Perpetual Industries (PRPI) 10-Q 23 May 14 2014 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
	Apr. 30, 2014
Document and Entity Information:	'
Entity Registrant Name	'Perpetual Industries Inc.
Document Type	'10-Q
Document Period End Date	30-Apr-14
Amendment Flag	'false
Entity Central Index Key	'0001395445
Current Fiscal Year End Date	'--07-31
Entity Common Stock, Shares Outstanding	32,470,000
Entity Filer Category	'Smaller Reporting Company
Entity Current Reporting Status	'Yes
Entity Voluntary Filers	'No
Entity Well-known Seasoned Issuer	'No
Document Fiscal Year Focus	'2014
Document Fiscal Period Focus	'Q3

Perpetual_Industries_Inc_Balan

Perpetual Industries Inc. - Balance Sheets (USD $)	Apr. 30, 2014		Jul. 31, 2013
Current Assets	'		'
Cash	$21,386		$30,348
Accounts Receivable, current	535		535
Total Current Assets	21,921		30,883
Equipment, Net of Accumulated Depreciation	3,817		5,150
Total Assets	25,738		36,033
Liabilities and Stockholders' Equity (Deficit)	'		'
Accounts payable and accrued liabilities, current	254,417	[1]	134,649	[1]
Accrued expenses, current	1,274,343	[2]	1,125,052	[2]
Deferred revenue, current	'		23,775
Other current liabilities	62,201		65,583
Total Current Liabilities	1,590,961		1,349,059
Stockholders' Equity (Deficit)	'		'
Common Stock	32,471	[3]	32,471	[3]
Capital in excess of par value	4,790,110		4,605,702
Common stock payable	115,800		'
Deficit accumulated during the development stage	-6,503,604		-5,951,199
Total Stockholders' Equity (Deficit)	-1,565,223		-1,313,026
Total Liabilities and Stockholders' Equity (Deficit)	$25,738		$36,033
[1]	including related party balances of approximately $143,000 and $123,000 at April 30, 2014 and July 31, 2013, respectively.
[2]	including related party balances of approximately $1,061,000 and $930,000 at April 30, 2014 and July 31, 2013, respectively.
[3]	$0.001 par value, 100,000,000 shares authorized, 32,470,000 shares issued and outstanding at both April 30, 2014 and July 31, 2013.

Perpetual_Industries_Inc_Balan1

Perpetual Industries Inc. - Balance Sheets- Parenthetical (USD $)	Apr. 30, 2014	Jul. 31, 2013
Statement of Financial Position	'	'
Common Stock, Par Value	$0.00	$0.00
Common Stock, Shares Authorized	100,000,000	100,000,000
Common Stock, Shares Issued	32,470,000	32,470,000
Common Stock, Shares Outstanding	32,470,000	32,470,000

Perpetual_Industries_Inc_State

Perpetual Industries Inc. - Statements of Operations (USD $)	3 Months Ended		9 Months Ended		111 Months Ended
	Apr. 30, 2014	Apr. 30, 2013	Apr. 30, 2014	Apr. 30, 2013	Apr. 30, 2014
Income Statement	'	'	'	'	'
Revenues	'	$12,034	$157,211	$47,856	$379,637
Operating Expenses	'	'	'	'	'
Related party expenses	-86,258	-87,342	-254,452	-431,484	-4,208,355
Other operating expenses	-56,830	-117,046	-243,456	-302,941	-2,190,589
Total operating expenses	-143,088	-204,388	-497,908	-734,425	-6,398,944
Operating loss	-143,088	-192,354	-340,697	-686,569	-6,019,307
Other Income (Expense)	'	'	'	'	'
Interest income, related party	-5,177	8,843	10,721	27,036	269,662
Interest expense, related party	-13,445	-10,825	-38,290	-30,417	-211,077
Interest expense, non-related party	-1,445	'	-2,627	'	-2,627
Warrant issuance expense	'	'	-184,408	'	-1,254,224
Derivative income	'	41,042	'	556,994	1,533,297
Provision for loan and interest losses	'	'	'	'	-809,245
Other	-3,572	-65	2,896	-4,679	-10,083
Net Loss	($166,727)	($153,359)	($552,405)	($137,635)	($6,503,604)
Basic and Diluted Loss Per Share	($0.01)	$0	($0.02)	$0	($0.29)
Basic and Diluted Weighted Average Common Shares Outstanding	32,470,000	31,680,253	32,470,000	30,035,013	22,766,456

Perpetual_Industries_Inc_State1

Perpetual Industries Inc. - Statements of Cash Flows (USD $)	9 Months Ended		111 Months Ended
	Apr. 30, 2014	Apr. 30, 2013	Apr. 30, 2014
Cash flows from Operating Activities:	'	'	'
Net Loss	($552,405)	($137,635)	($6,503,604)
Adjustments to reconcile net loss to net cash (used) provided in operating activities:	'	'	'
Depreciation	1,332	3,915	50,937
Interest income, added to loan receivable	'	'	-117,886
Provision of allowance on loans receivable	'	'	809,245
Issuance of warrants	184,408	'	1,254,224
Change in fair value of derivative liability	'	-556,994	-1,533,297
Stock compensation	15,000	48,150	75,050
Accounts receivable, (increase) decrease	'	19,938	-535
Accounts payable, increase (decrease)	19,764	88,544	154,418
Accrued expenses, increase (decrease)	149,291	194,615	1,274,343
Deferred revenue- current, increase (decrease)	-23,775	-52,378	'
Deferred revenue- long term, increase (decrease)	'	64,000	'
Other liabilities, increase (decrease)	-3,377	4,275	62,204
Net cash flows used in operating activities	-209,762	-323,570	-4,474,901
Cash Flows used in Investing Activities:	'	'	'
Net borrowings under loan receivable	'	'	-691,359
Purchases of equipment	'	'	-54,754
Net cash flows used in investing activities	'	'	-746,113
Cash Flows Provided by Financing Activities:	'	'	'
Proceeds from notes payable	100,000	'	100,000
Proceeds from issuance of common stock	'	'	270,000
Proceeds from increases to common stock payable	100,800	210,000	4,878,400
Repurchase and cancellation of common stock	'	-6,000	-6,000
Net cash flows provided by financing activities	200,800	204,000	5,242,400
Net change in cash	-8,962	-119,570	21,386
Cash, beginning of period	30,348	220,140	'
Cash, end of period	21,386	100,570	21,386
Supplemental Disclosures of Cash Flow Information	'the company has not paid any income taxes or interest since its inception. see the accompanying notes to financials.	'	'
Non-cash Investing and Financing Activities:	'	'	'
Common stock shares issued, stock payable	0	848,400	4,777,600
Common stock shares issued, stock payable, shares	0	2,828,000	16,779,500
Derivative liabilities and decreased equity	0	0	1,533,297
Common stock shares issued from warrant exercise	$0	$100,000	$100,000
Common stock shares issued from warrant exercise, shares	0	250,000	250,000

