4. Related party transactions | 12 Months Ended |
Jul. 31, 2013 |
Related Party Transactions [Abstract] | ' |
Related party transactions | ' |
Accrued liabilities |
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At July 31, 2013 and 2012, accrued liabilities totaled $1,544 and $100,523 respectively. During the 2013 fiscal year the CEO incurred $8,321 expenses related to Company efforts. The CEO forgave accrued expenses of $108,844 in exchange for convertible promissory notes totaling $45,500 in value, including amounts related to Accrued Liabilities forgiven. The difference was recorded to Paid In Capital on the balance sheet. An additional amount of $1,065 represents accrued interest expense on notes payable to related parties for 2013. |
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Notes payable |
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During May 2010, the Company issued a convertible promissory note to a related party in exchange for $50,000. The note bears interest at 9% and the principal and accrued interest is convertible into common shares at $.04 per share upon the election of the holder. The note also provide for renewal in 120-day cycles, assuming issuing of common stock as a renewal premium. Interest expense for this note payable was $3,188 and $4,500 and the renewal premium recorded as interest expense for this note was $20,050 and $101,592 for the years ended July 31, 2013 and 2012, respectively. This note was exchanged in April 2013 for new promissory notes bearing interest at 10% and convertible into common shares at $.01 per share with a 120-day renewal cycle and identical renewal premium. The new promissory notes allow the Company to call the note and pay it off, a feature not available in the prior promissory note. |
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During December 2010, the Company issued a convertible promissory note to a related party in exchange for $15,000. The note bears interest at 9% and the principal and accrued interest is convertible into common shares at $.04 per share upon the election of the holder. The note also provide for renewal in 120-day cycles, assuming issuing of common stock as a renewal premium. Interest expense for this note payable was $956 and $1,350 and the renewal premium recorded as interest expense for this note was $13,400 and $17,799 for the years ended July 31, 2013 and 2012, respectively. This note was exchanged in April 2013 for new promissory notes bearing interest at 10% and convertible into common shares at $.01 per share with a 120-day renewal cycle and identical renewal premium. The new promissory notes allow the Company to call the note and pay it off, a feature not available in the prior promissory note. |
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During May 2011, the Company issued two convertible promissory notes to related parties in exchange for a total of $4,000. The notes bear interest at 10% and the principal and accrued interest is convertible into common shares at $.07 per share upon the election of the holder. In November 2011 these notes were exchanged for new convertible promissory notes totaling $4,173 in principal and accrued interest. |
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During November 2011, the Company issued two convertible promissory notes to related parties in exchange for $4,173 of principal and accrued interest on due promissory notes. The notes bear interest at 10% and the principal and accrued interest is convertible into common shares at $.07 per share upon the election of the holders, as did the notes being replaced. Interest expense for these notes was $418 and $313 for the years ended July 31, 2013 and 2012, respectively. Based on the initial valuation the Company has recorded a debt discount of $2,340, all of which was amortized in the fiscal year ending July 31, 2012. The original maturity date on these notes was April 30, 2012. The holders have extended both notes to July 31, 2015. |
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During April 2012, the Company issued a convertible promissory note to a related party in exchange for a total of $5,000. The note bears interest at 10% and the principal and accrued interest is convertible into common shares at $.04 per share upon the election of the holder. Interest expense for this note was $500 and $167 for the years ended July 31, 2013 and 2012, respectively. Based on the initial valuation the Company has recorded a debt discount of $1,250, $831 of which was amortized in the fiscal year ended July 31, 2012 and the remaining $419 amortized in the fiscal year ending July 31, 2013. The original maturity date on this note was September 30, 2012. The holder has extended the note to July 31, 2015. |
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During December 2012, the Company issued two promissory notes to two related parties totaling $2,000. The notes bear interest at 10% and the principal and accrued interest are convertible into common shares at $.01 per share. Interest expense for these notes was accrued in the amount of $123 for the year ended July 31, 2013. Based on the initial valuation the Company has recorded a debt discount of $2,000, all of which was amortized in the fiscal year ending July 31, 2013. The original maturity date on these notes was June 30, 2013. The holders have extended the notes to July 31, 2015. |
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During February 2013, the Company issued one promissory note to a related party for $500. The note bears interest at 10% and the principal and accrued interest are convertible into common shares at $.01 per share. This note was related to company expenses paid. Interest expense for this note was accrued in the amount of $25 for the year ended July 31, 2013. Based on the initial valuation the Company has recorded a debt discount of $500, $427 of which was amortized in the fiscal year ended July 31, 2013. The original maturity date on this note was August 31, 2013. The holder has extended the note to July 31, 2015. |
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During April 2013, the Company issued five convertible promissory notes to related parties in exchange for two promissory notes totaling $65,000. The notes bear interest at 10% and the principal and accrued interest is convertible into common shares at $.01 per share upon the election of the holder. These notes have a 120-day term and are renewed with payment of accrued interest in common stock as well as a renewal fee of 455,000 shares. The common shares for this renewal fee were issued May 14, 2013 and valued at $13,577. Interest expense for these notes was $1,896 for the year ended July 31, 2013. These notes were replaced through renewal July 2013. |
