Iota Communications (IOTC) 10-Q 19 Jan 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Nov. 30, 2015	Jan. 18, 2016
Document And Entity Information
Entity Registrant Name	ARKADOS GROUP, INC.
Entity Central Index Key	1,095,130
Document Type	10-Q
Trading Symbol	AKDS
Document Period End Date	Nov. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--05-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		12,131,500
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,016

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($)	Nov. 30, 2015	May. 31, 2015
Current assets:
Cash	$ 25,989	$ 234,994
Accounts receivable	133,847	132,349
Inventory	294,136	156,705
Prepaid expenses and other current assets	20,311	12,004
Total current assets	474,283	$ 536,052
Property and equipment, net of accumulated depreciation	8,168
Security deposits	20,384	$ 1,874
Total assets	502,835	537,926
Current liabilities:
Accounts payable and accrued expenses	1,086,647	2,655,132
Deferred revenue	196,538	267,291
Accrued income tax	63,082	63,082
Debt subject to equity being issued	456,930	456,930
Notes payable	345,832	345,832
Total current liabilities	2,149,029	3,788,267
Total liabilities	$ 2,149,029	$ 3,788,267
Commitments
Stockholders' deficiency:
Additional paid-in capital	$ 39,668,191	$ 36,840,157
Accumulated deficit	(41,315,593)	(40,091,608)
Total stockholders' deficiency	(1,646,194)	(3,250,341)
Total liabilities and stockholders' deficiency	$ 502,835	$ 537,926
Preferred Stock [Member]
Stockholders' deficiency:
Convertible preferred stock, $.0001 par value; 5,000,000 shares authorized, zero shares outstanding
Common Stock [Member]
Stockholders' deficiency:
Common stock, $.0001 par value; 600,000,000 shares authorized; 12,081,500 and 11,099,833 issued and outstanding	$ 1,208	$ 1,110

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Nov. 30, 2015	May. 31, 2015
Preferred Stock [Member]
Convertible preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Convertible preferred stock, shares authorized	5,000,000	5,000,000
Convertible preferred stock, shares outstanding	0	0
Common Stock [Member]
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	600,000,000	600,000,000
Common stock, shares issued	12,081,500	11,099,833
Common stock, shares outstanding	12,081,500	11,099,833

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Nov. 30, 2015	Nov. 30, 2014	Nov. 30, 2015	Nov. 30, 2014
Income Statement [Abstract]
Net sales (includes related party of $142,070, $0, $142,070 and $0)	$ 815,219	$ 78,996	$ 922,055	$ 118,996
Cost of sales	534,989		534,989
Gross profit	280,230	$ 78,996	387,066	$ 118,996
Operating expenses:
Selling and general and administrative	781,063	254,194	1,310,255	1,441,368
Research and development	185,778	88,245	284,207	140,437
Total operating expenses	966,841	342,439	1,594,462	1,581,805
Loss from operations	(686,611)	(263,443)	(1,207,396)	(1,462,809)
Other income (expenses):
Interest expense	(8,044)	$ (143,719)	(15,458)	$ (259,383)
Loss on translation adjustments	$ (569)		$ (1,131)
Other income		$ 124,793		$ 124,793
Gain on settlement of debt		44,071		44,071
Total other income (expenses)	$ (8,613)	25,145	$ (16,589)	(90,519)
Loss before provision for income tax benefits	$ (695,224)	(238,298)	$ (1,223,985)	(1,553,328)
Provision for income tax benefits		35,840		35,840
Net loss	$ (695,224)	$ (202,458)	$ (1,223,985)	$ (1,517,488)
Loss per common share - basic and diluted (in dollars per share)	$ (0.06)	$ (0.04)	$ (0.10)	$ (0.33)
Weighted average of common shares outstanding - basic and diluted (in shares)	12,081,500	5,105,709	11,942,374	4,622,711

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($)	3 Months Ended		6 Months Ended
	Nov. 30, 2015	Nov. 30, 2014	Nov. 30, 2015	Nov. 30, 2014
Income Statement [Abstract]
Net sales, related party	$ 142,070	$ 0	$ 142,070	$ 0

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($)	6 Months Ended
	Nov. 30, 2015	Nov. 30, 2014
Cash flows from operating activities:
Net loss	$ (1,223,985)	$ (1,517,488)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation	293,122
Issuance of warrants for services	158,399	$ 37,000
Depreciation	$ 264
Amortization of debt discount		$ 191,663
Issuance of common stock for services		1,000,000
Reversal of accounts payable		(124,793)
Gain on settlement of debt		(44,071)
Interest accrued on debt subject to equity being issued		17,753
Changes in operating assets and liabilities:
Accounts receivable	$ (1,498)	$ (20,000)
Inventory	(137,431)
Prepaid expenses and other current assets	(8,307)	$ 10,616
Security deposit	(18,510)
Accounts payable and accrued expenses	305,126	$ 166,926
Deferred revenue	$ (70,753)
Accrued income tax benefits		$ (35,840)
Net cash used in operating activities	$ (703,573)	$ (318,234)
Cash flows from investing activities:
Purchases of property and equipment	(8,432)
Net cash used in investing activities	(8,432)
Cash flows from financing activities:
Proceeds from sales of common stock	$ 503,000
Proceeds from convertible debt		$ 200,000
Net cash provided by financing activities	$ 503,000	200,000
Net decrease in cash	(209,005)	(118,234)
Cash at beginning of period	234,994	118,505
Cash at end of period	25,989	$ 271
Schedule of non-cash transactions:
Common stock issued for accrued stock based compensation	250,833
Stock options issued for accrued stock based compensation	$ 1,622,778
Warrants issued to former employees to settle debt subject to equity being issued		$ 747,536
Common stock issued or to be issued for debt subject to equity being issued		466,000
Common stock issued for transactions previously classified as common stock to be issued		1,835,486
Valuation of beneficial conversion feature of debt raise		71,000
Refinance of due to related party		$ 130,000
Supplemental disclosure of cash flow information:
Interest paid
Income taxes paid

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS	6 Months Ended
	Nov. 30, 2015
Accounting Policies [Abstract]
DESCRIPTION OF BUSINESS	1. DESCRIPTION OF BUSINESS Arkados Group, Inc. (the “Parent”) conducts business activities principally through two of its wholly-owned subsidiaries, Arkados, Inc. (“Arkados”) and Arkados Energy Solutions, LLC (“AES”) (collectively, the “Company”). The Company underwent a significant restructuring following December 23, 2010, during which substantially all of its assets were acquired by STMicroelectronics (sometimes referred to hereinafter as the “Asset Sale”), as disclosed in the Form 8-K filed December 29, 2010 and further described (as to the closing) in the Form 8-K filed July 12, 2011. Settlements reached in connection with the Asset Sale and the fulfillment of obligations in connection therewith, have just recently been (post the period covered by this report) substantially completed. Following the sale of its assets associated with the manufacture of microchips, the Company shifted its focus towards the following businesses: Arkados - Software and hardware design and development of solutions that enable machine to machine communications for the Internet of Things (IoT). Arkados’ solutions support smart grid and smart building applications primarily in the areas of building automation and energy management and are uniquely designed to drive a wide variety of wireless and powerline communication (PLC)-based products, such as sensors, gateways, video cameras, appliances and other devices. AES - Energy services provider with focus on the design, installation and maintenance of innovative, sustainable, and cost-effective energy solutions for commercial customers. AES implements smart grid applications primarily in the areas of LED lighting, building automation, and energy management. These applications are uniquely designed to drive a wide variety of wireless and powerline communication (PLC)-based products, such as sensors, gateways, video cameras, appliances and other devices. Effective March 18, 2015, the Company implemented a reverse stock split of its outstanding common stock at a ratio of 1-for-30 shares. All share figures and results are reflected on a post-split basis. See Note 6. The accompanying condensed consolidated financial statements as of November 30, 2015 (unaudited) and May 31, 2015 and for the three and six months ended November 30, 2015 and 2014 (unaudited) have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission including Form 10-Q and Regulation S-X. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. These financial statements and the information included under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the audited financial statements and explanatory notes for the year ended May 31, 2015 as disclosed in our annual report on Form 10-K for that year. The results of the three and six months ended November 30, 2015 (unaudited) are not necessarily indicative of the results to be expected for the pending full year ending May 31, 2016.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Nov. 30, 2015
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Basis of Presentation - The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred net losses of approximately $41.3 million since inception, including a net loss of approximately $1.2 million for the six months ended November 30, 2015. Additionally, the Company still had both working capital and stockholders’ deficiencies at November 30, 2015 and May 31, 2015 and negative cash flow from operations since inception. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management expects to incur additional losses in the foreseeable future and recognizes the need to raise capital to remain viable. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. b. Principles of consolidation - The consolidated financial statements include the accounts of the Parent, and its wholly-owned subsidiaries, which include: AES, Arkados, CDKnet, LLC and Creative Technology, LLC. Currently, Arkados and AES are the only active entities with operations. Intercompany accounts and transactions have been eliminated in consolidation. c. Revenue Recognition - Arkados The Company enters into arrangements with end users for items which may include software license fees, services, maintenance and royalties or various combinations thereof. For each arrangement, revenues will be recognized when evidence of an agreement has been documented, the fees are fixed or determinable, collection of fees is probable, delivery of the product has occurred and no other significant obligations remain. Revenues from software licensing are recognized in accordance with Accounting Standards Codification (“ASC”) 985-605, “Software Revenue Recognition.” Accordingly, revenue from software licensing is recognized when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. License revenues are recognized at the time of delivery of the software and all other revenue recognition criteria discussed above have been met. Deferred revenue represents license revenues billed but not yet earned. Sales of products are recognized when the products are shipped and the customer takes risk of ownership and assumes the risk of loss. Royalty income is recognized as it is earned and recorded when reported by the customer. AES Sales of products are recognized when the products are shipped and the customer takes risk of ownership and assumes the risk of loss. Service revenue is recognized when the service is completed. Deferred revenue represents revenues billed but not yet earned. d. Cash and cash equivalents - The Company considers investments in highly liquid instruments with a maturity of three months or less to be cash equivalents. The Company did not have any cash equivalents at both November 30, 2015 and May 31, 2015. e. Accounts receivable - Accounts receivable are reported at their outstanding unpaid principal balances net of allowances for uncollectible accounts. The Company provides for allowances for uncollectible receivables based on management’s estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. The Company writes off accounts receivable against the allowance for doubtful accounts when a balance is determined to be uncollectible. At November 30, 2015 and May 31, 2015, the Company determined that an allowance for doubtful accounts was not needed. f. Fair Value of Financial Instruments - The carrying value of cash, accounts receivable, other receivables, accounts payable and accrued expenses approximate their fair values based on the short-term maturity of these instruments. The carrying amounts of debt were also estimated to approximate fair value. As defined in ASC 820, "Fair Value Measurements and Disclosures," fair value is 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 (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). This fair value measurement framework applies at both initial and subsequent measurement. The three levels of the fair value hierarchy defined by ASC 820 are as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. g. Earnings (Loss) Per Share (“EPS”) - Basic EPS is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding. Diluted EPS includes the effect from potential issuance of common stock, such as stock issuable pursuant to the exercise of stock options and warrants and the assumed conversion of convertible notes. The following table summarizes the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive even though the exercise price could be less than the average market price of the common shares. T hree and Six Months ended 2015 2014 Convertible notes 117,078 2,115,852 Stock options 3,012,500 1,181,250 Warrants 5,059,320 3,082,657 Potentially dilutive securities 8,188,898 6,379,759 h. Stock Based Compensation - In computing the impact, the fair value of each option and/or warrant is estimated on the date of grant based on the Black-Scholes options-pricing model utilizing certain assumptions for a risk-free interest rate; volatility; and expected remaining lives of the awards. The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture rate, the Company analyzed its historical forfeiture rate, the remaining lives of unvested options, and the amount of vested options as a percentage of total options outstanding. If the Company’s actual forfeiture rate is materially different from its estimate, or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different from what we have recorded in the current period. Stock based compensation expense was $451,521 and $37,000 for the three months ended November 30, 2015 and 2014, respectively, and $451,521 and $1,037,000 for the six months ended November 30, 2015 and 2014, respectively. See Note 7a. The following table presents stock based compensation expenses included in the Company’s consolidated statements of operations: Three Months ended November 30, 2015 2014 Selling and general and administrative $ 311,593 $ 37,000 Research and development 139,928 - $ 451,521 $ 37,000 Six Months ended November 30 2015 2014 Selling and general and administrative $ 311,593 $ 1,037,000 Research, development and engineering 139,928 - $ 451,521 $ 1,037,000 i. Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity based transactions and disclosure of contingent liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates. j. Inventory - Inventory, which will consist solely of finished goods of AES, is valued at the lower of cost on a first-in, first-out basis or market. Inventory consists of the following at November 30, 2015 and May 31, 2015. November 30, 2015 May 31, 2015 (unaudited) Finished goods $ 270,939 $ 147,605 Work-in-process (unbilled labor and consulting) 23,197 9,100 $ 294,136 $ 156,705 k. Property and equipment – Property and equipment is recorded at cost. Depreciation is computed using straight-line and accelerated methods over the estimated useful lives of the related assets. Expenditures that enhance the useful lives of the assets are capitalized and depreciated. Maintenance and repairs are expensed as incurred. When properties are retired or otherwise disposed of, related costs and related accumulated depreciation are removed from the accounts. l. Research and Development –All research and development costs are expensed as incurred. m. Foreign Currency Transactions – The Company accounts for foreign currency translation pursuant to ASC 830. The functional currency of the Company is the United States dollar. Under ASC 830, all assets and liabilities denominated in foreign currencies are translated into United States dollars using the current exchange rate at the end of each fiscal period. Revenues and expenses are translated using the average exchange rates prevailing throughout the respective periods. All transaction gains and losses from the measurement of monetary balance sheet items denominated in foreign currencies are reflected in the statement of operations as gain (loss) on foreign currency transactions. n. New Accounting Pronouncements – In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” The amendments in ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in ASC 605, “Revenue Recognition,” and most industry-specific guidance, and creates an ASC 606, “Revenue from Contracts with Customers.” The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 was scheduled to be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date” (“ASU 2015-14”) which defers the effective date of ASU 2014-09 by one year. ASU 2014-09 is now effective for annual reporting periods after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the effects of adopting ASU 2014-09 on its consolidated financial statements for fiscal 2016 and fiscal 2015 but the adoption is not expected to have a significant impact on the Company’s consolidated financial statements for fiscal 2014 as the Company did not recognize revenues for such year. In June 2014, ASU 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” (“ASU 2014-12”) was issued. ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. An entity should recognize compensation cost in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. ASU 2014-12 becomes effective for interim and annual periods beginning on or after December 15, 2015. Early adoption is permitted. The Company is currently evaluating the effects of adopting ASU 2014-12 on its consolidated financial statements but the adoption is not expected to have a significant impact on the Company’s consolidated financial statements. In June 2014, ASU 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”) was issued. Before the issuance of ASU 2014-15, there was no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. This guidance is expected to reduce the diversity in the timing and content of footnote disclosures. ASU 2014-15 requires management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards as specified in the guidance. ASU 2014-15 becomes effective for the annual period ending after December 15, 2016 and for annual and interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the effects of adopting ASU 2014-15 on its consolidated financial statements but the adoption is not expected to have a significant impact on the Company’s consolidated financial statements. In January 2015, the FASB issued ASU 2015-01, “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items ” In April 2015, the FASB issued ASU 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”) as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). The Board received feedback that having different balance sheet presentation requirements for debt issuance costs and debt discount and premium creates unnecessary complexity. Recognizing debt issuance costs as a deferred charge (that is, an asset) also is different from the guidance in International Financial Reporting Standards, which requires that transaction costs be deducted from the carrying value of the financial liability and not recorded as separate assets. Additionally, the requirement to recognize debt issuance costs as deferred charges conflicts with the guidance in FASB Concepts Statement No. 6, “Elements of Financial Statements,” which states that debt issuance costs are similar to debt discounts and in effect reduce the proceeds of borrowing, thereby increasing the effective interest rate. FASB Concepts Statement No. 6 further states that debt issuance costs cannot be an asset because they provide no future economic benefit. To simplify presentation of debt issuance costs, the amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company will evaluate the effects of adopting ASU 2015-03 if and when it is deemed to be applicable. In July 2015, the FASB issued ASU 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory" ("ASU 2015-11") ASU 2015-11 requires reporting entities measuring inventories under the first-in, first-out or average cost methods to measure inventory at the lower of cost or net realizable value, where net realizable value is "estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation." Inventory was previously required to be measured at the lower of cost or market value, where the measurement of market value had several potential outcomes. ASU 2015-11 becomes effective for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted provided that presentation is applied to the beginning of the fiscal year of adoption. A reporting entity may apply the amendment prospectively. The Company is currently evaluating the effects of adopting ASU 2015-11 on its consolidated financial statements but the adoption is not expected to have a significant impact on the Company’s consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes" ("ASU 2015-17"). ASU 2015-17 requires deferred tax liabilities and assets to be classified as noncurrent in the consolidated balance sheet. ASU 2015-17 becomes effective for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted. A reporting entity should apply the amendment prospectively or retrospectively. The Company is currently evaluating the effects of adopting ASU 2015-17 on its consolidated financial statements. All newly issued but not yet effective accounting pronouncements have been deemed to be not applicable or immaterial to the Company.