Note_1_Basis_of_Presentation_a

Note 1- Basis of Presentation and Background Information	9 Months Ended
	Apr. 30, 2014
Notes	'
Note 1- Basis of Presentation and Background Information	'
	Note 1- Basis of Presentation and Background Information
	Interim Period Financial Statements
	The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and with the Securities and Exchange Commission's instructions. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. The results of operations reflect interim adjustments, all of which are of a normal recurring nature and, in the opinion of management, are necessary for a fair presentation of the results for such interim period. The results reported in these interim financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. Certain information and note disclosure normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the Securities and Exchange Commission's rules and regulations. These unaudited interim financial statements should be read in conjunction with the Company's audited financial statements for the year ended July 31, 2013.
	Nature of Operations
	Perpetual Industries Inc. (the “Company”) was incorporated under the laws of Nevada in January 2005. The Company coordinates research and development activities aimed at bringing new technology to market. At present, the Company's feature technology is the internationally patented XYO mechanical balancing system (“XYO”). On January 26, 2005, the Company acquired a license for the worldwide, exclusive right to manufacture or have manufactured, sell, and use the products incorporating XYO, and to sublicense these rights to third parties.
	The Company is in the development stage, which is characterized by significant expenditures on obtaining the rights to XYO, on preliminary sublicensing and marketing efforts, and on coordinating the development of products that contain XYO. The accompanying financial statements do not reflect the Company's planned principal operations, in which the focus is intended to continue to shift more heavily onto the sublicensing, manufacturing, and marketing of XYO, and to diversification into other technologies.
	The Company's corporate office is located in Calgary, Alberta.

Note_2_Going_Concern

Note 2 - Going Concern	9 Months Ended
	Apr. 30, 2014
Notes	'
Note 2 - Going Concern	'
	Note 2 – Going Concern
	As shown in the accompanying financial statements, the Company is currently in the development stage with an overall loss since Inception. While the Company’s current principal business activities are to coordinate the research and development of products that feature the internationally patented XYO mechanical balancing system and to market these products, there can be no assurance that the Company will be able to successfully develop or operate a business using this concept.
	The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to carry out its planned principal operations and maintain a certain level of profitability. The Company intends to finance its future activities and working capital needs primarily from the sale of equity securities and ongoing sub-licensing efforts.

Note_3a_Summary_of_Significant

Note 3a - Summary of Significant Accounting Policies	9 Months Ended
	Apr. 30, 2014
Notes	'
Note 3a - Summary of Significant Accounting Policies	'
	Note 3a - Summary of Significant Accounting Policies
	Earnings (Loss) Per Share
	Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the periods presented. Diluted loss per share is computed by dividing net loss by the weighted average common shares and potentially dilutive common share equivalents. The effects of potential common stock equivalents are not included in computations when their effect is anti-dilutive.
	Because of the net losses for all periods presented, the basic and diluted weighted average shares outstanding are the same since including the additional shares would have an anti-dilutive effect on the loss per share calculations. Common stock warrants to purchase 16,257,500 and 4,647,000 shares of common stock for the nine months ended April 30, 2014 and 2013 (Q1-Q3 ’14 and Q1-Q3 ’13), respectively, 16,257,500 and 4,647,000 shares of common stock for the three months ended April 30, 2014 and 2013 (Q3 ’14 and Q3 ’13), respectively, and 16,257,500 shares of common stock for the period January 25, 2005 (Inception) through April 30, 2014 (end of Q3 ’14), were not included in the computation of diluted weighted average common shares outstanding.

Note_3b_Impact_of_Recently_Iss

Note 3b - Impact of Recently Issued Accounting Standards	9 Months Ended
	Apr. 30, 2014
Notes	'
Note 3b - Impact of Recently Issued Accounting Standards	'
	Note 3b - Impact of Recently Issued Accounting Standards
	Other than as listed below, we do not believe that any accounting pronouncements recently issued by the FASB, the AICPA, and the SEC, would if adopted have a material effect on our present or future financial statements.
	Emerging Growth Company
	We are an emerging growth company under the JOBS Act. We shall continue to be deemed an emerging growth company until the earliest of:
	(a)                      the last day of the fiscal year of the issuer during which it had total annual gross revenues of $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;
	(b)                     the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective IPO registration statement;
	(c)                      the date on which such issuer has, during the previous 3-year period, issued more than $1,000,000,000 in nonconvertible debt; or
	(d)                     the date on which such issuer is deemed to be a ‘large accelerated filer’, as defined in section 240.12b-2 of title 17, Code of Federal Regulations, or any successor thereto.’
	As an emerging growth company we are exempt from Section 404(b) of Sarbanes Oxley. Section 404(a) requires Issuers to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures. Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting. As an emerging growth company we are also exempt from Section 14A (a) and (b) of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes. These exemptions are also available to us as a Smaller Reporting Company.
	We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act, that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

Note_4_Loan_Receivable_and_Lea

Note 4 - Loan Receivable and Lease Obligation	9 Months Ended
	Apr. 30, 2014
Notes	'
Note 4 - Loan Receivable and Lease Obligation	'
	Note 4 - Loan Receivable and Lease Obligation
	During the period January 25, 2005 (Inception) through January 1, 2010, the Company advanced funds to a limited liability company that has been identified as a Variable Interest Entity (“VIE”). These funds supported the operations of this VIE, which are to research and develop products that feature XYO and to market these products. The Company holds a note for these advances and the uncollected interest due, which calls for 9% interest per annum and has a maturity date of August 31, 2012 and is currently in default. In addition to the advancement of funds, the Company continues to have two other forms of involvement with the above VIE. The Company incurred marketing expenses for the nine months ended April 30, 2014 and 2013 (Q1-Q3 ’14 and Q1-Q3 ’13) totalling approximately $2,400 and $149,200, respectively, for the three months ended April 30, 2014 and 2013 (Q3 ’14 and Q3 ’13), $0 and $2,500, respectively, and for the period January 25, 2005 (Inception) through April 30, 2014 (end of Q3 ’14), $575,600, for services performed by the VIE. In this regard there was no balance owing to the VIE at April 30, 2014 (end of Q3 ’14) and July 31, 2013 (YE ’13). The Company also leases its offices from the above VIE. The terms of the lease call for monthly rent of $3,000 through March 31, 2015. The Company’s involvement with this VIE is limited to the aforementioned transactions.
	Management has determined that although the above transactions created a variable interest in this entity, the Company is not the VIE’s primary beneficiary and, as such, the Company is not required to consolidate the financial statements of the VIE. In determining that it is not the primary beneficiary, the Company considered the VIE’s equity and voting interests, the percentage of the Company’s variable interest compared to the total of all other variable interests as well as an analysis determining the bearer of any losses and the benefactor of any gains from the VIE.
	The maximum exposure to loss from this variable interest is limited to the collection of the loan receivable. The Company’s variable interest in the VIE amounted to $809,245 as of July 31, 2010 prior to the establishment of a full allowance on that date. Factors considered in establishing the allowance included the current financial condition of the VIE coupled with the fact that the loan is not guaranteed and has no liquidation preference. The carrying amounts on the balance sheets as of April 30, 2014 (end of Q3 ’14) and July 31, 2013 (YE ’13) are zero, net of allowances.
	Total rent expense for the nine months ended April 30, 2014 and 2013 (Q1-Q3 ’14 and Q1-Q3 ’13) was approximately $25,200 and $27,000, respectively, for the three months ended April 30, 2014 and 2013 (Q3 ’14 and Q3 ’13), $8,100 and $8,800, respectively, and for the period January 25, 2005 (Inception) through April 30, 2014 (end of Q3 ’14), $324,800. The future rent obligations under this lease will require approximately $9,000 for the remaining three months of the year ended July 31, 2014 and $24,000 for the year ended July 31, 2015. Since February 2012, the Company’s rent obligations have been met by recording the amount of rent expense as interest income in lieu of cash outlay, and this arrangement may continue. However, in the three months ended April 30, 2014 (Q3 ’14), the Company paid the VIE”s landlord (the landowner) and the VIE’s utilities providers directly for an approximately $13,300 portion of the back rent and back utilities owed by the VIE. The Company therefore booked $8,100 rent as paid in cash, and recorded a decrease to interest income in the amount of the excess, approximately $5,200.