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During July 2013, the Company issued one promissory note to a related party for $28,500. The note bears interest at 10% and the principal and accrued interest are convertible into common shares at $.01 per share. This note was in exchange for accrued and owed salary of $241,875 and accrued and owed expense of $108,844. There was no interest expense for this note for the year ended July 31, 2013. Based on the initial valuation the Company has recorded a debt discount of $28,500, none of which was amortized in the fiscal year ended July 31, 2013. The original maturity date on this note was January 31, 2014. The holder has extended the note to July 31, 2015. |
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During July 2013, the Company issued one promissory note to a related party for $17,000. The note bears interest at 10% and the principal and accrued interest are convertible into common shares at $.01 per share. This note was in exchange for accrued and owed salary of $168,750 to the Company's former CFO. There was no interest expense for this note for the year ended July 31, 2013. Based on the initial valuation the Company has recorded a debt discount of $17,000, none of which was amortized in the fiscal year ended July 31, 2013. The original maturity date on this note was January 31, 2014. As of this time the holder has not responded to a request to extend the note maturity date and the note is in default and payable on demand by the holder. |
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During July 2013, the Company issued five convertible promissory notes to related parties in exchange for five promissory notes totaling $65,000. The notes bear interest at 10% and the principal and accrued interest is convertible into common shares at $.01 per share upon the election of the holder. These notes have a 120-day term and are renewed with payment of accrued interest in common stock as well as a renewal fee of 455,000 shares. The common shares for this renewal fee were issued August 5, 2013 and valued at $26,845. Interest expense for these notes was $1,896 for the year ended July 31, 2013. These notes matured December 11, 2013 and the holders chose not to renew per the note terms. The notes are in default and payable on demand of the holders. |
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As of July 31, 2013, the Company had outstanding convertible promissory notes to nine related parties totaling $122,173. The notes bear interest at 10% and the principal and accrued interest is convertible into common shares, with $4,173 convertible at $.07 per share, $5,000 convertible at $.04 per share and $113,000 convertible at $.01 per share upon the election of the holder. Interest expense for these notes was $7,105 and $6,330 for the years ended July 31, 2013 and 2012 respectively. The Company reported Debt Discount of $51,590 on these notes of which $3,171 and $2,846 was amortized in the fiscal years ended July 31, 2012 and July 31, 2013 respectively. $45,573 Debt Discount remains unamortized as of July 31, 2013. |
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Preferred stock |
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In December 2008, outstanding notes, including accrued interest, which was capitalized, totaling $322,981 were repaid with the issuance of 645,962 shares of preferred stock. An additional note in the amount of $10,000 was issued to the CEO for cash in April 2009. The note, including $210 in accrued interest, was repaid by issuing 20,420 shares of preferred stock in July 2009. |
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In May 2010, five directors and two officers were each issued 7,500 preferred shares totaling 52,500 shares in exchange for uncompensated services. This amount ($26,250) is reflected in the accompanying financial statements as stock based compensation. |
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Common stock |
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In August 2011, the Company issued 300,000 shares of the Company's common stock in exchange for uncompensated services provided to the Company by four directors. The shares were valued at $.12 per share based on the fair value of the shares on the day they were granted. This amount ($36,000) is reflected in the accompanying financial statements as stock based compensation. |
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In August 2011, the Company approved issuance of 300,000 shares of the Company's common stock in February 2012 in exchange for uncompensated services provided to the Company by four directors during Fiscal 2013. Issuance of these shares was not done and Stock Payable of $54,000 and $55,500 as of July 31, 2013 and 2012 respectively has been recorded based on the value of the unissued shares at those dates. |
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In September 2011, the Company issued 387,500 shares of the Company's common stock in exchange for accrued interest and an extension of due date from September 18, 2011 to January 16, 2012 on a note payable. The shares related to the accrued interest were issued at $.04 per share and the shares related to the extension were issued at $.15 per share (fair market value) on the day they were granted, per the terms of the agreement. This amount ($54,000) is reflected in the accompanying financial statements as interest. |
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In November 2011, the Company issued 116,250 shares of the Company's common stock in exchange for accrued interest and an extension of due date from November 28, 2011 to March 27, 2012 on a note payable. The shares related to the accrued interest were issued at $.04 per share and the shares related to the extension were issued at $.05 per share (fair market value) on the day they were granted, per the terms of the agreement. This amount ($5,700) will be reflected in the accompanying financial statements as interest. |
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In December 2011, the Company issued 150,000 shares of the Company's common stock in exchange for uncompensated services provided to the Company by the VP Finance & CFO. The shares were valued at $.04 per share based on the fair value of the shares on the day they were granted. This amount ($6,000) is reflected in the accompanying financial statements as stock based compensation. |
