest of $563.23

24The Company issued an aggregate of 90,000 shares for the six month period ending November 30, 2013 with an average price of $0.001267 per share on November 27, 2013 to the Board pursuant to Board Member Compensation Agreements with Mr. Peter Matousek, Mr. Jerry G. Mikolajczyk, and Dr. William D. Spier.

~~CPN#16~~The ~~- On September 30, 2013, the~~ Company issued an ~~unsecured~~aggregate 9of ~~month 8% Convertible Promissory Note (CPN#16) due on July 2~~45,000 ~~2014 for $27,500. The principal and accrued interest is convertible into~~ shares of common stock at the discretion of the note holder. The Conversion Price shall be the greater of: (i) the Variable Conversion Price and (ii) the Fixed Conversion Price (subject, in each case, to equitable adjustments for ~~stock splits, stock dividends or rights offerings by~~ the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 55% multiplied by the Market Price (representing a discount rate of 45%). "Market Price" means the average of the lowest three ~~(3)~~month ~~Trading Prices for the Common Stock during the ten (10) Trading Day~~ period ending onFebruary ~~the latest complete Trading Day prior to the Conversion Date. "Trading Price" means~~28, ~~for~~2014 ~~any~~with ~~security~~an asaverage ~~of any date, the closing bid~~ price ~~on the Over-the-Counter Bulletin Board or applicable trading market as reported by a reliable reporting service designated by the note holder. The note holder is limited to owning 4.99%~~ of ~~the Company’s issued and outstanding shares~~$0.000153 ~~Default interest is 22%~~ per ~~annum~~share ~~should the Company default~~ on ~~the~~May ~~CPN#16. The Company may prepay CPN#16 at any time for the period beginning on the date of the CPN#16 and ending on the date which is ninety (90) days following the date of the CPN#16~~13, ~~the~~2014 ~~CPN#16 may be prepaid by the Company upon payment~~ to the ~~note~~Board ~~holder~~pursuant ~~of an amount equal~~ to ~~the~~Board ~~outstanding~~Member ~~principal~~Compensation ~~amount~~Agreements ~~of the CPN#16 multiplied by 125% together~~ with ~~accrued~~Mr. ~~and~~Peter ~~unpaid~~Matousek, ~~interest thereon~~Mr. AtJerry ~~any~~G. ~~time during the period beginning on the ninety (91) day from the date of the CPN#16 and ending on the date which is one hundred twenty (120) days following the date of CPN#16~~Mikolajczyk, ~~the Company may prepay the CPN#16 to the note holder upon payment of an amount equal to the outstanding principal amount of the CPN#16 multiplied by 135% together with accrued~~ and ~~unpaid~~Dr. ~~interest~~William ~~thereon~~D. AtSpier. ~~any~~The ~~time~~issuance ~~during~~of the ~~period~~common ~~beginning~~stock onwas ~~the~~exempt ~~date which is one hundred twenty one (121) days~~ from ~~the~~registration ~~date~~under ofSection ~~the CPN#16 and ending on one hundred eighty~~ 4(~~180~~a) days following the date of this CPN#16, the Company may prepay the CPN#16 to the note holder upon payment of an amount equal to the outstanding principal amount of the CPN#16 multiplied by 145% together with accrued and unpaid interest thereon. After the expiration of one hundred eighty (~~180~~2) ~~days following the date~~ of the ~~CPN#16,~~Securities ~~the Company shall have no right of prepayment~~Act. ~~The floor price of $0.00005. As of November 30, 2013, the Company accrued interest of $271.~~

~~ASC~~On ~~DISCLOSURE~~May 30, 2014, the Board of Directors renewed the Board Member Compensation Agreement with Dr. William D. Spier as a director of the Company for a term of one (1) year ending May 31, 2015. Mr. Spier will receive 5,000 shares per month of the Company’s common stock in consideration for them serving on the Company’s Board of Directors.

InOn ~~accordance~~May ~~with ASC 470-20 Debt with Conversion and Other Options~~30, ~~the Company recorded total debt discounts of $122~~2014,~~718,~~ ~~and $379,486 for~~ the ~~variable~~Board ~~conversion feature~~ of ~~the~~Directors ~~convertible~~renewed ~~debts incurred during~~ the ~~six~~Board ~~months~~Member ~~ended~~Compensation ~~November~~Agreement ~~30,~~with ~~2013 and the fiscal year ended May 31, 2013, respectively~~Mr. AsPeter ofMatousek ~~November 30, 2013, the debt discount on the CPN's was $102,154 and $210,657~~ as ofa ~~May~~director ~~31, 2013. The discount will be amortized to debt discount over the term~~ of the ~~debentures using the effective interest method. The~~ Company ~~recorded~~for ~~$114,454~~a ~~and~~term ~~$116,768~~ of ~~debt~~one ~~discount~~(1) ~~expense pursuant to the amortization of the convertible promissory note discounts during the six months ended November 30, 2013 and the fiscal~~ year ~~ended~~ending May 31, ~~2013,~~2015. ~~respectively~~Mr. ~~The~~Matousek ~~Company~~will ~~recorded~~receive ~~$19~~5,~~737~~000 ~~and~~shares ~~$33,064~~per month of ~~interest expense for convertible promissory notes~~ the ~~during~~Company’s ~~the~~common ~~six~~stock ~~months~~in ~~ended~~consideration ~~November~~for ~~30,~~them ~~2013~~serving ~~and~~on the ~~fiscal~~Company’s ~~year~~Board ~~ended~~of ~~May 31, 2013, respectively~~Directors.

InThe ~~accordance~~common ~~with~~stock ~~ASC~~will ~~815-15,~~be valued based on the ~~Company~~average ~~determined~~of ~~that~~the 5 trading day close price prior to each month end. This amount includes all costs related to his engagement as a Director of the ~~variable~~Company ~~conversion~~except ~~feature~~3rd party or travel expenses. The terms and ~~shares~~conditions towill be ~~issued~~renegotiated ~~are~~upon ~~not~~the ~~embedded~~successful ~~derivative~~consummation ~~features~~of a Business Combination through the acquisition of, ~~and~~or ~~these~~merger ~~are~~or ~~included~~consolidation inwith, ~~Loan~~a ~~Payable~~company onthat has substantial additional capital and or operating revenues; or the ~~balance~~Company ~~sheet~~is able to finance operating expenses with additional debt or through equity financing of not less than $5 million.

~~NOTE~~The ~~14:~~Company ~~FAIR~~entered ~~VALUE~~renewed OFthe ~~FINANCIAL~~Management ~~INSTRUMENTS~~and Financial Service Agreement with Dr. William D. Spier for a 12 month period commencing June 1, 2014 and ending May 31, 2015 whereby Dr. Spier will be paid $90,000 in cash payments. The terms and conditions will be renegotiated upon the successful consummation of a Business Combination through the acquisition of, or merger or consolidation with, a company that has substantial additional capital and or operating revenues; or the Company is able to finance operating expenses with additional debt or through equity financing of not less than $5,000,000.

~~Under~~The ~~FASB~~Company ~~ASC~~issued ~~820-10-5,~~an ~~fair~~aggregate ~~value~~of is45,000 ~~defined~~shares asfor the ~~price~~three ~~that~~month ~~would~~period beending ~~received~~May to31, ~~sell~~2014 anwith ~~asset or paid to transfer a liability in~~ an ~~orderly~~average ~~transaction~~price ~~between~~of ~~market participants at the measurement date (an exit price)~~$0.000173 ~~The~~per ~~standard~~share ~~outlines~~on aMay ~~valuation~~30, ~~framework~~2014 ~~and~~to ~~creates~~the aBoard ~~fair~~pursuant ~~value hierarchy in order~~ to ~~increase~~Board ~~the~~Member ~~consistency~~Compensation ~~and~~Agreements ~~comparability~~with ofMr. ~~fair~~Peter ~~value~~Matousek, ~~measurements~~Mr. ~~and~~Jerry ~~the related disclosures~~G. ~~Under GAAP~~Mikolajczyk, ~~certain assets~~ and ~~liabilities~~Dr. ~~must~~William beD. ~~measured~~Spier. atThe ~~fair~~issuance ~~value,~~of ~~and~~the ~~FASB~~common ~~ASC~~stock ~~820-10-50~~was ~~details~~exempt ~~the~~from ~~disclosures~~registration ~~that~~under ~~are~~Section ~~required~~4(a) ~~for~~(2) ~~items~~of ~~measured~~the atSecurities ~~fair value~~Act.

~~The~~On August 31, 2014, the Board of Directors renewed the Board Member Compensation Agreement with Mr. Jerry G. Mikolajczyk as a director of the Company for a term of one (1) year ending August 31, 2015. Mr. Mikolajczyk will receive 5,000 shares per month of the Company’s ~~financial~~common ~~assets~~stock ~~and~~in ~~liabilities~~consideration ~~are~~for ~~measured~~his ~~using~~serving ~~inputs~~on ~~from~~the Company’s Board of Directors. The common stock will be valued based on the ~~three~~average ~~levels~~of the 5 trading day close price prior to each month end. This amount includes all costs related to his engagement as a Director of the ~~fair~~Company ~~value~~except ~~hierarchy~~3rd party or travel expenses. The ~~three~~terms ~~levels~~and ~~are~~conditions aswill ~~follows:~~be renegotiated upon the successful consummation of a Business Combination through the acquisition of, or merger or consolidation with, a company that has substantial additional capital and or operating revenues; or the Company is able to finance operating expenses with additional debt or through equity financing of not less than $5 million.

~~Level~~The 1Schedule -of ~~Inputs~~Board ~~are~~Compensation ~~unadjusted~~below ~~quoted~~represents ~~prices~~the inshares ~~active~~issued ~~markets~~or ~~for~~approved ~~identical~~to ~~assets~~the orBoard ~~liabilities~~with ~~that~~ the ~~Company~~5-Day ~~has~~Average ~~the~~Share ~~ability~~Closing toPrice ~~access~~for ateach month during the ~~measurement~~three ~~date.~~month period ending August 31, 2014:

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).


Schedule of Board Compensation

Month	Board Shares Approved, Not Issued	Board Shares Issued	5 Day Average Share Closing Price	Cost Base
June	15,000	0	$ 0.000120	$ 1.80
July	15,000	0	0.000100	1.50
August	15,000	0	0.000100	1.50
Quarter Total	45,000	0	$ 0.000107	$ 4.80

~~Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.~~24

25NOTE 18: EXECUTIVE AND BOARD CHANGES

~~The~~On ~~Company~~August ~~estimates~~31, ~~the~~2012, ~~fair~~Company ~~value~~entered ofinto ~~financial~~a ~~instruments~~Board ~~using~~Member ~~the~~Compensation ~~available~~Agreement ~~market~~with ~~information~~Mr. ~~and~~Jerry ~~valuation methods~~G. ~~Considerable~~Mikolajczyk ~~judgment~~as isa ~~required~~director inof ~~estimating fair value. Accordingly,~~ the ~~estimates~~Company offor ~~fair~~a ~~value~~term ~~may not be indicative~~ of ~~the~~one ~~amounts~~(1) ~~the~~year ~~Company~~ending ~~could~~August ~~realize~~31, ~~in a current market exchange~~2013.

AsOn ofMay ~~November~~ 30, 2013, ~~and~~Company ~~May~~entered ~~31,~~into ~~2013,~~a ~~the~~Board ~~carrying~~Member ~~value~~Compensation ofAgreement ~~accounts~~with ~~payable~~Dr. ~~and~~William ~~loans~~D. ~~approximated~~Spier ~~fair~~as ~~value~~a ~~due~~director toof the ~~short-term~~Company ~~nature~~for ~~and~~a ~~maturity~~term of ~~these~~one ~~instruments~~(1) year ending May 31, 2014.

~~NOTE~~On ~~15:~~May ~~CORPORATE~~30, ~~ACTION~~2013, Company entered into a Board Member Compensation Agreement with Mr. Peter Matousek as a director of the Company for a term of one (1) year ending May 31, 2014.

AOn ~~Certificate~~August of31, ~~Amendment~~2013, toCompany ~~the~~entered ~~Certificate~~into ofa ~~Incorporation was authorized by the Company’s~~ Board ofMember ~~Directors~~Compensation onAgreement ~~May~~with ~~15,~~Mr. ~~2010~~Jerry ~~and~~G. ~~approved~~Mikolajczyk byas ~~the written consent of the holders of~~ a ~~majority~~director of the Company’s ~~shareholders~~for ~~owning~~ a ~~majority~~term of ~~the~~one ~~outstanding~~(1) ~~issued~~year ~~and~~ending ~~outstanding~~August ~~voting~~31, ~~shares~~2014. ~~The Certificate of Amendment provided for the Company to:~~

·On May 30, 2014, Company entered into a Board Member Compensation Agreement with Dr. William D. Spier as a director of the Company for a term of one (1) year ending May 31, 2015.

~~Change~~On ~~its~~May ~~name~~30, ~~from~~2014, ~~Real~~Company ~~Value~~entered ~~Estates,~~into ~~Inc~~a Board Member Compensation Agreement with Mr. toPeter ~~Xun~~Matousek ~~Energy~~as a director of the Company for a term of one (1) year ending May 31, ~~Inc~~2015.;

·On August 31, 2014, Company entered into a Board Member Compensation Agreement with Mr. Jerry G. Mikolajczyk as a director of the Company for a term of one (1) year ending August 31, 2015.

~~Increase~~Each ~~the~~Board ~~number~~member ofwill ~~authorized~~receive 5,000 shares per month of ~~its~~the Company’s common stock ~~from~~in ~~100~~consideration ~~million~~for ~~shares~~their $0serving on the Company’s Board of Directors.~~0001~~ ~~par~~The ~~value~~common tostock will be valued based on the average of the 5 ~~billion~~trading ~~shares~~day close price prior to each month end. This amount includes all costs related to their engagement as Directors of ~~common~~the ~~stock,~~Company $0except 3rd party or travel expenses.~~0001~~ ~~par~~The ~~value;~~terms and conditions will be renegotiated upon the successful consummation of a Business Combination through the acquisition of, or merger or consolidation with, a company that has substantial additional capital and or operating revenues; or the Company is able to finance operating expenses with additional debt or through equity financing of not less than $5 million.

·NOTE 19: VENANGO 30 WELL LOCATION

AnOn ~~80:1~~August ~~forward~~31, ~~split~~2012 ofthe Company entered into an Oil and Gas Well Location Agreement (the "Agreement") with Vencedor Energy Partners (Assignor). The Agreement allows the Company’s ~~issued~~to drill 30 offset oil and ~~outstanding~~gas ~~common~~wells ~~stock~~on 3 producing oil and gas leases in Venango County, Pennsylvania.

OnThe ~~July~~Company ~~20,~~paid ~~2010~~$585,000 in the ~~Company~~form ~~filed~~of a11,700,000 ~~Certificate~~shares of ~~Amendment~~common tostock ~~the~~(Shares) ~~Company’s certificate~~ of ~~incorporation~~the ~~with~~Company for the ~~Nevada~~rights. ~~Secretary~~As of ~~State~~August to31, ~~effect~~2014, the ~~name~~assignor ~~change~~is toa ~~Xun~~related ~~Energy,~~party ~~Inc.~~holding ~~and~~the to11,700,000 ~~increase~~Shares, ~~the~~0.1636% ~~authorized~~of ~~common~~the ~~stock~~issued toand 5outstanding ~~billion~~Shares ~~shares~~ of ~~common~~the ~~stock, $0~~Company.~~0001 par value.~~

OnThe ~~August~~Company 3,will ~~2010,~~have ~~the~~100% ~~corporate~~working ~~action~~interest ~~became~~in ~~effective whereby~~ the ~~6,380,200~~wells ~~issued~~ and ~~authorized~~Net ~~shares~~Revenue ofInterest ~~common~~as ~~stock were forward split resulting in 510,416,000 issued and outstanding shares of common stock.~~follows:

NOTE 16: COMMITMENTS


Lease Name	Net Revenue Interest Breakdown
Rice	Master Lease Lessor - 12.5% Royalty, Master Lease Lessee 2.5% Override royalty interest, Assignor - 2.5% Override royalty interest; and the Company - 82.5% royalty interest;

Lalley	Master Lease Lessor - 12.5% Royalty, Master Lease Lessee 2.5% Override royalty interest, Assignor - 2.5% Override royalty interest; and the Company - 82.5% royalty interest; and

Corse	Master Lease Lessor - 15.0% Royalty, Master Lease Lessee 2.5% Override royalty interest, Assignor - 2.5% Override royalty interest; and the Company - 80.0% royalty interest.

The ~~Company~~Agreement ~~entered~~allows inthe aCompany ~~Management~~to ~~and~~have ~~Financial~~the ~~Service~~exclusive ~~Agreement~~right ~~with~~to ~~Mr.~~explore, ~~Wayne~~operate, ~~St.~~produce ~~Cyr~~all asnaturally-occurring ~~the~~oil, ~~Executive~~gas, ~~Vice~~casing-head ~~President,~~gas ~~Marketing~~or ~~and~~gasoline, ~~Strategic~~gas ~~Development~~condensate onand/or ~~December~~all ~~21,~~other ~~2010~~liquid ~~for~~or agaseous ~~ten~~hydrocarbons ~~day~~and ~~period~~other ~~ending~~marketable ~~December~~or ~~31,~~non-marketable ~~2010~~substances ~~which~~produced ~~was~~(Oil ~~extended~~and ~~for~~Gas) afrom 12Oil ~~month~~and ~~term~~Gas todeposits ~~December~~contained ~~31,~~within ~~2011,~~and ~~whereby~~under the ~~Executive~~well ~~Vice~~location ~~President,~~and ~~Marketing~~any and ~~Strategic~~all ~~Development~~other isrights ~~paid~~and ~~$10~~privileges necessary,~~000~~ ~~per~~incident ~~month.~~to, ~~The~~or ~~Company~~convenient ~~has~~for ~~not renewed~~ the ~~contract~~economical ~~with~~operation ~~Mr.~~of ~~Ct.~~the ~~Cyr~~well location and ~~has~~other ~~retained~~lands ~~Mr.~~for ~~St.~~the ~~Cyr~~production onof aOil ~~month~~and Gas to ~~month~~the ~~basis~~Company. InA ~~addition~~well tolocation ~~his~~is ~~duties~~defined as ~~Executive~~a ~~Vice~~circle ~~President,~~having ~~Marketing~~a ~~and~~radius ~~Strategic~~of ~~Development,~~150 ~~Mr.~~feet ~~St.~~with ~~Cyr is~~ the ~~Corporate~~well, ~~Secretary~~to ~~for~~a ~~the~~depth ~~Company.~~as ~~Mr.~~allowed Stin ~~Cyr~~the isMaster ~~paid $10~~Lease,~~000~~ ~~per~~at ~~month~~the center thereof.

The Company ~~entered~~had ~~into~~2 ayears ~~Management~~from and Financial Service Agreement for Mr. Jerry G. Mikolajczyk for a 12 month period commencing on June 1, 2011 and ending May 31, 2012. Mr. Mikolajczyk is hired through a service company, and will be paid $120,000 in cash payments for the ~~services~~date of ~~Mr.~~execution ~~Mikolajczyk.~~of ~~The~~the ~~terms~~Agreement ~~and~~to ~~conditions~~complete ~~will be renegotiated upon~~ the ~~successful~~drilling ~~consummation~~ of ~~a Business Combination through~~ the ~~acquisition~~30 ~~of,~~well orlocations ~~merger~~and ~~or consolidation with, a company that~~ has ~~substantial additional capital and or operating revenues; or~~ the ~~Company~~option ~~is able~~ to ~~finance~~acquire ~~operating~~an ~~expenses with~~ additional ~~debt~~15 orwell ~~through~~locations ~~equity~~for ~~financing~~the ofsame ~~not~~terms ~~less~~and ~~than~~conditions ~~$5,000,000.~~of ~~The Company has not renewed~~ the ~~contract~~Agreement ~~with~~after ~~Mr. Mikolajczyk. Mr. Mikolajczyk continues to work for~~ the ~~Company~~first on30 awells ~~month-to-month~~locations ~~basis~~have ~~and~~been ~~is paid $10,000 per month~~completed.