Note_5_Derivative_Instruments_

Note 5 - Derivative Instruments (warrants)	9 Months Ended
	Apr. 30, 2014
Notes	'
Note 5 - Derivative Instruments (warrants)	'
	Note 5 - Derivative Instruments (Warrants)
	The following table summarizes fair value measurements at April 30, 2014 (end of Q3 ’14) and July 31, 2013 (YE ’13) for assets and liabilities measured at fair value on a recurring basis:
		Level I	Level II	Level III	Total
	Derivative liabilities, April 30, 2014	$  —	$  —	$  —	$  —
	Derivative liabilities, July 31, 2013	$  —	$  —	$  —	$  —
	Since Inception, the Company issued 13,951,500 warrants with derivative features in connection with the issuance of 13,951,500 shares of common stock through various Private Placement Offerings. These warrants vested immediately upon grant date and have a two year exercise period. The warrants had fixed escalating exercise prices based on time elapsed from the date of grant, ranging from $0.30 to $0.50 per share for subscriptions before March 14, 2007, and from $0.40 to $0.60 per share for subscriptions after that date.
	The warrants were issued with an adjustment provision whereby the exercise price would be adjusted in the event of any of the following: the Company issues or sells any shares of common stock for a price less than the exercise price, the Company's shares of common stock outstanding are subdivided into greater or consolidated into fewer shares, or in the case of any capital reorganization. Therefore, in accordance with the guidance provided in FASB ASC 815-40-15-5 through 815-40-15-8, the Company accounted for these warrants as derivative liabilities.
	In accordance with the adjustment provision, the Company reduced the exercise price of warrants to the sale price of subsequent stock issuances, to an amount of $0.30.
	All changes in the fair value of these warrants are recognized in Statements of Operations until they are exercised or expire or are otherwise extinguished.
	As at April 30, 2014 (end of Q3 ’14), no warrants with derivative features were outstanding. The Company estimated the fair value of the warrants that were outstanding at July 31, 2013 (YE ’13) using the Black-Scholes option pricing model with the following assumptions:
		Year Ended July 31, 2013
	Expected life (in years)	0.04
	Expected dividend yield	0.00%
	Expected volatility (%)	2.8
	Risk free interest rate (%)	0.02
	The Company’s common stock has not been publicly traded; therefore historical volatility information is limited and considered not representative of the expected volatility. The Company identified similar public entities for which share and option price information was available, and considered the historical volatilities of those public entities’ share prices in calculating the estimate of the expected volatility appropriate to the Company (i.e. the calculated value).
	The risk-free rate of return reflects the interest rate for a United States Treasury Note with similar time-to-maturity to that of the warrants.
	The following summarizes information about warrants with derivative features outstanding as of July 31, 2013 (YE ’13):
	Exercise Price	Number of Warrants	Remaining Life
	$0.30	2,069,000	0.04 Years
	The issuance of the above warrants resulted in a derivative liability that required re-measurement each reporting period. The following is a reconciliation of the derivative liability for the period January 25, 2005 (Inception) through April 30, 2014 (end of Q3 ’14):
	Fair value of instruments issued, March 2007	$182,212
	Fair value of instruments issued, November 2007	133,909
	Fair value of instruments issued, July 2007	118,705
	Decrease in value, July 31, 2007 through July 31, 2008	-164,363
	Fair value of instruments issued, December 2008	313,906
	Increase in value, year ended July 31, 2009	111,458
	Fair value of instruments issued, January 2010	214,187
	Decrease in value, year ended July 31, 2010	-423,528
	Fair value of instruments issued, August 2010	347,241
	Fair value of instruments issued, September 2010	17,291
	Increase in value, year ended July 31, 2011	103,589
	Fair value of instruments issued, August 2011	205,842
	Decrease in value, year ended July 31, 2012	-572,918
	Decrease in value, year ended July 31, 2013	-587,531
		$              -
	As disclosed earlier in this Note, the exercise prices of the warrants with derivative features escalate over a period of two years. The following is a reconciliation of the number and weighted-average exercise prices for the warrants with derivative features:
		Warrants with Derivative Features
				Weighted Average Exercise Prices ($)
		Number of Shares
	Outstanding, July 31, 2006	-		-
	Granted	2,562,500		0.2
	Exercised	-		-
	Expired	-		-
	Outstanding, July 31, 2007	2,562,500		0.2
	Granted	2,468,000		0.3
	Exercised	-		-
	Expired	-		-
	Outstanding, July 31, 2008	5,030,500		0.25
	Granted	2,482,500		0.3
	Exercised	-		-
	Expired	-		-
	Outstanding, July 31, 2009	7,513,000		0.3
	Granted	1,597,000		0.3
	Exercised	-		-
	Expired	-		-
	Outstanding, July 31, 2010	9,110,000		0.3
	Granted	2,752,500		0.3
	Exercised	-		-
	Expired	-		-
	Outstanding, July 31, 2011	11,862,500		0.3
	Granted	2,089,000		0.3
	Exercised	-		-
Expired	-		-
Outstanding, July 31, 2012	13,951,500		0.3
Granted	-		-
Exercised	-		-
Expired/Cancelled	11,882,500		0.3
Outstanding, July 31, 2013	2,069,000		0.3
Granted	-		-
Exercised	-		-
Expired/Cancelled	2,069,000		0.3
Outstanding, April 30, 2014 (end of Q2 ’14)	-		-

