Perpetual Industries (PRPI) 10-Q 15 Dec 14 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Oct. 31, 2014
Document and Entity Information:
Entity Registrant Name	Perpetual Industries Inc.
Document Type	10-Q
Document Period End Date	31-Oct-14
Amendment Flag	FALSE
Entity Central Index Key	1395445
Current Fiscal Year End Date	-24
Entity Common Stock, Shares Outstanding	34,018,500
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	2015
Document Fiscal Period Focus	Q1

Perpetual_Industries_Inc_Balan

Perpetual Industries Inc. - Balance Sheets (USD $)	Oct. 31, 2014		Jul. 31, 2014
Current Assets
Cash	$4,197		$32,117
Accounts Receivable, current	535		535
Total Current Assets	4,732		32,652
Equipment, Net of Accumulated Depreciation	4,260		3,406
Total Assets	8,992		36,058
Liabilities and Stockholders' Equity (Deficit)
Accounts payable, current	9,373	[1]	151,653	[1]
Accrued expenses, current	225,270	[2]	1,330,140	[2]
Convertible notes payable	1,875,961	[3]		[3]
Other current liabilities	58,543		64,016
Total Current Liabilities	2,169,147		1,545,809
Long term liabilities			110,000
Total liabilities	2,169,147		1,655,809
Stockholders' Equity (Deficit)
Common Stock	34,019	[4]	33,123	[4]
Capital in excess of par value	6,139,165		5,045,258
Prepaid stock services	-187,500
Deficit accumulated during development stage	-8,145,839		-6,698,132
Total Stockholders' Equity (Deficit)	-2,160,155		-1,619,751
Total Liabilities and Stockholders' Equity (Deficit)	$8,992		$36,058
[1]	including related party balances of approximately $5,900 and $150,000 at October 31, 2014 and July 31, 2014, respectively.
[2]	including related party balances of approximately $13,100 and $1,113,000 at October 31, 2014 and July 31, 2014, respectively.
[3]	including related party balances of approximately $1,408,000 and $0 at October 31, 2014 and July 31, 2014, respectively.
[4]	$0.001 par value, 100,000,000 shares authorized, 34,018,500 and 32,122,000 shares issued and outstanding at October 31, 2014 and July 31, 2014, respectively.

Perpetual_Industries_Inc_Balan1

Perpetual Industries Inc. - Balance Sheets- Parenthetical (USD $)	Oct. 31, 2014	Jul. 31, 2014
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	34,018,500	33,122,000
Common Stock, Shares Outstanding	34,018,500	33,122,000

Perpetual_Industries_Inc_State

Perpetual Industries Inc. - Statements of Operations (USD $)	3 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Income Statement
Revenues		$131,225
Operating Expenses
Related party expenses	-187,151	-86,830
Other operating expenses	-554,088	-98,251
Total operating expenses	-741,239	-185,081
Operating loss	-741,239	-53,856
Other Income (Expense)
Interest income, related party	-2,756	8,678
Interest expense, related party	-19,400	-12,163
Interest expense, non-related party	-6,257
Stock option issuance expense	-678,303
Warrant issuance expense		-184,408
Other	248	-460
Net Loss	($1,447,707)	($242,209)
Basic and Diluted Loss Per Share	($0.04)	($0.01)
Basic and Diluted Weighted Average Common Shares Outstanding	33,488,440	32,470,000