SALE OF LICENSE AND IP AGREEMEN

SALE OF LICENSE AND IP AGREEMENTS	6 Months Ended
	Nov. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
SALE OF LICENSE AND IP AGREEMENTS	3. SALE OF LICENSE AND IP AGREEMENTS In December 2010, the Company entered into an agreement to sell substantially all of the assets used in the Company’s business of designing, developing and selling semiconductor products that incorporate power line communications and networking services and offering services related thereto (the “Asset Sale”) to STMicroelectronics, Inc. (“ST US”), a subsidiary of STMicroelectronics N.V. (“ST”), pursuant to an Asset Purchase Agreement, by and among the Parent, Arkados, Inc. and Arkados Wireless Technologies, Inc. and ST US, dated as of December 23, 2010 (the “Purchase Agreement”). At the same time, the Company granted a license (the “License”) to ST US to use the Company’s intellectual property assets included in the Asset Sale pending the closing of such sale. In exchange for granting the License, the Company received gross proceeds of $7 million. The Asset Sale was predicated on the Company settling its secured debt and a significant part of its unsecured debt and closed in June, 2011, whereupon the Company received $4 million. At the time the Asset Sale was completed, ST US agreed to license back certain intellectual property on a non-exclusive basis to Arkados to facilitate the continuation and expansion of the Company’s home automation business, support the Company’s customers and, with adequate financing (of which there is no assurance), permit the Company to continue the development and marketing of smart grid products. ST US hired substantially all of the Company’s engineering and semiconductor employees (including Oleg Logvinov, the Company’s former CEO and director, who was engaged in and directed the semiconductor business). Substantially all of the proceeds received pursuant to the License and the Asset Sale, after payment of expenses related to the transactions, were used to settle approximately $20 million of the Company’s outstanding secured debt issued during the period from December 2004 to August 31, 2008 (which was in default) and pay employees $1.4 million of $5.2 million due them. The remainder of the proceeds received by the Company was used to pay other creditors and expenses incurred in connection with the Asset Sale to the extent funds were available to do so. As a condition to entering into the Purchase Agreement and the License, ST US required that the Company have written settlement agreements and releases with all of our secured creditors as well as all of our employees. Under the settlement agreements with creditors, the creditors agreed to settle the amounts owed (approximately $30,000,000), for an aggregate amount of $10,862,241 in cash, notes payable of $818,768 and another $5,259,926 in common stock of the Company which has yet to be issued. Of the cash settlements, $7,000,000 was paid in December 2010 out of proceeds from the $7,000,000 license fee received pursuant to the License (received in December, 2010), and $3,862,241 was paid at the closing out of proceeds from the Asset Sale (received in June, 2011). In exchange for the settlement amount, the secured creditors agreed to release their security interest in Arkados’ assets and most secured creditors released Arkados from any and all additional claims, if any, that the secured creditors may have had against Arkados. The secured creditors also agreed that ST and its affiliates were third party beneficiaries to the settlement agreements. Under the settlement agreements with the Company’s employees, the employees agreed to accept an aggregate of $1,429,949 and an amount of the Company’s equity rights to be negotiated after the closing as payment for back wages and unreimbursed expenses. The cash payment was paid to employees in December 2010 out of the license fee paid to the Company by ST US. Also, as a condition to entering into the Purchase Agreement and the License, the Company entered into standstill agreements with holders of approximately $2,100,000 of unsecured debt pursuant to which those unsecured creditors agreed, among other things, not to exercise remedies that they may have as creditors of Arkados, not to sell or transfer their debt, to release ST and its affiliates from any and all claims that they may have against ST, if any, and not to sue ST for any dealings that the creditors had with Arkados. The Company is negotiating with its outstanding unsecured debt holders to compromise, extend the due date or convert outstanding debt into equity and thereby facilitate raising additional investor capital for the portion of the Company’s business that may continue. The amounts that the debt holders have agreed to settle through the receipt of the Company’s equity are labeled as “Debt Subject to Equity Being Issued” on the balance sheet. Except as set forth above, there is no binding commitment on anyone’s part to complete the transactions.

ACCOUNTS PAYABLE AND ACCRUED EX

ACCOUNTS PAYABLE AND ACCRUED EXPENSES	6 Months Ended
	Nov. 30, 2015
Payables and Accruals [Abstract]
ACCOUNTS PAYABLE AND ACCRUED EXPENSES	4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES As of November 30, 2015 and May 31, 2015, accounts payable and accrued expenses consist of the following amounts: November 30, May 31, (Unaudited) Accounts payable $ 832,436 $ 463,911 Accrued board of director fees (see Notes 6i and 7A) — 1,873,611 Accrued interest payable 113,536 98,078 Accrued payroll 54,386 54,882 Accrued other 86,289 164,650 $ 1,086,647 $ 2,665,132 Accounts payable transactions included the following: On September 10, 2013, the Company entered into a Settlement Agreement and Release with an unsecured creditor whereby the Company was released from all existing debt, including interest, in exchange for the issuance of 792,550 shares of common stock within 90 days of the signing of the Agreement. The Company issued such shares under this Settlement Agreement in September 2014. As of both November 30, 2015 and May 31, 2015, there was $0 of payables due. See Note 6b. In fiscal 2015, the Company determined that certain accounts payable had been settled in prior periods and should be written off. Balances totaling $124,793 were reversed and recognized as other income.

