Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Jul. 31, 2014 | Sep. 11, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'ON4 COMMUNICATIONS INC. | ' |
Entity Central Index Key | '0001300867 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Jul-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--10-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'No | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 49,584,554 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
Balance_Sheets
Balance Sheets (USD $) | Jul. 31, 2014 | Oct. 31, 2013 |
Current Assets | ' | ' |
Cash | $0 | $0 |
Loan receivable (Note 3) | 117,952 | 121,090 |
Total Current Assets | 117,952 | 121,090 |
Deferred financing costs | 0 | 778 |
Total Assets | 117,952 | 121,868 |
Current Liabilities | ' | ' |
Bank indebtedness | 0 | 1,022 |
Accounts payable and accrued liabilities (Note 5) | 1,551,029 | 1,378,983 |
Due to related parties (Note 4) | 143,546 | 4,858 |
Notes payable (Note 6) | 385,529 | 390,320 |
Convertible notes payable, net of unamortized discount of $nil and $38,099, respectively (Note 7) | 145,116 | 80,933 |
Derivative liabilities (Note 8) | 84,303 | 121,632 |
Total Liabilities | 2,309,523 | 1,977,748 |
Nature of Operations and Continuance of Business (Note 1) | 0 | 0 |
Commitments (Note 12) | 0 | 0 |
Stockholders' Deficit | ' | ' |
Preferred stock: 30,000,000 shares authorized, non-voting, no par value; No shares issued and outstanding | 0 | 0 |
Common stock: 600,000,000 shares authorized, $0.0001 par value; 12,075,121 and 1,465,566 shares issued and outstanding, respectively | 2,110 | 147 |
Additional paid-in capital | 13,631,281 | 13,381,883 |
Common stock issuable | 70,000 | 70,000 |
Deficit accumulated during the development stage | -15,894,962 | -15,307,910 |
Total Stockholders' Deficit | -2,191,571 | -1,855,880 |
Total Liabilities and Stockholders' Deficit | $117,952 | $121,868 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Jul. 31, 2014 | Oct. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Convertible notes payable | $0 | $38,099 |
Preferred Stock, Shares Authorized | 30,000,000 | 30,000,000 |
Preferred Stock, No Par Value | $0 | $0 |
Common Stock, Shares Authorized | 600,000,000 | 600,000,000 |
Common Stock, Par Value Per Share | $0.00 | $0.00 |
Common Stock, Shares, Issued | 12,075,121 | 1,465,566 |
Common Stock, Shares, Outstanding | 12,075,121 | 1,465,566 |
Statements_of_Operations
Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2013 | |
Operating Expenses | ' | ' | ' | ' |
Advertising and marketing | $0 | $0 | $55,000 | $0 |
Consulting fees | 0 | 0 | 0 | 5,232 |
Foreign exchange loss (gain) | 827 | -2,789 | -6,921 | -2,807 |
General and administrative | 0 | 1,878 | 4,127 | 10,712 |
Management fees (Note 4) | 102,900 | 4,028 | 241,900 | 19,638 |
Professional fees | 18,090 | 10,687 | 58,726 | 52,514 |
Total Operating Expenses | 121,817 | 13,804 | 352,832 | 85,289 |
Operating Loss | -121,817 | -13,804 | -352,832 | -85,289 |
Other Income (Expense) | ' | ' | ' | ' |
Accretion of discounts on convertible notes payable (Note 7) | 0 | -62,958 | -38,099 | -215,995 |
Amortization of deferred financing costs | 0 | -1,981 | -778 | -8,112 |
Interest expense | -47,662 | -72,842 | -116,972 | -142,841 |
Gain (loss) on change in fair value of derivative liabilities (Note 8) | 49,892 | -41,653 | -65,412 | -213,787 |
Loss on settlement of debt | -12,959 | 0 | -12,959 | 0 |
Total Other Income (Expense) | -10,729 | -179,434 | -234,220 | -580,735 |
Net Loss | ($132,546) | ($193,238) | ($587,052) | ($666,024) |
Net Loss Per Share - Basic and Diluted | ($0.01) | ($0.43) | ($0.08) | ($1.20) |
Weighted Average Shares Outstanding | 16,586,508 | 326,767,971 | 7,758,952 | 242,722,820 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 9 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Operating Activities | ' | ' |
Net loss from continuing operations | ($587,052) | ($666,024) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Accretion of discounts on convertible notes payable | 38,099 | 215,995 |
Amortization of deferred financing costs | 778 | 8,112 |
Loss on settlement of debt | 12,959 | -722 |
Issuance of notes payable for services and penalties | 55,000 | 35,000 |
Loss on change in fair value of derivative liabilities | 65,412 | 213,787 |
Stock-based compensation | 103,000 | 0 |
Changes in operating assets and liabilities: | ' | ' |
Accounts payable and accrued liabilities | 172,047 | 356,623 |