Perpetual_Industries_Inc_State1

Perpetual Industries Inc. - Statements of Cash Flows (USD $)	3 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Cash flows from Operating Activities:
Net Loss	($1,447,707)	($242,209)
Adjustments to reconcile net loss to net cash (used) provided in operating activities:
Depreciation	433	510
Issuance of stock options	678,303
Issuance of warrants		184,408
Amortization of common stock issued for services	12,000
Expenses incurred related to issuance of convertible notes payable	612,538
Increase (Decrease) in:
Accounts payable, increase (decrease)	9,003	113,484
Accrued expenses, increase (decrease)	8,271	57,564
Deferred revenue- current, increase (decrease)		-11,888
Other liabilities, increase (decrease)	-5,475	-2,469
Net cash flows provided (used) in operating activities	-132,634	99,400
Cash flows used in investing activities:
Purchase of equipment	-1,286
Net cash flows used in investing activities	-1,286
Cash Flows Provided by Financing Activities:
Proceeds from exercise of warrants	106,000
Net cash flows provided by financing activities	106,000
Net change in cash	-27,920	99,400
Cash, beginning of period	32,117	30,348
Cash, end of period	4,197	129,748
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, prepaid services	199,500
Common stock shares issued, prepaid services, shares	284,000
Common stock shares issued, retirement of debt	111,000
Common stock shares issued retirement of debt, shares	370,000
Common stock shares issued, notes payable	$1,863,537
Common stock shares issued, notes payable, shares

Note_1_Basis_of_Presentation_a

Note 1- Basis of Presentation and Background Information	3 Months Ended
	Oct. 31, 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, 2014.
	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 has not commenced its principal operations, and its present condition 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	3 Months Ended
	Oct. 31, 2014
Notes
Note 2 - Going Concern	Note 2 – Going Concern
	As shown in the accompanying financial statements, the Company has negative working capital, has cash used in operations of $132,634 for the three months ended October 31, 2014 (Q1 ’15), and an accumulated deficit, i.e. 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 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. Our lack of meaningful operating revenues, negative working capital, cash used in operations, and having an accumulated deficit to date, raise substantial doubt about our ability to continue as a going concern.
	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	3 Months Ended
	Oct. 31, 2014
Notes
Note 3a - Summary of Significant Accounting Policies	Note 3a - Summary of Significant Accounting Policies
	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 and options to purchase 20,465,000 and 16,509,500 shares of common stock for the three months ended October 31, 2014 and 2013 (Q1 ’15 and ’14), respectively, were not included in the computation of diluted weighted average common shares outstanding. Additionally, $1,875,961 of convertible debt and accrued interest can potentially convert into 6,253,203 shares of common stock as of October 31, 2014 (end of Q1 ‘15).

Note_3b_Impact_of_Recently_Iss

Note 3b - Impact of Recently Issued Accounting Standards	3 Months Ended
	Oct. 31, 2014
Notes
Note 3b - Impact of Recently Issued Accounting Standards	Note 3b - Impact of Recently Issued Accounting Standards
	Other than as disclosed in previous financial statements, 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.

Note_4_Loan_Receivable_and_Lea

Note 4 - Loan Receivable and Lease Obligation	3 Months Ended
	Oct. 31, 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 three months ended October 31, 2014 and 2013 (Q1 ’15 and ’14) totalling $0 and $2,402, respectively, for services performed by the VIE. In this regard there was no balance owing to the VIE at October 31, 2014 (end of Q1 ‘15) and July 31, 2014 (YE ’14). 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 October 31, 2014 (end of Q1 ’15) and July 31, 2014 (YE ’14) are $0, net of allowances.
	Total rent expense for the three months ended October 31, 2014 and 2013 (Q1 ’15 and ’14), was $8,100 and $8,700, respectively. The future rent obligations under this lease will require approximately $15,000 for the remaining five months until the lease ends. 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, during the last six months of the year ended July 31, 2014, and the three months ended October 31, 2014 (Q1 ’15), the Company paid the VIE’s landlord (the landowner) and the VIE’s utilities providers directly for portions of the back rent and back utilities owed by the VIE, in amounts totaling approximately $33,300 and $10,900, respectively. For the three months ended October 31, 2014 (Q1 ’15) the Company therefore booked $8,100 rent as paid in cash, with the surplus amount of $2,800 being applied against interest income.