NOTES PAYABLE, RELATED PARTY PA

NOTES PAYABLE, RELATED PARTY PAYABLES AND DEBT SUBJECT TO EQUITY BEING ISSUED	6 Months Ended
	Nov. 30, 2015
Debt Disclosure [Abstract]
NOTES PAYABLE, RELATED PARTY PAYABLES AND DEBT SUBJECT TO EQUITY BEING ISSUED	5. NOTES PAYABLE, RELATED PARTY PAYABLES AND DEBT SUBJECT TO EQUITY BEING ISSUED Notes Payable As a result of the Asset Sale, the notes payable and convertible debentures of $17,269,689 and the related accrued interest of $3,671,137 as of May 31, 2010, have been settled in part with the December 2010 closing in the amount of $5,570,059 and the balance in June 2011 closing with cash of $3,526,523, an undetermined amount of equity yet to be issued and $688,768 of remaining notes payable as of May 31, 2012. In fiscal 2014, the Company received loans of $400,000. As of May 31, 2014, there was $939,894 of notes payable, net of debt discounts of $309,263. In fiscal 2015, the Company received loans of $200,000 and refinanced related party payables totaling $130,000. In addition, as discussed below, the Company issued common stock for the conversion of various notes payable and accrued interest. As of November 30, 2015 and May 31, 2015, there was notes payable of $345,832, net of debt discounts of $0. All notes payable matured on or before October 31, 2015 and as such, are classified as current liabilities on the consolidated balance sheet. Notes payable transactions include the following: FY 2013 (Year Ended May 31, 2013) Transactions: In November 2012, the Company received a loan in the form of a Convertible Note in the principal amount of $180,000. The Convertible Note bears interest at 6% per year and was scheduled to mature on November 15, 2014. In November 2014, the maturity date was extended to January 15, 2015. At any time during the term of the Convertible Note, the holder had the right to convert any unpaid portion of the Convertible Note into shares of common stock at a conversion price of $0.30 per share. The beneficial conversion feature was fair valued at $180,000 and was amortized over the life of the debt instrument. On April 1, 2015, the Company issued 687,921 shares for the conversion of the principal and accrued interest of $26,377. As a result of the conversion of the notes, the remaining unamortized beneficial conversion feature was written off in March 2015. See Note 6h. In December 2012, the Company received a loan in the form of a Convertible Note in the principal amount of $20,000. The Convertible Note bore interest at 6% per year and was scheduled to mature on November 15, 2014. In November 2014, the maturity date was extended to January 31, 2015. Under the terms of the Convertible Note, if the Convertible Note was not paid upon maturity, the interest rate increased to 12% per year. At any time during the term of the Convertible Note, the holder had the right to convert any unpaid portion of the Convertible Note into shares of common stock at a conversion price of $0.30 per share. The beneficial conversion feature was fair valued at $20,000 and was amortized over the life of the debt instrument. On April 1, 2015, the Company issued 76,373 shares for the conversion of the principal and accrued interest of $2,912. As a result of the conversion of the Convertible Notes, the remaining unamortized beneficial conversion features was written off in March 2015. See Note 6h. On April 22, 2013, the Company executed two Convertible Notes for loans in principal amount of $40,000 each. Each Convertible Note bore interest at 6% per year and was scheduled to mature on April 30, 2015. At any time during the term of the Convertible Notes, the holders had the right to convert any unpaid portion of the Convertible Notes into shares of common stock at an original conversion price of $0.60 per share for both Convertible Notes. The beneficial conversion feature was fair valued at $40,000 each and was being amortized over the lives of the debt instruments. On March 16, 2015, the conversion price for the two Convertible Notes was amended to $0.30 per share. On April 1, 2015, the Company issued 298,111 shares for the conversion of the principal and accrued interest of $9,433. As a result of the conversion of the Convertible Notes, the remaining unamortized beneficial conversion features were written off in March 2015. See Note 6h. On April 22, 2013, the Company executed a Convertible Note for a loan in the principal amount of $120,000. The Convertible Note bore interest at 6% per year and was scheduled to mature on April 30, 2015. At any time during the term of the Convertible Note, the holder had the right to convert any unpaid portion of the Convertible Note into shares of common stock at an original conversion price of $0.60 per share. The beneficial conversion feature was fair valued at $120,000 and was being amortized over the life of the debt instrument. On March 16, 2015, the conversion price for the note was amended to $0.30 per share. On April1, 2015, the Company issued 447,167 shares for the conversion of the principal and accrued interest to date of $14,150. As a result of the conversion of the Convertible Note, the remaining unamortized beneficial conversion feature was written off in March 2015. See Note 6h. On May 2, 2013, the Company executed a Convertible Note for a loan in the principal amount of $200,000. The Convertible Note bore interest at 6% per year and was scheduled to mature on April 30, 2015. At any time during the term of the Convertible Note, the holder had the right to convert any unpaid portion of the Convertible Note into shares of common stock at an original conversion price of $0.60 per share. The beneficial conversion feature was fair valued at $200,000 and was being amortized over the life of the debt instrument. On March 16, 2015, the conversion price for the Convertible Note was amended to $0.30 per share. On April 1, 2015, the Company issued 741,872 shares for the conversion of the principal and accrued interest of $22,562. As a result of the conversion of the Convertible Note, the remaining unamortized beneficial conversion feature was written off in March 2015. See Note 6h. FY 2014 (Year Ended May 31, 2014) Transactions: On October 28, 2013, the Company executed a Convertible Note for a loan in the principal amount of $200,000. The Convertible Note bore interest at 6% per year and was scheduled to mature on October 31, 2015. At any time during the term of the Convertible Note, the holder had the right to convert any unpaid portion of the Convertible Note into shares of common stock at an original conversion price of $1.20 per share. The beneficial conversion feature was fair valued at $7,500 and was being amortized over the life of the debt instrument. On March 16, 2015, the conversion price for the Convertible Note was amended to $0.30 per share. On April 1, 2015, the Company issued 723,706 shares for the conversion of the principal and accrued interest of $17,112. As a result of the conversion of the Convertible Note, the remaining unamortized beneficial conversion feature was written off in March 2015. See Note 6h. On November 12, 2013, the Company executed a Convertible Note for a loan in the principal amount of $200,000. The Convertible Note bore interest at 6% per year and was scheduled to mature on October 31, 2015. At any time during the term of the Convertible Note, the holder had the right to convert any unpaid portion of the Convertible Note into shares of common stock at an original conversion price of $1.20 per share. The beneficial conversion feature was fair valued at $100,000 and was being amortized over the life of the debt instrument. On March 16, 2015, the conversion price for the Convertible Note was amended to $0.30 per share. On April 1, 2015, the Company issued 722,066 shares for the conversion of the principal and accrued interest of $16,620. As a result of the conversion of the Convertible Note, the remaining unamortized beneficial conversion feature was written off in March 2015. See Note 6h. FY 2015 (Year Ended May 31, 2015) Transactions: On August 11, 2014, the Company executed a Convertible Note for a loan in the principal amount of $100,000. The Convertible Note bore interest at 6% per year and was scheduled to mature on October 31, 2015. At any time during the term of the Convertible Note, the holder had the right to convert any unpaid portion of the Convertible Note and accrued interest into shares of common stock at an original conversion price of $0.60 per share. The beneficial conversion feature was fair valued at $35,500 and was being amortized over the life of the debt instrument. On March 16, 2015, the conversion price for the Convertible Note was amended to $0.30 per share. On April 1, 2015, the Company issued 345,360 shares for the conversion of the principal and accrued interest of $3,608. As a result of the conversion of the Convertible Note, the remaining unamortized beneficial conversion feature was written off in March 2015. See Note 6h. On August 12, 2014, the Company executed a Convertible Note for a loan in the principal amount of $100,000. The Convertible Note bore interest at 6% per year and was scheduled to mature on October 31, 2015. At any time during the term of the Convertible Note, the holder had the right to convert any unpaid portion of the Convertible Note and accrued interest into shares of common stock at an original conversion price of $0.60 per share. The beneficial conversion feature was fair valued at $35,500 and was being amortized over the life of the debt instrument. On April 1, 2015, the Company issued 345,303 shares for the conversion of the principal and accrued interest of $3,591. As a result of the conversion of the Convertible Note, the remaining unamortized beneficial conversion features were written off in March 2015. See Note 6h. On September 10, 2014, the Company executed two Convertible Notes to refinance due to related party, a previously issued outstanding note payable and accrued interest totaling $174,071. Each of these Convertible Notes had a principal balance of $65,000, bore interest at 6% per year and matured on October 31, 2015. The Convertible Notes were not paid at maturity and were in default. The terms of the two Convertible Notes have substantially been renegotiated as discussed below. The holders had the right to convert any unpaid portion of the Convertible Notes and accrued interest into shares of common stock at a conversion price of $1.20 per share. There was no beneficial conversion feature. The Company recognized a gain on the settlement of debt of $44,071 for the year ended May 31, 2015. FY 2016 (Year Ended May 31, 2016) Transactions: In January 2016, the Company executed a Promissory Note for a loan in the principal amount of $60,000. The Promissory Note bears interest at 6% per year, compounded quarterly, and matures on January 15, 2017. The proceeds from the Promissory Note were used to partially repay two Convertible Notes as discussed below. On January 8, 2016, the Company entered into an Exchange Agreement with the noteholders of the Convertible Notes that were in default. On January 15, 2016, the Company applied the proceeds of the new Promissory Note together with the issuance of 50,000 shares of the Company’s common stock, to the payment of two outstanding 6% Convertible Notes that were in default having the aggregate outstanding principal amount of $130,000. In exchange for the payment and the shares, the holders of the outstanding 6% Convertible Notes surrendered their notes, and the Company issued a new 6% Convertible Note December 31, 2016 to them in the original principal amount of $40,000. The new Convertible Note bears interest at the rate of 6% per year, compounded quarterly, and matures on December 31, 2016. At any time during the term of the Convertible Note, the holders have the right to convert any unpaid portion of the Convertible Note and accrued interest into shares of common stock at an original conversion price of $1.20 per share. There is no beneficial conversion feature. The holders further agreed that their extension of the maturity of the outstanding Convertible Notes had been effective from October 31, 2015 until January 15, 2016. Debt Subject To Equity Being Issued As a direct result of the Sale of the License and IP Agreements to ST US and the mandate to obtain debt releases, the Company has been able to reach settlements with its secured creditors and employees, with cash payments to the secured creditors made as of the December 2010 and June 2011 closings. Nothing further is owed to the Company’s secured creditors. There remains, however, approximately $179,000 of payments due the former employees as of both November 30, 2015 and May 31, 2015. The continuing settlements with unsecured and related parties resulted in gains being recorded in the amount of $482,784 in fiscal 2012. As of both November 30, 2015 and May 31, 2015, there remained $456,930 of debts to be settled via cash payments and/or the issuance of equity on as yet to be determined or negotiated terms. The majority of debt holders who have settled have agreed to accept equity for their remaining debt. FY 2013 (Year Ended May 31, 2013): On January 6, 2013, the Company and Andreas Typaldos (“Typaldos”), former officer and director, entered into a Separation and Release Agreement (Separation Agreement”). Under the Separation Agreement, all prior agreements with Typaldos were terminated and certain debts and obligations to Typaldos were released in exchange for (1) a cash payment of $15,920 and (2) the issuance of 469,132 shares of the Company's common stock. In addition, $19,000 was to be paid to Typaldos’ son for an existing loan with the Company. The Company issued such shares under this Separation Agreement in September 2014. As of both November 30, 2015 and May 31, 2015 no payables were due to Typaldos. See Note 6c. FY 2015 (Year Ended May 31, 2015): In fiscal 2015, the Company entered into final supplemental agreements with former employees to settle all outstanding claims. The Company issued warrants to purchase 622,947 shares of its common stock at $1.20 per share exercisable for a five-year period ending in 2020 to settle claims totaling $747,535. During the year ended May 31, 2015, the Company entered into final supplemental agreements with bridge note holders to settle all outstanding claims. The Company issued 648,381 shares of its common stock to settle claims totaling $466,000 in September 2014 and 256,486 shares of its common stock to settle claims totaling $207,753 on April 1, 2015. See Note 6d. During the year ended May 31, 2015, the Company agreed to issue 418,669 shares of its common stock to settle claims totaling $502,408 from previous holders of unsecured debt. The shares were issued in January 2015. See Note 6e.