The Company ~~entered into a Management and Financial Service Agreement with Mr. Peter Matousek for a 12 month period commencing June 1, 2011 and ending May 31, 2012 whereby Mr. Matousek~~ will beprovide ~~paid~~funding ~~$90,000~~ in ~~cash~~groups ~~payments.~~of ~~The~~4 ~~terms~~to ~~and~~6 ~~conditions~~wells ~~will~~to beoptimize ~~renegotiated~~economies ~~upon the successful consummation~~ of ~~a Business Combination through the acquisition of~~scale, ~~or merger or consolidation~~ with, ~~a company that has substantial additional capital and or operating revenues; or~~ the ~~Company~~exception ~~is able to finance operating expenses with additional debt or through equity financing~~ of ~~not less than $5,000,000. The Company has not renewed~~ the ~~contract~~first ~~with~~4 ~~Mr.~~wells ~~Matousek.~~which ~~Mr.~~can ~~Matousek~~be ~~continues~~funded ~~to work for the Company~~ on aan ~~month-to-month~~individual basis ~~and is paid $7,500 per month~~.

~~The Company entered into a Management and Financial Service Agreement with Dr. William D. Spier for a 7.~~25-month period commencing October 23 and ending May 31, 2013 whereby Dr. Spier was paid $29,032 in cash payments. The agreement was renewed for an additional 12 months at $7,500 per month ending May 31, 2014. The terms and conditions will be renegotiated upon the successful consummation of a Business Combination through the acquisition of, or merger or consolidation with, a company that has substantial additional capital and or operating revenues; or the Company is able to finance operating expenses with additional debt or through equity financing of not less than $5,000,000.

OnThe ~~August~~Company ~~31,~~agreed ~~2013,~~to ~~the~~have ~~Board~~Assignor ofbe ~~Directors renewed~~ the ~~Board~~designated ~~Member~~Operator ~~Compensation~~(the ~~Agreement~~"Operator") ~~with~~of ~~Mr.~~the ~~Jerry~~Oil G.and ~~Mikolajczyk~~Gas asWell aLocations ~~director~~which ofincludes all the ~~Company~~responsibilities ~~for~~as a ~~term~~designated ofoperator ~~one~~in ~~(1)~~the ~~year~~State ~~ending~~of ~~August~~Pennsylvania ~~31,~~which ~~2014.~~includes ~~Mr.~~the ~~Mikolajczyk~~duties ~~will~~of ~~receive~~managing ~~5,000~~and ~~shares~~supervising ~~per~~the ~~month~~drilling and completions of the ~~Company’s~~Oil ~~common~~and ~~stock~~Gas inLocations, ~~consideration~~the ~~for~~Participation ~~them~~and ~~serving~~Operating onAgreement (the ~~Company’s Board of Directors~~"POA").

26On December 18, 2012, pursuant to the POA, the Operator invoiced the Company $835,000 for the drilling and completion of five oil wells on the Rice lease. The Company has recorded the transaction capitalizing the drilling and completions as work in progress. The liability is included in the Company's Accounts Payable. The Company impaired $417,186 of the $835,000 for the period ending August 31, 2014. VEP is one the Company's creditors that is participating in the Debt Settlement Claim, refer to NOTE 23: DEBT SETTLEMENT CLAIM, for additional information.

~~The~~On ~~common~~March ~~stock~~30, ~~will~~2013, ~~be valued based on~~ the ~~average of the 5 trading day close price prior to each month end. This amount includes all costs related to the engagement Director of the~~ Company's ~~except 3rd party or travel expenses. The terms and conditions will be renegotiated upon the successful consummation of a Business Combination through the acquisition of~~operator, orVencedor ~~merger~~Energy ~~or consolidation with~~Partners, abegan ~~company~~site ~~that~~work ~~has~~on ~~substantial additional capital and or operating revenues; or~~ the ~~Company~~Rice ~~is able to finance operating expenses with additional debt or through equity financing of not less than $5 million~~lease.

~~NOTE~~On ~~17:~~August ~~EXECUTIVE~~26, ~~AND~~2013, ~~BOARD~~the ~~COMPENSATION~~Company's operator, Vencedor Energy Partners (VEP), completed the drilling, casing and cementing of our first oil well of the 30 well drilling program. Rice oil well number 15 was drilled to the Target Depth of 1,050' on the Rice lease, in Venango County, PA. Samples were taken during the drilling program for analysis. Petroleum odors were emitted at the 720', 745', and 915' levels of the wellbore, indicating oil presence at these depths. The review of the drill cuttings (samples) from the Rice #15 supported the need for a wire line log to be conducted on the well. VEP's geologist confirmed that the samples taken on August 26, 2013 revealed a well formed zone in the Venango 2 and also potential lenses in the Venango 1 and Red Valley sequence.

~~The~~On ~~Company~~June ~~entered~~2, in2014, athe ~~Management~~Company ~~and~~completed ~~Financial~~Rice ~~Service~~#15 ~~Agreement~~oil ~~with~~well ~~Mr.~~in ~~Wayne~~Pennsylvania ~~St.~~and ~~Cyr~~began asproduction of the ~~Executive~~Rice ~~Vice~~#15 ~~President,~~crude ~~Marketing~~oil ~~and~~well. ~~Strategic~~By ~~Development~~August on31, ~~December 21~~2014, ~~2010~~Rice ~~for~~#15 aproduced ~~ten~~369.5 ~~day~~barrels ~~period~~of ~~ending~~crude ~~December~~oil ~~31,~~since ~~2010~~oil ~~which~~began ~~was~~streaming ~~extended~~on ~~for~~June a16, 122014. ~~month~~The ~~term~~Rice to#15 ~~December~~has ~~31,~~settled ~~2011,~~in ~~whereby~~and ~~the~~is ~~Executive~~producing ~~Vice~~between ~~President,~~1 ~~Marketing~~ and ~~Strategic~~2 ~~Development~~barrels isof ~~paid~~crude ~~$10,000~~oil per ~~month.~~day ~~The~~with ~~Company~~water ~~has~~production ~~not~~between ~~renewed~~4 ~~the~~to ~~contract~~6 ~~with~~barrels ~~Mr.~~of ~~Ct.~~water ~~Cyr~~per ~~and has retained Mr~~day. ~~St.~~During ~~Cyr~~the on3 a month toperiod ~~month~~ending ~~basis.~~August In31, ~~addition~~2014, to296 ~~his~~gross ~~duties~~barrels asof ~~Executive~~crude ~~Vice~~oil ~~President~~were sold, ~~Marketing~~net ~~and~~243 ~~Strategic~~barrels ~~Development~~of crude oil, ~~Mr.~~for ~~St.~~an ~~Cyr~~average issales ~~the~~price ~~Corporate~~of ~~Secretary~~$99 ~~for~~per ~~the~~net ~~Company~~barrel. ~~Mr.~~Operating Stcosts, ~~Cyr~~including isDepletion ~~paid~~and Depreciation, averaged $1040 per gross barrel,~~000~~ $48 per ~~month~~net barrel.

~~The~~There ~~Company~~is ~~entered~~no ~~into~~guarantee aas ~~Management~~to ~~and~~how ~~Financial~~much ~~Service~~longer ~~Agreement~~Rice#15 ~~for~~will ~~Mr.~~produce ~~Jerry~~oil ~~G. Mikolajczyk for a 12-month period commencing on June 1, 2011~~ and ~~ending~~there ~~May~~are ~~31,~~no ~~2012.~~assurances ~~Mr.~~that ~~Mikolajczyk~~if isRice ~~hired~~#15 ~~through~~produces aoil ~~service~~that ~~company,~~it ~~and~~ will be ~~paid $120,000 in cash payments for the services of Mr~~profitable. Mikolajczyk. The terms and conditions will be renegotiated upon the successful consummation of a Business Combination through the acquisition of, or merger or consolidation with, a company that has substantial additional capital and or operating revenues; or the Company is able to finance operating expenses with additional debt or through equity financing of not less than $5,000,000. The Company has not renewed the contract with Mr. Mikolajczyk. Mr. Mikolajczyk continues to work for the Company on a month-to-month basis and is paid $10,000 per month.

~~The~~On ~~Company~~August ~~entered~~31, ~~into~~2014, athe ~~Management~~Company ~~and~~forfeited ~~Financial~~its ~~Service~~rights ~~Agreement~~to ~~with~~drill ~~Mr.~~on ~~Peter~~the ~~Matousek~~Corse ~~for~~and aLalley ~~12-month~~oil ~~period commencing June 1, 2011~~ and ~~ending~~gas ~~May~~leases ~~31,~~in ~~2012~~Venango ~~whereby Mr. Matousek will be paid $90~~County,~~000~~ ~~in cash payments~~Pennsylvania. The ~~terms~~Company ~~and~~retains ~~conditions~~its ~~will~~drilling berights ~~renegotiated~~on ~~upon~~ the ~~successful~~Rice ~~consummation of a Business Combination through the acquisition of~~3, orRice ~~merger or consolidation with~~4, aRice ~~company~~6 ~~that has substantial additional capital~~ and orRice ~~operating~~14 ~~revenues;~~by or"Held ~~the~~By ~~Company~~Production" isand ~~able~~drilling topermits ~~finance~~which ~~operating~~expire ~~expenses with additional debt or through equity financing of not less than $5,000,000. The Company has not renewed the contract with Mr. Matousek. Mr. Matousek continues to work for the Company~~ on aApril ~~month-to-month basis and is paid $7~~28,~~500~~ ~~per month~~2015.

The ~~Company~~company ~~entered~~will ~~into~~need ~~Board~~to ~~Member~~raise ~~Compensation~~additional ~~Agreements~~funds ~~with~~to ~~Mr.~~drill ~~Kevin~~the M.oil ~~Grapes~~ and ~~Mr.~~gas ~~Jerry~~wells ~~G. Mikolajczyk as directors of the Company for a term of one (1) year ending August 31, 2012. Both Mr. Grapes~~ and ~~Mr.~~there ~~Mikolajczyk~~is ~~will~~no ~~receive~~guarantee ~~5,000~~that ~~shares per month of~~ the ~~Company’s~~company ~~common stock in consideration for them serving on the Company’s Board of Directors. The common stock~~ will be ~~valued~~successful ~~based~~in onraising the ~~average~~funds ofnecessary ~~the 5 trading day close price prior~~ to ~~each month end. This amount includes all costs related to~~ complete the ~~engagement~~second ~~Director~~or any of the ~~Company~~remaining ~~except~~4 ~~3rd~~offset ~~party~~oil orand ~~travel~~gas ~~expenses~~wells.

OnNOTE ~~May~~20: TERMINATION ~~21,~~OF ~~2012,~~FINANCIAL ~~Mr.~~CONSULTING ~~Kevin~~SERVICES ~~M. Grapes resigned as a Board member.~~ AGREEMENT

On ~~May~~December 2218, 2012, the Company ~~entered~~issued ~~into~~ a ~~Board~~Notice ~~Member~~of ~~Compensation~~Termination ~~Agreement~~to ~~with~~Vaquero ~~Dr.~~Private ~~William~~Capital, DInc. ~~Spier~~(“VPC”) asfor abreach ~~director~~ of contract by VPC, terminating the ~~Company~~September ~~for~~4, a2012 ~~term~~twelve ofmonth ~~one~~Financial Consulting Services Agreement (1the “Agreement”) ~~year~~effective ~~ending~~as ~~May~~of 31June 1, ~~2013.~~2012, ~~Dr.~~pursuant ~~Spier~~to ~~will~~which ~~receive~~VPC ~~5,000~~would ~~shares~~provide ~~per~~consulting ~~month~~services ofin connection with the Company’s ~~common~~business ~~stock~~affairs inand ~~consideration~~assist ~~for them serving on~~ the Company’s ~~Board~~in ofraising ~~Directors~~capital. In ~~The~~consideration ~~common~~of ~~stock~~the ~~will~~services to be ~~valued~~provided ~~based~~by onVPC, the ~~average~~Company paid VPC a prepaid fee of ~~the~~$810,000 5in ~~trading~~the ~~day~~form ~~close~~of ~~price~~16.2 ~~prior~~million tocommon ~~each~~shares ~~month~~of ~~end~~the Company. ~~This~~The ~~amount~~Company ~~includes~~has ~~all~~placed ~~costs~~a ~~related~~Stop toOrder on the ~~engagement~~transference ~~Director~~ of ~~the~~16.2 ~~Company~~million ~~except~~shares ~~3rd~~pending ~~party~~resolution orof ~~travel~~the ~~expenses~~breach of contract by VPC.

OnNOTE ~~May~~21: ~~25,~~FINANCING 2012, Company entered into a Board Member Compensation Agreement with Mr. Peter Matousek as a director of the Company for a term of one (1) year ending May 31, 2013. Mr. Matousek will receive 5,000 shares per month of the Company’s common stock in consideration for them serving on the Company’s Board of Directors. The common stock will be valued based on the average of the 5 trading day close price prior to each month end. This amount includes all costs related to the engagement Director of the Company except 3rd party or travel expenses.AGREEMENTS

~~The~~On May 7, 2013, the Company ~~authorized~~entered ~~and~~into ~~approved~~a anreserve ~~aggregate~~equity offinancing ~~136~~agreement (the “Financing Agreement”) with AGS Capital Group,~~129~~ ~~shares~~LLC, ~~for~~(“AGS”). ~~the~~Pursuant ~~period~~to ~~ended~~the ~~May~~Financing 31Agreement, ~~2012~~the ~~with~~Company anhas ~~average~~the ~~price~~right, ofbut ~~$0.0333~~not ~~per~~the ~~share~~obligation, to issue $15,000,000 of the ~~Board~~Company’s ~~pursuant~~common stock to aAGS ~~Board~~over ~~Member~~the ~~Compensation~~course ~~Agreements~~of ~~with~~3 Mryears. ~~Jerry~~The G.Company ~~Mikolajczyk~~has full control and discretion over the timing and amount of any shares that they sell to AGS when the Market Price, ~~Mr.~~as ~~Kevin~~defined M.in ~~Grapes~~the Financing Agreement, Mris $0.50 ~~Peter~~or ~~Matousek~~higher ~~and~~per Drshare. ~~William~~For D.each ~~Spier.~~advance, ~~The~~the Company ~~issued~~may ~~105~~issue an amount of stock up to $250,000. Such advance will not exceed more than 200% of the ~~136,129~~average daily trading volume for the previous 10 trading days. The purchase price of the shares toshall be set at ninety percent (90%) of the ~~Board~~average asof the three (3) lowest closing bid prices of ~~May~~the ~~31,~~stock ~~2012~~during the ten (10) consecutive weekday trading days (the “Pricing Period”) immediately after the date on which the Company provides an advance notice. The ~~balance~~Company, ~~31,129~~ ~~shares~~at its option, ~~cost~~may ofselect ~~$2,106~~a safety net price for any specified advance which the ~~period~~Company ~~March~~will 1,not ~~2012~~sell shares to ~~May~~AGS ~~31,~~under ~~2012, were~~that advance when the Purchase Price (Market Price less 10% discount) falls below such safety net price during the Pricing Period. The Company issued to4,081,633 shares of common stock as a commitment fee deposit towards the ~~Board~~commitment onfee ~~June~~of 25$40,000 ~~2012~~to be deducted from the first advance.

~~The~~On ~~Company~~May ~~authorized~~7, ~~and~~2013, ~~approved~~the anCompany ~~aggregate~~entered ofinto ~~45,000~~a ~~shares~~registration ~~for~~rights ~~the~~agreement ~~period~~with ~~ended~~AGS ~~August~~(the 31“RRA,” ~~2012~~and along with anthe ~~average~~Financing ~~price~~Agreement, ofthe $0“Agreements”).~~04033~~ According ~~per share~~ to the ~~Board~~RRA, ~~pursuant~~the toCompany ~~Board~~was ~~Member~~required ~~Compensation~~to ~~Agreements~~file ~~with~~a ~~Mr.~~registration ~~Jerry~~statement G.on ~~Mikolajczyk~~Form S-1, ~~Mr.~~registering ~~Peter~~the ~~Matousek~~shares ~~and~~of ~~Dr.~~common ~~William~~stock D.which ~~Spier.~~may ~~The~~be ~~45,000~~issued ~~shares~~to ~~were~~AGS ~~issued~~pursuant to the ~~Board~~Financing onAgreement ~~October~~within ~~26,~~thirty ~~2012~~(30) days of the date of the RRA.

2726

OnPrior ~~August~~to ~~31, 2012, Jerry G. Mikolajczyk was re-appointed as a director by~~ the ~~Board~~date of ~~Directors of~~ the ~~Company for another one-year term ending August 31~~Agreements, ~~2013. In~~AGS ~~consideration~~had ~~for~~no ~~Mr.~~material ~~Mikolajczyk’s service as director~~interaction, ~~the~~other ~~Company~~than ~~will issue 5,000 shares per month of~~ the ~~Company’s~~negotiation ~~stock, which will be valued based on the average~~ of the ~~five trading day close price prior to each month end. In addition~~Agreements, ~~the~~with ~~Company will reimburse Mr. Mikolajczyk for~~ the ~~preapproved cost of airfare, travel expenses and disbursements made on behalf of the~~ Company.

~~The~~After ~~Company~~a ~~authorized~~series ~~and~~of ~~approved~~withdrawals ~~an aggregate~~ of ~~45,000 shares for~~ the ~~period~~Registration ~~ended November 30~~Statement, ~~2012~~on ~~with~~Form anS-1 ~~average~~by ~~price~~the ofCompany, ~~$0.01228~~on ~~per~~February ~~share~~4, to2014, the ~~Board~~Company ~~pursuant~~filed toa ~~Board~~Registration ~~Member~~Statement, ~~Compensation~~on ~~Agreements~~Form ~~with~~S-1, registering ~~Mr.~~the ~~Jerry~~shares G.of ~~Mikolajczyk,~~common ~~Mr.~~stock ~~Peter~~of ~~Matousek~~the ~~and~~Company ~~Dr.~~as ~~William D. Spier.~~follows:

~~The~~· 33,333,334 shares of the Company's ~~authorized~~common stock (the “Put Shares”) that the Company may put to AGS pursuant to the Financing Agreement between AGS and ~~approved~~the anCompany, ~~aggregate~~dated ofNovember 4527,~~000~~ 2013, and 4,081,633 commitment shares of the Company's common stock that the Company paid to AGS as a fee for providing the ~~period~~facility. ~~ended~~· ~~February~~In 28the event of stock splits, ~~2013~~stock ~~with~~dividends, anor ~~average~~similar ~~price~~transactions involving the common stock, the number of ~~$0.01093~~common ~~per~~shares ~~share~~registered shall, unless otherwise expressly provided, automatically be deemed to cover the ~~Board~~additional securities to be offered or issued pursuant to ~~Board~~Rule ~~Member~~416 ~~Compensation~~promulgated ~~Agreements~~under ~~with~~the ~~Mr.~~Securities ~~Jerry~~Act G.of ~~Mikolajczyk~~1933, ~~Mr.~~as ~~Peter~~amended ~~Matousek~~(the ~~and~~“Securities DrAct”). ~~William~~In D.the ~~Spier~~event that adjustment provisions of the Drawdown Agreement require the registrant to issue more shares than are being registered in this registration statement, for reasons other than those stated in Rule 416 of the Securities Act of 1933, as amended, the Company will file a new registration statement to register those additional shares.

On ~~May~~March 3026, ~~2013~~2014, the ~~Board~~Securities ofand ~~Directors~~Exchange ~~renewed~~Commission (the ~~Board~~“SEC”) ~~Member~~declared ~~Compensation~~the ~~Agreement~~Registration ~~with~~Statement ~~Dr.~~on ~~William~~Form D.S-1 ~~Spier as a director of~~ (the ~~Company~~“Registration ~~for~~Statement”) ~~a term~~ of ~~one~~Xun ~~(1) year ending May 31~~Energy, ~~2014~~Inc. ~~Mr. Spier will receive 5~~,~~000~~ ~~shares per month of~~ (the “Company’s”), ~~common~~filed ~~stock in consideration for them serving~~ on ~~the~~February ~~Company’s~~4, ~~Board~~2014, ~~of Directors~~effective. The ~~common~~Registration ~~stock~~Statement ~~will~~registers befor ~~valued~~sale ~~based~~37,414,967 onshares ~~the average~~ of the 5Company’s ~~trading~~common ~~day~~stock ~~close~~pursuant ~~price prior~~ to ~~each~~an ~~month~~amended ~~end.~~and ~~This~~restated ~~amount~~reserve ~~includes~~equity ~~all~~financing ~~costs~~agreement ~~related to~~ (the ~~engagement~~“Financing ~~Director~~Agreement”) ofpreviously ~~the~~issued ~~Company except 3rd party~~ or ~~travel~~to ~~expenses. The terms and conditions will~~ be ~~renegotiated~~issued ~~upon~~to ~~the~~AGS ~~successful~~Capital ~~consummation of a Business Combination through the acquisition of~~Group, orLLC merger or consolidation with, a company that has substantial additional capital and or operating revenues; or the Company is able to finance operating expenses with additional debt or through equity financing of not less than $5 million(“AGS”).