Due to related parties | 137,641 | -203,646 |
Net Cash Used In Operating Activities | -2,116 | -40,875 |
Investing Activities | ' | ' |
Loan receivable | 3,138 | -52,370 |
Acquisition of property and equipment | 0 | 0 |
Advances for note receivable | 0 | 0 |
Net Cash Provided By (Used In) Investing Activities | 3,138 | -52,370 |
Financing Activities | ' | ' |
Bank indebtedness | -1,022 | 440 |
Proceeds from notes payable and convertible notes payable | 0 | 98,935 |
Repayment of notes payable | 0 | 0 |
Payment of deferred financing costs | 0 | -6,500 |
Proceeds from related parties | 0 | 0 |
Repayments to related parties | 0 | 0 |
Share issuance costs | 0 | 0 |
Net Cash (Used In) Provided By Financing Activities | -1,022 | 92,875 |
Change in Cash | 0 | -370 |
Cash, Beginning of Period | 0 | 370 |
Cash, End of Period | $0 | $0 |
1_Basis_of_Presentation
1. Basis of Presentation | 9 Months Ended |
Jul. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Presentation | ' |
These interim unaudited financial statements of On4 Communications, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended October 31, 2013, included in the Company’s Annual Report on Form 10-K filed on March 18, 2014 with the SEC. | |
The financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position at July 31, 2014, and the results of its operations and cash flows for the nine months ended July 31, 2014. The results of operations for the nine months ended July 31, 2014, are not necessarily indicative of the results to be expected for future quarters or the full year. | |
Sound Revolution Inc. (the "Company"), was incorporated on June 4, 2001 under the laws of the State of Delaware and on October 2, 2009 changed its name to On4 Communications, Inc. On May 1, 2009, the Company merged with On4 Communications, Inc. (“On4”), an Arizona corporation incorporated on June 5, 2006. Pursuant to the terms of the merger agreement, the Company acquired all assets and liabilities of On4 by issuing new shares to all former shareholders of On4 on a 1-to-1 basis. The Company issued 27,955,089 common shares to the former shareholders of On4 and the merger was accounted for as a “reverse merger” using the purchase method of accounting, with the former shareholders of On4 controlling 68% of the issued and outstanding common shares of the Company after the closing of the transaction. Accordingly, On4 was deemed to be the acquirer for accounting purposes and the financial statements are presented as a continuation of On4 and include the results of operations of On4 since incorporation on June 5, 2006, and the results of operations of the Company since the date of acquisition on May 1, 2009. On May 3, 2012, the Company’s shareholders approved a name change to NetCents Systems International Ltd., however, this has not been declared effective as of the date of issuance of these financial statements. | |
On4 is in the business of manufacturing two-way communication and location devices with applications that include tracking people, pets, assets, and inventory, among others. The Company has not yet generated significant revenues from their intended business activities. | |
Going Concern | |
These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated significant revenues since inception and is unlikely to generate significant revenue or earnings in the immediate or foreseeable future. As at July 31, 2014, the Company has not generated any revenues since inception, has a working capital deficiency of $2,191,571 and has an accumulated deficit of $15,894,962 since inception. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. | |
The Company will need additional working capital to continue or to be successful in any future business activities. Therefore, continuation of the Company as a going concern is dependent upon obtaining the additional working capital necessary to accomplish its objective. Management plans to seek debt or equity financing, or a combination of both, to raise the necessary working capital. | |
2_Summary_of_Significant_Accou
2. Summary of Significant Accounting Principles | 9 Months Ended |
Jul. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Principles | ' |
Comprehensive Loss | |
ASC 220, “Comprehensive Income” establishes standards for the reporting and display of comprehensive income and its components in the financial statements. As at July 31, 2014 and 2013, the Company had no items that represent comprehensive income or loss. | |
Recent Accounting Pronouncements | |