Note_6_Nonderivative_Warrants

Note 6 - Non-derivative Warrants	9 Months Ended
	Apr. 30, 2014
Notes	'
Note 6 - Non-derivative Warrants	'
	Note 6 – Non-Derivative Warrants
	In the nine months ended April 30, 2014 (Q1-Q3 ’14) and the year ended July 31, 2013, the Company issued 2,069,000 and 14,440,500 non-derivative warrants in connection with previous issuances of 2,069,000 and 14,440,500 shares of common stock, respectively. These warrants vest immediately upon grant date and have a two year exercise period. The warrants have fixed escalating exercise prices based on time elapsed from the date of grant, ranging from $0.30 to $0.50 per share for subscriptions before March 14, 2007, and from $0.40 to $0.60 per share for subscriptions after that date. The Company recorded $184,408 and $1,069,816 of expense, respectively, associated with these warrants at the time of issuance.
	The warrants were issued with an adjustment provision whereby the exercise price would be adjusted in the event of any of the following: the Company's shares of common stock outstanding are subdivided into greater or consolidated into fewer shares, or in the case of any capital reorganization.
	The following is a reconciliation of the number and weighted-average exercise prices for the warrants with non-derivative features:
		Warrants
				Weighted Average Exercise Price ($)
		Number of Shares
		14,440,500		0.38
	Outstanding, July 31, 2013
	Granted August 15, 2013	2,069,000		0.4
	Exercised in three months ended April 30, 2014	-252,000		0.4
	Outstanding, April 30, 2014 (end of Q3 ’14)	16,257,500		0.4
	The following summarizes information about warrants with non-derivative features outstanding as of April 30, 2014 (end of Q3 ’14):
	Exercise Price	Number of Warrants	Remaining Life
	$0.50	2,451,000	0.79 Years
	$0.30	2,562,500	1.12 Years
	$0.40	9,175,000	1.12 Years
	$0.40	2,069,000	1.29 Years
	The Company estimated the fair value of the warrants issued during the periods using the Black-Scholes option pricing model with the following assumptions:
		Nine months ended April 30, 2014 (Q1-Q3 ’14)	Year Ended July 31, 2013
	Expected life (in years)	2	2
	Expected dividend yield (%)	0	0
	Expected volatility (%)	81.3	79.7
	Risk free interest rate (%)	0.36	0.33

Note_7_Accrued_Expenses

Note 7 - Accrued Expenses	9 Months Ended
	Apr. 30, 2014
Notes	'
Note 7 - Accrued Expenses	'
	Note 7 – Accrued Expenses
	Accrued expenses as of April 30, 2014 (end of Q3 ’14) and July 31, 2013 (YE ’13) consisted of the following:
		April 30, 2014 (end of Q3 ’14)	July 31, 2013 (YE ’13)
	Accrued license fees	$268,470	$232,311
	Accrued royalties	456,250	400,000
	Accrued interest	187,657	146,741
	Accrued wages	151,000	151,000
	Accrued audit and legal fees	210,966	195,000
		$1,274,343	$1,125,052

Note_8_Related_Party_Transacti

Note 8 - Related Party Transactions and Commitments	9 Months Ended
	Apr. 30, 2014
Notes	'
Note 8 - Related Party Transactions and Commitments	'
	Note 8 - Related Party Transactions and Commitments
	Management and Other Expenses
	The Company’s president deferred portions of the first three years of compensation due him. The balances due him as of April 30, 2014 (end of Q3 ’14) totalled $151,000 and as of July 31, 2013 (YE ’13) for amounts deferred totalled $151,000. These back wages are unsecured, non-interest bearing and due upon demand. There was no formal deferred wages agreement and therefore no set repayment date. The Company has recorded these amounts as current in the accompanying balance sheets.
	Period During Which Wages Were Earned	Portion Deferred	Balance
			Deferred
	YE July 31, 2006	$72,000	$72,000
	YE July 31, 2007	$38,500	$110,500
	YE July 31, 2008	$40,500	$151,000
	In subsequent years the Company contracted for management services from an entity owned by the Company’s president.
	A short term shareholder loan of approximately $100,000 was received from the president in the year ended July 31, 2013. It was unsecured, non-interest bearing and due upon demand. It appears under ordinary accounts payable on the Balance Sheet, and is unrelated to the accrued wages discussed above. As at April 30, 2014 (end of Q3 ’14) and July 31, 2013 (YE ’13), the repayment balance outstanding for this loan was approximately $0 and $(45,000), respectively.
	During the period January 25, 2005 (Inception) through April 30, 2014 (end of Q3 ’14), the Company paid certain entities owned by members of management for management services rendered. The amounts for the nine months ended April 30, 2014 and 2013 (Q1-Q3 ’14 and Q1-Q3 ’13) were approximately $116,300 and $130,300, respectively, for the three months ended April 30, 2014 and 2013 (Q3 ’14 and Q3 ’13), $39,364 and $39,795, respectively, and for the period January 25, 2005 (Inception) through April 30, 2014 (end of Q3 ’14), $1,530,600. Management has not been drawing paychecks against wages that have been accruing in recent months, and thus as of April 30, 2014 (end of Q3 ’14) and July 31, 2013 (YE ’13), the Company owed these entities approximately $142,800 and $77,900, respectively, which is included in accounts payable in the accompanying balance sheets. As of April 30, 2014 (end of Q3 ’14), the president had not taken a paycheck for the past approximately 11 months of pay, approximately $105,000, owed to him. As of April 30, 2014 (end of Q3 ’14), the general manager of operations had not taken a paycheck for the past 11 months of pay, approximately $37,800, owed to him.
	During the periods presented, the Company was provided multi-media marketing, advertising and website maintenance services from a related entity. The owner of the entity is a small shareholder of the Company, and a relative of the Company’s president. There was no amount due to this entity at April 30, 2014 (end of Q3 ’14) and July 31, 2013 (YE ’13). Total services provided from this entity to the Company during the nine months ended April 30, 2014 and 2013 (Q1-Q3 ’14 and Q1-Q3 ’13) were approximately $0 and $21,200, respectively, for the three months ended April 30, 2014 and 2013 (Q3 ’14 and Q3 ’13), $0 and $0 in both periods, and for the period January 25, 2005 (Inception) through April 30, 2014 (end of Q3 ’14), $454,000.
	Expenses pertaining to the Variable Interest Entity (“VIE”) mentioned in Note 4 are included in Statements of Operations as related party expenses.
	Royalties and License Fees Pertaining to Exclusive Rights
	In January 2005, the Company entered into a licensing agreement with a related party whose primary business is the ownership and maintenance of patents concerning the XYO technology, for the exclusive rights in XYO for automatic balancing systems suitable in the balancing and stabilization of rotating systems. These rights enable the Company to manufacture, or have manufactured, sell, and use, the products incorporating this technology, and to sub-license to third parties the right to manufacture or have manufactured, sell and use, the products incorporating this technology. The agreement calls for annual royalties and license fees. Royalties are calculated annually at a rate of 2.5% on any revenue derived from the use of the technology, subject to a varying minimum annual royalty fee of up to $125,000, for a period that is equal to the life of the underlying patents, i.e., until March 7, 2023. The license fees are due annually in escalating amounts as stated in the agreement through January 2015.
	The agreement also requires 6% annual interest, compounded quarterly, on any unpaid license fees, and 6% annual interest, compounded quarterly, on any unpaid royalty fees outstanding after January 2010.
	The License Agreement was modified by an Amendment and Waiver of Default effective July 31, 2010, in which ETI waived any rights to terminate the Agreement in the event of non-payment by Perpetual.
	In connection with the above agreement, the Company incurred royalties for the nine months ended April 30, 2014 and 2013 (Q1-Q3 ’14 and Q1-Q3 ’13) amounting to $56,250 and $56,250, respectively, for the three months ended April 30, 2014 and 2013 (Q3 ’14 and Q3 ’13), $18,750 and $18,750, respectively, and for the period January 25, 2005 (Inception) through April 30, 2014 (end of Q3 ’14), $456,250. Included in accrued expenses as of April 30, 2014 (end of Q3 ’14) and July 31, 2013 (YE ’13) are $456,250 and $400,000 relating to unpaid royalty fees.
	The Company also incurred license fees related to the above agreement, amounting to approximately $55,000 and $47,500 in the nine months ended April 30, 2014 and 2013 (Q1-Q3 ’14 and Q1-Q3 ’13) respectively, $20,000 and $17,500 for the three months ended April 30, 2014 and 2013 (Q3 ’14 and Q3 ’13), respectively, and for the period January 25, 2005 (Inception) through April 30, 2014 (end of Q3 ’14), $575,000. Included in accrued payables as of April 30, 2014 (end of Q3 ’14) and July 31, 2013 (YE ’13) are $268,470 and $232,311 relating to unpaid license fees.
	Included in accrued expenses as of April 30, 2014 (end of Q3 ’14) and July 31, 2013 (YE ’13) are $185,030 and $146,741 of interest accrued on the above amounts outstanding computed in accordance with the agreement.
	The following minimum payments are required under the aforementioned royalty and licensing agreement:
	Year ended July 31,	Amount
	2014 (remaining three months)	$38,750
	2015	$160,000
	2016	$120,000
	Annually thereafter until projected 2023 expiry	$  75,000
	General
	The amounts and terms of related party transactions are not necessarily indicative of the amounts and terms which would have been incurred had the transactions been incurred with unrelated parties.
	Reconciliation of Related Party Expenses Disclosures to Related Party Expenses Line of Statement of Operations
		Nine months ended April 30, 2014 (Q1-Q3 ’14)	Nine months ended April 30, 2013 (Q1-Q3 ’13)	Three Months Ended April 30, 2014 (Q3 ’14)	Three Months Ended April 30, 2013
					(Q3 ’13)
	Management and Other Expenses:
	Management services	$  116,307	$130,276	$  39,364	$39,795
	Airfare reimbursement	451	-	-	-
	Multi-media marketing, advertising and website maintenance services	-	21,243	-	-
	Royalties and License Fees Pertaining to Exclusive Rights, excluding interest which appears under Other Income (Expense)
		111,250	103,750	38,750	36,250
	Variable Interest Entity outlined in Note 4:
	Marketing services	2,402	149,178	-	2,454
	Rent	25,243	27,037	8,144	8,843
	Offset for legal fees paid on VIE’s behalf	-1,201	-	-	-
	Total Related Party Expenses	$  254,452	$431,484	$  86,258	$87,342