OnNOTE ~~May~~22: ~~30,~~XUN ~~2013,~~OIL ~~the~~MARKETING Board of Directors renewed the Board Member Compensation Agreement with Mr. Peter Matousek as a director of the Company for a term of one (1) year ending May 31, 2014. Mr. Matousek will receive 5,000 shares per month of the Company’s common stock in consideration for them serving on the Company’s Board of Directors. The common stock will be valued based on the average of the 5 trading day close price prior to each month end. This amount includes all costs related to the engagement Director of the Company except 3rd party or travel expenses. The terms and conditions will be renegotiated upon the successful consummation of a Business Combination through the acquisition of, or merger or consolidation with, a company that has substantial additional capital and or operating revenues; or the Company is able to finance operating expenses with additional debt or through equity financing of not less than $5 million.DIVISION

OnOver ~~May~~the ~~31,~~last ~~2013~~several years, the Company’s ~~entered~~President ~~into~~and aCEO, ~~Management~~Jerry G. Mikolajczyk, acted as an intermediary to facilitate petroleum product and ~~Financial~~precious ~~Service~~metals ~~Agreement~~transactions ~~with~~between ~~Dr.~~sizeable ~~William~~Buyers Dand Sellers. ~~Spier~~He asdid ~~Treasurer~~this ofon ~~the~~a ~~Company~~pro ~~for~~bono abasis. ~~12-month~~In ~~period~~the ~~commencing~~fall ~~June~~of 12013, ~~2013~~Mr. Mikolajczyk was approached by active and ~~ending~~committed ~~May~~buyers ~~31,~~to ~~2014~~assist ~~whereby~~them ~~Dr.~~in ~~Spier~~sourcing ~~will~~and beprocuring ~~paid~~refined ~~$90,000~~petroleum products in ~~cash~~new ~~payments~~markets. ~~The~~Since ~~terms~~Mr. ~~and~~Mikolajczyk's ~~conditions~~experience ~~will~~in bethis ~~renegotiated~~area ~~upon~~of ~~the~~petroleum ~~successful~~and ~~consummation~~metals ofmarketing ais ~~Business~~significant, ~~Combination~~the ~~through~~Company ~~the~~formed ~~acquisition~~a ofdivision, orheaded ~~merger~~by orMr. ~~consolidation~~Mikolajczyk ~~with,~~to acapitalize ~~company~~on ~~that~~opportunities ~~has~~in procurement ~~substantial~~services ~~additional~~for ~~capital~~active ~~and~~buyers. orThe ~~operating~~Company ~~revenues;~~calls orthis ~~the~~division ~~Company~~Xun isOil ~~able~~Marketing to(XOM) ~~finance~~and ~~operating~~it ~~expenses~~is ~~with~~now ~~additional~~in ~~debt~~the orresearch ~~through~~and ~~equity~~actuation ~~financing~~evaluation stage of ~~not~~development ~~less~~so ~~than~~it $5can ~~million.~~ultimately initiate the following business objectives:

~~The~~· ~~Company~~Purchase ~~authorized~~high ~~and~~quality ~~approved~~petroleum anproducts ~~aggregate~~from ofreputable ~~45,000~~Suppliers; ~~shares~~· ~~for~~Establish ~~the~~long ~~period~~term ~~ended~~Supplier ~~May~~contracts; ~~31,~~· ~~2013~~Sell ~~with~~high anquality ~~average~~petroleum ~~price~~products ofto ~~$0.01033~~Majors; ~~per~~· ~~share~~Establish tolong term sales agreements with the ~~Board~~Majors; ~~pursuant~~and to· ~~Board~~Establish ~~Member~~long ~~Compensation~~term ~~Agreements~~relationships and creditability with ~~Mr.~~Suppliers ~~Jerry~~and G.Buyers ~~Mikolajczyk,~~based ~~Mr.~~on ~~Peter~~product ~~Matousek~~quality, ~~and~~delivery ~~Dr.~~performance, ~~William~~service D.and ~~Spier~~flexibility.

On ~~August~~May 3125, ~~2013~~2014, the ~~Board~~Company, ofthrough ~~Directors~~its ~~renewed~~wholly ~~the~~owned ~~Board~~subsidiary, ~~Member~~Xun ~~Compensation~~Oil ~~Agreement~~Corporation, ~~with~~entered ~~Mr.~~into ~~Jerry G. Mikolajczyk as~~ a ~~director~~Joint ofVenture ~~the~~Agreement ~~Company for a term of one~~ (1JV002) ~~year~~with ~~ending~~an ~~August~~arm's ~~31,~~length ~~2014.~~3rd ~~Mr.~~party ~~Mikolajczyk~~to ~~will~~collaborate ~~receive~~with ~~5,000 shares per month of~~ the ~~Company’s~~3rd ~~common~~party ~~stock~~ in ~~consideration~~completing ~~for~~its ~~them~~obligation ~~serving~~ on ~~the~~a ~~Company’s~~61 ~~Board~~million ofbarrel ~~Directors.~~Aviation ~~The~~Jet ~~common~~Fuel ~~stock~~FOB ~~will~~Rotterdam, beover ~~valued~~a ~~based~~13 ~~on the average of the 5 trading day close price prior to each~~ month ~~end.~~period, ~~This~~Sales ~~amount includes all costs related to the engagement Director of the Company except 3rd party or travel expenses. The terms~~ and ~~conditions~~Purchase ~~will~~Agreement be(SPA) ~~renegotiated~~dated ~~upon~~July ~~the~~27, ~~successful~~2013 ~~consummation~~with of a ~~Business~~supplier ~~Combination through the acquisition~~ of, orAviation ~~merger~~Jet orFuel. ~~consolidation~~JV002 ~~with,~~is asubject ~~company~~to ~~that~~financing ~~has substantial additional capital~~ and ~~or operating revenues; or the Company~~ is ~~able~~subject to ~~finance~~changes ~~operating~~to ~~expenses~~the SPA with ~~additional~~the ~~debt or through equity financing of not less than $5 million~~supplier.

~~The~~There ~~Company~~can ~~issued~~be anno ~~aggregate~~assurance ofthat ~~90,000~~JV002 ~~shares~~will ~~for~~be ~~the~~able ~~six~~to ~~month~~obtain ~~period~~the ~~ending~~financing ~~November~~required ~~30,~~to ~~2013~~purchase ~~with~~the an61 ~~average~~million ~~price~~barrels of ~~$0.001267~~aviation ~~per~~jet ~~share~~fuel. onThere ~~November~~can ~~27,~~be ~~2013~~no toassurance that the ~~Board~~supplier ~~pursuant~~will agree to ~~Board~~the ~~Member~~contemplated ~~Compensation~~changes ~~Agreements~~to ~~with~~the Mrspa. ~~Peter Matousek, Mr. Jerry G. Mikolajczyk, and Dr. William D. Spier.~~

28The Company will participate as a 50% joint venture partner in the 61 million barrel Aviation Jet Fuel purchase and sale. JV002 plans to sell the Aviation Jet Fuel at prevailing market prices to Major buyers. (i.e. airlines, end users of aviation jet fuel).

~~The~~There ~~Schedule~~can ofbe ~~Board~~no ~~Compensation~~assurance ~~below~~that ~~represents~~JV002 will be able to sell the ~~shares~~aviation ~~issued~~jet orfuel ~~approved~~should it be successful in obtaining financing for the aviation jet fuel and obtain the necessary changes to the ~~Board~~spa. ~~with~~Even if JV002 was successful in selling the ~~5-Day~~aviation ~~Average~~jet ~~Share~~fuel, ~~Closing~~there ~~Price~~can ~~for~~be ~~each~~no ~~month~~assurance ~~during~~that the ~~six~~sale ~~months~~of ~~ending~~the ~~November~~aviation ~~30,~~jet ~~2013:~~fuel will be profitable or that the company will be able to generate sufficient revenues to operate profitably.

	Schedule of Board Compensation
Month		Board Shares Approved, Not Issued	Board Shares Issued	5 Day Average Share Closing Price	Cost Base
June		0	15,000	$0.00274	$41.10
July		0	15,000	$0.00222	$33.30
August		0	15,000	$0.00112	$16.80
Quarter Total		0	45,000	$0.00203	$91.20
September		0	15,000	$0.00094	$14.10
October		0	15,000	$0.00038	$5.70
November		0	15,000	$0.00020	$3.00
Quarter Total		0	45,000	$0.00051	$22.80
Year Total		0	90,000	$0.00127	$114.00

The Company has not committed to begin full operations of XOM until the Company has concluded with its research and actuation evaluation. As of August 31, 2014, the Company has spent $15,055 on business development expenses for XOM which is included in our operating expenses.

The following Schedule of Executive Compensation discloses compensation paid/accrued during the six months ended November 30, 2013 to the Company’s Officers and the most highly compensated executive officer whose total compensation exceeded $100,000 for the period ended November 30, 2013 (Collectively, the “Named Executive Officers”). No restricted stock awards, long-term incentive plan payouts or other types of compensation, other than the compensation identified in the table below, were paid/accrued to the Named Executive Officers during the period.27

2014 Schedule of Executive Compensation
Through to November 30, 2013
Name and Principal Position	Salary[1]	Bonus	StockAward	Option Awards	Total Salary
Jerry G. Mikolajczyk, President/CEO/CFO	$60,000	0	0	0	$60,000
Wayne St. Cyr, Executive Vice President	$60,000	0	0	0	$60,000
Peter Matousek, VP-Investor Relations	$45,000	0	0	0	$45,000
Dr. William D. Spier, Treasurer	$45,000	0	0	0	$45,000
Note 1 - Does not include stock compensation as Board members

There are no assurances that the company will commence operations of XOM. There are no assurances that should the company commence operations in XOM, XOM will generate revenue. There are no assurances that should the company generate revenue in XOM, that XOM or the company will be profitable.

~~NOTE~~On ~~18:~~June ~~COMMON~~1, ~~SHARES~~2014, ~~PURCHASE~~the ~~LITIGATION~~Company entered into a SPA (JV003) for 8,450,000 metric tons of Aviation Jet Fuel FOB Rotterdam, over a 13 month period, with a Supplier subject to financing.

OnThere ~~May~~can ~~10,~~be ~~2011,~~no ~~the~~assurance ~~Company~~that ~~accepted~~JV003 anwill ~~Offer~~be able to ~~Purchase~~obtain ~~from~~the ~~Lea~~financing ~~Kennedy~~required ~~d/b/a LuxemBarings (“Purchaser”)~~ to purchase ~~$10~~the 8.54 million ofmetric ~~the~~tons ~~Company’s~~of ~~common~~aviation ~~stock~~jet ~~based~~fuel. onThere ~~the~~can ~~average~~be ofno 5assurance ~~consecutive~~that ~~trading~~JV003 ~~day’s~~will ~~close~~be ~~prior~~able to ~~date~~sell ofthe ~~closing.~~aviation ~~The~~jet ~~Offer~~fuel toshould ~~Purchase~~it ~~was~~be ~~scheduled~~successful toin ~~close~~obtaining onfinancing orfor ~~before~~the ~~June~~aviation ~~24,~~jet ~~2011~~fuel. ~~The~~Even ~~Purchaser~~if ~~failed~~JV003 towas ~~complete~~successful ~~the~~in ~~transaction,~~selling ~~after mutually agreed extensions of~~ the ~~closing~~aviation ~~date.~~jet ~~The~~fuel, ~~Company~~there ~~has~~can ~~retained~~be ~~legal~~no ~~counsel~~assurance tothat ~~take~~the ~~legal~~sale ~~action~~of ~~against~~ the ~~Purchaser~~aviation ~~for~~jet ~~failing~~fuel towill ~~complete~~be ~~the~~profitable ~~purchase~~or ~~transaction~~that ~~and for damages to~~ the ~~Company~~company aswill abe ~~result~~able ofto ~~the~~generate ~~failure~~sufficient revenues to ~~complete~~operate ~~the transaction~~profitably.

On ~~March~~August 231, ~~2013~~2014, ~~The~~JV002 ~~United~~received ~~States~~a ~~District~~financial ~~Court~~commitment ~~For~~from ~~The~~a ~~Southern~~3rd ~~District~~party Offinancier ~~Illinois~~to ~~granted~~fund ~~summary~~the ~~judgment~~61 onmillion ~~Xun~~barrel ~~Energy’s~~Aviation ~~breach~~Jet ofFuel ~~contract~~SPA ~~claim~~subject ~~against Lea Kennedy d/b/a/ LuxemBarings. The amount of damages remains an issue~~ to ~~be resolved in~~ the ~~case~~contemplated ~~and~~changes ~~the Company's "fraud~~ in the ~~inducement~~SPA ~~claim"~~with ~~alleged~~the ~~in its complaint remains pending~~Supplier.

OnThere ~~July,~~can 8,be ~~2013,~~ no assurance that the ~~Company~~supplier ~~was~~will ~~awarded~~agree ato ~~judgment~~the ~~dismissing,~~contemplated ~~without~~changes ~~prejudice,~~to the ~~legal~~spa. ~~action~~There ~~between~~can ~~Xun~~be ~~Energy,~~no ~~Inc.,~~assurance asthat ~~Plaintiff~~JV002 will be able to sell the aviation jet fuel should it be successful in obtaining financing for the aviation jet fuel and ~~Lea~~obtain ~~Kennedy,~~the annecessary ~~individual,~~changes ~~d/b/a~~to ~~LUXEMBARINGS~~the spa. Even if JV002 was successful in selling the aviation jet fuel, asthere ~~Defendant.~~can ~~The~~be ~~Company~~no ~~filed~~assurance ~~for~~that athe ~~voluntary~~sale ~~dismissal~~of ~~without~~the ~~prejudice~~aviation onjet fuel will be profitable or that the ~~legal~~company ~~action~~will be able to generate sufficient revenues to operate profitably.

The Company ~~has~~entered ~~recognized~~into ~~losses,~~a atProfit ~~cost~~and Sharing Agreement (JV003) on August 18, in2014 ~~the~~with ~~financial~~an ~~statements~~arm's length 3rd party for the ~~period~~financing ~~ended~~of ~~May~~20% ~~31,~~of ~~2012~~a ~~and~~8,540,000 ~~legal~~metric ~~costs~~ton SPA for ~~the~~Aviation ~~period~~Jet ~~ending~~Fuel ~~November~~FOB 30Rotterdam. The SPA is subject to XOM obtaining financing for 100% of the 8,450,000 ~~2013~~metric ton SPA.

29There can be no assurance that JV003 will be able to obtain the remaining 80% financing required to purchase the 8.54 million metric tons of aviation jet fuel. There can be no assurance that JV003 will be able to sell the aviation jet fuel should it be successful in obtaining financing for the aviation jet fuel. Even if JV003 was successful in selling the aviation jet fuel, there can be no assurance that the sale of the aviation jet fuel will be profitable or that the company will be able to generate sufficient revenues to operate profitably.

~~NOTE~~On ~~19:~~August ~~EXECUTIVE~~15, ~~AND~~2014, ~~BOARD~~JV002 ~~CHANGES~~was informed by the Supplier that the July 27, 2013 SPA for 61 million barrels of Aviation Jet Fuel FOB Rotterdam was terminated and that a new transaction shall be executed requiring JV002 to issue a fresh Irrevocable Commercial Purchase Order (ICPO) and a new SPA for the 61 million barrels of Aviation Jet Fuel FOB Rotterdam.

On ~~May~~August 3120, ~~2011~~2014, ~~Mr.~~JV002 ~~Matousek,~~issued ~~our President and CEO, advised that~~ the ~~roles~~ICPO ~~and responsibilities are increasing for the Company and that Mr. Jerry G. Mikolajczyk, while as consultant~~ to the ~~Company,~~Supplier ~~has been instrumental in developing and building the Company to its current status including funding and operations. Mr. Matousek advised that it is in the best interests~~ for the ~~Company~~61 ~~and~~million ~~the~~barrels ~~Shareholders that Mr. Mikolajczyk have authority to continue developing the Company and have authority to make decisions at an Executive Level~~ of ~~the~~Aviation ~~Company.~~Jet ~~Subsequently,~~Fuel ~~Mr.~~FOB ~~Matousek resigned as President, CEO and CFO and the Company appointed Jerry G~~Rotterdam. Mikolajczyk as Interim President, CEO and CFO until a permanent President and CEO is recruited and a permanent CFO is recruited. The Company entered into a Management and Financial Service Agreement for Mr. Jerry G. Mikolajczyk for a 12-month period commencing on June 1, 2011 and ending May 31, 2012. Mr. Mikolajczyk is hired through a service company, and will be paid $120,000 in cash payments for the services of Mr. Mikolajczyk. The terms and conditions will be renegotiated upon the successful consummation of a Business Combination through the acquisition of, or merger or consolidation with, a company that has substantial additional capital and or operating revenues; or the Company is able to finance operating expenses with additional debt or through equity financing of not less than $5,000,000. The Company has not renewed the contract with Mr. Mikolajczyk. Mr. Mikolajczyk continues to work for the Company on a month-to-month basis and is paid $10,000 per month.

~~The~~There ~~Company~~can ~~also~~be ~~appointed~~no ~~Mr.~~assurance ~~Peter~~that ~~Matousek as~~ the ~~Company’s~~supplier ~~Vice-President~~will ofagree ~~Investor~~to ~~Relations.~~the ~~The~~new ~~Company entered into a Management and Financial Service Agreement with Mr~~spa. ~~Peter~~There ~~Matousek~~can ~~for~~be ano ~~12-month~~assurance ~~period~~that ~~commencing~~JV002 ~~June~~will 1,be ~~2011~~able ~~and~~to ~~ending~~sell ~~May~~the ~~31,~~aviation ~~2012~~jet ~~whereby~~fuel ~~Mr.~~should ~~Matousek~~it ~~will~~ be ~~paid~~successful ~~$90,000~~ in ~~cash~~obtaining ~~payments~~the spa. ~~The~~Even ~~terms~~if ~~and~~JV002 ~~conditions~~was ~~will be renegotiated upon the~~ successful ~~consummation~~in ofselling ~~a Business Combination through~~ the ~~acquisition~~aviation ofjet fuel, orthere ~~merger~~can orbe ~~consolidation~~no ~~with,~~assurance ~~a company~~ that ~~has~~the ~~substantial~~sale ~~additional~~of ~~capital and or operating revenues; or~~ the ~~Company~~aviation isjet ~~able~~fuel towill ~~finance~~be ~~operating~~profitable ~~expenses with additional debt~~ or ~~through~~that ~~equity financing of not less than $5 million. The Company has not renewed~~ the ~~contract~~company ~~with~~will ~~Mr.~~be ~~Matousek.~~able ~~Mr. Matousek continues~~ to ~~work~~generate ~~for~~sufficient ~~the~~revenues ~~Company on a month-~~to~~-month~~ ~~basis~~operate ~~and is paid $7,500 per month~~profitably.

OnNOTE ~~August~~23: ~~31,~~DEBT ~~2011,~~SETTLEMENT directors Peter Matousek, Donald Lynch and Jerry G. Mikolajczyk termed out. On September 1, 2011, the Company obtained the written consent of the stockholders holding a majority, 86.51%, of the outstanding voting rights of the Company (the "Consent"). The Consent approved the election of Kevin M. Grapes and Jerry G. Mikolajczyk as directors of the Company for a term of one (1) year ending August 31, 2012.CLAIM

On ~~May~~September 215, ~~2012~~2014, ~~Mr.~~a ~~Kevin~~complaint M(the “Complaint”) was filed against the Company in the Superior Court of Connecticut, Judicial District of Danbury (the “Court”) by Equity Capital Ventures, Inc. ~~Grapes~~(“ECVI”) ~~resigned~~for asthe aCompany’s ~~Board~~failure ~~member~~to pay $1,834,935 in debt obligations (the “Debt”) which ECVI had acquired from 11 persons (the “Debt Assignors”) through the execution of Debt Claim Purchase Agreements.