Note_5_Nonderivative_Warrants

Note 5 - Non-derivative Warrants	3 Months Ended
	Oct. 31, 2014
Notes
Note 5 - Non-derivative Warrants	Note 5 – Non-Derivative Warrants
	In the years ended July 31, 2014 and 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 $1,069,816 of expense, respectively, associated with these warrants at the time of issuance.
	The following is a reconciliation of the number and weighted-average exercise prices for the warrants with non-derivative features:
		Warrants
				Weighted Average Exercise Price ($)
		Number of Shares
		15,907,500		0.47
	Outstanding, July 31, 2014
	Exercised in three months ended October 31, 2014	-242,500		0.44
	Outstanding, October 31, 2014 (end of Q1 ‘15)	15,665,000		0.5
	The following summarizes information about warrants with non-derivative features outstanding as of October 31, 2014 (end of Q1 ‘15):
	Exercise Price	Number of Warrants	Remaining Life
	$0.60	2,381,000	0.29 Years
	$0.40	2,562,500	0.62 Years
	$0.50	8,805,000	0.62 Years
	$0.50	1,916,500	0.79 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:
		Year Ended July 31, 2014	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_6_Stock_Options

Note 6 - Stock Options	3 Months Ended
	Oct. 31, 2014
Notes
Note 6 - Stock Options	Note 6 – Stock Options
	In the three months ended October 31, 2014 (Q1 ’15), the Company issued non-statutory stock options to independent contractors and consultants as well as to employees. Options have been granted to purchase a total of 4,800,000 shares at $0.30 per Share. The Board of the Company has authorized the Chairman, President and CEO to issue a cumulative aggregate quantity of up to 15% (as of October 31, 2014, 5,102,775 shares) of the issued and outstanding common stock total at the time of any grant. 302,775 shares of the authorized total are as yet not granted. No options had previously been granted. The terms, prices, and quantities of any future grants are to be determined.
		Optionee’s Relationship to the Registrant Company	Number of Shares Pursuant to Which Option is Granted
		President, Chairman and CEO	1,000,000
		General Manager of Operations	400,000
		Subtotal, Executive Officers (as defined in Rule 501(f) of Reg D)	1,400,000
		Director	300,000
		Director	300,000
		Consultants and/or independent contractors	2,800,000
		Subtotal, Non- Executive Officers	3,400,000
		Total	4,800,000
	These stock options vest immediately upon grant date and have exercise periods of two, three, or five years. The exercise price is fixed at $0.30 per share. The Company recorded $678,303 of expense associated with these stock options at the time of issuance. The following summarizes information about stock options outstanding as of October 31, 2014 (end of Q1 ‘15):
	Exercise Price	Grant Date Fair Value	Number of Options	Remaining Life
	$0.30	$0.17	3,250,000	4.92 Years
	$0.30	$0.10	670,000	2.92 Years
	$0.30	$0.06	880,000	1.92 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:
		2 year term	3 year term	5 year term
	Expected life (in years)	1	1.5	2.5
	Expected dividend yield (%)	0	0	0
	Expected volatility (%)	52.8	69.5	98.7
	Risk free interest rate (%)	0.13	0.58	1.07

Note_7_Convertible_Notes

Note 7 - Convertible Notes	3 Months Ended
	Oct. 31, 2014
Notes
Note 7 - Convertible Notes	Note 7 - Convertible Notes
	In the three months ended October 31, 2014 (Q1 ’15), the Board authorized the Company’s Chairman, President and CEO to enter the Company into various convertible notes for the purposes of (1) retiring existing debts and (2) taking on new debts for services rendered. The conversion basis is set at $0.30 per share, up to an aggregate total of 8,000,000 shares, hence a total potential value of $2,400,000. Such notes have been entered into with various parties for a total principal value convertible to 6,216,000 shares before accrual of interest (rounded up to the nearest 1,000 shares for each holder). Notes for the remaining authorized 1,784,000 shares have not been entered into. The notes do not specify any repayment term, have an interest rate of 8%, and do not involve any collateral; accordingly they are considered short term liabilities.
	In connection with the issuance of these convertible notes the Company recognized approximately $613,000 in non-cash expenses during the three months ended October 31, 2014 (Q1 ’15), related to management services, royalty and license fees, and various marketing, engineering and administrative services.
	Holder’s Relationship to Company	Nature of Services	Convertible Principal	Convertible Interest as at Oct. 31, 2014
	Chairman, President and CEO	Management services to Sep 30 ’14	$   328,960	$       2,193
	General Manager of Operations	Management services to Sep 30 ’14	72,251	482
		Subtotal, Executive Officers (as defined in Rule 501(f) of Securities Act Regulation D)	401,211	2,675
	Licensor of XYO Technology	Royalty and license fees accrued as at Sep 30 ’14 including accrued interest	997,826	6,652
	All others: consultants and/or independent contractors	Various marketing, engineering and administrative services	464,500	3,097
		Subtotal, Non-Executive Officers	1,462,326	9,749
		Total	$  1,863,537	$  12,424