Note_9_Debenture_With_Nonaffil

Note 9 - Debenture With Non-affiliated Shareholder	9 Months Ended
	Apr. 30, 2014
Notes	'
Note 9 - Debenture With Non-affiliated Shareholder	'
	Note 9 – Debenture with Non-Affiliated Shareholder
	On October 1, 2013, the Company entered into an unsecured debenture under which it borrowed $100,000 from a non-affiliated shareholder at an annual non compounding interest rate of 12%. Repayments are to be applied first to payment of principal and secondly to payment of interest. No maturity date is specified. As at April 30, 2014 (end of Q3 ’14), the balance owing was $107,000 including interest, and is included in ordinary accounts payable on the balance sheet. On the statement of cash flows it is shown as a note payable, under financing activities.

Note_10_Sales_Agreement_and_Cu

Note 10 - Sales Agreement and Customer Concentrations	9 Months Ended
	Apr. 30, 2014
Notes	'
Note 10 - Sales Agreement and Customer Concentrations	'
	Note 10 - Sales Agreement and Customer Concentrations
	In the year ended July 31, 2012, the Company entered into sales agreements with an entity whose owner is a shareholder of the Company. A prototype evaluation agreement for approximately $ (25,000) was entered into, and the Company received payment in full. This revenue was deferred and was to be recognized over a six month period. The Company also entered into an exclusive North American license agreement with this party, involving a $ (30,000) fee for pre-purchase of XYO balancers and a $ (45,000) upfront license fee for the exclusive right to manufacture or have manufactured, sell, use, and sublicense a type of marine propeller, or balancer thereof, incorporating XYO. The license agreement also calls for royalties to be paid to the Company, calculated quarterly as 50% of any revenue derived by the entity from the manufacture, sale, use, or sublicensing of products incorporating XYO. Effective April 30, 2013 (end of Q3 ’13), the entity and its owner formally requested that the license agreement be rescinded and the total $75,000 license and pre-purchase fee plus the $25,000 prototype evaluation fee be redirected toward the exercise of stock warrants in the personal name of the entity’s owner. The Company agreed, and thereupon recorded reversing entries effective April 30, 2013 and processed the warrant exercise request.
	During the nine months ended April 30, 2014 and 2013 (Q1-Q3 ’14 and Q1-Q3 ’13), revenues earned from three and three customers, respectively, for the three months ended April 30, 2014 and 2013 (Q3 ’14 and Q3 ’13), zero and one customer, respectively, and for the period January 25, 2005 (Inception) through April 30, 2014 (end of Q3 ’14), four customers, amounted to approximately $157,200 and $47,900 (100% and 100% of total revenue) for the nine months ended April 30, 2014 and 2013 (Q1-Q3 ’14 and Q1-Q3 ’13), respectively, $0 and $12,000 (0% and 100% of total revenue) for the three months ended April 30, 2014 and 2013 (Q3 ’14 and Q3 ’13), and $327,000 (86%) for the period January 25, 2005 (Inception) through April 30, 2014 (end of Q3 ’14). There were no amounts due from these customers at April 30, 2014 (end of Q3 ’14) and July 31, 2013 (YE ’13).