OnThe ~~May~~Debt ~~22,~~Assignors ~~2012,~~consist of creditors of the Company ~~entered~~including ~~into~~insiders of the Company that voluntarily assigned all or a ~~Board~~portion ~~Member~~of ~~Compensation~~their ~~Agreement~~receivable ~~with~~from ~~Dr.~~the ~~William~~Company Dto ECVI subject to approval of a court. ~~Spier~~By asa Stipulation between the Company and ECVI, the Company has agreed to settle the Debt in reliance on the 3(a)10 ~~director~~exemption from the Securities Act of 1933’s registration requirements pending a fairness hearing before the ~~Company~~Court. The Stipulation, if approved by court order, provides for athe ~~term~~issuance of ~~one~~shares of the Company’s common stock to ECVI (1the “3(a)(10) ~~year~~Stock ~~ending~~Issuance”) ~~May~~for 31resale by ECVI, ~~2013~~resulting in sale proceeds to ECVI of approximately $2,038,818. ECVI shall retain $203,883 of the sale proceeds and shall transfer and deliver the $1,834,935 balance to the Debt Assignors.

OnShould ~~May~~this ~~25,~~action ~~2012,~~be ~~Company~~approved ~~entered~~by ~~into~~the aCourt, ~~Board~~there ~~Member~~will ~~Compensation~~be ~~Agreement~~dilution ~~with~~to Mrthe Company’s stockholders. ~~Peter~~There ~~Matousek~~are asno aassurances ~~director~~that ofthe Court will approve the ~~Company~~Stipulation ~~for~~and the 3(a)10 ~~term~~Stock ofIssuance. ~~one~~Further, there are no assurances that should the Court approve the 3(1a)10 ~~year~~Stock ~~ending~~Issuance ~~May~~that ~~31,~~there ~~2013.~~will be a market for the common stock that will be issued to the ECVI.

OnNOTE ~~August~~24: ~~31,~~SUBSEQUENT ~~2012, Company entered into a Board Member Compensation Agreement with Mr. Jerry G. Mikolajczyk as a director of the Company for a term of one (1) year ending August 31, 2013.~~ EVENTS

On ~~May~~September 308, ~~2013~~2014, ~~Company~~the ~~entered~~Supplier ~~into~~for aJV002 ~~Board~~confirmed ~~Member~~the ~~Compensation~~terms ~~Agreement~~and ~~with~~conditions ~~Dr.~~of ~~William~~the D.SPA ~~Spier~~for as61 amillion ~~director~~barrels of ~~the~~Aviation ~~Company~~Jet ~~for~~Fuel FOB Rotterdam. The SPA is subject to JV002 executing a ~~term~~Charter ofParty ~~one~~Agreement (1CPA) ~~year~~with ~~ending~~its ~~May~~nominated ~~31,~~shipping ~~2014.~~company

~~On May 30, 2013, Company entered into a Board Member Compensation Agreement with Mr. Peter Matousek as a director of the Company for a term of one (1) year ending May 31, 2014.~~ 28

Onto ~~August~~deliver ~~31,~~the ~~2013,~~Aviation ~~Company~~Jet ~~entered~~Fuel ~~into~~to aRotterdam ~~Board~~and ~~Member~~paying ~~Compensation~~50% ~~Agreement~~of ~~with~~the ~~Mr.~~cost ~~Jerry~~of G.the ~~Mikolajczyk~~vessel asfor afirst ~~director~~delivery ofto ~~the~~Rotterdam. ~~Company~~Refer ~~for~~to aNOTE ~~term~~22: ofXUN ~~one~~OIL ~~(1)~~MARKETING ~~year~~DIVISION, ~~ending~~for ~~August~~additional ~~31,~~information ~~2014.~~and risk disclosures.

~~Each~~On ~~Board~~September ~~member will receive~~ 5,~~000~~ ~~shares~~2014, ~~per~~a ~~month~~complaint of (the ~~Company’s~~“Complaint”) ~~common~~was ~~stock~~filed inagainst ~~consideration~~the ~~for~~Company ~~them~~in ~~serving on~~ the ~~Company’s~~Superior ~~Board~~Court of ~~Directors.~~Connecticut, ~~The~~Judicial ~~common~~District ~~stock~~of ~~will~~Danbury ~~be valued based on~~ (the ~~average~~“Court”) ofby ~~the~~Equity 5Capital ~~trading~~Ventures, ~~day close price prior to each month end~~Inc. ~~This~~(“ECVI”) ~~amount~~for ~~includes~~the ~~all~~Company’s ~~costs~~failure ~~related~~ to ~~the~~pay ~~engagement~~$1,834,935 ~~Director~~in ofdebt obligations (the ~~Company~~“Debt”) ~~except~~which ~~3rd~~ECVI ~~party~~had oracquired ~~travel~~from ~~expenses.~~11 ~~The~~persons ~~terms~~(the ~~and~~“Debt ~~conditions~~Assignors”) ~~will~~through ~~be renegotiated upon~~ the ~~successful~~execution ~~consummation~~ of aDebt ~~Business~~Claim ~~Combination~~Purchase ~~through~~Agreements. ~~the~~Refer ~~acquisition~~to ~~of,~~NOTE or23: ~~merger~~DEBT orSETTLEMENT ~~consolidation with~~CLAIM, afor ~~company that has substantial~~ additional ~~capital~~information and orrisk ~~operating revenues; or the Company is able to finance operating expenses with additional debt or through equity financing of not less than $5 million~~disclosures.

30On September 12, 2014, JV002 executed the CPA to deliver the Aviation Jet Fuel to Rotterdam. The CPA requires JV002 to pay for 50% of the vessel for the first delivery to Rotterdam. Refer to NOTE 22: XUN OIL MARKETING DIVISION, for additional information and risk disclosures.

On September 26, 2014, JV002 paid its 50% share of the vessel for the first delivery to Rotterdam. There can be no assurance that JV002 will be able to sell the aviation jet fuel should JV002 be successful closing on the aviation jet fuel purchase when the aviation jet fuel arrives at Rotterdam. Even if JV002 was successful in selling the aviation jet fuel, there can be no assurance that the sale of the aviation jet fuel will be profitable or that the company will be able to generate sufficient revenues to operate profitably. Refer to NOTE 2022: ~~VENANGO~~ 30XUN ~~WELL~~OIL ~~LOCATION~~MARKETING DIVISION, for additional information and risk disclosures.

OnITEM ~~August 31, 2012 the Company entered into an Oil and Gas Well Location Agreement with Vencedor Energy Partners (Assignor)~~2. MANAGEMENT'S ~~The~~DISCUSSION ~~agreement~~AND ~~allows~~ANALYSIS ~~the~~OF ~~Company~~FINANCIAL toCONDITION ~~drill~~AND 30RESULTS ~~offset~~OF ~~oil and gas wells on 3 producing oil and gas leases in Venango County, Pennsylvania.~~ OPERATIONS

~~The~~ Management’s ~~Company~~Discussion ~~paid~~and ~~$585,000~~Analysis ~~in the form~~ of ~~11,700,000~~Financial ~~shares~~Condition ofand ~~common~~Results ~~stock (Shares)~~ of ~~the Company for the rights~~Operations.

The following management’s discussion and analysis (“MD&A”) is management’s assessment of the historical financial and operating results of the Company ~~will~~during ~~have~~the ~~100%~~period ~~working~~covered ~~interest~~by the financial statements. This MD&A should be read in conjunction with the ~~wells~~condensed consolidated financial statements and ~~Net~~the ~~Revenue~~related ~~Interest~~notes asand ~~follows:~~other information included elsewhere in this Quarterly Report on Form 10-Q.

Lease Name	Net Revenue Interest Breakdown
Rice	Master Lease Lessor - 12.5% Royalty, Master Lease Lessee 2.5% Override royalty interest, Assignor - 2.5% Override royalty interest; and the Company - 82.5% royalty interest;
Lalley	Master Lease Lessor - 12.5% Royalty, Master Lease Lessee 2.5% Override royalty interest, Assignor - 2.5% Override royalty interest; and the Company - 82.5% royalty interest; and
Corse	Master Lease Lessor - 15.0% Royalty, Master Lease Lessee 2.5% Override royalty interest, Assignor - 2.5% Override royalty interest; and the Company - 80.0% royalty interest.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

~~The~~This ~~Agreement~~Quarterly ~~allows~~Report ~~the~~on ~~Company~~Form 10-Q tofor ~~have~~ the ~~exclusive~~quarterly ~~right~~period toended ~~explore,~~August ~~operate~~31, ~~produce~~2014 ~~all~~contains ~~naturally~~“forward-~~occurring~~looking ~~oil~~statements”. Generally, ~~gas~~the words “believes”, ~~casing-head~~“anticipates,” ~~gas~~“may,” or“will,” ~~gasoline~~“should,” ~~gas~~“expect,” ~~condensate~~“intend,” “estimate,” “continue,” and/ similar expressions or ~~all~~the ~~other~~negative ~~liquid~~thereof or ~~gaseous~~comparable ~~hydrocarbons~~terminology ~~and~~are ~~other~~intended ~~marketable~~to ~~or non~~identify forward-~~marketable~~looking ~~substances~~statements ~~produced~~which ~~(Oil~~include, ~~and~~but ~~Gas)~~are ~~from~~not ~~Oil~~limited ~~and~~to, ~~Gas~~statements ~~deposits~~concerning ~~contained~~the ~~within~~Company’s ~~and~~expectations ~~under~~regarding ~~the~~its ~~well~~working ~~location~~capital ~~and~~requirements, ~~any~~financing ~~and~~requirements, ~~all~~business prospects, and other ~~rights~~statements ~~and~~of ~~privileges~~expectations, ~~necessary~~beliefs, ~~incident~~future toplans and strategies, anticipated events or ~~convenient~~trends, ~~for~~and ~~the~~similar ~~economical~~expressions ~~operation~~concerning ofmatters ~~the~~that ~~well~~are ~~location~~not ~~and~~historical ~~other~~facts. ~~lands~~Such ~~for~~statements ~~the~~are ~~production~~subject ofto ~~Oil~~certain risks and ~~Gas~~uncertainties, toincluding the ~~Company.~~matters Aset ~~well~~forth ~~location~~in isthis ~~defined~~Quarterly asReport aor ~~circle~~other ~~having~~reports aor ~~radius~~documents ofthe ~~150~~Company ~~feet~~files with the ~~well,~~Securities and Exchange Commission from time to atime, ~~depth~~which ascould ~~allowed~~cause inactual ~~the~~results ~~Master~~or ~~Lease,~~outcomes atto ~~the~~differ ~~center~~materially ~~thereof~~from those projected.

~~The~~These ~~Company~~forward-looking ~~owns~~statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the ~~rights~~forward-looking statements. These factors include, but are not limited to, economic, political and ~~may~~market ~~select~~conditions upand fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to 30predict ~~well~~accurately ~~locations~~and ~~from~~are generally beyond our control. You should consider the ~~following:~~areas of risk described in connection with any forward-looking statements that may be made herein.

Lease Name	Locations	Rights
Rice	Up to 10	One well per location, to a depth from the surface through the Speechley sands which depth is approximately 2,200 feet on the Premises alone for producing oil and gas by any means, and all rights necessary convenient and incident thereto, granted pursuant to the Master Rice Lease.
Lalley	Up to 8	One well per location, to a depth from the surface through the Speechley sands which depth is approximately 2,200 feet on the Premises alone for producing oil and gas by any means, and all rights necessary convenient and incident thereto, granted pursuant to the Master Lalley Lease.
Corse	Up to 15	One well per location, to a depth from the surface through the Speechley sands which depth is approximately 2,000 feet on the Premises alone for producing oil and gas by any means, and all rights necessary convenient and incident thereto, granted pursuant to the Master Corse Lease.

Undue reliance should not be placed on these forward-looking statements which speak only as of the date hereof. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. For any forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

IfOTHER ~~Company~~PERTINENT does not begin or provide proof of funds or funding for the first well on or before January 31, 2013, subject to our operator, Vencedor Energy Partners, obtaining the necessary permits to allow the Company to commence drilling and completions operations, and does not begin or provide proof of funds or funding for 3 more wells on or before March 31, 2013, then the Company will have forfeited its rights and the Agreement shall terminate and unwind and the Assignor agrees to return the Shares (11,700,000) to the Company. INFORMATION

OnWhen ~~January~~used ~~29,~~in ~~2013~~this report, ~~pursuant to a letter agreement between~~ the ~~Company~~terms ~~and~~"Xun ~~the Assignor~~Energy," the "Company," ~~acknowledged~~"we," "our," and ~~agreed~~"us" torefer ~~the notice of the delay of the permits up~~ to 4Xun ~~weeks beyond January 31~~Energy, ~~2013~~Inc., ~~The~~a ~~permits~~Nevada ~~were issued on February 4, 2013~~corporation.

After completing 8 wells and if Company does not complete any of the remaining 22 well drilling provision set forth in the Agreement within the 2 years from the date of the execution of the Agreement, then the Company will forfeit its rights to the well locations not completed. The Company will retain its rights for the well locations completed and will retain an Override Royalty of Seven and one half per cent (7.5%) on the well locations forfeited.General

31The Company is engaged primarily in the acquisition of producing or near producing oil and gas properties and the development of these oil and gas properties. The Company acquired oil and gas properties in August 2012 that allow it to drill oil and

The Company has 2 years from the date of execution of the Agreement to complete the drilling of the 30 well locations and has the option to acquire an additional 15 well locations for the same terms and conditions of the Agreement after the first 30 wells locations have been completed.29

gas wells in Venango County, Pennsylvania. One oil well was drilled and completed on the Rice lease (Rice #15) that is producing crude oil and has settled in as a "Stripper" oil well. The Company has drilling permits to drill four more offset oil wells on the Rice lease. There is no assurance that we will ~~provide~~be ~~funding~~successful in ~~groups~~raising ofthe 4necessary funds to 6drill ~~wells~~and tocomplete ~~optimize~~one ~~economies~~or more of ~~scale,~~the ~~with~~remaining 4 oil and gas well locations; there are no assurances that if we are successful in raising the ~~exception~~necessary funds to drill and complete one or more of the ~~first~~ 4 ~~wells~~oil ~~which~~and ~~can~~gas well locations that they will produce oil and gas. There are no assurances that should oil and gas be ~~funded~~produced onfrom anone ~~individual~~or ~~basis~~more of the 5 oil and gas well locations, that the Company will be profitable.

The Company ~~agreed,~~plans ~~the~~to ~~Participation~~acquire ~~and~~additional ~~Operating~~producing ~~Agreement~~or ~~(the~~near ~~"POA"),~~producing tooil ~~have~~and ~~Assignor~~gas ~~the~~properties ~~designated~~that ~~Operator~~will ~~(the~~provide ~~"Operator")~~cash offlow ~~the~~and ~~Oil~~an ~~and~~upside ~~Gas~~for ~~Well~~future ~~Locations~~development. ~~which~~Such ~~includes~~activities ~~all~~are ~~the~~concentrated ~~responsibilities~~in asNorth aAmerica ~~designated~~onshore, ~~operator~~primarily in the ~~State~~United ofStates. ~~Pennsylvania~~We ~~which~~are ~~includes~~currently ~~the~~scouting ~~duties~~and ofevaluating ~~managing~~properties in Texas, Oklahoma, Pennsylvania, Kansas and ~~supervising~~in Canada. There is no assurance that we will be successful in raising the ~~drilling~~necessary ~~and~~funds ~~completions~~to acquire any of ~~the~~producing ~~Oil~~oil and ~~Gas~~gas ~~Locations~~properties.

OnWe ~~December~~were ~~18,~~incorporated ~~2012,~~on ~~pursuant~~December ~~to the POA~~20, ~~the~~2007 ~~Operator~~in ~~invoiced~~ the ~~Company~~State ~~$835,000 for the drilling and completion~~ of ~~five oil wells on the Rice lease~~Nevada. ~~The~~We ~~Company~~are ~~has~~a ~~recorded~~development ~~the~~stage ~~transaction~~company, ~~capitalizing the drilling~~ and ~~completions~~to asdate ~~work~~have inearned ~~progress.~~limited ~~The liability is included in the Company's Accounts Payable~~revenue.

OnOur ~~March~~focus ~~18,~~is ~~2013, pursuant~~ to agenerate ~~letter~~cash agreement, Amendment #3, between the Company and Vencedor Energy Partners, the Company has agreed to delete Section 4a (financing conditions) of the Oil and Gas Well Location Assignment dated August 31, 2012 between Xun Energy, Incflow. ~~and Vencedor Energy Partners.~~

OnMission ~~March~~Statement ~~30, 2013, the Company's operator, Vencedor Energy Partners, began site work on the Rice lease.~~

On· ~~August~~To ~~26,~~become ~~2013,~~a ~~the~~leader ~~Company's~~in ~~operator,~~providing ~~Vencedor Energy Partners (VEP)~~energy, ~~completed~~through ~~the~~acquisition ~~drilling, casing~~ and ~~cementing of our first oil well of the 30 well drilling program~~diversification. ~~Rice~~· ~~oil~~To ~~well~~acquire ~~number~~working 15interest ~~was~~positions ~~drilled~~and tomineral ~~the~~rights ~~Target~~leases ~~Depth of 1,050' on the Rice lease, in Venango County, PA. Samples were taken during the drilling program~~ for ~~analysis. Petroleum odors were emitted at~~ the ~~720',~~purposes ~~745', and 915' levels~~ of ~~the wellbore, indicating~~ oil ~~presence~~and atgas ~~these~~development ~~depths. The~~and ~~review~~production ofusing ~~the~~new ~~drill cuttings (samples) from the Rice #15 supported the need for a wire line log to be conducted on the well. VEP's geologist confirmed that the samples taken on August 26~~technologies, ~~2013~~advanced ~~revealed~~drilling aand ~~well~~completion ~~formed~~methods ~~zone in the Venango 2~~ and ~~also~~invest ~~potential lenses~~ in ~~the~~known, ~~Venango~~producing 1properties and ~~Red~~surrounding ~~Valley sequence~~areas. ~~Oil~~· ~~saturation~~To isbe ~~estimated~~aggressive atin ~~30-35%~~gaining ~~for~~interest ~~the~~positions ~~Venango sequence with a strong show~~ in ~~the~~leases ~~Red~~and ~~Valley~~existing ~~sequence.~~producing ~~The~~properties ~~log~~that will ~~provide~~produce ~~enough~~desirable ~~details~~returns, toutilize ~~determine~~leading ~~other~~technologies, ~~key~~utilize ~~factors~~methods into ~~determining~~maximize ~~whether~~exploration orand ~~not~~production ~~the~~results ~~oil~~while ~~well~~providing ~~should~~Return beOn ~~put into production~~Investment.

On September 16, 2013 the Company's operator, Vencedor Energy Partners (VEP), completed the nuclear wire line log on Rice #15 on the Rise Lease, in Venango County, PA. Verbal reports from the logging crew and staff on site were very positive when the logging tool pulled out of the well bore was covered with crude oil.Strategy

OnWe ~~September 25,~~aspire ~~2013~~to ~~the~~be ~~Company's~~an ~~operator,~~independent ~~Vencedor~~oil ~~Energy~~and ~~Partners~~gas ~~(VEP),~~company ~~reported~~in ~~the~~North ~~analysis~~America ofand ~~the~~to ~~wire-line~~provide ~~log~~our onshareholders ~~Rice~~with ~~#15~~returns onover the ~~Rise~~long-term. ~~Lease~~To achieve this, ~~Venango~~we ~~County~~strive to optimize our capital investments to maximize growth in cash flows, PAearnings, production and establish reserves. ~~VEP~~We ~~reported~~will ~~the~~do ~~following~~this by:

1.· ~~The~~Generating ~~Venango-First~~cash ~~has~~flow, ~~two~~· ~~separated~~Securing ~~lenses,~~financing ~~one~~to isacquire ~~about~~our 6planned ~~feet~~acquisitions, ~~762'-766',~~· ~~and~~Exercising ~~another~~capital 9discipline, ~~foot~~· ~~section,~~Ensuring ~~788'-797'~~financial strength, and ~~both~~· ~~have~~Investing ~~decent~~in ~~porosity. The sand thickness has developed at this location along with its~~ oil ~~saturations. The upper~~ and ~~lower~~gas ~~lenses~~properties ~~both have a fair to good oil show. 2. The Venango-Second has 16 feet of formation on the bottom lens, 916'-932',~~ with ~~good~~strong ~~porosity and saturation and another 4 feet above it, 908'~~full-~~912'~~cycle ~~that's producible with lesser values~~margins. The porosity on the lower lens has a fair to excellent show of oil with a poorer oil show in the upper lens portion. 3. VEP recommended the balance of the infrastructure on the Rice Lease be completed first. After the infrastructure is installed, then Rice #15 well should be completed for production.