The Company has limited operations and is considered to be in the development stage. In the period ended July 31, 2014, the Company has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage. | |
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. | |
3_Loan_Receivable
3. Loan Receivable | 9 Months Ended |
Jul. 31, 2014 | |
Receivables [Abstract] | ' |
Loan Receivable | ' |
On December 15, 2011, the Company entered into the share exchange agreement with NetCents Systems Ltd. (“NetCents”), as described in Note 12(b). At July 31, 2014, the Company was owed $117,952 (October 31, 2013 - $121,090) for expenses paid on behalf of NetCents. The amount is unsecured, non-interest bearing, and due on demand. |
4_Related_Party_Transactions
4. Related Party Transactions | 9 Months Ended | |
Jul. 31, 2014 | ||
Related Party Transactions [Abstract] | ' | |
Related Party Transactions | ' | |
(a) | As at July 31, 2014, the Company owed $37,995 (October 31, 2013 - $2,085) to the Chief Executive Officer of the Company. The amounts owing are unsecured, non-interest bearing, and due on demand. | |
(b) | As at July 31, 2014, the Company owed $2,651 (October 31, 2013 - $2,773) to the Chief Operating Officer of the Company. The amounts owing are unsecured, non-interest bearing, and due on demand. | |
(c) | During the nine months ended July 31, 2014, the Company incurred $241,900 (2013 - $4,028) of management fees to officers and directors of the Company. At July 31, 2014, the Company owes management fees of $102,900 to officers and directors of the Company. | |
(d) | On March 26, 2014, the Company issued 5,000,000 shares of the Company’s common stock with a fair value of $15,000 to the Chief Executive Officer of the Company. | |
(e) | On April 23, 2014, the Company issued 4,000,000 shares of the Company’s common stock with a fair value of $88,000 to the Chief Operating Officer of the Company. |
5_Accounts_Payable_and_Accrued
5. Accounts Payable and Accrued Liabilities | 9 Months Ended | ||||||||
Jul. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Accounts Payable and Accrued Liabilities | ' | ||||||||
July 31, | October 31, | ||||||||
2014 | 2013 | ||||||||
$ | $ | ||||||||
(unaudited) | |||||||||
Trade payables | 1,062,087 | 956,100 | |||||||
Accrued interest expense | 488,942 | 422,883 | |||||||
1,551,029 | 1,378,983 | ||||||||
6_Notes_Payable
6. Notes Payable | 9 Months Ended | ||||||||
Jul. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Notes Payable | ' | ||||||||
July 31, | October 31, | ||||||||
2014 | 2013 | ||||||||
$ | $ | ||||||||
(unaudited) | |||||||||
Kestrel Gold Inc., unsecured, due interest at prime plus 2% per annum, and due on demand. | 22,928 | 23,975 | |||||||
Scottsdale Investment Corporation, unsecured, due interest at 12% per annum, and due on demand. | 319,980 | 319,980 | |||||||
Gordon Jessop, unsecured, due interest at 5% per annum, and due on demand | 42,621 | 46,365 | |||||||
385,529 | 390,320 |
7_Convertible_Notes_Payable
7. Convertible Notes Payable | 9 Months Ended | |
Jul. 31, 2014 | ||
Debt Disclosure [Abstract] | ' | |
Convertible Notes Payable | ' | |
(a) | On February 1, 2013, the Company entered into a Convertible Promissory Note agreement for $62,000 of marketing services. Pursuant to the agreement, the promissory note is convertible at any time after issuance into shares of common stock at a price of $1.0363 per share. The promissory note is unsecured, bears interest at 1% per year, and the principal amount and any interest thereon are due on January 30, 2014. | |
(a) | On February 10, 2013, the Company entered into a Convertible Promissory Note agreement for $27,500. Pursuant to the terms of the agreement, the loan is unsecured, bears interest at 8% per annum, and is due on February 10, 2014. Furthermore, the note is convertible into shares of the Company’s common stock at any time at a variable conversion price equal to 50% of the average of the lowest three closing bid prices for the common stock during the 10 trading days prior to the date of the conversion notice. Due to this provision, the embedded conversion option qualifies for derivative accounting under ASC 815-15 “Derivatives and Hedging”. The fair value of the derivative liability resulted in a full discount to the note payable of $27,500. The carrying value of the convertible note will be accreted over the term of the convertible note up to the value of $27,500. During the year ended October 31, 2013, the Company issued 244,437 shares of common stock for the conversion of $26,000 of the note. During the nine months ended July 31, 2014, $586 (2013 - $3,452) of accretion expense had been recorded and the carrying value of the note is $1,500. The Company paid financing costs of $1,500 relating to the issuance of the note. | |