Note_3a_Summary_of_Significant1

Note 3a - Summary of Significant Accounting Policies: Earnings (loss) Per Share (Policies)	9 Months Ended
	Apr. 30, 2014
Policies	'
Earnings (loss) Per Share	'
	Earnings (Loss) Per Share
	Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the periods presented. Diluted loss per share is computed by dividing net loss by the weighted average common shares and potentially dilutive common share equivalents. The effects of potential common stock equivalents are not included in computations when their effect is anti-dilutive.
	Because of the net losses for all periods presented, the basic and diluted weighted average shares outstanding are the same since including the additional shares would have an anti-dilutive effect on the loss per share calculations. Common stock warrants to purchase 16,257,500 and 4,647,000 shares of common stock for the nine months ended April 30, 2014 and 2013 (Q1-Q3 ’14 and Q1-Q3 ’13), respectively, 16,257,500 and 4,647,000 shares of common stock for the three months ended April 30, 2014 and 2013 (Q3 ’14 and Q3 ’13), respectively, and 16,257,500 shares of common stock for the period January 25, 2005 (Inception) through April 30, 2014 (end of Q3 ’14), were not included in the computation of diluted weighted average common shares outstanding.

Note_5_Derivative_Instruments_1

Note 5 - Derivative Instruments (warrants): Schedule of Fair Value Measurements (Tables)	9 Months Ended
	Apr. 30, 2014
Tables/Schedules	'
Schedule of Fair Value Measurements	'
		Level I	Level II	Level III	Total
	Derivative liabilities, April 30, 2014	$  —	$  —	$  —	$  —
	Derivative liabilities, July 31, 2013	$  —	$  —	$  —	$  —

Note_5_Derivative_Instruments_2

Note 5 - Derivative Instruments (warrants): Schedule of Fair Value Assumptions, Derivative (Tables)	9 Months Ended
	Apr. 30, 2014
Tables/Schedules	'
Schedule of Fair Value Assumptions, Derivative	'
		Year Ended July 31, 2013
	Expected life (in years)	0.04
	Expected dividend yield	0.00%
	Expected volatility (%)	2.8
	Risk free interest rate (%)	0.02

Note_5_Derivative_Instruments_3

Note 5 - Derivative Instruments (warrants): Summary of Information, Derivative Warrants (Tables)	9 Months Ended
	Apr. 30, 2014
Tables/Schedules	'
Summary of Information, Derivative Warrants	'
	Exercise Price	Number of Warrants	Remaining Life
	$0.30	2,069,000	0.04 Years

Note_5_Derivative_Instruments_4

Note 5 - Derivative Instruments (warrants): Reconciliation of Fair Value of Issuances and Increases Decreases in Value (Tables)	9 Months Ended
	Apr. 30, 2014
Tables/Schedules	'
Reconciliation of Fair Value of Issuances and Increases Decreases in Value	'
	Fair value of instruments issued, March 2007	$182,212
	Fair value of instruments issued, November 2007	133,909
	Fair value of instruments issued, July 2007	118,705
	Decrease in value, July 31, 2007 through July 31, 2008	-164,363
	Fair value of instruments issued, December 2008	313,906
	Increase in value, year ended July 31, 2009	111,458
	Fair value of instruments issued, January 2010	214,187
	Decrease in value, year ended July 31, 2010	-423,528
	Fair value of instruments issued, August 2010	347,241
	Fair value of instruments issued, September 2010	17,291
	Increase in value, year ended July 31, 2011	103,589
	Fair value of instruments issued, August 2011	205,842
	Decrease in value, year ended July 31, 2012	-572,918
	Decrease in value, year ended July 31, 2013	-587,531
		$              -

Note_5_Derivative_Instruments_5

Note 5 - Derivative Instruments (warrants): Reconciliation of Number and Weighted Average Exercise Prices Derivative Warrants (Tables)	9 Months Ended
	Apr. 30, 2014
Tables/Schedules	'
Reconciliation of Number and Weighted Average Exercise Prices Derivative Warrants	'
		Warrants with Derivative Features
			Weighted Average Exercise Prices ($)
		Number of Shares
	Outstanding, July 31, 2006	-	-
	Granted	2,562,500	0.2
	Exercised	-	-
	Expired	-	-
	Outstanding, July 31, 2007	2,562,500	0.2
	Granted	2,468,000	0.3
	Exercised	-	-
	Expired	-	-
	Outstanding, July 31, 2008	5,030,500	0.25
	Granted	2,482,500	0.3
	Exercised	-	-
	Expired	-	-
	Outstanding, July 31, 2009	7,513,000	0.3
	Granted	1,597,000	0.3
	Exercised	-	-
	Expired	-	-
	Outstanding, July 31, 2010	9,110,000	0.3
	Granted	2,752,500	0.3
	Exercised	-	-
	Expired	-	-
	Outstanding, July 31, 2011	11,862,500	0.3
	Granted	2,089,000	0.3
	Exercised	-	-
	Expired	-	-
	Outstanding, July 31, 2012	13,951,500	0.3
	Granted	-	-
	Exercised	-	-
	Expired/Cancelled	11,882,500	0.3
	Outstanding, July 31, 2013	2,069,000	0.3
	Granted	-	-
	Exercised	-	-
	Expired/Cancelled	2,069,000	0.3
	Outstanding, April 30, 2014 (end of Q2 ’14)	-	-

Note_6_Nonderivative_Warrants_

Note 6 - Non-derivative Warrants: Reconciliation of Number and Weighted Average Exercise Prices Non-Derivative Warrants (Tables)	9 Months Ended
	Apr. 30, 2014
Tables/Schedules	'
Reconciliation of Number and Weighted Average Exercise Prices Non-Derivative Warrants	'
		Warrants
			Weighted Average Exercise Price ($)
		Number of Shares
		14,440,500	0.38
	Outstanding, July 31, 2013
	Granted August 15, 2013	2,069,000	0.4
	Exercised in three months ended April 30, 2014	-252,000	0.4
	Outstanding, April 30, 2014 (end of Q3 ’14)	16,257,500	0.4

Note_6_Nonderivative_Warrants_1

Note 6 - Non-derivative Warrants: Summary of Information, Non-Derivative Features (Tables)	9 Months Ended
	Apr. 30, 2014
Tables/Schedules	'
Summary of Information, Non-Derivative Features	'
	Exercise Price	Number of Warrants	Remaining Life
	$0.50	2,451,000	0.79 Years
	$0.30	2,562,500	1.12 Years
	$0.40	9,175,000	1.12 Years
	$0.40	2,069,000	1.29 Years

Note_6_Nonderivative_Warrants_2

Note 6 - Non-derivative Warrants: Fair Value Assumptions, Non-Derivative (Tables)	9 Months Ended
	Apr. 30, 2014
Tables/Schedules	'
Fair Value Assumptions, Non-Derivative	'
		Nine months ended April 30, 2014 (Q1-Q3 ’14)	Year Ended July 31, 2013
	Expected life (in years)	2	2
	Expected dividend yield (%)	0	0
	Expected volatility (%)	81.3	79.7
	Risk free interest rate (%)	0.36	0.33

Note_7_Accrued_Expenses_Schedu

Note 7 - Accrued Expenses: Schedule of Accrued Liabilities (Tables)	9 Months Ended
	Apr. 30, 2014
Tables/Schedules	'
Schedule of Accrued Liabilities	'
		April 30, 2014 (end of Q3 ’14)	July 31, 2013 (YE ’13)
	Accrued license fees	$268,470	$232,311
	Accrued royalties	456,250	400,000
	Accrued interest	187,657	146,741
	Accrued wages	151,000	151,000
	Accrued audit and legal fees	210,966	195,000
		$1,274,343	$1,125,052