Note_8_Reg_D_506c_Offering

Note 8 - Reg D 506(c) Offering	3 Months Ended
	Oct. 31, 2014
Notes
Note 8 - Reg D 506(c) Offering	Note 8 – Reg D 506(c) Offering
	In the three months ended October 31, 2014 (Q1 ’15), the Company began the pursuit of additional financing in the form of a private offering in accordance with Regulation D under the Securities Act and subject to the terms of an appropriate private placement memorandum. Said offering is for the sale of a maximum of 4,800,000 shares of the Company’s $0.001 par value common stock at a price per share of $0.75, for a maximum offering amount of $3,600,000. There is no minimum offering and no provision to return or escrow investor funds if any minimum number of shares is not sold. The minimum investment established per investor is $15,000, unless such minimum is waived in the Company’s sole discretion. This offering is restricted to Accredited Investors. No funds have been accepted in relation to said offering.

Note_9_Accrued_Expenses

Note 9 - Accrued Expenses	3 Months Ended
	Oct. 31, 2014
Notes
Note 9 - Accrued Expenses	Note 9 – Accrued Expenses
	Accrued expenses as of October 31, 2014 (end of Q1 ’15) and July 31, 2014 (YE ’14) consisted of the following:
		October 31, 2014 (end of Q1 ‘15)	July 31, 2014 (YE ‘14)
	Accrued license fees	$6,667	$287,873
	Accrued royalties	6,250	475,000
	Accrued interest	8,287	204,200
	Accrued management fees	-	151,000
	Accrued legal fees	125,000	125,000
	Accrued audit fees	79,066	87,067
		$225,270	$1,330,140