~~THE~~Xun ~~COMPANY~~Oil ~~WILL~~Marketing NEED TO RAISE ADDITIONAL FUNDS TO DRILL THE OIL AND GAS WELLS AND THERE IS NO GUARANTEE THAT THE COMPANY WILL BE SUCCESSFUL IN RAISING THE FUNDS NECESSARY TO COMPLETE 1 OR ANY OF THE 30 OFFSET OIL AND GAS WELLS.Division

~~NOTE~~The ~~21: TERMINATION~~Company OFbegan ~~FINANCIAL~~its ~~CONSULTING~~evaluation ~~SERVICES~~of ~~AGREEMENT~~establishing an oil marketing division to provide the procurement services for physical commodity trading. The Xun Oil Marketing Division (XOM), is lead by Jerry G. Mikolajczyk, our President, capitalizing on his expertise, experience and industry connections, in developing XOM. The research and evaluation is based on the following primary business objectives:

On· ~~December~~Purchase ~~18,~~high ~~2012,~~quality ~~the~~petroleum ~~Company~~products ~~issued~~from areputable ~~Notice~~Suppliers; of· ~~Termination~~Establish tolong ~~Vaquero~~term ~~Private~~Supplier ~~Capital,~~contracts; ~~Inc.~~· ~~(“VPC”)~~Sell ~~for~~high ~~breach~~quality ofpetroleum ~~contract~~products ~~by VPC, terminating the September 4, 2012 twelve month Financial Consulting Services Agreement (the “Agreement”) effective as of June 1, 2012, pursuant~~ to ~~which~~Majors; ~~VPC~~· ~~would~~Establish ~~provide~~long ~~consulting~~term ~~services~~sales inagreements ~~connection~~ with the ~~Company’s~~Majors; ~~business affairs~~ and ~~assist~~· ~~the~~Establish ~~Company~~long interm ~~raising~~relationships ~~capital. In~~and ~~consideration~~creditability ofwith ~~the~~Suppliers ~~services~~and toBuyers bebased ~~provided~~on byproduct ~~VPC~~quality, ~~the~~delivery ~~Company paid VPC a prepaid fee of $810~~performance,~~000~~ inservice ~~the~~and ~~form of 16~~flexibility.~~2 million common shares of the Company. The Company has placed a Stop Order on the transference of 16.2 million shares pending resolution of the breach of contract by VPC.~~

32The Company has not committed to begin full operations of the Xun Oil Marketing Division until the Company has concluded with its research and evaluation. There are no assurances that the Company will commence operations of XOM. There are no assurances that should the Company commence operations in XOM, that XOM will generate revenue. There are no assurances that should the Company generate revenue in XOM, that XOM or the Company will be profitable.

~~NOTE 22: FINANCING AGREEMENTS~~30

OnSubsequent May 7, 2013, the Company entered into a reserve equity financing agreement (the “Financing Agreement”) with AGS Capital Group, LLC, (“AGS”). Pursuant to the Financing Agreement, the Company has the right, but not the obligation, to issue $15,000,000 of the Company’s common stock to AGS over the course of 3 years. The Company has full control and discretion over the timing and amount of any shares that they sell to AGS when the Market Price, as defined in the Financing Agreement, is $0.50 or higher per share. For each advance, the Company may issue an amount of stock up to $250,000. Such advance will not exceed more than 200% of the average daily trading volume for the previous 10 trading days. The purchase price of the shares shall be set at ninety percent (90%) of the average of the three (3) lowest closing bid prices of the stock during the ten (10) consecutive weekday trading days (the “Pricing Period”) immediately after the date on which the Company provides an advance notice. The Company, at its option, may select a safety net price for any specified advance which the Company will not sell shares to AGS under that advance when the Purchase Price (Market Price less 10% discount) falls below such safety net price during the Pricing Period. The Company issued 4,081,633 shares of common stock as a commitment fee deposit towards the commitment fee of $40,000 to be deducted from the first advance. Events:

On ~~May~~September 78, ~~2013~~2014, the ~~Company~~Aviation ~~entered~~Jet ~~into~~Fuel asupplier ~~registration~~for ~~rights~~XOM's JV002 ~~agreement~~confirmed ~~with AGS (~~the ~~“RRA,”~~terms and ~~along~~conditions ~~with~~for ~~the~~an ~~Financing~~SPA ~~Agreement,~~for ~~the~~61 ~~“Agreements”). According~~million tobarrels ~~the~~of ~~RRA,~~Aviation ~~the~~Jet ~~Company~~Fuel ~~must~~FOB ~~file~~Rotterdam. aThe ~~registration~~SPA ~~statement~~is onsubject ~~Form~~to ~~S-1,~~JV002 ~~registering~~executing ~~the~~a ~~shares~~Charter ofParty ~~common~~Agreement ~~stock~~(CPA) ~~which~~with ~~may~~its benominated ~~issued~~shipping company to ~~AGS~~deliver ~~pursuant~~the toAviation ~~the~~Jet ~~Financing~~Fuel ~~Agreement~~to ~~within~~Rotterdam ~~thirty~~and ~~(30)~~paying ~~days~~50% of the ~~date~~cost of the ~~RRA~~vessel for first delivery to Rotterdam.

~~Prior~~On September 9, 2014, the Company was named in a Debt Settlement Claim for $1,834,935 (hereinafter referred to "DSC"). The DSC consists of creditors of the ~~date~~Company including insiders of the ~~Agreements,~~Company ~~AGS~~that ~~had~~voluntarily noassigned ~~material~~all ~~interaction,~~or ~~other~~a ~~than~~portion of their receivable from the ~~negotiation~~Company to the Plaintiff subject to approval of a court. The Company has agreed to settle the ~~Agreements,~~DSC ~~with~~relying on the ~~Company~~3(a)10 exemption pending a Fairness Hearing.

On ~~May~~September 2912, ~~2013~~2014, JV002 executed the ~~Company~~CPA ~~filed~~to adeliver ~~Registration~~the ~~Statement,~~Aviation ~~Form~~Jet ~~S-1, registering the~~Fuel ~~shares~~to ofRotterdam. ~~common~~The ~~stock~~CPA requires JV002 to pay for 50% of the ~~Company~~vessel asfor ~~follows:~~the first delivery to Rotterdam.

1.On ~~75,000,000~~September ~~shares of the Company's common stock (the “Put Shares”) that the Company will put to AGS pursuant to Financing Agreement between AGS and the Company~~26, ~~dated May 7~~2014, ~~2013,~~JV002 ~~and~~paid 2.its ~~4,081,633~~50% ~~commitment~~share ~~shares~~ of the ~~Company's~~vessel ~~common~~for ~~stock~~ the ~~Company~~first ~~paid~~delivery to ~~AGS as a fee for providing the facility~~Rotterdam.

InTHERE ~~the~~CAN ~~event~~BE ofNO ~~stock~~ASSURANCE ~~splits,~~THAT ~~stock~~JV002 ~~dividends,~~WILL orBE ~~similar~~ABLE ~~transactions~~TO ~~involving~~SELL ~~the~~THE ~~common~~AVIATION ~~stock,~~JET ~~the~~FUEL ~~number~~SHOULD ofJV002 ~~common~~BE ~~shares~~SUCCESSFUL ~~registered~~CLOSING ~~shall,~~ON ~~unless~~THE ~~otherwise~~AVIATION ~~expressly~~JET ~~provided,~~FUEL ~~automatically~~PURCHASE beWHEN ~~deemed~~THE toAVIATION ~~cover~~JET ~~the~~FUEL ~~additional~~ARRIVES ~~securities~~AT ~~to be offered or issued pursuant to Rule 416 promulgated under the Securities Act of 1933, as amended (the “Securities Act”)~~ROTTERDAM. InEVEN ~~the~~IF ~~event~~JV002 ~~that~~WAS ~~adjustment~~SUCCESSFUL ~~provisions~~IN ofSELLING ~~the~~THE ~~Drawdown~~AVIATION ~~Agreement~~JET ~~require the registrant to issue more shares than are being registered in this registration statement~~FUEL, ~~for~~THERE ~~reasons~~CAN ~~other~~BE ~~than~~NO ~~those~~ASSURANCE ~~stated~~THAT inTHE ~~Rule~~SALE ~~416~~OF ofTHE ~~the~~AVIATION ~~Securities~~JET ~~Act~~FUEL ofWILL ~~1933,~~BE asPROFITABLE ~~amended,~~OR ~~the~~THAT ~~Company~~THE ~~will~~COMPANY ~~file~~WILL aBE ~~new~~ABLE ~~registration~~TO ~~statement~~GENERATE toSUFFICIENT ~~register~~REVENUES ~~those~~TO ~~additional~~OPERATE ~~shares~~PROFITABLY.

On July 1, 2013, the Company requested the withdrawal of the Registration Statement, Form S-1 (Registration No. 333-188906) because the related reserve equity financing agreement with AGS contained provisions that result in the selling stockholder not being irrevocably bound to purchase the shares that the Company elects to sell under the agreement. No securities were sold pursuant to the Registration Statement. Introduction

OnWe ~~July~~are ~~11,~~an ~~2013,~~independent ~~the~~oil ~~Company~~and ~~entered~~natural ~~into~~gas adevelopment ~~amended~~ and ~~restated~~production ~~reserve~~company. ~~equity~~Our ~~financing~~basic ~~agreement~~business ~~(the~~model ~~“Financing~~is ~~Agreement”) with AGS Capital Group, LLC, (“AGS”). Pursuant~~ to ~~the~~increase ~~Financing~~shareholder ~~Agreement,~~value ~~the~~by ~~Company~~finding ~~has~~and ~~the~~developing ~~right,~~oil ~~but~~and ~~not~~gas ~~the~~production ~~obligation,~~through todevelopment ~~issue $15~~activities,~~000,000~~ ofwhich ~~the~~include ~~Company’s~~drilling ~~common~~offset ~~stock~~oil toand ~~AGS~~gas ~~over~~wells ~~the course of 3 years. The Company has full control~~ and ~~discretion~~re-entering ~~over~~oil ~~the timing~~ and ~~amount~~gas ofwells, ~~any shares~~ that ~~they~~have ~~sell~~historical tooil ~~AGS~~and ~~when~~gas ~~the~~production ~~Market~~or ~~Price,~~are ascurrently ~~defined~~producing inoil ~~the~~and ~~Financing Agreement~~gas, isand ~~$0.50~~selling ~~or higher per share. For each advance,~~ the ~~Company~~production ~~may~~from ~~issue an amount of stock up to $250~~these,~~000.~~ ~~Such~~worked ~~advance~~over ~~will~~wells ~~not~~at ~~exceed~~a ~~more than 200% of the average daily trading volume for the previous 10 trading days~~profit. ~~The~~To ~~purchase price of the shares shall~~ be ~~set~~successful, atwe ~~ninety~~must, ~~percent~~over ~~(90%)~~time, ofcomplete ~~the~~our ~~average~~goal of ~~the~~raising ~~three~~sufficient ~~(3)~~funds ~~lowest~~to ~~closing~~drill ~~bid~~offset ~~prices~~wells ofor ~~the~~complete ~~stock~~development ~~during~~programs ~~the~~over ~~ten (10) consecutive weekday trading days (~~the ~~“Pricing~~next ~~Period”)~~year ~~immediately~~and ~~after~~then ~~the~~sell ~~date on which~~ the ~~Company~~resulting ~~provides~~production ~~an advance notice. The Company,~~ at ~~its option, may select~~ a ~~safety net~~ price ~~for any specified advance which the Company will not sell shares to AGS under~~ that ~~advance~~is ~~when~~sufficient the Purchase Price (Market Price less 10% discount) falls below such safety net price during the Pricing Period. The Company issued 4,081,633 shares of common stock as a commitment fee deposit towards the commitment fee of $40,000 to becover ~~deducted~~our ~~from~~operating ~~the first advance. Prior to the date of the Agreement~~expenses, ~~AGS~~administrative ~~had~~costs noand ~~material~~interest ~~interaction with the Company~~expense, ~~other~~plus ~~than~~offer ~~the~~us ~~negotiation~~a ofreturn ~~the~~on ~~Agreement~~our ~~and~~capital ~~the negotiation and execution of the original reserve equity financing agreement and registration rights agreement~~investment.

33We have a limited operating history of oil and gas production and no proven reserves, no production and negative cash flow. To date, we have had limited revenues and have not been able to generate sustainable positive earnings on a Company-wide basis. Our management cannot provide any assurances that the Company will ever operate profitably. As a result of our limited operating history, we are more susceptible to the numerous business, investment and industry risks that have been described in Item 1A. Risk Factors of our Annual Report on Form 10K for the fiscal year ended May 31, 2014 .

OnOur ~~July~~longer-term 11success depends on, ~~2013~~among many other factors, the ~~Company~~production ~~also~~of ~~entered~~grade ~~into~~oil aand ~~registration~~gas ~~rights~~properties ~~agreement~~and ~~with~~on ~~AGS (~~the ~~“RRA,”~~prevailing sales prices for oil and natural gas along with ~~the~~associated ~~Financing~~operating ~~Agreement, the “Agreements”)~~expenses. ~~According~~ toThe ~~the~~volatile ~~RRA,~~nature of the ~~Company~~energy ~~must~~markets ~~file~~makes ait ~~registration~~difficult ~~statement~~to onestimate ~~Form~~future ~~S-1,~~prices ~~registering~~of ~~the~~oil ~~shares~~and ofnatural ~~common~~gas; ~~stock~~however, ~~which~~any ~~may~~prolonged beperiod ~~issued~~of todepressed ~~AGS~~prices ~~pursuant~~would tohave ~~the~~a ~~Financing~~material ~~Agreement~~adverse ~~within~~effect ~~thirty~~on ~~(30)~~our ~~days~~results of ~~the~~operations ~~date~~and offinancial ~~the~~ condition.

~~RRA.~~Our ~~Prior~~operations toare ~~the~~focused ~~date~~on ofidentifying ~~the~~and ~~Agreement,~~evaluating ~~AGS~~prospective ~~had~~oil noand ~~material~~gas ~~interaction~~properties ~~with~~and ~~the~~funding ~~Company,~~projects ~~other~~that ~~than~~we believe have the ~~negotiation~~potential ofto ~~the~~produce ~~Agreement~~oil ~~and~~or ~~the~~gas ~~negotiation~~in ~~and~~commercial ~~execution~~quantities ofsubject to the ~~original~~Company ~~reserve~~obtaining ~~equity~~the ~~financing~~necessary ~~agreement~~funding ~~and~~for ~~registration~~the ~~rights~~offset ~~agreement~~drilling or development programs.

OnOur ~~September~~inability ~~17,~~to ~~2013~~generate sufficient revenue during the ~~Company~~three ~~filed~~month aperiod ~~Registration~~ending ~~Statement~~August 31, ~~Form~~2014 ~~S-1, registering~~ is due primarily to difficulties in our ability to raise sufficient funds necessary to close on the ~~shares~~financing ofto ~~common~~complete ~~stock~~the ofdrilling and completion program on the remaining 4 oil and gas well locations in Venango County, Pennsylvania. There are no assurances that the Company aswill ~~follows:~~be successful in raising sufficient funds to accomplish our goals and objectives.

1.COMPARISON ~~75,000,000~~OF ~~shares~~RESULTS ofOF ~~the~~OPERATIONS ~~Company's~~FOR ~~common~~THE ~~stock~~THREE ~~(the~~MONTHS “Put Shares”) that the Company will put to AGS pursuant to Financing Agreement between AGS and the Company, dated May 7, 2013, and 2. 4,081,633 commitment shares of the Company's common stock the Company paid to AGS as a fee for providing the facility.ENDED

InAUGUST ~~the event of stock splits~~31, ~~stock~~2014 ~~dividends,~~AND orAUGUST ~~similar transactions involving the common stock~~31, the number of common shares registered shall, unless otherwise expressly provided, automatically be deemed to cover the additional securities to be offered or issued pursuant to Rule 416 promulgated under the Securities Act of 1933, as amended (the “Securities Act”)2013. In the event that adjustment provisions of the Drawdown Agreement require the registrant to issue more shares than are being registered in this registration statement, for reasons other than those stated in Rule 416 of the Securities Act of 1933, as amended, the Company will file a new registration statement to register those additional shares.

OnResults November 27, 2013, the Company amended the reserve equity financing agreement (the “Amendment”) with AGS. The amendment clarifies Section 2.1, Advances to include a new defined term, “Exercise Market Price,” which shall mean the average of ~~the~~Operations 3 lowest Closing Bid Prices of the Company’s Common Stock prior to any Advance Notice Date. The Amendment did not further change or amend the terms and conditions of the Amended and Restated Reserve Equity Financing Agreement (the Financing Agreement"), between the Company and AGS dated July 11, 2013.

~~NOTE~~The ~~23:~~following ~~SUBSEQUENT~~discussion ~~EVENTS~~and analysis of our results of operations and financial condition for the three months ended August 31, 2014 should be read in conjunction with our unaudited interim consolidated financial statements and related notes included in this report, as well as our most recent annual report on Form 10-K for the year ended May 31, 2014 filed with the SEC.

The Company issued 90,000,000 shares on December 3, 2013 for 9,000 pursuant to the conversion of a Convertible Promissory Note dated October 19, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.31

~~The~~ Three ~~Company~~Months ~~issued~~Ended ~~34,333,333~~August ~~shares on December 11~~31, ~~2013~~2014 ~~for~~Compared ~~$2,060 pursuant~~ to ~~the~~Three ~~conversion~~Months ofEnded aAugust ~~Convertible Promissory Note dated May 2~~31, 2013~~. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.~~

The Company issued 34,000,000 shares on December 12, 2013 for $1,700 pursuant to the conversion of a Convertible Promissory Note dated June 5, 2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act. Revenues

OnWe ~~December~~generated 16$24,123 ~~2013~~in ~~the~~revenue ~~Company~~for ~~filed~~the anthree ~~amended~~months ~~Registration~~ending ~~Statement~~August 31, ~~Form~~2014 ~~S-1/A~~and no revenues for the three months ending August 31, ~~registering~~ 2013. Our operations to date have been financed by the ~~shares~~sale of our common stock ofand ~~the~~third ~~Company~~party asloans. ~~follows:~~

1.Lease ~~33,333,334~~operating ~~shares~~expenses offor the ~~Company's~~three ~~common~~months ~~stock~~ended ~~(the~~August ~~“Put~~31, ~~Shares”)~~2014 ~~that~~and ~~the~~August ~~Company~~31, ~~will~~2013 ~~put~~totalled to$11,736 ~~AGS~~and ~~pursuant~~zero, torespectively. ~~Financing~~Our ~~Agreement~~single ~~between~~largest ~~AGS~~lease ~~and~~operating expense for the ~~Company,~~three ~~dated~~months ~~November~~ended ~~27,~~August ~~2013~~31, ~~and~~2014 2.has ~~4,081,633~~been ~~commitment~~the ~~shares~~depletion and depreciation of the ~~Company's~~capital ~~common~~cost ~~stock~~of the ~~Company~~drilling ~~paid~~and tocompleting ~~AGS~~the asoil awell ~~fee~~including ~~for~~infrastructure ~~providing the facility~~costs.