Note_8_Related_Party_Transacti1

Note 8 - Related Party Transactions and Commitments: Deferred Compensation Arrangements, Overall, Description (Tables)	9 Months Ended
	Apr. 30, 2014
Tables/Schedules	'
Deferred Compensation Arrangements, Overall, Description	'
	Period During Which Wages Were Earned	Portion Deferred	Balance
			Deferred
	YE July 31, 2006	$72,000	$72,000
	YE July 31, 2007	$38,500	$110,500
	YE July 31, 2008	$40,500	$151,000

Note_8_Related_Party_Transacti2

Note 8 - Related Party Transactions and Commitments: Schedule of Royalty and License Fees (Tables)	9 Months Ended
	Apr. 30, 2014
Tables/Schedules	'
Schedule of Royalty and License Fees	'
	Year ended July 31,	Amount
	2014 (remaining three months)	$38,750
	2015	$160,000
	2016	$120,000
	Annually thereafter until projected 2023 expiry	$  75,000

Note_8_Related_Party_Transacti3

Note 8 - Related Party Transactions and Commitments: Schedule of Related Party Transactions (Tables)	9 Months Ended
	Apr. 30, 2014
Tables/Schedules	'
Schedule of Related Party Transactions	'
		Nine months ended April 30, 2014 (Q1-Q3 ’14)	Nine months ended April 30, 2013 (Q1-Q3 ’13)	Three Months Ended April 30, 2014 (Q3 ’14)	Three Months Ended April 30, 2013
					(Q3 ’13)
	Management and Other Expenses:
	Management services	$  116,307	$130,276	$  39,364	$39,795
	Airfare reimbursement	451	-	-	-
	Multi-media marketing, advertising and website maintenance services	-	21,243	-	-
	Royalties and License Fees Pertaining to Exclusive Rights, excluding interest which appears under Other Income (Expense)
		111,250	103,750	38,750	36,250
	Variable Interest Entity outlined in Note 4:
	Marketing services	2,402	149,178	-	2,454
	Rent	25,243	27,037	8,144	8,843
	Offset for legal fees paid on VIE’s behalf	-1,201	-	-	-
	Total Related Party Expenses	$  254,452	$431,484	$  86,258	$87,342

Note_3a_Summary_of_Significant2

Note 3a - Summary of Significant Accounting Policies: Earnings (loss) Per Share (Details)	3 Months Ended		9 Months Ended		111 Months Ended
	Apr. 30, 2014	Apr. 30, 2013	Apr. 30, 2014	Apr. 30, 2013	Apr. 30, 2014
Details	'	'	'	'	'
Warrants Not Included in Computation of Weighted Average	16,257,500	4,647,000	16,257,500	4,647,000	16,257,500

Note_4_Loan_Receivable_and_Lea1

Note 4 - Loan Receivable and Lease Obligation (Details) (USD $)	3 Months Ended			9 Months Ended		12 Months Ended	111 Months Ended
	Jul. 31, 2014	Apr. 30, 2014	Apr. 30, 2013	Apr. 30, 2014	Apr. 30, 2013	Jul. 31, 2015	Apr. 30, 2014
Operating Leases, Rent Expense	$9,000	$8,144	$8,843	$25,243	$27,037	$24,000	$324,800
Rent Paid in Cash	'	8,100	'	8,100	'	'	8,100
Interest Income Decrease	'	5,200	'	5,200	'	'	5,200
Variable Interest Entity	'	'	'	'	'	'	'
Marketing Expense	'	$0	$2,500	$2,400	$149,200	'	$575,600

Note_5_Derivative_Instruments_6

Note 5 - Derivative Instruments (warrants): Schedule of Fair Value Assumptions, Derivative (Details) (0.04 Years)	12 Months Ended
	Jul. 31, 2013
0.04 Years	'
Remaining Contractual Term	0.04
Fair Value Assumptions, Expected Dividend Rate	0.00%
Fair Value Assumptions, Expected Volatility Rate	2.80%
Fair Value Assumptions, Risk Free Interest Rate	0.02%

Note_5_Derivative_Instruments_7

Note 5 - Derivative Instruments (warrants): Summary of Information, Derivative Warrants (Details) (0.04 Years, USD $)	Jul. 31, 2013
0.04 Years	'
Exercise Price Outstanding	$0.30
Number Outstanding	2,069,000
Remaining Contractual Term	0.04

Note_5_Derivative_Instruments_8

Note 5 - Derivative Instruments (warrants): Reconciliation of Fair Value of Issuances and Increases Decreases in Value (Details) (USD $)	111 Months Ended
	Apr. 30, 2014
Mar-07	'
Fair Value of Instruments Issued	$182,212
Nov-07	'
Fair Value of Instruments Issued	133,909
Jul-07	'
Fair Value of Instruments Issued	118,705
July 31, 2007 to July 31, 2008	'
Decrease in Value of Instrument	164,363
Dec-08	'
Fair Value of Instruments Issued	313,906
Year Ended July 31, 2009	'
Increase in Value of Instrument	111,458
Jan-10	'
Fair Value of Instruments Issued	214,187
Year Ended July 31, 2010	'
Decrease in Value of Instrument	423,528
Aug-10	'
Fair Value of Instruments Issued	347,241
Sep-10	'
Fair Value of Instruments Issued	17,291
Year Ended July 31, 2011	'
Increase in Value of Instrument	103,589
Aug-11	'
Fair Value of Instruments Issued	205,842
Year Ended July 31, 2012	'
Decrease in Value of Instrument	572,918
Year Ended July 31, 2013	'
Decrease in Value of Instrument	$587,531

Note_5_Derivative_Instruments_9

Note 5 - Derivative Instruments (warrants): Reconciliation of Number and Weighted Average Exercise Prices Derivative Warrants (Details) (Derivative Warrants, USD $)

9 Months Ended

Apr. 30, 2014

Apr. 30, 2013

Apr. 30, 2012

Apr. 30, 2011

Apr. 30, 2010

Apr. 30, 2009

Apr. 30, 2008

Apr. 30, 2007

Jul. 31, 2013

Jul. 31, 2012

Jul. 31, 2011

Jul. 31, 2010

Jul. 31, 2009

Jul. 31, 2008

Jul. 31, 2007

Derivative Warrants

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Number Outstanding

'

'

'

'

'

'

'

'

2,069,000

13,951,500

11,862,500

9,110,000

7,513,000

5,030,500

2,562,500

Weighted Average Exercise Price, Outstanding

'

'

'

'

'

'

'

'

$0.30

$0.30

$0.30

$0.30

$0.30

$0.25

$0.20

Number Granted

'

'