Note_10_Related_Party_Transact

Note 10 - Related Party Transactions and Commitments	3 Months Ended
	Oct. 31, 2014
Notes
Note 10 - Related Party Transactions and Commitments	Note 10 - 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 balance due him as of July 31, 2014 (YE ’14) for amounts deferred totalled and $151,000. These back management fees are unsecured, non-interest bearing and due upon demand. There was no formal deferred management fees agreement and therefore no set repayment date. The Company recorded this amounts as current in the accompanying July 31, 2014 (YE ’14) balance sheet.
		Period During Which Management Fees 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.
	During the period January 25, 2005 (Inception) through October 31, 2014 (end of Q1 ’15), the Company paid certain entities owned by members of management for management services rendered. The amounts for the three months ended October 31, 2014 and 2013 (Q1 ’15 and ’14) were approximately $138,000 and $39,000, respectively. The Company has not made payments against management fees that have been accruing in recent months, and thus as of October 31, 2014 and 2013 (Q1 ’15 and ’14), the Company owed these entities approximately $409,786 and $109,000, respectively, which is included in accounts payable and convertible notes payable in the accompanying balance sheets.
	As described in Note 7, on September 30, 2014, all amounts owing to the president and the president’s entity were combined into a convertible note in his personal name, and all amounts owing to the general manager of operations’ entity were combined into a convertible note in his personal name. As of October 31, 2014 (end of Q1 ’15), the Company had not paid the president's entity for approximately 12 months of management fees, approximately $182,000 (not including the $151,000 described above), and the Company had not paid the general manager of operations' entity for approximately 14 months of management fees, approximately $77,000.
	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 October 31, 2014 (end of Q1 ‘15) and July 31, 2014 (YE ‘14). Total services provided from this entity to the Company during the three months ended October 31, 2014 and 2013 (Q1 ’15 & ’14), were $600 and $0, respectively.
	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.
	As described in Note 7, on September 30, 2014, all amounts owing to this entity were combined into a convertible note. The above agreement continues with respect to license and royalty fees, and interest thereon, that accrue after the date of the convertible note (i.e. the accrued expense amounts in respective of the agreement that appear on the balance sheet at October 31, 2014 represent just one month’s worth of new accruals).
	In connection with the above agreement, the Company incurred royalties for the three months ended October 31, 2014 and 2013 (Q1 ’15 and ’14), amounting to $18,750 and $18,750, respectively. Included in accrued expenses as of October 31, 2014 (end of Q1 ‘15) and July 31, 2014 (YE ’14) are $6,250 and $475,000 relating to unpaid royalty fees.
	The Company also incurred license fees related to the above agreement, amounting to $20,000 and $17,500 in the three months ended October 31, 2014 and 2013 (Q1 ’15 & ’14), respectively. Included in accrued payables as of October 31, 2014 (end of Q1 ‘15) and July 31, 2014 (YE ‘14) are $6,667 and $287,873 relating to unpaid license fees.
	Included in accrued expenses as of October 31, 2014 (end of Q1 ‘15) and July 31, 2014 (YE ‘14) are $194 and $199,267 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
		2015 (remaining nine months)	$121,250
		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
			Three Months Ended October 31, 2014 (Q1 ’15)	Three Months Ended October 31, 2013 (Q1 ’14)
	Management and Other Expenses:
	Management services		$  138,449	$39,049
	Travel-related reimbursement		1,207	$451
	Multi-media marketing, advertising and website services		600	-
	Royalties and License Fees Pertaining to Exclusive Rights, excluding interest which appears under Other Income (Expense)
			38,750	36,250
	Variable Interest Entity outlined in Note 4:
	Marketing services		-	2,402
	Rent		8,145	8,678
	Total Related Party Expenses		$  187,151	$86,830

Note_11_Debenture_With_Nonaffi

Note 11 - Debenture With Non-affiliated Shareholder	3 Months Ended
	Oct. 31, 2014
Notes
Note 11 - Debenture With Non-affiliated Shareholder	Note 11 – 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 were to be applied first to payment of principal and secondly to payment of interest. No maturity date was specified. During the three months ended October 31, 2014 (Q1 ’15), this debenture was retired in full, with interest, via conversion of the $111,000 total to 370,000 shares of the Company at a fixed conversion rate of $0.30 per share. Accordingly, as of July 31, 2014, this amount has been classified on the balance sheet as a long term liability.

Note_12_Marketing_Engagements_

Note 12 - Marketing Engagements With Non-affiliated Shareholders	3 Months Ended
	Oct. 31, 2014
Notes
Note 12 - Marketing Engagements With Non-affiliated Shareholders	Note 12 – Marketing Engagements with Non-Affiliated Shareholders
	During the periods presented, the Company was provided publicity services from a non-affiliated entity that was paid partly via issuance of 30,000 shares of common stock in the Company at a value of $0.30 per share. The stock issuance was booked as stock services to be applied against monthly fees of $1,500 per month commencing October 1, 2014. There was $575 and $0 due to this entity at October 31, 2014 (end of Q1 ’15) and July 31, 2014 (YE ’14), respectively. Total services provided from this entity to the Company during the three months ended October 31, 2014 and 2013 (Q1 ’15 & ’14), were $5,575 and $0, respectively.
	During the periods presented, the Company entered into a twelve month non-exclusive public relations campaign agreement with a non-affiliated entity for a total value of $220,500 consisting of monthly cash payments of $2,500 and the issuance of 254,000 shares of common stock in the Company at a value of $0.75 per share. $10,500 of the stock issuance was applied toward initial setup fees, and the remainder was set up as stock services to be applied against monthly fees of $15,000 per month commencing November 1, 2014. There was no amount due to this entity at October 31, 2014 (end of Q1 ’15) and July 31, 2014 (YE ’14), respectively. Total services provided from this entity to the Company during the three months ended October 31, 2014 and 2013 (Q1 ’15 & ’14), were $10,500 and $0, respectively.