(b) | On February 20, 2013, the Company entered into a Convertible Promissory Note agreement for $37,500. Pursuant to the agreement, the loan is convertible 180 days after issuance into shares of common stock at a variable conversion price equal to 51% of the average of the lowest two closing bid prices for the common stock during the 20 trading days prior to the date of the conversion notice. The loan bears interest at 8% per year and the principal amount and any interest thereon are due on November 22, 2013. Pursuant to ASC 815, “Derivatives and Hedging,” the Company will recognize the fair value of the embedded conversion feature as a derivative liability when the note becomes convertible on August 29, 2013. On June 20, 2013, the Company defaulted on the loan. As a result, a penalty of 150% of the principal balance was applied, increasing the loan to $56,250. The carrying value of the convertible note will be accreted over the term of the convertible note up to the value of $56,250. During the year ended October 31, 2013, the Company issued 132,962 shares of common stock for the conversion of $718 of the note. During the nine months ended July 31, 2014, the Company issued 8,695,010 shares of common stock for the conversion of $25,622 of the note. During the nine months ended July 31, 2014, $37,513 (2013 - $nil) of accretion expense had been recorded and the carrying value of the note is $29,910. The Company paid financing costs $2,500 relating to the issuance of the note. | |
(c) | On March 1, 2014, the Company entered into a Convertible Promissory Note agreement for $55,000 of marketing services. Pursuant to the agreement, the promissory note is convertible at any time after issuance into shares of common stock at a price of $0.013 per share. The promissory note is unsecured, bears interest at 1% per year, and the principal amount and any interest thereon are due on July 15, 2014. On May 6, 2014, the Company issued 600,000 common shares upon the conversion of $2,400 of the convertible notes payable. The conversion resulted in a loss on conversion of shares of $3,600. On July 15, 2014, the Company issued 961,780 common shares upon the conversion of $894 of the convertible notes payable. The conversion resulted in a loss on conversion of shares of $8,273. |
8_Derivative_Liabilities
8. Derivative Liabilities | 9 Months Ended | ||||||||||||||||
Jul. 31, 2014 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
Derivative Liabilities | ' | ||||||||||||||||
The conversion options of the convertible notes payable, as disclosed in Note 7, are required to record a derivative at their estimated fair value on each balance sheet date with changes in fair value reflected in the statement of operations. | |||||||||||||||||
The fair value of the derivative liabilities for the February 10, 2013 and February 20, 2013 convertible notes were $57,147 and $91,023, respectively, on vesting. The fair values as at July 31, 2014 and October 31, 2013 are as follows: | |||||||||||||||||
31-Jul-14 | 31-Oct-13 | ||||||||||||||||
$ | $ | ||||||||||||||||
(unaudited) | |||||||||||||||||
$27,500 convertible debenture issued February 10, 2013 | 2,995 | 2,777 | |||||||||||||||
$37,500 convertible debenture issued February 20, 2013 | 81,308 | 118,855 | |||||||||||||||
84,303 | 121,632 | ||||||||||||||||
During the nine months ended July 31, 2014, the Company recorded a loss on the change in fair value of the derivative liabilities of $65,412 (2013 – $213,787). The Company uses the Black-Scholes option pricing model to calculate the fair values of the derivative liabilities. The following table shows the assumptions used in the calculations: | |||||||||||||||||
Expected Volatility | Risk-free Interest Rate | Expected Dividend Yield | Expected Life (in years) | ||||||||||||||
February 10, 2013 convertible note | |||||||||||||||||
As at February 10, 2013 (date of vesting) | 307 | % | 0.17 | % | 0 | % | 1 | ||||||||||
As at July 31, 2014 | 603 | % | 0.12 | % | 0 | % | 1 | ||||||||||
February 20, 2013 convertible note | |||||||||||||||||
As at August 19, 2013 (date of vesting) | 301 | % | 0.04 | % | 0 | % | 0.25 | ||||||||||
As at July 31, 2014 | 593 | % | 0.12 | % | 0 | % | 1 | ||||||||||