In General ~~the~~and ~~event~~Administrative ofexpenses, ~~stock~~including ~~splits,~~financial ~~stock~~consulting ~~dividends~~fees, orfor ~~similar~~the ~~transactions~~three ~~involving~~months ~~the~~ended ~~common~~August ~~stock~~31, ~~the~~2014 ~~number~~and ofAugust ~~common~~31, ~~shares~~2013 ~~registered~~totalled ~~shall~~$1,475,395 ~~unless~~and ~~otherwise expressly provided~~$301,484 ~~automatically~~respectively. beThe ~~deemed~~largest toexpense ~~cover~~is the ~~additional~~impairment ~~securities~~of tothe be25 ~~offered~~Venango orCounty ~~issued~~oil ~~pursuant~~and togas ~~Rule~~leases, ~~416 promulgated under~~ the ~~Securities~~impairment ~~Act~~ of ~~1933,~~assets asthat ~~amended~~may ~~(the~~be ~~“Securities~~paid ~~Act”).~~on Ina ~~the~~non-cash ~~event~~basis ~~that~~stemming ~~adjustment~~from ~~provisions~~a of3(a)10 ~~the~~exemption ~~Drawdown~~as ~~Agreement~~a ~~require~~settlement ~~the~~of ~~registrant~~certain toliabilities ~~issue~~of ~~more~~the ~~shares~~Company ~~than~~when securities are ~~being~~issued ~~registered~~ in ~~this~~exchange ~~registration statement,~~ for ~~reasons~~ other ~~than~~securities, ~~those~~not ~~stated~~for incash, ~~Rule~~and ~~416 of~~ the ~~Securities~~fairness ~~Act~~ of ~~1933, as amended,~~ the ~~Company~~exchange ~~will~~is ~~file~~approved by a ~~new~~court ~~registration~~or ~~statement~~a togovernmental ~~register those additional shares~~entity. ~~Refer to NOTE 22: FINANCING AGREEMENTS for detailed information on the Financing Agreement with AGS.~~

~~The~~ Other ~~Company~~Expenses ~~issued~~for ~~34,333,333~~the ~~shares~~three onmonths ~~December~~ended ~~16,~~August ~~2013 for $2~~31,~~060~~ ~~pursuant~~2014 toand ~~the~~August ~~conversion~~31, of2013 atotalled ~~Convertible~~$29,184 ~~Promissory~~and ~~Note dated May 2~~$137,442 ~~2013~~respectively. The ~~issuance~~Other ofExpenses ~~the~~include ~~common~~debt ~~stock~~interest, ~~was~~amortized ~~exempt~~discounts ~~from~~and ~~registration under Section 3(a)(9) of the Securities Act~~extraordinary.

~~The~~For ~~Company~~the ~~issued~~three ~~100,000,000~~months ~~shares~~ended onAugust ~~December 18~~31, ~~2013~~2014 ~~for~~we ~~$10,000~~had ~~pursuant~~a tonet ~~the~~loss ~~conversion~~ of a($1,492,192) ~~Convertible~~and ~~Promissory~~a ~~Note~~net ~~dated~~loss ~~October~~of 19($438,927) ~~2012.~~for ~~The issuance of~~ the ~~common~~three ~~stock~~months ~~was~~ended ~~exempt~~August ~~from~~31, ~~registration under Section 3(a)(9) of the Securities Act~~2013.

34Until we obtain additional funding to complete our oil and gas well drilling and completions program, we do not anticipate our revenues will be sufficient to cover our operating expenses. In which case we may have to cease operations and you may lose your entire investment.

~~The~~Liquidity ~~Company~~and ~~issued~~Capital 46,500,000 shares on December 23, 2013 for $2441 pursuant to the conversion of a Convertible Promissory Note dated July 2, 2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.Resources

~~The~~Assets ~~Company~~and issued 122,830,000 shares on January 6, 2014 for $12,238 pursuant to the conversion of a Convertible Promissory Note dated October 19, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.Liabilities

~~The~~Our ~~Company~~primary ~~issued~~financial 56resource is our base of unproven oil and gas leases. Our ability to fund our capital expenditure program is dependent upon the availability of capital resource financing. In this fiscal year,~~000,000~~ ~~shares~~we planned on ~~January~~spending 15approximately $9,000,000 ~~2014~~in new capital investments for ~~$2,800~~the ~~pursuant~~purchase toof the ~~conversion~~Texas Falls oil and gas leases and the drilling of a23 ~~Convertible~~new ~~Promissory~~oil ~~Note~~and ~~dated~~gas ~~June~~wells 5,on ~~2013~~these leases. ~~The~~Factors ~~issuance~~such as changes in operating margins due to changes in the price of oil and gas and the ~~common~~availability ~~stock~~of ~~was~~capital ~~exempt~~resources-- ~~from~~could ~~registration~~increase ~~under~~or ~~Section~~decrease ~~3(a)(9)~~our ultimate level of expenditures during the ~~Securities~~remaining ~~Act~~fiscal year.

OnThe ~~January~~changes ~~16,~~in ~~2014~~our ~~the~~capital ~~Company~~resources ~~filed~~at anAugust ~~amended Registration Statement~~31, ~~Form~~2014 ~~S-1/A, registering the~~compared ~~shares~~with ofAugust ~~common~~31, ~~stock~~2013 ~~of the Company as follows~~are:

1. 33,333,334 shares of the Company's common stock (the “Put Shares”) that the Company will put to AGS pursuant to Financing Agreement between AGS and the Company, dated November 27, 2013, and 2. 4,081,633 commitment shares of the Company's common stock the Company paid to AGS as a fee for providing the facility.


Changes in our capital resources
				(Unaudited)
		August 31, 2014		August 31, 2013		Increase (Decrease)	Percentage Change

Cash	$	3,216	$	9,213	$	(5,996)	65.09%
Current Assets		39,067		393,295		(354,228)	90.07%
Total Assets		556,452		1,871,795		(1,315,343)	70.27%
Current Liabilities		3,145,956		3,045,970		99,986	3.28%
Total Liabilities		3,145,956		3,045,970		99,986	3.28%
Working Capital Deficit	$	3,106,890	$	2,652,676	$	454,214	17.12%

In Our ~~the~~working ~~event~~capital ofdeficit ~~stock~~increased ~~splits~~by $454,214 ~~stock~~from ~~dividends~~$2,652,676 oras ~~similar~~of ~~transactions~~August ~~involving~~31, ~~the~~2013 ~~common~~to ~~stock~~$3,106,890 ~~the~~as ~~number~~ of ~~common~~August ~~shares registered shall~~31, ~~unless~~2014. ~~otherwise~~This ~~expressly~~increase ~~provided,~~in ~~automatically be deemed to cover~~ the ~~additional~~deficit ~~securities~~was todue ~~be offered or issued pursuant~~ to ~~Rule 416 promulgated under~~ the ~~Securities~~amount ~~Act~~ of ~~1933,~~resources aswe ~~amended~~expended ~~(the~~to ~~“Securities~~source ~~Act”).~~financing Infor the ~~event~~drilling ~~that~~and ~~adjustment~~completions ~~provisions~~for of the ~~Drawdown~~remaining ~~Agreement~~25 ~~require~~oil ~~the~~and ~~registrant~~gas toleases ~~issue more shares than are being registered~~ in ~~this~~Venango ~~registration statement~~County, ~~for~~PA; ~~reasons~~complete ~~other~~all ~~than those stated in Rule 416 of~~ the ~~Securities~~necessary ~~Act~~SEC offilings; ~~1933~~and, assupport ~~amended,~~ the ~~Company~~drilling ~~will~~and ~~file~~completions awork ~~new~~program ~~registration statement to register those additional shares. Refer to NOTE 22: FINANCING AGREEMENTS for detailed information~~ on the ~~Financing~~Rice ~~Agreement~~Lease ~~with~~in ~~AGS~~Venango County, PA.

~~ITEM~~Over ~~2. MANAGEMENT'S~~the ~~DISCUSSION~~past ~~AND~~three ~~ANALYSIS~~months, OFwe ~~FINANCIAL~~expended ~~CONDITION~~our ~~AND~~resources ~~RESULTS~~to OFraise ~~OPERATIONS~~funds to complete our 29 oil well drilling program in Venango County, PA, to attempt to raise funds for the acquisition of oil and gas leases that meet our criteria, to raise sufficient funds to fund a drilling and completions programs once we acquired oil and gas leases, updating our prior SEC filings with XBRL interactive data files, and completing our fiscal year end consolidated statements and SEC filings and the research for the Xun Oil

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations.~~ 32

~~The~~Marketing ~~following~~Division. ~~management’s~~Our ~~discussion~~business ~~and~~is ~~analysis~~capital ~~(“MD&A”)~~intensive. Our ability to grow is ~~management’s~~dependent ~~assessment~~on offavorably ~~the~~obtaining ~~historical~~outside ~~financial~~debt and ~~operating~~capital ~~results~~and ofgenerating ~~the~~cash ~~Company~~flows ~~during~~from ~~the~~operating ~~period~~activities ~~covered~~necessary byto ~~the~~fund ~~financial~~our ~~statements~~investment activities. ~~This~~There ~~MD&A~~is ~~should~~no assurance that we will be ~~read~~able into ~~conjunction~~achieve ~~with~~profitability. ~~the~~Since ~~audited~~our ~~consolidated~~future ~~financial~~operations ~~statements~~will continue to be dependent on successful development activities and ~~the~~our ~~related~~ability ~~notes~~to seek and ~~other~~secure ~~information~~capital ~~included~~from ~~elsewhere~~external insources, should we be unable to achieve sustainable profitability this ~~Quarterly~~could ~~Report~~cause onany ~~Form~~equity ~~10-Q~~investment in the Company to become worthless.

~~CAUTIONARY~~Major ~~STATEMENT~~sources ~~REGARDING~~of ~~FORWARD-LOOKING~~funds ~~INFORMATION~~in the past for us have included the debt or equity markets. We will have to rely on these capital markets to fund future operations and growth. Our business model is focused on the development of our properties. Our ability to generate future revenues and operating cash flow will depend on successful completion of our planned drilling and completions program and the acquisition of oil and gas producing properties, which may very likely require us to continue to raise equity or debt capital from outside sources.

~~This~~The ~~Quarterly~~Company ~~Report~~has onongoing ~~Form 10-Q~~capital ~~for~~commitments ~~the~~to ~~quarterly~~develop ~~period~~certain ~~ended~~leases ~~November~~pursuant ~~30,~~to ~~2013~~their ~~contains~~underlying ~~“forward-looking statements”~~terms. ~~Generally,~~Failure ~~the~~to ~~words~~meet ~~“believes”,~~such ~~“anticipates,”~~ongoing “commitments may,” ~~“will,”~~result ~~“should,”~~in ~~“expect,”~~the ~~“intend,”~~loss ~~“estimate,”~~of ~~“continue,” and similar expressions or~~ the ~~negative~~lease ~~thereof~~itself. orThese ~~comparable~~ongoing ~~terminology~~capital ~~are~~commitments ~~intended~~require tous ~~identify forward-looking statements which include, but are not limited~~ to, ~~statements~~seek ~~concerning the Company’s expectations regarding its working~~ capital ~~requirements,~~from ~~financing~~sources ~~requirements,~~outside ~~business prospects, and other statements~~ of ~~expectations,~~the ~~beliefs, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts~~Company. ~~Such~~The ~~statements~~current ~~are~~uncertainty ~~subject to certain risks and uncertainties, including the matters set forth~~ in ~~this Quarterly Report or other reports or documents~~ the ~~Company~~credit ~~files~~and ~~with~~capital ~~the~~markets, ~~Securities~~ and ~~Exchange~~the ~~Commission~~economic ~~from time to time~~downturn, ~~which~~may ~~could~~restrict ~~cause~~our ~~actual~~ability ~~results or outcomes~~ to ~~differ~~obtain ~~materially~~needed ~~from those projected~~capital.

~~These~~Cash forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein.Flows

~~Undue~~Changes ~~reliance~~in ~~should not be placed on these forward-looking statements which speak only as of~~ the ~~date~~net ~~hereof.~~funds ~~Except~~provided ~~for~~by our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to(used ~~report~~in) ~~the~~each ~~occurrence~~ of ~~unanticipated~~our ~~events. For any forward-looking statements contained in any document~~operating, weinvesting ~~claim~~and ~~the~~financing ~~protection~~activities ofare ~~the~~set ~~safe~~forth ~~harbor for forward-looking statements contained~~ in the ~~Private~~table ~~Securities Litigation Reform Act of 1995.~~below:


Cash Flow Used in Operating activities:
		(Unaudited)
		August 31, 2014		August 31, 2014		Increase (Decrease)	Percentage Change
Net cash provided by (used in) operating activities	$	(38,246)	$	(92,457)	$	(54,211)	58.63%
Net cash provided by (used in) investing activities		-		(125)		(125)	100.00%
Net cash provided by (used by) financing activities	$	32,250	$	72,500	$	(40,250)	55.52%

~~OTHER~~Cash ~~PERTINENT~~flow ~~INFORMATION~~from operating activities is derived from changes in the balances of payables, or other non-oil property asset account balances. For the three months ended August 31, 2014, we had a negative cash flow from operating activities of $38,246, in comparison to a negative cash flow of $92,457 for the three months ended August 31, 2013. This change of $54,211 was the result of a increase in our payables balance and a decrease in our current assets. Variations in cash flow from operating activities may affect our level of development expenditures. Our expenditures consist primarily of our General and Administrative (G&A) expenses, which consist of consulting and professional services, employee compensation, legal, accounting, travel and other G&A expenses, which we have incurred in order to address necessary organizational activities.

~~When~~Cash ~~used~~Flow Used in ~~this~~Investing ~~report, the terms "Xun Energy," the "Company," "we," "our," and "us" refer to Xun Energy, Inc., a Nevada corporation.~~ activities:

~~General~~Cash flow used by investing activities was zero for the three months ended August 31, 2014. This is in comparison to $125 investing activities used for the three months ended August 31, 2013.

~~The~~Cash ~~Company~~Flow is engaged primarily in the acquisition of producing or near producing oil and gas properties and the development of these oil and gas properties. The Company acquired oil and gas properties that allow it to drill and complete 30 oil and gas wells with an option to acquire an additional 15 oil and gas well locations for drilling and completion in Venango County, Pennsylvania. There is no assurance that we will be successful in raising the necessary funds to drill and complete one or more of the 30 oil and gas well locations; there are no assurances that if we are successful in raising the necessary funds to drill and complete one or more of the 30 oil and gas well locations that they will produce oil and gas. There are no assurances that should oil and gas will be produced from ~~one~~Financing ~~or more of the 30 oil and gas well locations, that the Company will be profitable.~~ activities:

~~The~~Cash ~~Company~~flow ~~plans~~from tofinancing ~~acquire~~activities ~~additional~~is ~~producing~~derived orfrom ~~near~~short ~~producing~~term ~~oil~~debt ~~and~~account ~~gas~~balances ~~properties~~or ~~that~~in ~~will~~equity, ~~provide~~account ~~cash~~balances excluding retained earnings. Cash flow ~~and~~provided anby ~~upside~~financing activities was $32,250 for ~~future~~the ~~development.~~three ~~Such~~months ~~activities~~ended ~~are~~August ~~concentrated~~31, 2014. This is in ~~North~~comparison ~~America~~to ~~onshore~~$72,500 ~~primarily~~provided inby financing activities for the ~~United~~three ~~States~~months ended August 31, 2013. We ~~are~~anticipate ~~currently~~it ~~scouting~~will ~~and~~be ~~evaluating~~necessary ~~properties~~to inrely ~~Texas,~~on ~~Oklahoma,~~additional ~~Pennsylvania,~~funding ~~Kansas~~from ~~and~~the indebt ~~Canada.~~financing ~~There~~and isfrom nocapital ~~assurance~~markets ~~that~~in wethe ~~will~~current befiscal ~~successful~~year into ~~raising~~complete the ~~necessary~~4 ~~funds~~oil towell ~~acquire~~drilling ~~any~~and ofcompletions ~~producing~~program ~~oil~~in Venango County, P.A. other acquisitions and ~~gas~~to ~~properties~~discharge our debts.

WeOur ~~were~~business ~~incorporated~~is oncapital ~~December~~intensive. ~~20,~~Our ~~2007~~ability into ~~the~~grow ~~State~~is ofdependent ~~Nevada~~upon favorably obtaining outside capital and generating cash flows from operating activities necessary to fund our investment activities. WeThere ~~are~~is ano assurance that we will be able to achieve profitability. Since our future operations will continue to be dependent on successful development ~~stage~~activities ~~company,~~and our ability to seek and secure capital from external sources, should we be unable to ~~date~~achieve ~~have~~profitability ~~earned~~this ~~limited~~could ~~revenue.~~cause any equity investment in the Company to become worthless.

~~Our focus is to generate cash flow.~~ 33

OnWe ~~August~~have ~~31,~~limited ~~2012~~revenues ~~the~~to ~~Company~~satisfy ~~entered~~our ~~into~~ongoing anliabilities. ~~Oil~~Our ~~and~~auditors ~~Gas~~have ~~Well~~issued ~~Location~~a ~~Agreement~~going ~~with~~concern ~~Vencedor~~opinion. ~~Energy~~Unless ~~Partners~~we ~~(Assignor).~~secure ~~The~~equity, ~~agreement~~debt ~~allows~~financing ~~the~~or ~~Company~~Joint toVenture ~~drill~~partners, 30of ~~offset~~which ~~oil~~there ~~and~~can ~~gas~~be ~~wells~~no onassurance, 3or ~~producing~~identify ~~oil~~a ~~and~~profitable ~~gas~~acquisition ~~leases~~candidate, inwe ~~Venango~~will ~~County,~~not ~~Pennsylvania.~~be able to continue any operations.

~~The~~Plan ~~Company paid $585,000 in the form~~ of ~~11,700,000~~Operation ~~shares~~For ofRemaining ~~common~~Fiscal ~~stock (Shares) of the Company for the rights.~~ Year

~~The~~We ~~Company~~ will attempt to continue to source equity or debt financing, or Joint Venture partners for our operating costs and for our oil and gas well drilling programs or attempt to identify a profitable acquisition candidate. Pursuant to the May 7, 2013 Reserve Equity Financing Agreement with AGS Capital Group, LLC ("AGS"), we have ~~100%~~the ~~working~~right ~~interest~~to inissue up to $15,000,000 of our common stock to AGS over the ~~wells~~course of three years. We have had discussions with several companies and ~~Net~~individuals ~~Revenue~~for ~~Interest~~alternative funding and/or Joint Ventures. However, we have not come to terms with any company or individual as ~~follows:~~of August 31, 2014. We will attempt to finance our operating expenses with additional debt or through equity financing.

Lease Name	Net Revenue Interest Breakdown
Rice	Master Lease Lessor - 12.5% Royalty, Master Lease Lessee 2.5% Override royalty interest, Assignor - 2.5% Override royalty interest; and the Company - 82.5% royalty interest;
Lalley	Master Lease Lessor - 12.5% Royalty, Master Lease Lessee 2.5% Override royalty interest, Assignor - 2.5% Override royalty interest; and the Company - 82.5% royalty interest; and
Corse	Master Lease Lessor - 15.0% Royalty, Master Lease Lessee 2.5% Override royalty interest, Assignor - 2.5% Override royalty interest; and the Company - 80.0% royalty interest.

Our auditors have issued a going concern opinion. Unless we secure equity or debt financing, of which there can be no assurance, or our leasehold interests generate revenues sufficient to meet ongoing and accrued expenses, it is unlikely that we will be able to continue our operations in which case you will lose your investment.

~~The Agreement allows the Company to have the exclusive right to explore, operate, produce all naturally~~Off-~~occurring~~Balance ~~oil,~~Sheet gas, casing-head gas or gasoline, gas condensate and/or all other liquid or gaseous hydrocarbons and other marketable or non-marketable substances produced (Oil and Gas) from Oil and Gas deposits contained within and under the well location and any and all other rights and privileges necessary, incident to, or convenient for the economical operation of the well location and other lands for the production of Oil and Gas to the Company. A well location is defined as a circle having a radius of l50 feet with the well, to a depth as allowed in the Master Lease, at the center thereof. Arrangements

36We are not currently a party to, or otherwise involved with, any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues, or expenses, results of operations, liquidity, capital expenditures or capital resources.

~~The~~ITEM ~~Company~~3. QUANTITATIVE ~~owns~~AND ~~the~~QUALITATIVE ~~rights~~DISCLOSURE ~~and~~ABOUT ~~may~~MARKET ~~select up to 30 well locations from the following:~~ RISK

Lease Name	Locations	Rights
Rice	Up to 10	One well per location, to a depth from the surface through the Speechley sands which depth is approximately 2,200 feet on the Premises alone for producing oil and gas by any means, and all rights necessary convenient and incident thereto, granted pursuant to the Master Rice Lease.
Lalley	Up to 8	One well per location, to a depth from the surface through the Speechley sands which depth is approximately 2,200 feet on the Premises alone for producing oil and gas by any means, and all rights necessary convenient and incident thereto, granted pursuant to the Master Lalley Lease.
Corse	Up to 15	One well per location, to a depth from the surface through the Speechley sands which depth is approximately 2,000 feet on the Premises alone for producing oil and gas by any means, and all rights necessary convenient and incident thereto, granted pursuant to the Master Corse Lease.