Note_13_Customer_Concentration

Note 13 - Customer Concentrations	3 Months Ended
	Oct. 31, 2014
Notes
Note 13 - Customer Concentrations	Note 13 - Customer Concentrations
	During the three months ended October 31, 2014 and 2013 (Q1 ’15 and ’14), zero and two customers, respectively, $0 and $119,000 (0% and 91% of total revenue). There were no amounts due from these customers at October 31, 2014 (end of Q1 ‘15) and July 31, 2014 (YE ‘14).

Note_14_Subsequent_Events

Note 14 - Subsequent Events	3 Months Ended
	Oct. 31, 2014
Notes
Note 14 - Subsequent Events	Note 14 – Subsequent Events
	Subsequent to October 31, 2014 (end of Q1 ’15), 202,500 shares have been issued via exercise of warrants at prices ranging from $0.40 to $0.50 per share.

Note_3a_Summary_of_Significant1

Note 3a - Summary of Significant Accounting Policies: Loss Per Share (Policies)	3 Months Ended
	Oct. 31, 2014
Policies
Loss Per Share	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 and options to purchase 20,465,000 and 16,509,500 shares of common stock for the three months ended October 31, 2014 and 2013 (Q1 ’15 and ’14), respectively, were not included in the computation of diluted weighted average common shares outstanding. Additionally, $1,875,961 of convertible debt and accrued interest can potentially convert into 6,253,203 shares of common stock as of October 31, 2014 (end of Q1 ‘15).

Note_5_Nonderivative_Warrants_

Note 5 - Non-derivative Warrants: Reconciliation Of Number And Weighted Average Exercise Prices NonDerivative Warrants (Tables)	3 Months Ended
	Oct. 31, 2014
Tables/Schedules
Reconciliation Of Number And Weighted Average Exercise Prices NonDerivative Warrants
		Warrants
			Weighted Average Exercise Price ($)
		Number of Shares
		15,907,500	0.47
	Outstanding, July 31, 2014
	Exercised in three months ended October 31, 2014	-242,500	0.44
	Outstanding, October 31, 2014 (end of Q1 ‘15)	15,665,000	0.5

Note_5_Nonderivative_Warrants_1

Note 5 - Non-derivative Warrants: Summary of Information Nonderivative Features (Tables)	3 Months Ended
	Oct. 31, 2014
Tables/Schedules
Summary of Information Nonderivative Features
	Exercise Price	Number of Warrants	Remaining Life
	$0.60	2,381,000	0.29 Years
	$0.40	2,562,500	0.62 Years
	$0.50	8,805,000	0.62 Years
	$0.50	1,916,500	0.79 Years

Note_5_Nonderivative_Warrants_2

Note 5 - Non-derivative Warrants: Schedule of Fair Value of Warrants (Tables)	3 Months Ended
	Oct. 31, 2014
Tables/Schedules
Schedule of Fair Value of Warrants
		Year Ended July 31, 2014	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_6_Stock_Options_Schedule_

Note 6 - Stock Options: Schedule of Optionee's Relationship to Company (Tables)	3 Months Ended
	Oct. 31, 2014
Tables/Schedules
Schedule of Optionee's Relationship to Company
		Optionee’s Relationship to the Registrant Company	Number of Shares Pursuant to Which Option is Granted
		President, Chairman and CEO	1,000,000
		General Manager of Operations	400,000
		Subtotal, Executive Officers (as defined in Rule 501(f) of Reg D)	1,400,000
		Director	300,000
		Director	300,000
		Consultants and/or independent contractors	2,800,000
		Subtotal, Non- Executive Officers	3,400,000
		Total	4,800,000