9_Common_Stock
9. Common Stock | 9 Months Ended | |
Jul. 31, 2014 | ||
Equity [Abstract] | ' | |
Common Stock | ' | |
(a) | During the nine months ended July 31, 2014, the Company issued an aggregate of 8,695,010 shares of common stock for the conversion of $25,622 of convertible notes payable as described in Note 7(b). | |
(b) | During the nine months ended July 31, 2014, the Company issued an aggregate of 1,561,780 shares of common stock with a fair value of $15,167 upon the conversion of $3,294 of convertible notes payable as described in Note 7(c). The conversion resulted in a loss on settlement of debt of $11,873. | |
(c) | On March 26, 2014, the Company issued 5,000,000 shares of the Company’s common stock with a fair value of $15,000 to the Chief Executive Officer of the Company. | |
(d) | On April 23, 2014, the Company issued 4,000,000 shares of the Company’s common stock with a fair value of $88,000 to the Chief Operating Officer of the Company. | |
(e) | On May 12, 2014, the Company issued 374,378 shares of common stock with a fair value of $4,380 to settle $3,744 of the note payable to Gordon Jessop, resulting in a loss on settlement of debt of $636. |
10_Stock_Options
10. Stock Options | 9 Months Ended | ||||||||||||||||
Jul. 31, 2014 | |||||||||||||||||
Other Liabilities Disclosure [Abstract] | ' | ||||||||||||||||
Stock Options | ' | ||||||||||||||||
The following table summarizes stock option plan activities: | |||||||||||||||||
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (years) | |||||||||||||||
$ | Aggregate Intrinsic Value | ||||||||||||||||
$ | |||||||||||||||||
Outstanding, October 31, 2013 and July 31, 2014 | 5,833 | 135 | 1.21 | – | |||||||||||||
The Company’s had no unvested stock options at July 31, 2014 or October 31, 2013. | |||||||||||||||||
Additional information regarding stock options as of July 31, 2014 is as follows: | |||||||||||||||||
Number of | Exercise | Expiry Date | |||||||||||||||
Options | Price | ||||||||||||||||
$ | |||||||||||||||||
4,444 | 67.5 | 3-Mar-15 | |||||||||||||||
611 | 225 | 23-Jul-17 | |||||||||||||||
778 | 450 | 18-Dec-17 | |||||||||||||||
5,833 |
11_Supplemental_Disclosures
11. Supplemental Disclosures | 9 Months Ended | ||||||||
Jul. 31, 2014 | |||||||||
Supplemental Cash Flow Elements [Abstract] | ' | ||||||||
Supplemental Disclosures | ' | ||||||||
Nine Months Ended | Nine Months Ended | ||||||||
July 31, | July 31, | ||||||||
2014 | 2013 | ||||||||
$ | $ | ||||||||
Non-cash investing and financing activities: | |||||||||
Fair value of beneficial conversion options upon conversion of debt recorded as additional paid-in capital | – | 476,417 | |||||||
Shares issued for settlement of notes payable and accrued interest | 32,660 | 209,150 | |||||||
Supplemental Disclosures: | |||||||||
Interest paid | – | – | |||||||
Income taxes paid | – | – | |||||||
12_Commitments
12. Commitments | 9 Months Ended | |
Jul. 31, 2014 | ||
Commitments and Contingencies Disclosure [Abstract] | ' | |
Commitments | ' | |
(a) | On February 23, 2010, the Company entered into a trademark license agreement (the “Agreement”). Pursuant to the Agreement, the Company was granted an exclusive license to use certain trademarks and trade names on the Company’s hardware, software and services that provide tracking and location monitoring for people, animals and property of any other nature, but excluding firearms and related accessories, as well as existing licensed products and services of the Company, including but not limited to GPS, E911, A-GPS, radio frequency, beacon technology. Other applications that are covered under the Trademark License Agreement also include offenders monitoring, elderly, medical, teens and children tracking, public safety officers, executives, cars, tracks, motorcycles, aircrafts, boats, personal watercrafts, ATV’s, equipment, cargo, tools, trailers, electronic equipment, retail goods, and consumer goods in transit. The licensed territory includes the United States, Canada and Mexico. The Agreement expires on February 1, 2015. | |
The Company must pay a royalty of net sales and incurred a non-refundable advance against royalties of $5,000. The Company must pay guaranteed royalties with 25% of each royalty for the year due at the end of each calendar quarter. Further, the Company has agreed to spend an amount equal to at least 2% of all net sales of the licensed products during each contract year for promotional activities. | ||