Not applicable.

IfITEM ~~Company~~4. ~~does~~CONTROLS ~~not~~AND begin or provide proof of funds or funding for the first well on or before January 31, 2013, subject to our operator, Vencedor Energy Partners, obtaining the necessary permits to allow the Company to commence drilling and completions operations, and does not begin or provide proof of funds or funding for 3 more wells on or before March 31, 2013, then the Company will have forfeited its rights and the Agreement shall terminate and unwind and the Assignor agrees to return the Shares (11,700,000) to the Company. PROCEDURES

~~After~~Evaluation ~~completing 8 wells and if Company does not complete any~~ of ~~the~~Disclosure ~~remaining~~Controls 22 well drilling provision set forth in the Agreement within the 2 years from the date of the execution of the Agreement, then the Company will forfeit its rights to the well locations not completed. The Company will retain its rights for the well locations completed and ~~will retain an Override Royalty of Seven and one half per cent (7.5%) on the well locations forfeited.~~ Procedures

~~The~~We ~~Company~~maintain ~~has~~disclosure 2controls ~~years~~and ~~from~~procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed under the ~~date~~Securities ofExchange ~~execution~~Act of 1934, as amended, or 1934 Act, is recorded, processed, summarized, and reported within the ~~Agreement~~time periods specified in the SEC’s rules and forms and to ~~complete~~ensure that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer as appropriate, to allow timely decisions regarding required disclosure. At the ~~drilling~~end of the 30quarter ~~well~~ended ~~locations~~August 31, 2014 we carried out an evaluation, under the supervision and ~~has~~with the ~~option~~participation toof ~~acquire~~our anmanagement, ~~additional~~including 15our ~~well~~principal ~~locations~~executive ~~for~~officer and principal financial officer, of the ~~same~~effectiveness ~~terms~~of the design and ~~conditions~~operation of ~~the~~our ~~Agreement~~disclosure ~~after~~controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) under the ~~first~~1934 30Act. ~~wells~~Based ~~locations~~on ~~have~~this ~~been~~evaluation, ~~completed~~management concluded that as of August 31, 2014 our disclosure controls and procedures were effective.

~~The~~Limitations ~~Company~~on ~~will~~Effectiveness ~~provide funding in groups~~ of 4Controls toand ~~6 wells to optimize economies of scale, with the exception of the first 4 wells which can be funded on an individual basis.~~ Procedures

~~The~~Our ~~Company agreed~~management, ~~the~~including ~~Participation~~our Chief Executive Officer (Principal Executive Officer) and ~~Operating~~Chief ~~Agreement~~Financial Officer (~~the~~Principal ~~"POA"~~Financial Officer), todoes ~~have~~not ~~Assignor~~expect that our disclosure controls and procedures will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the ~~designated~~objectives ~~Operator~~of (the ~~"Operator")~~control system are met. Further, the design of a control system must reflect the ~~Oil~~fact that there are resource constraints and ~~Gas~~the ~~Well~~benefits ~~Locations~~of ~~which~~controls ~~includes~~must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the ~~responsibilities~~Company ashave abeen ~~designated~~detected. ~~operator~~These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the ~~State~~individual acts of ~~Pennsylvania~~some ~~which~~persons, ~~includes~~by collusion of two or more people, or by management override of the ~~duties~~control. The design of ~~managing~~any ~~and~~system ~~supervising~~of controls also is based in part upon certain assumptions about the ~~drilling~~likelihood of future events and ~~completions~~there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the ~~Oil~~degree ~~and~~of ~~Gas~~compliance ~~Locations~~with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

OnInternal ~~December~~Control ~~18,~~over ~~2012,~~Financial pursuant to the POA, the Operator invoiced the Company $835,000 for the drilling and completion of five oil wells on the Rice lease. The Company has recorded the transaction capitalizing the drilling and completions as work in progress. The liability is included in the Company's Accounts Payable. Reporting

OnDuring ~~January~~the ~~29,~~period ~~2013~~covered by this Quarterly Report on Form 10-Q, ~~pursuant~~there towas ano ~~letter~~change ~~agreement~~in ~~between~~our ~~the~~internal ~~Company~~control ~~and~~over ~~the~~financial ~~Assignor,~~reporting ~~the~~(as ~~Company~~such ~~acknowledged~~term is defined in Rules 13a-15(d) and ~~agreed~~13d-15(d) tounder the ~~notice~~Exchange ofAct) ~~the~~that ~~delay~~has ofmaterially ~~the~~affected, ~~permits~~or upis reasonably likely to 4materially ~~weeks~~affect, ~~beyond~~our ~~January~~internal 31control over financial reporting. However, ~~2013~~we report that the financial reporting is not effective. We attribute this to limited manpower resources and the potential hiring of a CFO to address this.

On March 18, 2013, pursuant to a letter agreement, Amendment #3, between the Company and the Assignor, both the Company and the Assignor agreed to delete Section 4a (financing conditions) of the Oil and Gas Well Location Assignment dated August 31, 2012 between Xun Energy, Inc. and Vencedor Energy Partners.34

OnPART ~~March~~II. ~~28,~~OTHER ~~2013, our Operator commenced site preparation on the Rice Lease, well numbers 3, 5, 6, 14 and 15.~~INFORMATION

OnITEM August 26, 2013, the Company's operator, Vencedor Energy Partners (VEP), completed the drilling, casing and cementing of our first oil well of the 30 well drilling program. Rice oil well number 15 was drilled to the Target Depth of 1~~,050' on the Rice lease, in Venango County, PA~~. LEGAL ~~Samples were taken during the drilling program for analysis~~PROCEEDINGS. Petroleum odors were emitted at the 720', 745', and 915' levels of the wellbore, indicating oil presence at these depths. The review of the drill cuttings (samples) from the Rice #15 supported the need for a wire line log to be conducted on the well.

37On September 5, 2014, a complaint (the “Complaint”) was filed against the Company in the Superior Court of Connecticut, Judicial District of Danbury (the “Court”) by Equity Capital Ventures, Inc. (“ECVI”) for the Company’s failure to pay $1,834,935 in debt obligations (the “Debt”) which ECVI had acquired from 11 persons (the “Debt Assignors”) through the execution of Debt Claim Purchase Agreements.

~~VEP's~~The ~~geologist~~Debt ~~confirmed~~Assignors ~~that~~consist of creditors of the ~~samples~~Company ~~taken~~including oninsiders ~~August~~of ~~26,~~the ~~2013~~Company ~~revealed~~that voluntarily assigned all or a ~~well~~portion ~~formed~~of ~~zone~~their inreceivable from the ~~Venango~~Company 2to ECVI subject to approval of a court. By a Stipulation between the Company and ~~also~~ECVI, ~~potential~~the ~~lenses~~Company has agreed to settle the Debt in reliance on the ~~Venango~~3(a)10 1exemption ~~and~~from ~~Red~~the ~~Valley~~Securities ~~sequence~~Act of 1933’s registration requirements pending a fairness hearing before the Court. ~~Oil~~The ~~saturation~~Stipulation, isif ~~estimated~~approved atby ~~30-35%~~court order, provides for the ~~Venango~~issuance ~~sequence~~of ~~with~~shares aof ~~strong~~the ~~show~~Company’s incommon stock to ECVI (the ~~Red~~“3(a)(10) ~~Valley~~Stock ~~sequence.~~Issuance”) ~~The~~for ~~log~~resale ~~will~~by ~~provide~~ECVI, ~~enough~~resulting ~~details~~in sale proceeds to ~~determine~~ECVI ~~other~~of ~~key~~approximately ~~factors~~$2,038,818. inECVI ~~determining~~shall ~~whether~~retain or$203,883 ~~not~~of the ~~oil~~sale ~~well~~proceeds ~~should~~and beshall ~~put~~transfer ~~into~~and ~~production~~deliver the $1,834,935 balance to the Debt Assignors.

OnShould ~~September~~this ~~16,~~action ~~2013~~be ~~the~~approved ~~Company's~~by ~~operator~~the Court, ~~Vencedor~~there ~~Energy~~will ~~Partners~~be ~~(VEP),~~dilution ~~completed~~to the ~~nuclear~~Company’s ~~wire~~stockholders. ~~line~~There ~~log~~are onno ~~Rice~~assurances ~~#15~~that on the ~~Rise~~Court ~~Lease,~~will inapprove ~~Venango County, PA. Verbal reports from~~ the ~~logging~~Stipulation ~~crew~~ and ~~staff~~the on3(a)10 ~~site~~Stock ~~were~~Issuance. ~~very~~Further, ~~positive~~there ~~when~~are ~~the~~no ~~logging~~assurances ~~tool~~that ~~pulled~~should ~~out of~~ the ~~well~~Court ~~bore~~approve ~~was covered with crude oil and on September 25, 2013~~ the ~~Company's operator, Vencedor Energy Partners~~ 3(~~VEP~~a),10 ~~reported~~Stock ~~the~~Issuance ~~analysis~~that ofthere ~~the~~will ~~wire-line~~be ~~log~~a onmarket ~~Rice~~for ~~#15 on~~ the ~~Rise~~common ~~Lease,~~stock ~~Venango~~that ~~County,~~will ~~PA.~~be ~~VEP~~issued ~~reported~~to the ~~following:~~ECVI.

1.ITEM ~~The Venango-First has two separated lenses, one is about 6 feet, 762'-766', and another 9 foot section, 788'-797', and both have decent porosity~~1A. RISK The sand thickness has developed at this location along with its oil saturations. The upper and lower lenses both have a fair to good oil show. 2. The Venango-Second has 16 feet of formation on the bottom lens, 916'-932', with good porosity and saturation and another 4 feet above it, 908'-912' that's producible with lesser values. The porosity on the lower lens has a fair to excellent show of oil with a poorer oil show in the upper lens portion. 3. VEP recommended the balance of the infrastructure on the Rice Lease be completed first. After the infrastructure is installed, then Rice #15 well should be completed for production.FACTORS

AsThere ofhave ~~November~~been ~~30,~~no ~~2013,~~material ~~the~~changes ~~Company~~in ~~paid~~our ~~for~~risk ~~the~~factors ~~construction~~from ofthose ~~the~~disclosed ~~tank~~in ~~battery~~our ~~and~~Form ~~tanks~~10-K ~~and~~filed isSeptember ~~waiting for the Company's Operator to complete the construction of the tank battery pad~~12, ~~deliver and install the 210 barrel storage tank for the crude oil~~2014.

~~Mission~~ITEM ~~Statement~~2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS SINCE MAY 31, 2014.

·The ToCompany ~~become~~issued a24,166,666 ~~leader~~shares inon ~~providing~~June ~~energy~~3, ~~through~~2014 ~~acquisition~~for ~~and~~$1,450 ~~diversification.~~pursuant ·to ~~To acquire working interest positions and mineral rights leases for~~ the ~~purposes~~conversion of ~~oil~~a ~~and~~Convertible ~~gas~~Promissory ~~development~~Note ~~and~~dated ~~production~~July ~~using new technologies~~2, ~~advanced drilling and completion methods and invest in known, producing properties and surrounding areas~~2013. ·The Toissuance beof ~~aggressive~~the incommon ~~gaining~~stock ~~interest~~was ~~positions~~exempt infrom ~~leases~~registration ~~and~~under ~~existing~~Section ~~producing~~3(a)(9) ~~properties~~of ~~that~~the ~~will~~Securities ~~produce desirable returns, utilize leading technologies, utilize methods to maximize exploration and production results while providing Return On Investment~~Act.

~~Strategy~~The Company issued 21,666,667 shares on June 3, 2014 for $1,300 for interest pursuant to the conversion of a Convertible Promissory Note dated July 2, 2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

WeThe ~~aspire~~Company toissued be110,000,000 anshares ~~independent~~on ~~oil~~June ~~and~~3, ~~gas~~2014 ~~company~~for in$6,600 ~~North~~pursuant ~~America and~~ to ~~provide~~the ~~our~~conversion ~~shareholders~~of ~~with~~a ~~returns~~Convertible ~~over~~Promissory ~~the~~Note ~~long-term.~~dated ToAugust ~~achieve this~~29, we2013. ~~strive~~The toissuance ~~optimize~~of ~~our~~the ~~capital~~common ~~investments~~stock towas ~~maximize~~exempt ~~growth~~from inregistration ~~cash~~under ~~flows,~~Section ~~earnings,~~3(a)(9) ~~production~~of ~~and~~the ~~establish~~Securities ~~reserves~~Act. ~~We will do this by:~~

·The ~~Generating~~Company ~~cash~~issued ~~flow~~177,444,444 ·shares ~~Securing~~on ~~financing~~June 10, 2014 for $8,872 for interest pursuant to ~~acquire~~the ~~our~~conversion ~~planned~~of ~~acquisitions,~~a ·Convertible ~~Exercising~~Promissory ~~capital~~Note ~~discipline~~dated June 5, ·2013. ~~Ensuring~~The ~~financial~~issuance ~~strength,~~of ~~and~~the ·common ~~Investing~~stock inwas ~~oil~~exempt ~~and~~from ~~gas~~registration ~~properties~~under ~~with~~Section ~~strong~~3(a)(9) ~~full-cycle~~of ~~margins~~the Securities Act.

~~Subsequent~~The ~~Events:~~Company issued 273,333,333 shares on June 16, 2014 for $16,400 pursuant to the conversion of a Convertible Promissory Note dated August 29, 2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 90158,~~000~~333,~~000~~333 shares on ~~December~~July 37, ~~2013~~2014 for $9,~~000~~500 pursuant to the conversion of a Convertible Promissory Note dated ~~October~~August 1929, ~~2012~~2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 3421,~~333~~666,~~333~~667 shares on ~~December~~July 117, ~~2013~~2014 for $21,~~060~~300 for interest pursuant to the conversion of a Convertible Promissory Note dated ~~May~~August 229, 2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 34274,000,000 shares on ~~December~~July 1230, ~~2013~~2014 for $116,~~700~~640 pursuant to the conversion of a Convertible Promissory Note dated ~~June~~September 530, 2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

3835

OnThe ~~December~~Company 16issued 300,000,000 ~~2013~~shares on August 19, 2014 for $15,000 pursuant to the ~~Company~~conversion ~~filed~~of ana ~~amended~~Convertible ~~Registration~~Promissory ~~Statement,~~Note ~~Form~~dated ~~S-1/A~~February 12, ~~registering the~~ ~~shares~~2014. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the ~~Company~~Securities ~~as follows:~~Act.

1.ITEM ~~33,333,334 shares of the Company's common stock (the “Put Shares”) that the Company will put to AGS pursuant to Financing Agreement between AGS and the Company, dated November 27, 2013, and 2~~3. DEFAULTS ~~4,081,633~~UPON ~~commitment~~SENIOR ~~shares of the Company's common stock the Company paid to AGS as a fee for providing the facility~~SECURITIES.

InNone the event of stock splits, stock dividends, or similar transactions involving the common stock, the number of common shares registered shall, unless otherwise expressly provided, automatically be deemed to cover the additional securities to be offered or issued pursuant to Rule 416 promulgated under the Securities Act of 1933, as amended (the “Securities Act”). In the event that adjustment provisions of the Drawdown Agreement require the registrant to issue more shares than are being registered in this registration statement, for reasons other than those stated in Rule 416 of the Securities Act of 1933, as amended, the Company will file a new registration statement to register those additional shares. Refer to NOTE 22: FINANCING AGREEMENTS for detailed information on the Financing Agreement with AGS.

~~The~~ITEM ~~Company issued 34,333,333 shares on December 16, 2013 for $2,060 pursuant to the conversion of a Convertible Promissory Note dated May 2, 2013~~4. MINE ~~The~~SAFETY ~~issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act~~DISCLOSURES.

~~The~~Not Company issued 100,000,000 shares on December 18, 2013 for $10,000 pursuant to the conversion of a Convertible Promissory Note dated October 19, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.Applicable

~~The~~ITEM ~~Company issued 46,500,000 shares on December 23, 2013 for $2441 pursuant to the conversion of a Convertible Promissory Note dated July 2, 2013~~5. OTHER ~~The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.~~INFORMATION

~~The Company issued 122,830,000 shares on January 6, 2014 for $12,238 pursuant to the conversion of a Convertible Promissory Note dated October 19, 2012~~None. ~~The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.~~

The Company issued 56,000,000 shares on January 15, 2014 for $2,800 pursuant to the conversion of a Convertible Promissory Note dated June 5, 2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.36

On January 16, 2014 the Company filed an amended Registration Statement, Form S-1/A, registering the shares of common stock of the Company as follows:


ITEM 6 EXHIBITS		INCORPORATED BY REFERENCE

Exhibit Number	Exhibit Description	Form	Exhibit	Filing Date	Filed Furnished Herewith
4.01	Resignation Letter of Weinberg & Baer LLC dated October 2, 201	8K	10.1	10/07/14
4.02	Letter from Weinberg & Baer LLC dated October 6, 2014 regarding changes in Registrant’s certifying accountant	8K	16.1	10/07/14
31.1	Certificate of the Chief Executive Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002				X
31.2	Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X
32.1	Certificate of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X
32.2	Certificate of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X

InPursuant ~~the~~to ~~event of stock splits, stock dividends, or similar transactions involving~~ the ~~common~~requirements ~~stock, the number~~ of ~~common shares registered shall, unless otherwise expressly provided, automatically be deemed to cover~~ the ~~additional securities to be offered or issued pursuant to Rule 416 promulgated under the~~ Securities Exchange Act of ~~1933~~1934, ~~as amended (~~the ~~“Securities Act”). In the event that adjustment provisions of the Drawdown Agreement require the~~ registrant tohas ~~issue~~duly ~~more~~caused ~~shares than are being registered in~~ this ~~registration~~report ~~statement, for reasons other than those stated in Rule 416 of the Securities Act of 1933, as amended, the Company will file a new registration statement~~ to ~~register~~be ~~those~~signed ~~additional~~on ~~shares.~~its ~~Refer~~behalf toby ~~NOTE 22: FINANCING AGREEMENTS for detailed information on~~ the ~~Financing~~undersigned ~~Agreement~~thereunto ~~with~~duly ~~AGS~~authorized.

Introduction


	XUN ENERGY, INC.

Date: October 20, 2014	By:	/s/ Jerry G. Mikolajczyk
		Jerry G. Mikolajczyk
		Chief Executive Officer (principal executive officer)

Date: October 20, 2014	By:	/s/ Jerry G. Mikolajczyk
		Jerry G. Mikolajczyk
		Chief Financial Officer (principal financial officer and principal accounting officer)

We are an independent oil and natural gas development and production company. Our basic business model is to increase shareholder value by finding and developing oil and gas production through the development activities, which include drilling offset oil and gas wells and re-entering oil and gas wells, that have historical oil and gas production or are currently producing oil and gas, and selling the production from these, worked over wells at a profit. To be successful, we must, over time, need to complete our goal of raising sufficient funds to drill offset wells or complete development programs over the next year and then sell the resulting production at a price that is sufficient to cover our operating expenses, administrative costs and interest expense, plus offer us a return on our capital investment.37

We have a limited operating history of oil and gas production and no proven reserves, no production and negative cash flow. To date, we have had limited revenues and have not been able to generate sustainable positive earnings on a Company-wide basis. Our management cannot provide any assurances that the Company will ever operate profitably. As a result of our limited operating history, we are more susceptible to the numerous business, investment and industry risks that have been described in Item 1A. Risk Factors of this Annual Report on Form 10K.

Our longer-term success depends on, among many other factors, the production of grade oil and gas properties and on the prevailing sales prices for oil and natural gas along with associated operating expenses. The volatile nature of the energy markets makes it difficult to estimate future prices of oil and natural gas; however, any prolonged period of depressed prices would have a material adverse effect on our results of operations and financial condition.

Our acquisition of the 30 oil and gas well locations, with the option for an additional 15 oil and gas well locations, in Venango County, Pennsylvania on August 31, 2012 will require $7,500,000 to complete the drilling and completions program. We have not completed our financing to be able to pay for the 30 oil and gas well drilling and completions program. We have an agreement with AGS Capital Group, LLC for a $15 Million Reserve Equity Financing (REF) which requires the Company to register 37 Million shares with the SEC. There is no guarantee that the Company will be successful in registering the 37 Million shares with the SEC or any guarantee that the Company will be successful in drawing down on the REF.