Note_6_Stock_Options_Summary_o

Note 6 - Stock Options: Summary of Information Nonderivative Features (Tables)	3 Months Ended
	Oct. 31, 2014
Tables/Schedules
Summary of Information Nonderivative Features
	Exercise Price	Grant Date Fair Value	Number of Options	Remaining Life
	$0.30	$0.17	3,250,000	4.92 Years
	$0.30	$0.10	670,000	2.92 Years
	$0.30	$0.06	880,000	1.92 Years

Note_6_Stock_Options_Fair_Valu

Note 6 - Stock Options: Fair Value Assumptions Nonderivative1 (Tables)	3 Months Ended
	Oct. 31, 2014
Tables/Schedules
Fair Value Assumptions Nonderivative1
		2 year term	3 year term	5 year term
	Expected life (in years)	1	1.5	2.5
	Expected dividend yield (%)	0	0	0
	Expected volatility (%)	52.8	69.5	98.7
	Risk free interest rate (%)	0.13	0.58	1.07

Note_7_Convertible_Notes_Conve

Note 7 - Convertible Notes: Convertible Debt (Tables)	3 Months Ended
	Oct. 31, 2014
Tables/Schedules
Convertible Debt
	Holder’s Relationship to Company	Nature of Services	Convertible Principal	Convertible Interest as at Oct. 31, 2014
	Chairman, President and CEO	Management services to Sep 30 ’14	$   328,960	$       2,193
	General Manager of Operations	Management services to Sep 30 ’14	72,251	482
		Subtotal, Executive Officers (as defined in Rule 501(f) of Securities Act Regulation D)	401,211	2,675
	Licensor of XYO Technology	Royalty and license fees accrued as at Sep 30 ’14 including accrued interest	997,826	6,652
	All others: consultants and/or independent contractors	Various marketing, engineering and administrative services	464,500	3,097
		Subtotal, Non-Executive Officers	1,462,326	9,749
		Total	$  1,863,537	$  12,424

Note_9_Accrued_Expenses_Schedu

Note 9 - Accrued Expenses: Schedule of Accrued Liabilities (Tables)	3 Months Ended
	Oct. 31, 2014
Tables/Schedules
Schedule of Accrued Liabilities
		October 31, 2014 (end of Q1 ‘15)	July 31, 2014 (YE ‘14)
	Accrued license fees	$6,667	$287,873
	Accrued royalties	6,250	475,000
	Accrued interest	8,287	204,200
	Accrued management fees	-	151,000
	Accrued legal fees	125,000	125,000
	Accrued audit fees	79,066	87,067
		$225,270	$1,330,140

Note_10_Related_Party_Transact1

Note 10 - Related Party Transactions and Commitments: Deferred Compensation Arrangements Schedule (Tables)	3 Months Ended
	Oct. 31, 2014
Tables/Schedules
Deferred Compensation Arrangements Schedule
		Period During Which Management Fees 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_10_Related_Party_Transact2

Note 10 - Related Party Transactions and Commitments: Schedule of Royalty and License Fees (Tables)	3 Months Ended
	Oct. 31, 2014
Tables/Schedules
Schedule of Royalty and License Fees
		Year ended July 31,	Amount
		2015 (remaining nine months)	$121,250
		2016	$120,000
		Annually thereafter until projected 2023 expiry	$  75,000

Note_10_Related_Party_Transact3

Note 10 - Related Party Transactions and Commitments: Schedule of Related Party Transactions (Tables)	3 Months Ended
	Oct. 31, 2014
Tables/Schedules
Schedule of Related Party Transactions
		Three Months Ended October 31, 2014 (Q1 ’15)	Three Months Ended October 31, 2013 (Q1 ’14)
	Management and Other Expenses:
	Management services	$  138,449	$39,049
	Travel-related reimbursement	1,207	$451
	Multi-media marketing, advertising and website services	600	-
	Royalties and License Fees Pertaining to Exclusive Rights, excluding interest which appears under Other Income (Expense)
		38,750	36,250
	Variable Interest Entity outlined in Note 4:
	Marketing services	-	2,402
	Rent	8,145	8,678
	Total Related Party Expenses	$  187,151	$86,830