(b) | On December 15, 2011, the Company entered into a share exchange agreement (the “Agreement”) with NetCents. Pursuant to the terms of the Agreement, the Company will issue two shares of common stock for every one share of NetCents stock issued and outstanding on the date of closing. Upon completion of the transaction, NetCents would become a wholly owned subsidiary of the Company. The Agreement is subject to conditions precedent to closing and the risk that these conditions precedent will not be satisfied results in there being no assurance that the Agreement will be completed as contemplated, or at all. As of the date of issuance of these financial statements, the agreement had yet to be completed. | |
(c) | On May 10, 2013, the Company entered into debt settlement agreements with certain creditors for amounts owed by the Company. Under the terms of the settlement, the Company agreed to settle $60,614 of accounts payable and accrued liabilities for cash payment of $12,122, and $215,299 of accounts payable and accrued liabilities in exchange for the issuance of 1,595 units. Each unit will be comprised of one common share of the Company and one share purchase warrant, which is exercisable into common shares of the Company at $135.00 per share for a period of two years from the effective date. The effective date of these debt settlement agreements will occur upon the closing of the Agreement, as noted in Note 12(b). As of the date of filing, the Agreement has not been completed, and the terms of the settlements have not yet been satisfied. |
13_Subsequent_Events
13. Subsequent Events | 9 Months Ended | |
Jul. 31, 2014 | ||
Subsequent Events [Abstract] | ' | |
Subsequent Events | ' | |
(a) | Subsequent to July 31, 2014, the Company issued 7,487,820 common shares upon the conversion of $4,585 of convertible notes payable. | |
(b) | On August 13, 2014, the Company issued 15,000,000 shares of the Company’s common stock with a fair value of $73,500 to the Chief Executive Officer of the Company for services provided prior to July 31, 2014. At July 31, 2014, the Company had accrued the fair value of the shares. | |
(c) | On August 13, 2014, the Company issued 4,000,000 shares of the Company’s common stock with a fair value of $19,600 to the Chief Operating Officer of the Company for services provided prior to July 31, 2014. At July 31, 2014, the Company had accrued the fair value of the shares. | |
(d) | On August 13, 2014, the Company issued 2,000,000 shares of the Company’s common stock with a fair value of $9,800 to a Director of the Company for services provided prior to July 31, 2014. At July 31, 2014, the Company had accrued the fair value of the shares. | |
2_Summary_of_Significant_Accou1
2. Summary of Significant Accounting Principles (Policies) | 9 Months Ended |
Jul. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Comprehensive Loss | ' |
ASC 220, “Comprehensive Income” establishes standards for the reporting and display of comprehensive income and its components in the financial statements. As at July 31, 2014 and 2013, the Company had no items that represent comprehensive income or loss. | |
Recent Accounting Pronouncements | ' |
The Company has limited operations and is considered to be in the development stage. In the period ended July 31, 2014, the Company has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage. | |
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
5_Accounts_Payable_and_Accrued1
5. Accounts Payable and Accrued Liabilities (Tables) | 9 Months Ended | ||||||||
Jul. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Accounts Payable and Accrued Liabilities | ' | ||||||||
July 31, | October 31, | ||||||||
2014 | 2013 | ||||||||
$ | $ | ||||||||
(unaudited) | |||||||||
Trade payables | 1,062,087 | 956,100 | |||||||
Accrued interest expense | 488,942 | 422,883 | |||||||
1,551,029 | 1,378,983 |
6_Notes_Payable_Tables
6. Notes Payable (Tables) | 9 Months Ended | ||||||||
Jul. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Notes Payable | ' | ||||||||
July 31, | October 31, | ||||||||
2014 | 2013 | ||||||||
$ | $ | ||||||||
(unaudited) | |||||||||
Kestrel Gold Inc., unsecured, due interest at prime plus 2% per annum, and due on demand. | 22,928 | 23,975 | |||||||
Scottsdale Investment Corporation, unsecured, due interest at 12% per annum, and due on demand. | 319,980 | 319,980 | |||||||
Gordon Jessop, unsecured, due interest at 5% per annum, and due on demand | 42,621 | 46,365 | |||||||
385,529 | 390,320 |
