Note 6 - Common Stock and Common Stock Payable Issued for Services

During the three months ended February 28, 2013, the Company was committed to issue 12,500 fully vested shares of common stock at $1.00 per share. During the nine months ended February 28, 2013 the Company issued 24,040 shares of fully vested common shares. The Company recognized approximately $12,500 and $37,500 in stock-based compensation for the three and nine months ended February 28, 2013, respectively, related to these issuances. During the three and nine months ended February 29, 2012, the Company issued 72,500 shares of common stock at $2.80 per share to consultants for services, and recognized $203,000 of stock-based compensation based on the fair market value of the common stock at the commitment date.

During the nine months ended February 28, 2013, the Company issued 60,000 shares of common stock to a consultant at $2.68 per share, which was the fair value at the commitment date, and is being amortized over the requisite service period. During the three and nine months ended February 28, 2012, the Company recognized $-0- and $161,000 in stock-based compensation related to this grant.

Effective December 28, 2012, the Company settled trade payable balances of approximately $447,000 owed to its previous principal law firm in exchange for a cash payment of $45,000 and 66,116 shares of Company common stock with a value of $80,000 as determined by the closing price of the stock on December 24, 2012. The Company recorded a gain on the satisfaction of the payables of approximately $322,000 and $373,000 for the three and nine months ended February 28, 2013, respectively.