STOCKHOLDERS' DEFICIENCY

STOCKHOLDERS' DEFICIENCY	6 Months Ended
	Nov. 30, 2015
Equity [Abstract]
STOCKHOLDERS' DEFICIENCY	6. STOCKHOLDERS’ DEFICIENCY Reverse Stock Split Effective March 18, 2015, the Company implemented a reverse stock split of its outstanding common stock at a ratio of 1-for-30 shares. In connection with the reverse stock split, the Company’s Certificate of Incorporation was amended such that the Company’s issued and outstanding common stock was proportionally reduced. The number of authorized shares and the par value of the Company’s common stock and preferred stock were not affected by the reverse stock split. Stockholders will not receive fractional shares but instead will receive cash in an amount equal to the fraction of a share that stockholder would have been entitled to receive multiplied by the sale price of the common stock as last reported on February 12, 2015, the last business day prior to the first public disclosure/announcement of the reverse stock split. Private Placement Offering (“PPO”) On March 15, 2015, the Company commenced a PPO for accredited investors to issue up to 2,500,000 shares of common stock and warrants to purchase 2,500,000 shares of common stock at $2.00 per share (each share and warrant constitutes a “Unit”) for total gross proceeds of $1,500,000. The warrants are immediately exercisable and have a term of three years. The Units are being offered by the Company on a “best efforts” “any-or-none” basis in Units of 166,666 shares although the Company may accept fractional Units. See Notes 6g, 6j and 7B for the shares and warrants subscribed for through the date of this report. Issuances of Common Stock FY 2015 (Year Ended May 31, 2015): a. On July 16, 2014, the Company issued 666,667 shares of its common stock to a consultant under the terms of a consulting agreement. The shares were valued at $1.50 per share which was the price of the common stock on the date of the consummation of an agreement with a customer. See Note 9. b. As described above, the Company signed a Settlement Agreement and Release with an unsecured creditor and agreed to issue 792,550 shares of its common stock for $550,000 of accounts payable and $310,977 of a promissory note and accrued interest. The Company issued such shares under this Settlement Agreement in September 2014. Prior to the issuance date, such shares were classified as common stock to be issued. c. As described above, the Company entered into a Separation Agreement with Typaldos and agreed to issue 469,132 shares of its common stock as part of the Agreement. The Company issued such shares under this Separation Agreement in September 2014. Prior to the issuance date, such shares were classified as common stock to be issued. d. As described above, the Company entered into final supplemental agreements with bridge note holder to settle all outstanding claims. In September 2014, the Company agreed to issue 648,381 shares of its common stock to settle claims totaling $466,000. Prior to the issuance date, such shares were classified as common stock to be issued. On April 1, 2015, the Company issued 256,486 shares of its common stock to settle claims totaling $207,754. e. As described above, the Company settled all outstanding claims with previous holders of unsecured debt. In September 2014, the Company issued 418,669 shares of its common stock to settle claims totaling $502,408. f. On February 19, 2015, the Company issued 50,000 shares of its common stock to a consultant under the terms of an investor relations agreement. The shares were valued at $1.20 per share which was the price of the common stock on the date the agreement was signed. See Note 9. g. For the period March 15, 2015 through May 31, 2015, 833,330 shares of its common stock were subscribed for under the PPO and the Company received proceeds of $500,000. The shares were issued on April 7, 2015. h. As described above, on April 1, 2015, the Company issued 4,387,879 shares of its common stock for the conversion of notes payable of $1,200,000 and accrued interest of $116,364. FY 2016 (Year Ended May 31, 2016): i. On June 25, 2015, the Company issued 108,333 shares of its common stock to its chairman/chief executive officer and 35,000 shares of its common stock to an officer/former director for services rendered to the Company’s board of directors in fiscal 2015. The shares were valued at $1.75 per share. The value of the shares totaling $250,833 was charged as stock compensation in fiscal 2015. j. For the period June 1, 2015 through the date of the filing of this report, 838,334 shares of the Company's common stock have been subscribed for under the PPO and the Company has received gross proceeds of $503,000. k. As discussed above, the Company entered into an Exchange Agreement with the noteholders of two Convertible Notes that were in default. Under the agreement, the Company agreed to issue 50,000 shares of its common stock to the noteholders.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	6 Months Ended
	Nov. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
STOCK-BASED COMPENSATION	7. STOCK-BASED COMPENSATION The Company accounted for its stock based compensation in accordance with the fair value recognition provisions of FASB ASC Topic 718, “Compensation – Stock Compensation”. A. Options No options were granted in the year ended May 31, 2015. On June 25, 2015, the Company issued options to its chairman/chief executive officer and an officer/former director for services rendered to the Company’s board of directors during fiscal 2015 to purchase a total of 1,300,000 shares of its common stock as follows: 1. Chairman/chief executive officer – options to purchase 1,000,000 shares of the Company's common stock at $0.60 per share. 2. Officer/former director – options to purchase 300,000 shares of the Company's common stock at $0.60 per share. The options vested immediately and are exercisable for three years. The options issued were valued using the Black-Scholes option pricing model under the assumptions below. The value of the options totaling $1,622,778 was charged as stock compensation in fiscal 2015. The assumptions are as follows - stock price - $1.75; strike price - $0.60; expected volatility – 91.35%; risk-free interest rate - 0.73%; dividend rate - 0%; and expected term – 1.5 years. On October 16, 2015, the Company issued options to employees to purchase 700,000 shares of its common stock at $1.00 per share. The options issued were valued using the Black-Scholes option pricing model under the assumptions below. The value of the options totaling $293,122 was charged as stock compensation. The assumptions are as follows - stock price - $1.00; strike price - $1.00; expected volatility – 89.12%; risk-free interest rate - 0.91%; dividend rate - 0%; and expected term – 1.5 years. Compensation based stock option activity for qualified and unqualified stock options are summarized as follows: Weighted Average Shares Exercise Price Outstanding at June 1, 2014 1,247,917 $ 1.53 Granted — — Exercised — — Expired or cancelled (235,417 ) 2.95 Outstanding at May 31, 2015 1,012,500 1.20 Granted 2,000,000 0.74 Exercised — — Expired or cancelled — — Outstanding at November 30, 2015 3,012,500 $ 0.89 The following table summarizes information about options to purchase shares of the Company's common stock outstanding and exercisable at November 30, 2015: Options Outstanding and Exercisable Number Weighted- Weighted- Number Range of exercise prices: $0.60 1,300,000 2.57 $ 0.60 1,300,000 $1.00 700,000 2.88 1.00 700,000 $1.20 1,012,500 8.39 1.20 1,012,500 3,012,500 4.60 $ 0.86 3,012,500 The compensation expense attributed to the issuance of the options will be recognized as they vest / earned. These stock options are exercisable for three to ten years from the grant date. The employee stock option plan stock options are exercisable for ten years from the grant date and vest over various terms from the grant date to three years. B. Warrants The issuance of warrants to purchase shares of the Company's common stock including those attributed to debt issuances are summarized as follows: Weighted Average Shares Exercise Price Outstanding at June 1, 2014 2,401,043 $ 1.34 Granted 1,536,943 1.63 Exercised — — Expired or cancelled — — Outstanding at May 31, 2015 3,937,986 1.45 Granted 1,121,334 1.75 Exercised — — Expired or cancelled — — Outstanding at November 30, 2015 5,059,320 $ 1.52 The following table summarizes information about warrants to purchase shares of the Company's common stock outstanding and exercisable at November 30, 2015: Outstanding and exercisable Number Weighted- Weighted- Number Range of exercise prices: $1.00 283,000 2.97 $ 1.00 283,000 $1.20 3,004,656 3.64 1.20 3,004,656 $2.00 1,671,664 2.49 2.00 1,671,664 $3.00 to $6.00 100,000 0.98 4.50 100,000 5,059,320 2.73 $ 1.55 5,059,320 Issuances of warrants to purchase shares of the Company's common stock were as follows: FY 2015 (Year Ended May 31, 2015): a. Warrants to purchase 622,947 shares of the Company's common stock were issued in exchange for certain past due indebtedness outstanding. Such warrants were determined to have been issued at fair value since such settlements were negotiated by the Company with each debt holder. b. Warrants to purchase 88,000 shares of the Company's common stock were issued to a consultant for services rendered under a consulting contract. The warrants issued were valued using the Black-Scholes option pricing model under the following assumptions: stock price - $0.46 - $1.87; strike price - $1.20; expected volatility - 100.00%; risk-free interest rate - 1.5%; dividend rate - 0%; and expected term - 3 years. The value of the warrants totaling $349,721 was charged as consulting. c. As discussed above, warrants to purchase 833,330 shares of the Company's common stock were issued under the PPO. FY 2016 (Year Ended May 31, 2016): d. As discussed above, warrants to purchase 838,334 shares of the Company's common stock were issued under the PPO. e. In November 2015, a warrant to purchase 250,000 shares of the Company's common stock at $1.00 per share was issued to a vendor as a bonus payment for services rendered in connection with a software development agreement. The warrant issued was valued using the Black-Scholes option pricing model under the following assumptions: stock price - $1.00; strike price - $1.00; expected volatility - 87.54%; risk-free interest rate - 1.21%; dividend rate - 0%; and expected term - 3 years. The value of the warrant totaling $139,928 was charged as research and development. e. In November 2015, a warrant to purchase 33,000 shares of the Company's common stock at $1.00 per share was issued to a consultant for services rendered under a consulting contract. The warrant issued was valued using the Black-Scholes option pricing model under the following assumptions: stock price - $1.00; strike price - $1.00; expected volatility - 87.54%; risk-free interest rate - 1.21%; dividend rate - 0%; and expected term - 3 years. The value of the warrant totaling $18,471 was charged as consulting. See Note 10. The expense attributed to the issuances of the warrants was recognized as they vested/earned. These warrants are exercisable for three years from the grant date.

LICENSE AGREEMENTS

LICENSE AGREEMENTS	6 Months Ended
	Nov. 30, 2015
Notes to Financial Statements
LICENSE AGREEMENTS	8. LICENSE AGREEMENTS The Company earned all of its revenue from one customer under the following agreements. Master Agreement – License of (“PEMS-SF”™) On July 10, 2014, the Company entered into a Master Agreement to license our Process and Event Management System (“PEMS-SF”™) with Tatung Corporation (“Tatung”). The basic fee generation structure of the Agreement allows for (1) a one-time licensing fee for each PEMS-SF-enabled stations or subsystems installed, (2) separate fees of up to 10% of the software fees for software updates, maintenance and technical support, (3) on-going service fees based on units of products manufactured utilizing PEMS-SF; and (4) an annual service fee for cloud-based services and data storage. The Master Agreement has a year-to-year term but can be terminated by either party upon 60 days’ prior written notice. Upon termination or expiration of this agreement, we are not required to provide any continuing or ongoing processing of data or other services that, pursuant to a sub-agreement, are discontinued upon termination, however, the customer shall retain any perpetual rights granted in a sub-agreement or schedule. The term of any sub-agreements is concomitant and co-terminus with the Master Agreement term. Revenue recognized under the Master Agreement amounted to $52,000 and $58,996 for the three months ended November 30, 2015 and 2014, respectively and $118,000 and $98,996 for the six months ended November 30, 2015 and 2014, respectively. Agreement – License of Meter Collar and Bridge Programmable Logic Controllers In October 2014, the Company entered into a year-to-year term agreement with Tatung to license its meter collar and bridge programmable logic controllers. The license is paid on a per copy (ordered) fee, and is on a perpetual, worldwide, non-exclusive, transferable basis. Revenue recognized under the agreement amounted to $65,000 and $20,000 for the three months ended November 30, 2015 and 2014, respectively and $107,500 and $20,000 for the six months ended November 30, 2015 and 2014, respectively.

PROVISION FOR INCOME TAX BENEFI

PROVISION FOR INCOME TAX BENEFITS	6 Months Ended
	Nov. 30, 2015
Provision For Income Tax Benefits
PROVISION FOR INCOME TAX BENEFITS	9. PROVISION FOR INCOME TAX BENEFITS The provision for income tax benefits of $35,840 for both the three and six months ended November 30, 2014 represents the reversal of over accruals from prior periods.

COMMITMENTS

COMMITMENTS	6 Months Ended
	Nov. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS	10. COMMITMENTS Leases The Company sublet office space on a month-to-month basis from a company affiliated with its chief executive officer at a rate of $1,668 per month through September 2014. Effective October 1, 2014 as amended on January 15, 2015, the Company entered a lease for its office space at a total monthly rental of $1,874. The lease expires on January 15, 2016 but can be renewed for two additional one-year terms. Our AES subsidiary leases offices in Jericho, New York. The facility is approximately 1,850 square feet, occupied pursuant to a lease that commenced on August 1, 2015 and expires September 30, 2018. The average annual rent over the term of the lease is approximately $57,300. This amount does not include taxes and other occupancy costs for the premises. Rent expense including occupancy costs for the three and six months ended November 30, 2015 was $21,445 and $32,211, respectively. Rent expense including occupancy costs for the three and six months ended November 30, 2014 was $5,004 and $10,008, respectively. Consulting Agreements On July 1, 2013, the Company entered into a two-year consulting agreement whereby the consultant was paid in shares of the Company’s common stock in lieu of cash after achieving certain milestones. 666,667 shares were issued on July 16, 2014 upon the consummation of an agreement with a customer. The agreement has expired. On February 19, 2015, the Company entered into a one-year consulting agreement whereby the consultant received a payment of $5,000 and 50,000 shares of common stock valued at $1.20 per share. In addition, the consultant is entitled to payments of $5,000 per month for the duration of the agreement if and when the Company receives $500,000 or more in debt or equity financing. On May 12, 2015, the Company entered into a three month consulting agreement for the raising of capital whereby the consultant received a payment of approximately $3,000. In addition, the consultant is entitled to a success fee of 5% of all monies raised as a direct result of introductions (as defined) made by the consultant. On November 15, 2015, the Company entered into a one year consulting agreement to provide advisory services whereby the consultant received a payment of a warrant to purchase 33,000 shares of the Company's common stock at $1.00 per share.