8_Derivative_Liabilities_Table
8. Derivative Liabilities (Tables) | 9 Months Ended | ||||||||||||||||
Jul. 31, 2014 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
Fair values of the derivative liabilities | ' | ||||||||||||||||
31-Jul-14 | 31-Oct-13 | ||||||||||||||||
$ | $ | ||||||||||||||||
(unaudited) | |||||||||||||||||
$27,500 convertible debenture issued February 10, 2013 | 2,995 | 2,777 | |||||||||||||||
$37,500 convertible debenture issued February 20, 2013 | 81,308 | 118,855 | |||||||||||||||
84,303 | 121,632 | ||||||||||||||||
Assumptions used in the calculation of the fair values of the derivative liabilities | ' | ||||||||||||||||
Expected Volatility | Risk-free Interest Rate | Expected Dividend Yield | Expected Life (in years) | ||||||||||||||
February 10, 2013 convertible note | |||||||||||||||||
As at February 10, 2013 (date of vesting) | 307 | % | 0.17 | % | 0 | % | 1 | ||||||||||
As at July 31, 2014 | 603 | % | 0.12 | % | 0 | % | 1 | ||||||||||
February 20, 2013 convertible note | |||||||||||||||||
As at August 19, 2013 (date of vesting) | 301 | % | 0.04 | % | 0 | % | 0.25 | ||||||||||
As at July 31, 2014 | 593 | % | 0.12 | % | 0 | % | 1 |
10_Stock_Options_Tables
10. Stock Options (Tables) | 9 Months Ended | ||||||||||||||||
Jul. 31, 2014 | |||||||||||||||||
Other Liabilities Disclosure [Abstract] | ' | ||||||||||||||||
Stock option plan activities | ' | ||||||||||||||||
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (years) | |||||||||||||||
$ | Aggregate Intrinsic Value | ||||||||||||||||
$ | |||||||||||||||||
Outstanding, October 31, 2013 and July 31, 2014 | 5,833 | 135 | 1.21 | – | |||||||||||||
Additional information regarding stock options | ' | ||||||||||||||||
Number of | Exercise | Expiry Date | |||||||||||||||
Options | Price | ||||||||||||||||
$ | |||||||||||||||||
4,444 | 67.5 | 3-Mar-15 | |||||||||||||||
611 | 225 | 23-Jul-17 | |||||||||||||||
778 | 450 | 18-Dec-17 | |||||||||||||||
5,833 |
11_Supplemental_Disclosures_Ta
11. Supplemental Disclosures (Tables) | 9 Months Ended | ||||||||
Jul. 31, 2014 | |||||||||
Supplemental Cash Flow Elements [Abstract] | ' | ||||||||
Supplemental Disclosures | ' | ||||||||
Nine Months Ended | Nine Months Ended | ||||||||
July 31, | July 31, | ||||||||
2014 | 2013 | ||||||||
$ | $ | ||||||||
Non-cash investing and financing activities: | |||||||||
Fair value of beneficial conversion options upon conversion of debt recorded as additional paid-in capital | – | 476,417 | |||||||
Shares issued for settlement of notes payable and accrued interest | 32,660 | 209,150 | |||||||
Supplemental Disclosures: | |||||||||
Interest paid | – | – | |||||||
Income taxes paid | – | – |
1_Basis_of_Presentation_Detail
1. Basis of Presentation (Details Narrative) (USD $) | Jul. 31, 2014 |
Accounting Policies [Abstract] | ' |
Issuance of common stock to former shareholder | 27,955,089 |
Percentage of issued and outstanding common stock controlled by former shareholders | 68.00% |
Working capital deficiency | $2,191,571 |
Accumulated deficit | $15,894,962 |
3_Loan_Receivable_Details_Narr
3. Loan Receivable (Details Narrative) (USD $) | Jul. 31, 2014 | Oct. 31, 2013 |
Receivables [Abstract] | ' | ' |
Receivables owed for expenses paid on behalf of NetCents | $117,952 | $121,090 |
5_Accounts_Payable_and_Accrued2
5. Accounts Payable and Accrued Liabilities (Details) (USD $) | Jul. 31, 2014 | Oct. 31, 2013 |
Related Party Transactions [Abstract] | ' | ' |
Trade payables | $1,062,087 | $956,100 |
Accrued interest expense | 488,942 | 422,883 |
Total Accounts Payable and Accrued Liabilities | $1,551,029 | $1,378,983 |
6_Notes_Payable_Details
6. Notes Payable (Details) (USD $) | Jul. 31, 2014 | Oct. 31, 2013 |
Kestrel Gold Inc. | ' | ' |
Notes Payable | $22,928 | $23,975 |
Notes Payable, interest rate | 2.00% | 2.00% |
Scottsdale Investment Corporation | ' | ' |
Notes Payable | 319,980 | 319,980 |
Notes Payable, interest rate | 12.00% | 12.00% |
Gordon Jessop [Member] | ' | ' |
Notes Payable | 42,621 | 46,365 |
Notes Payable, interest rate | 5.00% | 5.00% |
Total | ' | ' |
Notes Payable | $385,529 | $390,320 |
8_Derivative_Liabilities_Detai
8. Derivative Liabilities (Details) (USD $) | Jul. 31, 2014 | Oct. 31, 2013 |
$27,500 convertible debenture issued February 10, 2013 | ' | ' |
Fair value of the derivative liabilities | $2,995 | $2,777 |
$37,500 convertible debenture issued February 20, 2013 | ' | ' |
Fair value of the derivative liabilities | 81,308 | 118,855 |