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In January 2012, the Company issued 387,500 shares of the Company's common stock in exchange for accrued interest and an extension of due date from January 16, 2012 to May 15, 2012 on a note payable. The shares related to the accrued interest were issued at $.04 per share and the shares related to the extension were issued at $.05 per share (fair market value) on the day they were granted, per the terms of the agreement. This amount ($19,000) is reflected in the accompanying financial statements as interest. |
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In March 2012, the Company issued 150,000 shares of the Company's common stock in exchange for uncompensated services provided to the Company by the VP Finance & CFO. The shares were valued at $.05 per share based on the fair value of the shares on the day they were granted. This amount ($7,500) is reflected in the accompanying financial statements as stock based compensation. |
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In March 2012, the Company issued 116,250 shares of the Company's common stock in exchange for accrued interest and an extension of due date from March 27, 2012 to July 25, 2012 on a note payable. The shares related to the accrued interest were issued at $.04 per share and the shares related to the extension were issued at $.05 per share (fair market value) on the day they were granted, per the terms of the agreement. This amount ($5,700) is reflected in the accompanying financial statements as interest. |
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In May 2012, the Company issued 387,500 shares of the Company's common stock in exchange for accrued interest and an extension of due date from July 25, 2012 to September 12, 2012 on a note payable. The shares related to the accrued interest were issued at $.04 per share and the shares related to the extension were issued at $.03 per share (fair market value) on the day they were granted, per the terms of the agreement. This amount ($12,000) is reflected in the accompanying financial statements as interest. |
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In August 2012, the Company issued 150,000 shares of the Company's common stock in exchange for uncompensated services provided to the company by the VP Finance & CFO. The shares were valued at $.01 per share based on the fair value of the shares on the day they were granted. This amount ($1,500) is reflected in the accompanying financial statements as stock based compensation. |
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In August 2012, the Company issued 116,250 shares of the Company's common stock in exchange for accrued interest and an extension of due date from July 25, 2012 to November 22, 2012 on a note payable. The shares related to the accrued interest were issued at $.04 per share and the shares related to the extension were issued at $.01 per share (fair market value) on the day they were granted, per the terms of the agreement. This amount ($1,500) will be reflected in the accompanying financial statements as interest. |
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In September 2012, the Company issued 387,500 shares of the Company's common stock in exchange for accrued interest and an extension of due date from September 12, 2012 to January 10, 2013 on a note payable. The shares related to the accrued interest were issued at $.04 per share and the shares related to the extension were issued at $.01 per share (fair market value) on the day they were granted, per the terms of the agreement. This amount ($5,000) is reflected in the accompanying financial statements as interest. |
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In December 2012, the Company issued 116,250 shares of the Company's common stock in exchange for accrued interest and an extension of due date from November 22, 2012 to January 10, 2013 on a note payable. The shares related to the accrued interest were issued at $.04 per share and the shares related to the extension were issued at $.03 per share (fair market value) on the day they were granted, per the terms of the agreement. This amount ($3,488) will be reflected in the accompanying financial statements as interest. |
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In February 2013, the Company issued 387,500 shares of the Company's common stock in exchange for accrued interest and an extension of due date from January 10, 2013 to May 10, 2013 on a note payable. The shares related to the accrued interest were issued at $.04 per share and the shares related to the extension were issued at $.03 per share (fair market value) on the day they were granted, per the terms of the agreement. This amount ($11,625) will be reflected in the accompanying financial statements as interest. |
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In March 2013, the Company issued 116,250 shares of the Company's common stock in exchange for accrued interest and an extension of due date from March 22, 2013 to July 20, 2013 on a note payable. The shares related to the accrued interest were issued at $.04 per share and the shares related to the extension were issued at $.05 per share (fair market value) on the day they were granted, per the terms of the agreement. This amount ($3,600) will be reflected in the accompanying financial statements as interest. |
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In May 2013, the Company issued 330,021 shares of the Company's common stock in exchange for accrued interest and an exchange for replacement on two notes payable. The shares related to the accrued interest were issued at $.04 per share and the shares related to the extension were issued at $.05 per share (fair market value) on the day they were granted, per the terms of the agreement. This amount ($16,182) is reflected in the accompanying financial statements as interest. |
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In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements to improve financial reporting by reducing cost and complexity associated with the incremental reporting requirements of development stage entities. The changes eliminate the need for inception to date reporting and other disclosure requirement. The amendments are effective for annual reporting periods beginning after December 15, 2014. Early adoption is permitted. The Company has elected early adoption of these amendments. |
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