CONCENTRATIONS OF CREDIT RISK

CONCENTRATIONS OF CREDIT RISK	6 Months Ended
	Nov. 30, 2015
Risks and Uncertainties [Abstract]
CONCENTRATIONS OF CREDIT RISK	11. CONCENTRATIONS OF CREDIT RISK Cash The Company maintains principally all cash balances in two financial institutions which, at times, may exceed the amount insured by the Federal Deposit Insurance Corporation. The exposure to the Company is solely dependent upon daily bank balances and the respective strength of the financial institutions. The Company has not incurred any losses on these accounts. Net Sales Major customers for the three months ended November 30, 2015 and 2014 are set forth in the table below. Three Months Ended 2015 2014 Customer 1 36 % 75 % Customer 2 26 % 25 % Major customers for the six months ended November 30, 2015 and 2014 are set forth in the table below. Six Months Ended November 30 , 2015 2014 Customer 1 31 % 84 % Customer 2 23 % 16 % Customer 3 13 % - Customer 4 12 % - Accounts Receivable Major accounts receivable as of November 30, 2015 and May 31, 2015 are set forth in the table below. November, May 31, (unaudited) Customer 1 44 % 39 % Customer 2 24 % 29 % Customer 3 14 % 28 % Customer 4 11 % -

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended
	Nov. 30, 2015
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	12. RELATED PARTY TRANSACTIONS For the period from March 2015 to May 31, 2015, AES performed consulting services for an entity that is controlled by a former officer of AES and who was also a former director of the Company. No consulting services were performed for both the three and six months ended November 30, 2015 and 2014. In August 2015, AES entered into an agreement to provide energy services for the related entity. For both the three and six months ended November 30, 2015, net sales recognized totaled $142,070.

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION	6 Months Ended
	Nov. 30, 2015
Segment Reporting [Abstract]
BUSINESS SEGMENT INFORMATION	13. BUSINESS SEGMENT INFORMATION As of November 30, 2015, the Company had two operating segments, Arkados and AES. The Company’s reportable segments are distinguished by types of service, customers and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s chief operating decision maker. The accounting policies of each of the segments are the same as those described in the Summary of Significant Accounting Policies. The Company evaluates performance based primarily on income (loss) from operations Operating results for the business segments of the Company were as follows: Arkados AES Consolidated Three Months Ended November 30, 2015 Revenues $ 175,457 $ 639,762 $ 815,219 Loss from operations (254,067 ) (432,544 ) (686,611 ) Three Months Ended November 30, 2014 Revenues 78,996 - 78,996 Loss from operations (263,443 ) - (263,443 ) Six Months Ended November 30, 2015 Revenues 282,293 639,762 922,055 Loss from operations (511,804 ) (695,592 ) (1,207,396 ) Six Months Ended November 30, 2014 Revenues 118,996 - 118,996 Loss from operations (1,462,809 ) - (1,462,809 ) Total assets for the business segments of the Company were as follows: November 30, 2015 (unaudited) $ 67,303 $ 435,532 $ 502,835 May 31, 2015 283,154 254,772 537,926

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Nov. 30, 2015
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	14. SUBSEQUENT EVENTS In January 2016, the Company executed a Promissory Note for a loan in the principal amount of $60,000. On January 8, 2016, the Company entered into an Exchange Agreement with the noteholders of the Convertible Notes that were in default. On January 15, 2016, the Company applied the proceeds of the new Promissory Note together with the issuance of 50,000 shares of the Company’s common stock to the payment of two outstanding 6% Convertible Notes that were in default having the aggregate outstanding principal amount of $130,000. In exchange for the payment and the shares, the holders of the outstanding 6% Convertible Notes surrendered their notes, and the Company issued a new 6% Convertible Note December 31, 2016 to them in the original principal amount of $40,000. See Notes 5 and 6.

SUMMARY OF SIGNIFICANT ACCOUN21

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Nov. 30, 2015
Accounting Policies [Abstract]
Basis of Presentation	a. Basis of Presentation - The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred net losses of approximately $41.3 million since inception, including a net loss of approximately $1.2 million for the six months ended November 30, 2015. Additionally, the Company still had both working capital and stockholders’ deficiencies at November 30, 2015 and May 31, 2015 and negative cash flow from operations since inception. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management expects to incur additional losses in the foreseeable future and recognizes the need to raise capital to remain viable. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
Principles of consolidation	b. Principles of consolidation - The consolidated financial statements include the accounts of the Parent, and its wholly-owned subsidiaries, which include: AES, Arkados, CDKnet, LLC and Creative Technology, LLC. Currently, Arkados and AES are the only active entities with operations. Intercompany accounts and transactions have been eliminated in consolidation.
Revenue Recognition	c. Revenue Recognition - Arkados The Company enters into arrangements with end users for items which may include software license fees, services, maintenance and royalties or various combinations thereof. For each arrangement, revenues will be recognized when evidence of an agreement has been documented, the fees are fixed or determinable, collection of fees is probable, delivery of the product has occurred and no other significant obligations remain. Revenues from software licensing are recognized in accordance with Accounting Standards Codification (“ASC”) 985-605, “Software Revenue Recognition.” Accordingly, revenue from software licensing is recognized when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. License revenues are recognized at the time of delivery of the software and all other revenue recognition criteria discussed above have been met. Deferred revenue represents license revenues billed but not yet earned. Sales of products are recognized when the products are shipped and the customer takes risk of ownership and assumes the risk of loss. Royalty income is recognized as it is earned and recorded when reported by the customer. AES Sales of products are recognized when the products are shipped and the customer takes risk of ownership and assumes the risk of loss. Service revenue is recognized when the service is completed. Deferred revenue represents revenues billed but not yet earned.
Cash and cash equivalents	d. Cash and cash equivalents - The Company considers investments in highly liquid instruments with a maturity of three months or less to be cash equivalents. The Company did not have any cash equivalents at both November 30, 2015 and May 31, 2015.
Accounts receivable	e. Accounts receivable - Accounts receivable are reported at their outstanding unpaid principal balances net of allowances for uncollectible accounts. The Company provides for allowances for uncollectible receivables based on management’s estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. The Company writes off accounts receivable against the allowance for doubtful accounts when a balance is determined to be uncollectible. At November 30, 2015 and May 31, 2015, the Company determined that an allowance for doubtful accounts was not needed.
Fair Value of Financial Instruments	f. Fair Value of Financial Instruments - The carrying value of cash, accounts receivable, other receivables, accounts payable and accrued expenses approximate their fair values based on the short-term maturity of these instruments. The carrying amounts of debt were also estimated to approximate fair value. As defined in ASC 820, "Fair Value Measurements and Disclosures," fair value is 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 (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). This fair value measurement framework applies at both initial and subsequent measurement. The three levels of the fair value hierarchy defined by ASC 820 are as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.
Earnings (Loss) Per Share ("EPS")	g. Earnings (Loss) Per Share (“EPS”) - Basic EPS is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding. Diluted EPS includes the effect from potential issuance of common stock, such as stock issuable pursuant to the exercise of stock options and warrants and the assumed conversion of convertible notes. The following table summarizes the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive even though the exercise price could be less than the average market price of the common shares. Three and Six Months ended 2015 2014 Convertible notes 117,078 2,115,852 Stock options 3,012,500 1,181,250 Warrants 5,059,320 3,082,657 Potentially dilutive securities 8,188,898 6,379,759
Stock Based Compensation	h. Stock Based Compensation - In computing the impact, the fair value of each option and/or warrant is estimated on the date of grant based on the Black-Scholes options-pricing model utilizing certain assumptions for a risk-free interest rate; volatility; and expected remaining lives of the awards. The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture rate, the Company analyzed its historical forfeiture rate, the remaining lives of unvested options, and the amount of vested options as a percentage of total options outstanding. If the Company’s actual forfeiture rate is materially different from its estimate, or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different from what we have recorded in the current period. Stock based compensation expense was $451,521 and $37,000 for the three months ended November 30, 2015 and 2014, respectively, and $451,521 and $1,037,000 for the six months ended November 30, 2015 and 2014, respectively. See Note 7a. The following table presents stock based compensation expenses included in the Company’s consolidated statements of operations: Three Months ended November 30, 2015 2014 Selling and general and administrative $ 311,593 $ 37,000 Research and development 139,928 - $ 451,521 $ 37,000 Six Months ended November 30 2015 2014 Selling and general and administrative $ 311,593 $ 1,037,000 Research, development and engineering 139,928 - $ 451,521 $ 1,037,000
Use of Estimates	i. Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity based transactions and disclosure of contingent liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates.
Inventory	j. Inventory - Inventory, which will consist solely of finished goods of AES, is valued at the lower of cost on a first-in, first-out basis or market. Inventory consists of the following at November 30, 2015 and May 31, 2015. November 30, 2015 May 31, 2015 (unaudited) Finished goods $ 270,939 $ 147,605 Work-in-process (unbilled labor and consulting) 23,197 9,100 $ 294,136 $ 156,705
Property and equipment	k. Property and equipment – Property and equipment is recorded at cost. Depreciation is computed using straight-line and accelerated methods over the estimated useful lives of the related assets. Expenditures that enhance the useful lives of the assets are capitalized and depreciated. Maintenance and repairs are expensed as incurred. When properties are retired or otherwise disposed of, related costs and related accumulated depreciation are removed from the accounts.
Research and Development	l. Research and Development –All research and development costs are expensed as incurred.
Foreign Currency Transactions	m. Foreign Currency Transactions – The Company accounts for foreign currency translation pursuant to ASC 830. The functional currency of the Company is the United States dollar. Under ASC 830, all assets and liabilities denominated in foreign currencies are translated into United States dollars using the current exchange rate at the end of each fiscal period. Revenues and expenses are translated using the average exchange rates prevailing throughout the respective periods. All transaction gains and losses from the measurement of monetary balance sheet items denominated in foreign currencies are reflected in the statement of operations as gain (loss) on foreign currency transactions.
New Accounting Pronouncements	n. New Accounting Pronouncements – In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” The amendments in ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in ASC 605, “Revenue Recognition,” and most industry-specific guidance, and creates an ASC 606, “Revenue from Contracts with Customers.” The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 was scheduled to be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date” (“ASU 2015-14”) which defers the effective date of ASU 2014-09 by one year. ASU 2014-09 is now effective for annual reporting periods after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the effects of adopting ASU 2014-09 on its consolidated financial statements for fiscal 2016 and fiscal 2015 but the adoption is not expected to have a significant impact on the Company’s consolidated financial statements for fiscal 2014 as the Company did not recognize revenues for such year. In June 2014, ASU 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” (“ASU 2014-12”) was issued. ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. An entity should recognize compensation cost in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. ASU 2014-12 becomes effective for interim and annual periods beginning on or after December 15, 2015. Early adoption is permitted. The Company is currently evaluating the effects of adopting ASU 2014-12 on its consolidated financial statements but the adoption is not expected to have a significant impact on the Company’s consolidated financial statements. In June 2014, ASU 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”) was issued. Before the issuance of ASU 2014-15, there was no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. This guidance is expected to reduce the diversity in the timing and content of footnote disclosures. ASU 2014-15 requires management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards as specified in the guidance. ASU 2014-15 becomes effective for the annual period ending after December 15, 2016 and for annual and interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the effects of adopting ASU 2014-15 on its consolidated financial statements but the adoption is not expected to have a significant impact on the Company’s consolidated financial statements. In January 2015, the FASB issued ASU 2015-01, “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items ” In April 2015, the FASB issued ASU 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”) as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). The Board received feedback that having different balance sheet presentation requirements for debt issuance costs and debt discount and premium creates unnecessary complexity. Recognizing debt issuance costs as a deferred charge (that is, an asset) also is different from the guidance in International Financial Reporting Standards, which requires that transaction costs be deducted from the carrying value of the financial liability and not recorded as separate assets. Additionally, the requirement to recognize debt issuance costs as deferred charges conflicts with the guidance in FASB Concepts Statement No. 6, “Elements of Financial Statements,” which states that debt issuance costs are similar to debt discounts and in effect reduce the proceeds of borrowing, thereby increasing the effective interest rate. FASB Concepts Statement No. 6 further states that debt issuance costs cannot be an asset because they provide no future economic benefit. To simplify presentation of debt issuance costs, the amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company will evaluate the effects of adopting ASU 2015-03 if and when it is deemed to be applicable. In July 2015, the FASB issued ASU 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory" ("ASU 2015-11") ASU 2015-11 requires reporting entities measuring inventories under the first-in, first-out or average cost methods to measure inventory at the lower of cost or net realizable value, where net realizable value is "estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation." Inventory was previously required to be measured at the lower of cost or market value, where the measurement of market value had several potential outcomes. ASU 2015-11 becomes effective for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted provided that presentation is applied to the beginning of the fiscal year of adoption. A reporting entity may apply the amendment prospectively. The Company is currently evaluating the effects of adopting ASU 2015-11 on its consolidated financial statements but the adoption is not expected to have a significant impact on the Company’s consolidated financial statements . In November 2015, the FASB issued ASU 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes" ("ASU 2015-17"). ASU 2015-17 requires deferred tax liabilities and assets to be classified as noncurrent in the consolidated balance sheet. ASU 2015-17 becomes effective for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted. A reporting entity should apply the amendment prospectively or retrospectively. The Company is currently evaluating the effects of adopting ASU 2015-17 on its consolidated financial statements. All newly issued but not yet effective accounting pronouncements have been deemed to be not applicable or immaterial to the Company.