2,089,000

2,752,500

1,597,000

2,482,500

2,468,000

2,562,500

'

'

'

'

'

'

'

Weighted Average Exercise Price, Granted

'

'

$0.30

$0.30

$0.30

$0.30

$0.30

$0.20

'

'

'

'

'

'

'

Number Expired

2,069,000

11,882,500

'

'

'

'

'

'

'

'

'

'

'

'

'

Weighted Average Exercise Price, Expired

$0.30

$0.30

'

'

'

'

'

'

'

'

'

'

'

'

'

Note_6_Nonderivative_Warrants_3

Note 6 - Non-derivative Warrants (Details) (USD $)	9 Months Ended	12 Months Ended
	Apr. 30, 2014	Jul. 31, 2013
Details	'	'
Non Derivative Warrants Issued	2,069,000	14,440,500
Warrant Expense	$184,408	$1,069,816

Note_6_Nonderivative_Warrants_4

Note 6 - Non-derivative Warrants: Reconciliation of Number and Weighted Average Exercise Prices Non-Derivative Warrants (Details) (Non-Derivative Warrants, USD $)	3 Months Ended
	Apr. 30, 2014	Aug. 15, 2013	Jul. 31, 2013
Non-Derivative Warrants	'	'	'
Number of Warrants Outstanding	16,257,500	'	14,440,500
Weighted Average Exercise Price, Outstanding	$0.40	'	$0.38
Number Granted	'	2,069,000	'
Weighted Average Exercise Price, Granted	'	$0.40	'
Number Exercised in Three Months Ended	-252,000	'	'
Weighted Average Exercise Price, Exercised in Three Months Ended	$0.40	'	'

Note_6_Nonderivative_Warrants_5

Note 6 - Non-derivative Warrants: Summary of Information, Non-Derivative Features (Details) (USD $)	Apr. 30, 2014
0.79 Years	'
Exercise Price Outstanding	$0.50
Number of Warrants Outstanding	2,451,000
Remaining Contractual Term	0.79
1.12 Years	'
Exercise Price Outstanding	$0.30
Number of Warrants Outstanding	2,562,500
Remaining Contractual Term	1.12
1.12 (2) Years	'
Exercise Price Outstanding	$0.40
Number of Warrants Outstanding	9,175,000
Remaining Contractual Term	1.12
1.29 Years	'
Exercise Price Outstanding	$0.40
Number of Warrants Outstanding	2,069,000
Remaining Contractual Term	1.29

Note_6_Nonderivative_Warrants_6

Note 6 - Non-derivative Warrants: Fair Value Assumptions, Non-Derivative (Details)	9 Months Ended	12 Months Ended
	Apr. 30, 2014	Jul. 31, 2013
	2.00 (2) Years	2.00 Years
Contractual Term Remaining	2	2
Fair Value Assumptions, Expected Dividend Rate	0.00%	0.00%
Fair Value Assumptions, Expected Volatility Rate	81.30%	79.70%
Fair Value Assumptions, Risk Free Interest Rate	0.36%	0.33%

Note_7_Accrued_Expenses_Schedu1

Note 7 - Accrued Expenses: Schedule of Accrued Liabilities (Details) (USD $)	Apr. 30, 2014	Jul. 31, 2013
Details	'	'
Accrued License Expense	$268,470	$232,311
Accrued Royalties, Current	456,250	400,000
Accrued Interest	187,657	146,741
Accrued Salaries	151,000	151,000
Accrued Professional Fees, Current	$210,966	$195,000

Note_8_Related_Party_Transacti4

Note 8 - Related Party Transactions and Commitments (Details) (USD $)	3 Months Ended		9 Months Ended		111 Months Ended
	Apr. 30, 2014	Apr. 30, 2013	Apr. 30, 2014	Apr. 30, 2013	Apr. 30, 2014	Jul. 31, 2013
Other Deferred Compensation Arrangements, Liability, Current	$151,000	'	$151,000	'	$151,000	$151,000
Related Party Transaction, Due from (to) Related Party, Current	0	'	0	'	0	-45,000
Professional and Contract Services Expense	39,364	39,795	116,300	130,300	1,530,600	'
Accrued Salaries, Current	142,800	'	142,800	'	142,800	77,900
Royalty Expense	18,750	18,750	56,250	56,250	456,250	'
Accrued Royalty Expense	456,250	'	456,250	'	456,250	400,000
License Expense	20,000	17,500	55,000	47,500	575,000	'
Accrued License Expense	268,470	'	268,470	'	268,470	232,311
Accrued Interest Expense	185,030	'	185,030	'	185,030	146,741
President	'	'	'	'	'	'
Accrued Salaries, Current	105,000	'	105,000	'	105,000	'
General Manager	'	'	'	'	'	'
Accrued Salaries, Current	37,800	'	37,800	'	37,800	'
Shareholder	'	'	'	'	'	'
Marketing and Advertising Expense	$0	$0	$0	$21,200	$454,000	'

Note_8_Related_Party_Transacti5

Note 8 - Related Party Transactions and Commitments: Schedule of Related Party Transactions (Details) (USD $)	3 Months Ended			9 Months Ended		12 Months Ended	111 Months Ended
	Jul. 31, 2014	Apr. 30, 2014	Apr. 30, 2013	Apr. 30, 2014	Apr. 30, 2013	Jul. 31, 2015	Apr. 30, 2014
Details	'	'	'	'	'	'	'
Management Fees Expense	'	$39,364	$39,795	$116,307	$130,276	'	'
Airfare Reimbursement	'	'	'	451	'	'	'
Advertising Expense	'	'	'	'	21,243	'	'
Royalty and License Expense	'	38,750	36,250	111,250	103,750	'	'
Marketing Expense	'	'	2,454	2,402	149,178	'	'
Operating Leases, Rent Expense	9,000	8,144	8,843	25,243	27,037	24,000	324,800
Effect on Future Earnings, Offset Amount	'	'	'	-1,201	'	'	'
Total Related Party Expenses	'	$86,258	$87,342	$254,452	$431,484	'	'

Note_9_Debenture_With_Nonaffil1

Note 9 - Debenture With Non-affiliated Shareholder (Details) (USD $)	Apr. 30, 2014	Oct. 01, 2013
Details	'	'
Debt Instrument, Fair Value Disclosure	$107,000	$100,000

Note_10_Sales_Agreement_and_Cu1

Note 10 - Sales Agreement and Customer Concentrations (Details) (USD $)	3 Months Ended		9 Months Ended
	Apr. 30, 2014	Apr. 30, 2013	Apr. 30, 2014	Apr. 30, 2013
Total Revenue	$0	$12,000	$157,200	$47,900
April 30, 2013 XYO Evaluation (rescission)	'	'	'	'
Revenue	'	-25,000	'	-25,000
April 30, 2013 XYO Balancers (rescission)	'	'	'	'
Revenue	'	-30,000	'	-30,000
April 30, 2013 XYO License (rescission)	'	'	'	'
Revenue	'	($45,000)	'	($45,000)