We have applied for a $5 Million Small Business Administration (SBA) loan for the 30 oil and gas well program in Venango County, Pennsylvania. There is no guarantee that the Company will be approved for an SBA Loan or close on a SBA loan.

We have applied for a $5 Million Small Business Administration (SBA) loan in Texas for the acquisition of the Falls Project which consists of 24 producing oil and gas leases in the State of Texas. There is no guarantee that the Company will be approved for an SBA Loan, close on a SBA loan or close on the acquisition of the Falls Project.

Our operations are focused on identifying and evaluating prospective oil and gas properties and funding projects that we believe have the potential to produce oil or gas in commercial quantities subject to the Company obtaining the necessary funding for the offset drilling or development programs.

Our inability to generate revenue during the three month period ending November 30, 2013 is due primarily to difficulties in our ability to raise sufficient funds necessary to close on the financing to complete the drilling and completion program on the 30 oil and gas well locations in Venango County, Pennsylvania. There are no assurances that the Company will be successful in raising sufficient funds to accomplish our goals and objectives.

COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED NOVEMBER 30, 2013 AND NOVEMBER 30, 2012 AND FROM INCEPTION (DECEMBER 20, 2007) TO NOVEMBER 30, 2013.

Results of Operations

The following discussion and analysis of our results of operations and financial condition for the three and six months ended November 30, 2013 should be read in conjunction with our unaudited interim consolidated financial statements and related notes included in this report, as well as our most recent annual report on Form 10-K for the year ended May 31, 2013 filed with the SEC.

Three Months Ended November 30, 2013 Compared to Three Months Ended November 30, 2012

Revenues

We generated no revenues for the three months ending November 30, 2013 and the three months ending November 30, 2012. Total revenue from December 20, 2007 (“Inception”) through November 30, 2013 were $4,637. Our operations to date have been financed by the sale of our common stock and third party loans.

Operating expenses for the three months ended November 30, 2013 and November 30, 2012 totalled ($353,170) and $247,262. Total operating expenses from December 20, 2007 (“Inception”) through November 30, 2013 were $2,841,388. Our single largest expense for the three months ended November 30, 2013 has been financial consulting fees totalling ($498,250) and $94,800 for financial consulting for the three months ended November 30, 2012. Total financial consulting from December 20, 2007 (“Inception”) through November 30, 2013 were $888,550. The credit (negative) financial consulting fees is the result of the mutually agreed termination of the August 31, 2012 twenty-four month Financing Facilities Consulting Agreement (the “FFCA Agreement”) between the Company and Prodigy Asset Management, LLC (“PAM”). In consideration of the services to be provided by PAM, the Company agreed to pay PAM a prepaid retainer fee of $1,000,000 in the form of 20,000,000 common stock (Shares) of the Company.

The Company issued 20 million Shares to PAM which PAM has agreed to return the 20 million Shares to the Company resulting in the unwinding of the transaction. The Company amortized $500,000 of the prepaid retainer and upon termination of the FFCA Agreement, the costs amortized are reversed resulting in a credit or negative financial consulting fees for the three month period.

General and Administrative expenses, including financial consulting fees, for the three months ended November 30, 2013 and November 30, 2012 totalled ($353,170) and $247,262 respectively. Total General and Administrative expenses from December 20, 2007 (“Inception”) through November 30, 2013 were $2,841,388.

Other Expenses including debt interest, amortized discounts and extraordinary expenses, for the three months ended November 30, 2013 and November 30, 2012 totalled $121,427 and $7,040 respectively. Total Other Expenses from December 20, 2007 (“Inception”) through November 30, 2013 were $822,680.

For the three months ended November 30, 2013 we had a net profit of $231,743 and a net loss of ($254,302) for the three months ended November 30, 2012. Total losses since December 20, 2007 (“Inception”) were ($3,661,083).

Until we obtain additional funding to complete our oil and gas well drilling and completions program, we do not anticipate generating revenues, and any revenues that we generate may not be sufficient to cover our operating expenses. In which case we may have to cease operations and you may lose your entire investment.

Six Months Ended November 30, 2013 Compared to Six Months Ended November 30, 2012

Revenues

We generated no revenues for the six months ending November 30, 2013 and the six months ending November 30, 2012. Total revenue from December 20, 2007 (“Inception”) through November 30, 2013 were $4,637. Our operations to date have been financed by the sale of our common stock and third party loans.

Operating expenses for the six months ended November 30, 2013 and November 30, 2012 totalled ($51,686) and $603,030. Total operating expenses from December 20, 2007 (“Inception”) through November 30, 2013 were $2,841,388. Our single largest expense for the six months ended November 30, 2013 has been financial consulting fees totalling ($356,500) and $424,800 for financial consulting for the six months ended November 30, 2012. Total financial consulting from December 20, 2007 (“Inception”) through November 30, 2013 were $888,550. The credit (negative) financial consulting fees is the result of the mutually agreed termination of the August 31, 2012 twenty-four month Financing Facilities Consulting Agreement (the “FFCA Agreement”) between the Company and Prodigy Asset Management, LLC (“PAM”). In consideration of the services to be provided by PAM, the Company agreed to pay PAM a prepaid retainer fee of $1,000,000 in the form of 20,000,000 common stock (Shares) of the Company. The Company issued 20 million Shares to PAM which PAM has agreed to return the 20 million Shares to the Company resulting in the unwinding of the transaction. The Company amortized $500,000 of the prepaid retainer and upon termination of the FFCA Agreement, the costs amortized are reversed resulting in a credit or negative financial consulting fees for the six month period.

General and Administrative expenses, including financial consulting fees, for the six months ended November 30, 2013 and November 30, 2012 totalled ($51,686) and $603,030 respectively. Total General and Administrative expenses from December 20, 2007 (“Inception”) through November 30, 2013 were $2,841,388.

Other Expenses including debt interest, amortized discounts and extraordinary expenses, for the six months ended November 30, 2013 and November 30, 2012 totalled $258,869 and $16,205 respectively. Total Other Expenses from December 20, 2007 (“Inception”) through November 30, 2013 were $822,680.

For the six months ended November 30, 2013 and November 30, 2012, we had a net loss of $207,184 and $619,235. Total losses since December 20, 2007 (“Inception”) were $3,661,083.

Liquidity and Capital Resources

Assets and Liabilities

Our primary financial resource is our base of our unproven oil and gas leases. Our ability to fund our capital expenditure program is dependent upon the availability of capital resource financing. In this fiscal year, we planned on spending approximately $5,000,000 in new capital investments for a 30 well oil and gas drilling program on our ability to raise $5,000,000 in funding. Factors such as changes in operating margins due to changes in the price of oil and gas and the availability of capital resources could increase or decrease our ultimate level of expenditures during the remaining fiscal year.

The changes in our capital resources at November 30, 2013 compared with November 30, 2012 are:

		November 30, 2013		November 30, 2012		Increase (Decrease)	Percentage Change
Cash	$	409	$	8,597	$	(8,188)	-95.24%
Current Assets	$	3,891	$	1,291,425	$	(1,287,534)	-99.70%
Total Assets	$	1,482,391	$	1,935,115	$	(452,724)	-23.40%
Current Liabilities	$	2,883,677	$	1,597,111	$	1,286,566	80.56%
Total Liabilities	$	2,883,677	$	1,723,266	$	1,160,411	67.34%
Working Capital Deficit	$	2,879,786	$	1,588,514	$	1,291,272	81.29%

Our working capital deficit increased by $1,291,272 from $1,588,514 as of November 30, 2012 to $2,879,786 as of November 30, 2013. This increase in the deficit was due to the amount of resources that were expended to source financing for the drilling and completions of our 30 oil and gas leases in Venango County, PA, complete all the necessary SEC filings and the drilling and completions work program on the Rice Lease in Venango County, PA.

Over the last six months, we expended our resources on raising funds to complete our 30 oil well drilling program in Venango County, PA, attempting to raise funds for the acquisition of oil and gas leases that meet our criteria, to raise sufficient funds to fund a drilling and completions programs once we acquired oil and gas leases, updating our prior SEC filings with XBRL interactive data files, completing our fiscal year end consolidated statements and SEC filings. Our business is capital intensive. Our ability to grow is dependent upon favorably obtaining outside debt and capital and generating cash flows from operating activities necessary to fund our investment activities. There is no assurance that we will be able to achieve profitability. Since our future operations will continue to be dependent on successful development activities and our ability to seek and secure capital from external sources, should we be unable to achieve sustainable profitability this could cause any equity investment in the Company to become worthless.

Major sources of funds in the past for us have included the debt or equity markets. We will have to rely on these capital markets to fund future operations and growth. Our business model is focused on the development of our properties. Our ability to generate future revenues and operating cash flow will depend on successful completion of our planned drilling and completions program and the acquisition of oil and gas producing properties, which may very likely require us to continue to raise equity or debt capital from outside sources.

The Company has ongoing capital commitments to develop certain leases pursuant to their underlying terms. Failure to meet such ongoing commitments may result in the loss of the lease itself. These ongoing capital commitments require us to seek capital from sources outside of the Company. The current uncertainty in the credit and capital markets, and the economic downturn, may restrict our ability to obtain needed capital.

Cash Flows

Changes in the net funds provided by or (used in) each of our operating, investing and financing activities are set forth in the table below:

Cash Flow Used in Operating activities:

		November 30, 2013		November 30, 2012		Increase (Decrease)	Percentage Change
Net cash provided by (used in) operating activities	$	(180,490)	$	(503,712)	$	(323,222)	-64.17%
Net cash provided by (used in) investing activities	$	-	$	-	$	-	-
Net cash provided by (used by) financing activities	$	157,500	$	512,309	$	(354,809)	-69.26%

Cash flow from operating activities is derived from changes in the balances of payables, or other non-oil property asset account balances. For the six months ended November 30, 2013, we had a negative cash flow from operating activities of $180,490, in comparison to a negative cash flow of $503,712 for the six months ended November 30, 2012. This change of $323,222 was the result of a decrease in our payables balance and a decrease in our current assets mainly as a result of the mutually agreed termination of the August 31, 2012 twenty-four month Financing Facilities Consulting Agreement (the “FFCA Agreement”) between the Company and Prodigy Asset Management, LLC (“PAM”). In consideration of the services to be provided by PAM, the Company agreed to pay PAM a prepaid retainer fee of $1,000,000 in the form of 20,000,000 common stock (Shares) of the Company. The Company issued 20 million Shares to PAM which PAM has agreed to return the 20 million Shares to the Company resulting in the unwinding of the transaction. The Company amortized $500,000 of the prepaid retainer and upon termination of the FFCA Agreement, the remaining unamortized prepaid financial consulting fee retainer of $500,000 was credited reducing the current assets. Variations in cash flow from operating activities may affect our level of development expenditures. Our expenditures consist primarily of our General and Administrative (G&A) expenses, which consist of consulting and professional services, employee compensation, legal, accounting, travel and other G&A expenses, which we have incurred in order to address necessary organizational activities.

Cash Flow Used in Investing activities:

Cash flow used by investing activities was zero for the six months ended November 30, 2013. This is in comparison to zero investing activities used for the six months ended November 30, 2012.

Cash Flow from Financing activities:

Cash flow from financing activities is derived from short term debt account balances or in equity, account balances excluding retained earnings. Cash flow provided by financing activities was $157,500 for the six months ended November 30, 2013. This is in comparison to $512,309 provided by financing activities for the six months ended November 30, 2012. We anticipate it will be necessary to rely on additional funding from the debt financing and from capital markets in the current fiscal year to complete the 30 oil well drilling and completions program in Venango County, P.A. other acquisitions and to discharge our debts.

Our business is capital intensive. Our ability to grow is dependent upon favorably obtaining outside capital and generating cash flows from operating activities necessary to fund our investment activities. There is no assurance that we will be able to achieve profitability. Since our future operations will continue to be dependent on successful development activities and our ability to seek and secure capital from external sources, should we be unable to achieve profitability this could cause any equity investment in the Company to become worthless.

We have no ongoing revenues to satisfy our ongoing liabilities. Our auditors have issued a going concern opinion. Unless we secure equity, debt financing or Joint Venture partners, of which there can be no assurance, or identify a profitable acquisition candidate, we will not be able to continue any operations.

Plan of Operation For Remaining Fiscal Year

We will attempt to continue to source equity or debt financing, or Joint Venture partners for our operating costs and for our oil and gas well drilling programs or attempt to identify a profitable acquisition candidate. Our Reserve Equity Finance agreement with AGS Capital Group, LLC for $15 Million requires the Company to register 37 Million shares of our stock with the SEC. This will take time to become effective. There is no guarantee that the Company will be successful in registering the 37 Million shares with the SEC. We have had discussions with several companies and individuals for funding and/or Joint Ventures. However, we have not come to terms with any company or individual as of November 30, 2013. We will attempt to finance our operating expenses with additional debt or through equity financing.

Off-Balance Sheet Arrangements

We are not currently a party to, or otherwise involved with, any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues, or expenses, results of operations, liquidity, capital expenditures or capital resources.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Item 9A. Controls and Procedures.

Disclosure controls and procedures.

Under the supervision and with the participation of our management, including our principal executive and principal financial officer, we evaluated, as of November 30, 2013, the effectiveness of our disclosure controls and procedures. Based on that evaluation, our principal executive and principal financial officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q.

Internal Control over Financial Reporting

During the period covered by this Quarterly Report on Form 10-Q, there was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(d) and 13d-15(d) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

On May 10, 2011, the Company accepted an Offer to Purchase from Lea Kennedy d/b/a LuxemBarings (“Purchaser”) to purchase $10 million of the Company’s common stock based on the average of 5 consecutive trading day’s close prior to date of closing. The Offer to Purchase was scheduled to close on or before June 24, 2011. The Purchaser failed to complete the transaction, after mutually agreed extensions of the closing date. The Company has retained legal counsel to take legal action against the Purchaser for failing to complete the purchase transaction and for damages to the Company as a result of the failure to complete the transaction. The Company has recognized losses, at cost, in the financial statements for the period ended May 31, 2012 and legal costs for the fiscal year ending May 31, 2013.

On March 23, 2013 The United States District Court For The Southern District Of Illinois granted summary judgment on Xun Energy’s breach of contract claim against Lea Kennedy d/b/a/ LuxemBarings. The amount of damages remains an issue to be resolved in the case and the Company's "fraud in the inducement claim" alleged in its complaint remains pending.

On July, 8, 2013, the Company was awarded a judgment dismissing, without prejudice, the legal action between Xun Energy, Inc., as Plaintiff and Lea Kennedy, an individual, d/b/a LUXEMBARINGS, as Defendant. The Company filed for a voluntary dismissal without prejudice on the legal action.

ITEM 1A. RISK FACTORS

There have been no material changes in our risk factors from those disclosed in our Form 10-K filed September 13, 2013.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS SINCE MAY 31, 2013.

The Company issued 5,714,286 shares on June 13, 2013 for $12,000 pursuant to a Convertible Promissory Note dated December 6, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 5,000,000 shares on June 17, 2013 for $13,750 pursuant to a Convertible Promissory Note dated October 19, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 7,380,952 shares on June 19, 2013 for $15,500 pursuant to a Convertible Promissory Note dated December 6, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 4,000,000 shares on July 8, 2013 for $4,600 pursuant to a Convertible Promissory Note dated October 19, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 10,454,545 shares on July 15, 2013 for $11,500 pursuant to a Convertible Promissory Note dated December 6, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 12,195,121 shares on July 23, 2013 for $10,000 pursuant to a Convertible Promissory Note dated October 19, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 14,285,714 shares on August 9, 2013 for $10,000 pursuant to the conversion of a Convertible Promissory Note dated October 19, 2012. The issuance of the common stock was exempt from registration under Section 4(a)(2) of the Securities Act.

The Company issued 20,689,655 shares on August 20, 2013 for $12,000 pursuant to the Stock and Securities Exchange Agreement for a Convertible Promissory Note dated October 19, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 16,949,152 shares on August 26, 2013 for $10,000 pursuant to a Convertible Promissory Note dated October 19, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 33,000,000 shares on August 27, 2013 for $16,500 pursuant to a Convertible Promissory Note dated October 19, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 20,408,163 shares on September 4, 2013 for $10,000 pursuant to a Convertible Promissory Note dated October 19, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 19,186,046 shares on September 9, 2013 for $8,250 pursuant to a Convertible Promissory Note dated October 19, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 27,500,000 shares on September 16, 2013 for $8,250 pursuant to the conversion of a Convertible Promissory Note dated October 19, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 26,950,185 shares on September 17, 2013 for $11,319 pursuant to the conversion of a Convertible Promissory Note dated October 19, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 33,300,000 shares on September 20, 2013 for $10,000 pursuant to the conversion of a Convertible Promissory Note dated October 19, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 27,272,727 shares on September 25, 2013 for $9,000 pursuant to the conversion of a Convertible Promissory Note dated January 1, 2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 20,833,333 shares on October 4, 2013 for $5,000 pursuant to the conversion of a Convertible Promissory Note dated January 1, 2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 37,500,000 shares on October 11, 2013 for $7,500 pursuant to the conversion of a Convertible Promissory Note dated October 19, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 20,090,864 shares on October 11, 2013 for $5,331 and 7,589,856 shares for $2,014 for interest, both pursuant to the conversion of a Convertible Promissory Note dated October 19, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 34,090,909 shares on October 17, 2013 for $7,500 pursuant to the conversion of a Convertible Promissory Note dated January 1, 2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 29,411,764 shares on October 31, 2013 for $5,000 pursuant to the conversion of a Convertible Promissory Note dated January 1, 2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company cancelled 20 million shares on October 31, 2013 issued to Prodigy Asset Management, LLC pursuant to the mutually agreed termination of the August 31, 2012 Financing Facilities Consulting Agreement.

The Company issued 7,692,308 shares on November 7, 2013 for $1,000 pursuant to the conversion of a Convertible Promissory Note dated January 1, 2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 45,000,000 shares on November 8, 2013 for $4,500 pursuant to the conversion of a Convertible Promissory Note dated October 19, 2012. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 34,454,545 shares on November 14, 2013 for $3,790 pursuant to the conversion of a Convertible Promissory Note dated May 2, 2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued 34,454,545 shares on November 19, 2013 for $3,790 pursuant to the conversion of a Convertible Promissory Note dated May 2, 2013. The issuance of the common stock was exempt from registration under Section 3(a)(9) of the Securities Act.

The Company issued an aggregate of 90,000 shares for the six month period ending November 30, 2013 with an average price of $0.001267 per share on November 27, 2013 to the Board pursuant to Board Member Compensation Agreements with Mr. Peter Matousek, Mr. Jerry G. Mikolajczyk, and Dr. William D. Spier. The issuance of the common stock was exempt from registration under Section 4(a) (2) of the Securities Act.

The Company issued 6,418,980 shares on November 27, 2013 for $3,903 for interest pursuant to a Convertible Promissory Note dated January 1, 2013. The issuance of the common stock was exempt from registration under Section 4(a) (2) of the Securities Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS INCORPORATED BY REFERENCE
Exhibit Number	Exhibit Description	Form	Exhibit	Filing Date	File/ Furnished Herewith
Material Contracts
10.01	Termination Agreement dated October 31, 2013 between Xun Energy, Inc. and Prodigy Asset Management, LLC	8-K	10.1	11/04/13
10.02	Financing Facilities Consulting Agreement dated August 31, 2012 between Xun Energy, Inc. and Prodigy Asset Management, LLC	8-K	10.1	11/04/13
10.03	Amended and Restated Reserve Equity Financing Agreement, between Xun Energy, Inc. and AGS Capital Group, LLC, dated November 27, 2013	8-K	99.1	12/02/13
10.04	Registration Rights Agreement, between Xun Energy, Inc. and AGS Capital Group, LLC, dated July 11, 2013	8-K	99.2	12/02/13
Rule 13a–14(a)/15d-14(a) Certifications
31.1	Certificate of the Chief Executive Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002				X
31.2	Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X
32.1	Certificate of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X
32.2	Certificate of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	XUN ENERGY, INC.
Date: January 21, 2014	By:	/s/ Jerry G. Mikolajczyk
		Jerry G. Mikolajczyk
		Chief Executive Officer (principal executive officer)
Date: January 21, 2014	By:	/s/ Jerry G. Mikolajczyk
		Jerry G. Mikolajczyk
		Chief Financial Officer (principal financial officer and principal accounting officer)

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