SUMMARY OF SIGNIFICANT ACCOUN22

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Nov. 30, 2015
Accounting Policies [Abstract]
Schedule of antidilutive securities excluded from computation of earnings per share	The following table summarizes the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive even though the exercise price could be less than the average market price of the common shares. Three and Six Months ended 2015 2014 Convertible notes 117,078 2,115,852 Stock options 3,012,500 1,181,250 Warrants 5,059,320 3,082,657 Potentially dilutive securities 8,188,898 6,379,759
Schedule of stock based compensation expenses	The following table presents stock based compensation expenses included in the Company’s consolidated statements of operations: Three Months ended November 30, 2015 2014 Selling and general and administrative $ 311,593 $ 37,000 Research and development 139,928 - $ 451,521 $ 37,000 Six Months ended November 30, 2015 2014 Selling and general and administrative $ 311,593 $ 1,037,000 Research, development and engineering 139,928 - $ 451,521 $ 1,037,000
Schedule of inventory	Inventory consists of the following at November 30, 2015 and May 31, 2015. November 30, May 31, (unaudited) Finished goods $ 270,939 $ 147,605 Work-in-process (unbilled labor and consulting) 23,197 9,100 $ 294,136 $ 156,705

ACCOUNTS PAYABLE AND ACCRUED 23

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)	6 Months Ended
	Nov. 30, 2015
Payables and Accruals [Abstract]
Schedule of accounts payable and accrued expenses	As of November 30, 2015 and May 31, 2015, accounts payable and accrued expenses consist of the following amounts: November 30, May 31, (Unaudited) Accounts payable $ 832,436 $ 463,911 Accrued board of director fees (see Notes 6i and 7A) — 1,873,611 Accrued interest payable 113,536 98,078 Accrued payroll 54,386 54,882 Accrued other 86,289 164,650 $ 1,086,647 $ 2,665,132

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	6 Months Ended
	Nov. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of stock option activity for qualified and unqualified stock options	Compensation based stock option activity for qualified and unqualified stock options are summarized as follows: Weighted Average Shares Exercise Price Outstanding at June 1, 2014 1,247,917 $ 1.53 Granted — — Exercised — — Expired or cancelled (235,417 ) 2.95 Outstanding at May 31, 2015 1,012,500 1.20 Granted 2,000,000 0.74 Exercised — — Expired or cancelled — — Outstanding at November 30, 2015 3,012,500 $ 0.89
Schedule of options outstanding and exercisable	The following table summarizes information about options to purchase shares of the Company's common stock outstanding and exercisable at November 30, 2015: Options Outstanding and Exercisable Number Weighted- Weighted- Number Range of exercise prices: $0.60 1,300,000 2.57 $ 0.60 1,300,000 $1.00 700,000 2.88 1.00 700,000 $1.20 1,012,500 8.39 1.20 1,012,500 3,012,500 4.60 $ 0.86 3,012,500
Schedule of issuance of warrants	The issuance of warrants to purchase shares of the Company's common stock including those attributed to debt issuances are summarized as follows: Weighted Average Shares Exercise Price Outstanding at June 1, 2014 2,401,043 $ 1.34 Granted 1,536,943 1.63 Exercised — — Expired or cancelled — — Outstanding at May 31, 2015 3,937,986 1.45 Granted 1,121,334 1.75 Exercised — — Expired or cancelled — — Outstanding at November 30, 2015 5,059,320 $ 1.52
Schedule of warrants outstanding and exercisable	The following table summarizes information about warrants to purchase shares of the Company's common stock outstanding and exercisable at November 30, 2015: Outstanding and exercisable Number Weighted- Weighted- Number Range of exercise prices: $1.00 283,000 2.97 $ 1.00 283,000 $1.20 3,004,656 3.64 1.20 3,004,656 $2.00 1,671,664 2.49 2.00 1,671,664 $3.00 to $6.00 100,000 0.98 4.50 100,000 5,059,320 2.73 $ 1.55 5,059,320

CONCENTRATIONS OF CREDIT RISK (

CONCENTRATIONS OF CREDIT RISK (Tables)	6 Months Ended
	Nov. 30, 2015
Risks and Uncertainties [Abstract]
Schedule of major customers	Major customers for the three months ended November 30, 2015 and 2014 are set forth in the table below. Three Months Ended 2015 2014 Customer 1 36 % 75 % Customer 2 26 % 25 % Major customers for the six months ended November 30, 2015 and 2014 are set forth in the table below. Six Months Ended 2015 2014 Customer 1 31 % 84 % Customer 2 23 % 16 % Customer 3 13 % - Customer 4 12 % -
Schedule of accounts receivable	Major accounts receivable as of November 30, 2015 and May 31, 2015 are set forth in the table below. November, May 31, (unaudited) Customer 1 44 % 39 % Customer 2 24 % 29 % Customer 3 14 % 28 % Customer 4 11 % -

BUSINESS SEGMENT INFORMATION (T

BUSINESS SEGMENT INFORMATION (Tables)	6 Months Ended
	Nov. 30, 2015
Segment Reporting [Abstract]
Schedule of operating results for the business segment	Operating results for the business segments of the Company were as follows: Arkados AES Consolidated Three Months Ended November 30, 2015 Revenues $ 175,457 $ 639,762 $ 815,219 Loss from operations (254,067 ) (432,544 ) (686,611 ) Three Months Ended November 30, 2014 Revenues 78,996 - 78,996 Loss from operations (263,443 ) - (263,443 ) Six Months Ended November 30, 2015 Revenues 282,293 639,762 922,055 Loss from operations (511,804 ) (695,592 ) (1,207,396 ) Six Months Ended November 30, 2014 Revenues 118,996 - 118,996 Loss from operations (1,462,809 ) - (1,462,809 ) Total assets for the business segments of the Company were as follows: November 30, 2015 (unaudited) $ 67,303 $ 435,532 $ 502,835 May 31, 2015 283,154 254,772 537,926

DESCRIPTION OF BUSINESS (Detail

DESCRIPTION OF BUSINESS (Details Narrative) - Number	Mar. 18, 2015	Nov. 30, 2015
Accounting Policies [Abstract]
Number of subsidiaries		2
Description of reverse stock split	1-for-30

SUMMARY OF SIGNIFICANT ACCOUN28

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended		137 Months Ended
	Nov. 30, 2015	Nov. 30, 2014	Nov. 30, 2015	Nov. 30, 2014	Nov. 30, 2015
Accounting Policies [Abstract]
Net income (loss)	$ (695,224)	$ (202,458)	$ (1,223,985)	$ (1,517,488)	$ 41,300,000
Stock based compensation expense	$ 451,521	$ 37,000	$ 451,521	$ 1,037,000
Method used			Black-Scholes options-pricing model

SUMMARY OF SIGNIFICANT ACCOUN29

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - shares	3 Months Ended		6 Months Ended
	Nov. 30, 2015	Nov. 30, 2014	Nov. 30, 2015	Nov. 30, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities	8,188,898	6,379,759	8,188,898	6,379,759
Convertible notes [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities	117,078	2,115,852	117,078	2,115,852
Stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities	3,012,500	1,181,250	3,012,500	1,181,250
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities	5,059,320	3,082,657	5,059,320	3,082,657

SUMMARY OF SIGNIFICANT ACCOUN30

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($)	3 Months Ended		6 Months Ended
	Nov. 30, 2015	Nov. 30, 2014	Nov. 30, 2015	Nov. 30, 2014
Stock based compensation expenses	$ 451,521	$ 37,000	$ 451,521	$ 1,037,000
Selling and general and administrative [Member]
Stock based compensation expenses	311,593	$ 37,000	311,593	$ 1,037,000
Research and development [Member]
Stock based compensation expenses	$ 139,928		$ 139,928

SUMMARY OF SIGNIFICANT ACCOUN31

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($)	Nov. 30, 2015	May. 31, 2015
Accounting Policies [Abstract]
Finished goods	$ 270,939	$ 147,605
Work-in-process (unbilled labor and consulting)	23,197	9,100
Inventory, net	$ 294,136	$ 156,705

SALE OF LICENSE AND IP AGREEM32

SALE OF LICENSE AND IP AGREEMENTS (Details Narrative) - USD ($)	1 Months Ended	6 Months Ended
	Dec. 31, 2010	Nov. 30, 2015
Proceeds from sale of intangible assets	$ 7,000,000
Proceeds from sale of other assets	4,000,000
Settlement of outstanding secured debt		$ 20,000,000
Workers compensation liability		1,400,000
Employee-related liabilities		5,200,000
Proceeds from license fee received	$ 7,000,000
Payments to employees		1,429,949
Settlement Agreements [Member]
Settlement amounts owed		30,000,000
Extinguishment of debt		10,862,241
Payments for restructuring		3,862,241
Unsecured debt		2,100,000
Settlement Agreements [Member] | Notes Payable [Member]
Extinguishment of debt		818,768
Settlement Agreements [Member] | Equity [Member]
Extinguishment of debt		$ 5,259,926

ACCOUNTS PAYABLE AND ACCRUED 33

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details Narrative) - USD ($)	Sep. 10, 2013	Sep. 30, 2014	May. 31, 2015	Nov. 30, 2015
Accounts payable, current			$ 463,911	$ 832,436
Other income			124,793
Unsecured Creditor (Settlement Agreement and General Release ) [Member]
Number of shares issued upon conversion	792,550	792,550
Accounts payable, current			$ 0	$ 0

ACCOUNTS PAYABLE AND ACCRUED 34

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)	Nov. 30, 2015	May. 31, 2015
Payables and Accruals [Abstract]
Accounts payable	$ 832,436	$ 463,911
Accrued board of director fees (see Notes 6i and 7A)		1,873,611
Accrued interest payable	$ 113,536	98,078
Accrued payroll	54,386	54,882
Accrued other	86,289	164,650
Accounts payable and accrued expenses	$ 1,086,647	$ 2,655,132

