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Note 8 - Notes Payable To Existing Shareholders
 9 Months Ended
Feb. 28, 2013
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block] 8.         NOTES PAYABLE TO EXISTING SHAREHOLDERS

Notes payable to existing shareholders consisted of:


   

February 28,

2013

   

May 31,

2012

 
                 

Bridge loan, (a)

  $ 150,000     $ 150,000  

Term loan, (b)

    524,000       834,000  

Total notes payable to existing shareholders

  $ 674,000     $ 984,000  

 

(a)

In July 2009, the Company secured from an existing shareholder a $150,000 bridge loan at an annual interest rate of nine percent (9%) which matured on September 8, 2009 (the "Bridge Loan").  The Company has defaulted on repayment of the Bridge Loan by the maturity date, however, the lender has agreed to forbear collection until such time as the Company completes a secondary offering. As of February 28, 2013, the total amount due under the Bridge Loan including accrued interest is $194,975.


 

(b)

During the period July 2009 to February 2010, the Company secured from several existing shareholders a term loan in the aggregate amount of $1,214,000 at an annual interest rate of nine percent (9%) to mature on or about September 10, 2010 (the "Term Loan").  The Term Loan amount has since been reduced to $524,000 (excluding accrued interest) and the due date of the loan was extended to December 31, 2011. The Company has defaulted on repayment of the Term Loan by the maturity date, however, all but one lender has agreed to forbear collection until such time as the Company completes a secondary offering. As of February 28, 2013, the total amount due under the remaining portion of the Term Loan including interest is $679,284.