Convertible Notes Payable (a) | ' | ' |
Fair value of the derivative liabilities | $84,303 | $121,632 |
8_Derivative_Liabilities_Detai1
8. Derivative Liabilities (Detail 1) | 0 Months Ended | |||
Feb. 10, 2013 | Feb. 10, 2013 | Feb. 20, 2013 | Feb. 20, 2013 | |
February 10, 2013 convertible note (by date of vesting) | As at July 31, 2014 | August 19, 2013 convertible note (by date of vesting) | As at July 31, 2014 | |
Expected Volatility | 307.00% | 603.00% | 301.00% | 593.00% |
Risk-free Interest Rate | 17.00% | 12.00% | 4.00% | 12.00% |
Expected Dividend Yield | 0.00% | 0.00% | 0.00% | 0.00% |
Expected Life (in years) | '1 year | '1 year | '3 months | '1 year |
8_Derivative_Liabilities_Detai2
8. Derivative Liabilities (Details Narrative) (USD $) | 9 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Notes to Financial Statements | ' | ' |
Loss on the change in fair value of the derivative liabilities | $65,412 | $213,787 |
9_Common_Stock_Details_Narrati
9. Common Stock (Details Narrative) (USD $) | 9 Months Ended | |||
Jul. 31, 2014 | 12-May-14 | Apr. 23, 2014 | Mar. 26, 2014 | |
Equity [Abstract] | ' | ' | ' | ' |
Issuance of common stock | 8,695,010 | ' | ' | ' |
Value of convertible notes payable | $25,622 | ' | ' | ' |
Issuance of common stock to employees | 1,561,780 | ' | ' | ' |
Issuance of common stock, fair value | 15,167 | ' | ' | ' |
Issuance of common stock to CEO | ' | ' | ' | 5,000,000 |
Issuance of common stock to CEO, fair value | ' | ' | ' | 15,000 |
Issuance of common stock to COO | ' | ' | 4,000,000 | ' |
Issuance of common stock to COO, fair value | ' | ' | 88,000 | ' |
Issuance of common stock for settlement of note payable, shares | ' | 374,378 | ' | ' |
Issuance of common stock for settlement of note payable, fair value | ' | 4,380 | ' | ' |
Note payable settled | 3,744 | ' | ' | ' |
Loss on settlement of debt | $636 | ' | ' | ' |
10_Stock_Options_Details
10. Stock Options (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Jul. 31, 2014 | Oct. 31, 2013 | |
Number of Options | ' | ' |
Stock options outstanding, shares | 5,833 | 5,833 |
Weighted Average Exercise Price ($) | ' | ' |
Stock options outstanding, per share | 135 | 135 |
Weighted Average Remaining Contractual Life (years) | ' | ' |
Stock options outstanding, years | '1 year 2 months 16 days | '1 year 2 months 16 days |
Aggregate Intrinsic Value ($) | ' | ' |
Stock options outstanding, value | 0 | 0 |
10_Stock_Options_Detail_1
10. Stock Options (Detail 1) (USD $) | Jul. 31, 2014 |
Exercise Price ($) | ' |
Stock options - Expiry Date March 3, 2015, per share | $67.50 |
Stock options - Expiry Date July 23, 2017, per share | $225 |
Stock options - Expiry Date December 18, 2017, per share | $778 |
Equity Option [Member] | ' |
Stock options - Expiry Date March 3, 2015 | 4,444 |
Stock options - Expiry Date July 23, 2017 | 611 |
Stock options - Expiry Date December 18, 2017 | 450 |
Stock options | 5,833 |
11_Supplemental_Disclosures_De
11. Supplemental Disclosures (Details) (USD $) | 9 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Non-cash investing and financing activities: | ' | ' |
Fair value of beneficial conversion options upon conversion of debt recorded as additional paid-in capital | $0 | $476,417 |
Shares issued for settlement of notes payable and accrued interest | 32,660 | 209,150 |
Supplemental Disclosures: | ' | ' |
Interest paid | 0 | 0 |
Income taxes paid | $0 | $0 |
12_Commitments_Details_Narrati
12. Commitments (Details Narrative) (USD $) | 9 Months Ended |
Jul. 31, 2014 | |
Commitments Details Narrative | ' |
Non-refundable advance against royalties | $5,000 |
Guaranteed royalties | 25.00% |
Accounts payable to be settled with cash | 60,614 |
Cash to be paid to settle accounts payable | 12,122 |
Accounts payable to be settled with issuance of units | $215,299 |
Units to be issued to settle accounts payable | 1,595 |
13_Subsequent_Events_Details_N
13. Subsequent Events (Details Narrative) (USD $) | 2 Months Ended | |
Sep. 29, 2014 | Aug. 13, 2014 | |
Subsequent Events Details Narrative | ' | ' |
Shares issued upon conversion of notes payable | 7,487,820 | ' |
Conversion of notes payable | $4,585 | ' |
Stock-based compensation to CEO | ' | 15,000,000 |
Stock-based compensation to CEO, fair value | ' | 73,500 |
Stock-based compensation to COO | ' | 4,000,000 |
Stock-based compensation to COO, fair value | ' | 19,600 |
Stock-based compensation to director | ' | 2,000,000 |
Stock-based compensation to director, fair value | ' | $9,800 |