NOTES PAYABLE, RELATED PARTY 35

NOTES PAYABLE, RELATED PARTY PAYABLES AND DEBT SUBJECT TO EQUITY BEING ISSUED (Details Narrative) - USD ($)	1 Months Ended		12 Months Ended
	Jun. 30, 2011	Dec. 31, 2010	May. 31, 2015	May. 31, 2014	Nov. 30, 2015	May. 31, 2012	May. 31, 2010
Notes payable, net of debt discounts			$ 345,832		$ 345,832
Notes Payable [Member]
Proceeds from debt			200,000	$ 400,000
Notes payable, net of debt discounts			345,832	939,894	345,832
Debt discount			0	$ 309,263	$ 0
Refinanced related party payables			$ 130,000
STMicroelectronics, Inc [Member] | Notes Payable & Convertible Debentures [Member]
Convertible debt						$ 688,768	$ 17,269,689
Accrued interest							$ 3,671,137
Repayment of debt	$ 3,526,523	$ 5,570,059

NOTES PAYABLE, RELATED PARTY 36

NOTES PAYABLE, RELATED PARTY PAYABLES AND DEBT SUBJECT TO EQUITY BEING ISSUED (Details Narrative 1)	Apr. 01, 2015USD ($)Number	Apr. 01, 2015USD ($)Number	Apr. 30, 2015USD ($)Number	Mar. 16, 2015$ / shares	Sep. 30, 2014USD ($)	May. 02, 2013USD ($)$ / shares	Apr. 22, 2013USD ($)$ / shares	Dec. 31, 2012USD ($)$ / shares	Nov. 30, 2012USD ($)$ / shares
Principal amount					$ 502,408
6% Convertible Note Due 2015-01-15 [Member]
Principal amount									$ 180,000
Conversion price (in dollars per shares) | $ / shares									$ 0.30
Fair value of debt beneficial conversion feature									$ 180,000
Number of shares issued for conversion | Number	687,921
Debt beneficial conversion feature	$ 26,377
12% Convertible Note Due 2015-01-31 [Member]
Principal amount								$ 20,000
Conversion price (in dollars per shares) | $ / shares								$ 0.30
Fair value of debt beneficial conversion feature								$ 20,000
Number of shares issued for conversion | Number		76,373
Debt beneficial conversion feature		$ 2,912
6% Two Convertible Note Due 2015-04-30 [Member]
Principal amount							$ 40,000
Conversion price (in dollars per shares) | $ / shares				$ 0.30			$ 0.60
Fair value of debt beneficial conversion feature							$ 40,000
Number of shares issued for conversion | Number		298,111
Debt beneficial conversion feature		$ 9,433
6% Convertible Note Due 2015-04-30 [Member]
Principal amount							$ 120,000
Conversion price (in dollars per shares) | $ / shares				0.30			$ 0.60
Fair value of debt beneficial conversion feature							$ 120,000
Number of shares issued for conversion | Number		447,167
Debt beneficial conversion feature		$ 14,150
6% Convertible Note Due 2015-04-30 [Member]
Principal amount						$ 200,000
Conversion price (in dollars per shares) | $ / shares				$ 0.30		$ 0.60
Fair value of debt beneficial conversion feature						$ 200,000
Number of shares issued for conversion | Number			741,872
Debt beneficial conversion feature			$ 22,562

NOTES PAYABLE, RELATED PARTY 37

NOTES PAYABLE, RELATED PARTY PAYABLES AND DEBT SUBJECT TO EQUITY BEING ISSUED (Details Narrative 2)	Apr. 01, 2015USD ($)Number	Mar. 16, 2015$ / shares	Sep. 30, 2014USD ($)	Nov. 12, 2013USD ($)$ / shares	Oct. 28, 2013USD ($)$ / shares
Principal amount			$ 502,408
6% Convertible Note Due 2015-10-31 [Member]
Principal amount					$ 200,000
Conversion price (in dollars per shares) | $ / shares		$ 0.30			$ 1.20
Fair value of debt beneficial conversion feature					$ 7,500
Number of shares issued for conversion | Number	723,706
Debt beneficial conversion feature	$ 17,112
6% Convertible Note Due 2015-10-31 [Member]
Principal amount				$ 200,000
Conversion price (in dollars per shares) | $ / shares		$ 0.30		$ 1.20
Fair value of debt beneficial conversion feature				$ 100,000
Number of shares issued for conversion | Number	722,066
Debt beneficial conversion feature	$ 16,620

NOTES PAYABLE, RELATED PARTY 38

NOTES PAYABLE, RELATED PARTY PAYABLES AND DEBT SUBJECT TO EQUITY BEING ISSUED (Details Narrative 3)	Apr. 01, 2015USD ($)Number	Nov. 30, 2015USD ($)	Nov. 30, 2014USD ($)	Nov. 30, 2015USD ($)	Nov. 30, 2014USD ($)	May. 31, 2015USD ($)	May. 31, 2012USD ($)	Mar. 16, 2015$ / shares	Sep. 30, 2014USD ($)	Sep. 10, 2014USD ($)$ / shares	Aug. 12, 2014USD ($)$ / shares	Aug. 11, 2014USD ($)$ / shares
Principal amount									$ 502,408
Notes payable, net of debt discounts		$ 345,832		$ 345,832		$ 345,832
Gain on extinguishment of debt			$ 44,071		$ 44,071		$ 482,784
6% Convertible Note Due 2015-10-31 [Member]
Principal amount												$ 100,000
Conversion price (in dollars per shares) | $ / shares								$ 0.30				$ 0.60
Fair value of debt beneficial conversion feature												$ 35,500
Number of shares issued for conversion | Number	345,360
Debt beneficial conversion feature	$ 3,608
6% Promissory Note Due 2017-1-15 [Member]
Principal amount											$ 100,000
Conversion price (in dollars per shares) | $ / shares											$ 0.60
Fair value of debt beneficial conversion feature											$ 35,500
Number of shares issued for conversion | Number	345,303
Debt beneficial conversion feature	$ 3,591
6% Two Convertible Note Due 2015-10-31 [Member]
Principal amount										$ 130,000
Conversion price (in dollars per shares) | $ / shares										$ 1.20
Notes payable, net of debt discounts										$ 174,071
Gain on extinguishment of debt						$ 44,071

NOTES PAYABLE, RELATED PARTY 39

NOTES PAYABLE, RELATED PARTY PAYABLES AND DEBT SUBJECT TO EQUITY BEING ISSUED (Details Narrative 4)	Jan. 15, 2016USD ($)Number$ / shares	Jan. 08, 2016USD ($)	Sep. 30, 2014USD ($)	Sep. 10, 2014USD ($)$ / shares
Principal amount			$ 502,408
6% Two Convertible Note Due 2015-10-31 [Member]
Principal amount				$ 130,000
Conversion price (in dollars per shares) | $ / shares				$ 1.20
Subsequent Event [Member] | 6% Promissory Note Due 2017-01-15 [Member]
Principal amount	$ 60,000
Subsequent Event [Member] | 6% Two Convertible Note Due 2015-10-31 [Member]
Principal amount		$ 130,000
Number of shares issued for conversion | Number	50,000
Subsequent Event [Member] | 6% Convertible Note Due 2016-12-31 [Member]
Principal amount	$ 40,000
Conversion price (in dollars per shares) | $ / shares	$ 1.20

NOTES PAYABLE, RELATED PARTY 40

NOTES PAYABLE, RELATED PARTY PAYABLES AND DEBT SUBJECT TO EQUITY BEING ISSUED (Details Narrative 5) - USD ($)	Apr. 01, 2015	Jan. 06, 2013	Sep. 30, 2014	Nov. 30, 2015	Nov. 30, 2014	Nov. 30, 2015	Nov. 30, 2014	May. 31, 2015	May. 31, 2012
Gain on extinguishment of debt					$ 44,071		$ 44,071		$ 482,784
Number of warrants called (in shares)			418,669
Number of shares issued for conversion						456,930		456,930
Bridge Note [Member]
Debt outstanding	$ 207,753		$ 466,000
Number of share issued during the period (in shares)	256,486		648,381
Unsecured Debt [Member]
Debt outstanding								$ 502,408
Number of share issued during the period (in shares)								418,669
Andreas Typaldos (Separation and Release Agreement) [Member]
Payment of related party debt		$ 15,920
Number of share issued during the period (in shares)		469,132	469,132
Proceeds from related party debt		$ 19,000
Various Former Employees [Member] | Warrant [Member]
Due to related party								$ 747,535
Number of warrants called (in shares)								622,947
Warranr exercise price (in dollars per shares)								$ 1.20
STMicroelectronics, Inc [Member]
Due to related party				$ 179,000		$ 179,000		$ 179,000

STOCKHOLDERS' DEFICIENCY (Detai

STOCKHOLDERS' DEFICIENCY (Details Narrative) - USD ($)

Jan. 15, 2016

Apr. 01, 2015

Mar. 18, 2015

Mar. 15, 2015

Sep. 10, 2013

Jan. 06, 2013

Jun. 25, 2015

Feb. 19, 2015

Sep. 30, 2014

Jul. 16, 2014

May. 31, 2015

Nov. 30, 2015

Jan. 08, 2016

Sep. 10, 2014

Stockholders' equity, reverse stock split

1-for-30

Number of warrants called

418,669

Principal amount

$ 502,408

Shares issued, price per share

$ 1.75

Value of shares issued for stock compensation

$ 250,833

Terrence DeFranco [Member]

Number of share issued during the period (in shares)

108,333

Mark Gelnaw [Member]

Number of share issued during the period (in shares)

35,000

Andreas Typaldos (Separation and Release Agreement) [Member]

Number of share issued during the period (in shares)

469,132

469,132

6% Two Convertible Note Due 2015-10-31 [Member]

Principal amount

$ 130,000

6% Two Convertible Note Due 2015-10-31 [Member] | Subsequent Event [Member]

Principal amount

$ 130,000

Number of shares issued upon conversion

50,000

Consulting Agreement [Member]

Sale of stock, price per share (in dollars per share)

$ 1.50

Stock issued during period, shares, issued for services

666,667

Unsecured Creditor (Settlement Agreement and General Release ) [Member]

Number of warrants called

256,486

648,381

Principal amount

$ 207,754

$ 466,000

Accounts payable

1,200,000

$ 550,000

Number of shares issued upon conversion

792,550

792,550

Unsecured Creditor (Settlement Agreement and General Release ) [Member] | Promissory Note [Member]

Debt beneficial conversion feature

$ 310,977

Unsecured Creditor (Settlement Agreement and General Release ) [Member] | Third Bridge Note [Member]

Debt beneficial conversion feature

$ 116,364

Number of shares issued upon conversion

4,387,879

Consulting Agreement Four [Member]

Stock issued during period, shares

50,000

Shares issued, price per share

$ 1.20

Private Placement [Member]

Sale of stock, number of shares issued in transaction

2,500,000

Sale of stock, price per share (in dollars per share)

$ 2

Sale of stock, consideration received on transaction

$ 1,500,000

Units issued

166,666

Value of shares issued during the period

$ 500,000

Number of share issued during the period (in shares)

833,330

838,334

Proceeds from issuance of private placement (in dollars)

$ 503,000

Private Placement [Member] | Warrant [Member]

Warrant term

3 years

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Details Narrative) - USD ($)	Oct. 16, 2015	Jun. 25, 2015	Nov. 30, 2015	Nov. 30, 2015	May. 31, 2016	May. 31, 2015
Method used				Black-Scholes options-pricing model
Warrant [Member]
Number of gross warrant granted						622,947
Method used						Black-Scholes option pricing model
Consulting charges						$ 349,721
Warrant [Member] | Private Placement [Member]
Number of gross warrant granted					838,334	833,330
Warrant [Member] | Consulting Contract [Member]
Number of gross warrant granted			33,000			88,000
Method used			Black-Scholes option pricing model
Stock price (in dollars per share)			$ 1	$ 1
Strike price (in dollars per share)			$ 1	1		$ 1.20
Expected volatility			87.54%			100.00%
Risk-free interest rate			1.21%			1.50%
Dividend rate			0.00%			0.00%
Expected term			3 years			3 years
Common stock, par value (in dollars per share)			$ 1	$ 1
Warrant outstanding			18,471	18,471
Warrant [Member] | Consulting Contract [Member] | Maximum [Member]
Stock price (in dollars per share)						$ 1.87
Warrant [Member] | Consulting Contract [Member] | Minimum [Member]
Stock price (in dollars per share)						$ 0.46
Warrant [Member] | Software Development Agreement [Member]
Number of gross warrant granted			250,000
Method used			Black-Scholes option pricing model
Stock price (in dollars per share)			$ 1	$ 1
Strike price (in dollars per share)			$ 1	1
Expected volatility			87.54%
Risk-free interest rate			1.21%
Dividend rate			0.00%
Expected term			3 years
Common stock, par value (in dollars per share)			$ 1	$ 1
Warrant outstanding			139,928	139,928
Chief Executive Officer And Former Director [Member]
Number of gross option granted		1,300,000
Vesting period		3 years
Stock based compensation				$ 1,622,778
Method used				Black-Scholes option pricing model
Stock price (in dollars per share)			$ 1.75	$ 1.75
Strike price (in dollars per share)			0.60	$ 0.60
Expected volatility				91.35%
Risk-free interest rate				0.73%
Dividend rate				0.00%
Expected term				1 year 6 months
Chief Executive Officer [Member]
Number of gross option granted		1,000,000
Weighted average exercise price		$ 0.6
Vesting period		3 years
Former Director [Member]
Number of gross option granted		300,000
Weighted average exercise price		$ 0.6
Vesting period		3 years
Employees [Member]
Number of gross option granted	700,000
Weighted average exercise price	$ 1
Stock based compensation				$ 293,122
Method used				Black-Scholes option pricing model
Stock price (in dollars per share)			1	$ 1
Strike price (in dollars per share)			$ 1	$ 1
Expected volatility				89.12%
Risk-free interest rate				0.91%
Dividend rate				0.00%
Expected term				1 year 6 months

STOCK-BASED COMPENSATION (Det43

STOCK-BASED COMPENSATION (Details) - Employee Stock Option [Member] - $ / shares	6 Months Ended	12 Months Ended
	Nov. 30, 2015	May. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding at beginning	1,012,500	1,247,917
Granted	2,000,000
Exercised
Expired or cancelled		(235,417)
Outstanding at ending	3,012,500	1,012,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [RollForward]
Outstanding at beginning	$ 1.20	$ 1.53
Granted	$ 0.74
Exercised
Expired or cancelled		$ 2.95
Outstanding at ending	$ 0.89	$ 1.20

STOCK-BASED COMPENSATION (Det44

STOCK-BASED COMPENSATION (Details 1)	6 Months Ended
	Nov. 30, 2015$ / sharesshares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Shares outstanding	3,012,500
Weighted-average remaining life (in years)	4 years 7 months 6 days
Weighted-average exercise price (in dollars per share) | $ / shares	$ 0.86
Number exercisable	3,012,500
$0.60 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of exercise prices (in dollars per share) | $ / shares	$ 0.60
Shares outstanding	1,300,000
Weighted-average remaining life (in years)	2 years 6 months 25 days
Weighted-average exercise price (in dollars per share) | $ / shares	$ 0.60
Number exercisable	1,300,000
$1.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of exercise prices (in dollars per share) | $ / shares	$ 1
Shares outstanding	700,000
Weighted-average remaining life (in years)	2 years 10 months 17 days
Weighted-average exercise price (in dollars per share) | $ / shares	$ 1
Number exercisable	700,000
$1.20 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of exercise prices (in dollars per share) | $ / shares	$ 1.20
Shares outstanding	1,012,500
Weighted-average remaining life (in years)	8 years 4 months 20 days
Weighted-average exercise price (in dollars per share) | $ / shares	$ 1.20
Number exercisable	1,012,500

STOCK-BASED COMPENSATION (Det45

STOCK-BASED COMPENSATION (Details 2) - Warrant [Member] - $ / shares	6 Months Ended	12 Months Ended
	Nov. 30, 2015	May. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding at beginning	3,937,986	2,401,043
Granted	1,121,334	1,536,943
Exercised
Expired or cancelled
Outstanding at ending	5,059,320	3,937,986
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted-Average Exercise Price [Roll Forward]
Outstanding at beginning	$ 1.45	$ 1.34
Granted	$ 1.75	$ 1.63
Exercised
Expired or cancelled
Outstanding at ending	$ 1.52	$ 1.45

STOCK-BASED COMPENSATION (Det46

STOCK-BASED COMPENSATION (Details 3) - Warrant [Member] - $ / shares	6 Months Ended
	Nov. 30, 2015	May. 31, 2015	May. 31, 2014
Shares outstanding	5,059,320	3,937,986	2,401,043
Weighted-average remaining life	2 years 8 months 23 days
Weighted-average exercise price (in dollars per share)	$ 1.55
Number exercisable	5,059,320
$1.00 [Member]
Exercise price range, upper range limit (in dollars per share)	$ 1
Shares outstanding	283,000
Weighted-average remaining life	2 years 11 months 19 days
Weighted-average exercise price (in dollars per share)	$ 1
Number exercisable	283,000
$1.20 [Member]
Exercise price range, upper range limit (in dollars per share)	$ 1.20
Shares outstanding	3,004,656
Weighted-average remaining life	3 years 7 months 20 days
Weighted-average exercise price (in dollars per share)	$ 1.20
Number exercisable	3,004,656
$2.00 [Member]
Exercise price range, upper range limit (in dollars per share)	$ 2
Shares outstanding	1,671,664
Weighted-average remaining life	2 years 5 months 26 days
Weighted-average exercise price (in dollars per share)	$ 2
Number exercisable	1,671,664
$3.00 to $6.00 [Member]
Exercise price range, lower range limit (in dollars per share)	$ 3
Exercise price range, upper range limit (in dollars per share)	$ 6
Shares outstanding	100,000
Weighted-average remaining life	11 months 23 days
Weighted-average exercise price (in dollars per share)	$ 4.50
Number exercisable	100,000

LICENSE AGREEMENTS (Details Nar

LICENSE AGREEMENTS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Nov. 30, 2015	Nov. 30, 2014	Nov. 30, 2015	Nov. 30, 2014
Master Agreement License of Process and Event Management System [Member]
License and services revenue	$ 52,000	$ 58,996	$ 118,000	$ 98,996
Percentage of fees for software services			10.00%
Agreement License of Meter Collar and Bridge Programmable Logic Controllers [Member]
License and services revenue	$ 65,000	$ 20,000	$ 107,500	$ 20,000

PROVISION FOR INCOME TAX BENE48

PROVISION FOR INCOME TAX BENEFITS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Nov. 30, 2015	Nov. 30, 2014	Nov. 30, 2015	Nov. 30, 2014
Provision For Income Tax Benefits Details Narrative
Provision for income tax benefits		$ 35,840		$ 35,840

COMMITMENTS (Details Narrative)

COMMITMENTS (Details Narrative)	Nov. 15, 2015$ / sharesshares	May. 12, 2015USD ($)	Feb. 19, 2015USD ($)$ / sharesshares	Sep. 30, 2014USD ($)	Jul. 16, 2014shares	Nov. 30, 2015USD ($)ft²	Jan. 15, 2015USD ($)	Nov. 30, 2014USD ($)	Nov. 30, 2015USD ($)ft²	Nov. 30, 2014USD ($)	Jun. 25, 2015$ / shares
Rental income, nonoperating							$ 1,874
Lease term							2 years
Rent expenses						$ 21,445		$ 5,004	$ 32,211	$ 10,008
Shares issued, price per share | $ / shares											$ 1.75
Consulting Agreement [Member]
Stock issued during period, shares, issued for services | shares					666,667
Consulting Agreement Four [Member]
Payments of stock issuance costs			$ 5,000
Addition consultancy fees			$ 5,000
Stock issued during period, shares | shares			50,000
Shares issued, price per share | $ / shares			$ 1.20
Proceeds from issuance or sale of equity			$ 500,000
Consulting Agreement Five [Member]
Payments of stock issuance costs		$ 3,000
Percentage of additional success fee		5.00%
Consulting Agreement Five [Member] | Warrant [Member]
Stock issued during period, shares | shares	33,000
Shares issued, price per share | $ / shares	$ 1
AES [Member]
Rental income, nonoperating									$ 57,300
Area occupied pursuant to a lease | ft²						1,850			1,850
Terrence DeFranco [Member]
Rental income frequency of periodic payment				month-to-month
Rental income, nonoperating				$ 1,668

CONCENTRATIONS OF CREDIT RISK50

CONCENTRATIONS OF CREDIT RISK (Details) - Number	3 Months Ended		6 Months Ended		12 Months Ended
	Nov. 30, 2015	Nov. 30, 2014	Nov. 30, 2015	Nov. 30, 2014	May. 31, 2015
Net Sales [Member]
Number of customers			2
Net Sales [Member] | Customer 1 [Member]
Concentration risk, percentage	36.00%	75.00%	31.00%	84.00%
Net Sales [Member] | Customer 2 [Member]
Concentration risk, percentage	26.00%	25.00%	23.00%	16.00%
Net Sales [Member] | Customer 3 [Member]
Concentration risk, percentage			13.00%
Net Sales [Member] | Customer 4 [Member]
Concentration risk, percentage			12.00%
Accounts Receivable [Member]
Number of customers			3
Accounts Receivable [Member] | Customer 1 [Member]
Concentration risk, percentage			44.00%		39.00%
Accounts Receivable [Member] | Customer 2 [Member]
Concentration risk, percentage			24.00%		29.00%
Accounts Receivable [Member] | Customer 3 [Member]
Concentration risk, percentage			14.00%		28.00%
Accounts Receivable [Member] | Customer 4 [Member]
Concentration risk, percentage			11.00%

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Nov. 30, 2015	Nov. 30, 2014	Nov. 30, 2015	Nov. 30, 2014
Related Party Transactions [Abstract]
Net sales, related party	$ 142,070	$ 0	$ 142,070	$ 0

BUSINESS SEGMENT INFORMATION (D

BUSINESS SEGMENT INFORMATION (Details Narrative)	6 Months Ended
	Nov. 30, 2015Number
Segment Reporting [Abstract]
Number of operating segments	2

BUSINESS SEGMENT INFORMATION 53

BUSINESS SEGMENT INFORMATION (Details) - USD ($)	3 Months Ended		6 Months Ended
	Nov. 30, 2015	Nov. 30, 2014	Nov. 30, 2015	Nov. 30, 2014	May. 31, 2015
Segment Reporting Information [Line Items]
Revenues	$ 815,219	$ 78,996	$ 922,055	$ 118,996
Loss from operations	(686,611)	(263,443)	(1,207,396)	(1,462,809)
Total assets	502,835		502,835		$ 537,926
Arkados [Member]
Segment Reporting Information [Line Items]
Revenues	175,457	78,996	282,293	118,996
Loss from operations	(254,067)	$ (263,443)	(511,804)	$ (1,462,809)
Total assets	67,303		67,303		283,154
AES [Member]
Segment Reporting Information [Line Items]
Revenues	639,762		639,762
Loss from operations	(432,544)		(695,592)
Total assets	$ 435,532		$ 435,532		$ 254,772

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative)	Jan. 15, 2016USD ($)Number$ / shares	Jan. 08, 2016USD ($)	Sep. 30, 2014USD ($)	Sep. 10, 2014USD ($)$ / shares
Principal amount			$ 502,408
6% Two Convertible Note Due 2015-10-31 [Member]
Principal amount				$ 130,000
Conversion price (in dollars per shares) | $ / shares				$ 1.20
Subsequent Event [Member] | 6% Promissory Note Due 2017-01-15 [Member]
Principal amount	$ 60,000
Subsequent Event [Member] | 6% Two Convertible Note Due 2015-10-31 [Member]
Principal amount		$ 130,000
Number of shares issued for conversion | Number	50,000
Subsequent Event [Member] | 6% Convertible Note Due 2016-12-31 [Member]
Principal amount	$ 40,000
Conversion price (in dollars per shares) | $ / shares	$ 1.20