Note_2_Going_Concern_Details

Note 2 - Going Concern (Details) (USD $)	3 Months Ended
	Oct. 31, 2014
Details
Net Cash Provided by (Used in) Continuing Operations	$132,634

Note_3a_Summary_of_Significant2

Note 3a - Summary of Significant Accounting Policies: Loss Per Share (Details) (USD $)	3 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Details
Common Stock Warrants to Purchase	20,465,000	16,509,500
Convertible Debt	$1,875,961
Convertible Debt, Shares	6,253,203

Note_4_Loan_Receivable_and_Lea1

Note 4 - Loan Receivable and Lease Obligation (Details) (USD $)	3 Months Ended		5 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Mar. 31, 2015
Rent Expense	$8,100	$8,700	$15,000
Rent Paid in Cash	8,100
Variable Interest Entity
Marketing Expense	$0	$2,402

Note_5_Nonderivative_Warrants_3

Note 5 - Non-derivative Warrants (Details) (USD $)	12 Months Ended
	Jul. 31, 2014	Jul. 31, 2013
Details
Non Derivative Warrants Issued	2,069,000	14,440,500
Warrant Expense	$184,408	$1,069,816

Note_5_Nonderivative_Warrants_4

Note 5 - Non-derivative Warrants: Reconciliation Of Number And Weighted Average Exercise Prices NonDerivative Warrants (Details) (Non-Derivative Warrants, USD $)	3 Months Ended	12 Months Ended
	Oct. 31, 2014	Jul. 31, 2014
Non-Derivative Warrants
Number Of Warrants Outstanding	15,665,000	15,907,500
Weighted Average Exercise Price Outstanding	$0.50	$0.47
Number Exercised In Year Ended	-242,500
Weighted Average Exercise Price Exercised In Year Ended	$0.44

Note_5_Nonderivative_Warrants_5

Note 5 - Non-derivative Warrants: Summary of Information Nonderivative Features (Details) (USD $)	Oct. 31, 2014
0.29 Years
Exercise Price Outstanding	$0.60
Number of Warrants Outstanding2	2,381,000
Remaining Contractual Term	0.29
0.62 Years
Exercise Price Outstanding	$0.40
Number of Warrants Outstanding2	2,562,500
Remaining Contractual Term	0.62
0.62 (2)Years
Exercise Price Outstanding	$0.50
Number of Warrants Outstanding2	8,805,000
Remaining Contractual Term	0.62
0.79 Years
Exercise Price Outstanding	$0.50
Number of Warrants Outstanding2	1,916,500
Remaining Contractual Term	0.79

Note_5_Nonderivative_Warrants_6

Note 5 - Non-derivative Warrants: Schedule of Fair Value of Warrants (Details) (2.00 Years)	12 Months Ended	15 Months Ended
	Jul. 31, 2013	Oct. 31, 2014
2.00 Years
Remaining Contractual Term	2	2
Fair Value Assumptions, Expected Dividend Rate	0.00%	0.00%
Fair Value Assumptions, Expected Volatility Rate	79.70%	81.30%
Fair Value Assumptions, Risk Free Interest Rate	0.33%	0.36%

Note_6_Stock_Options_Schedule_1

Note 6 - Stock Options: Schedule of Optionee's Relationship to Company (Details)	3 Months Ended
	Oct. 31, 2014
President Chairman and CEO
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures	1,000,000
General Manager of Operations
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures	400,000
Subtotal, Executive Officers
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures	1,400,000
Director1
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures	300,000
Director2
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures	300,000
Consultants/independent contractors
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures	2,800,000
Non-Executive Officers
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures	3,400,000
Total
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures	4,800,000

Note_6_Stock_Options_Summary_o1

Note 6 - Stock Options: Summary of Information Nonderivative Features (Details) (USD $)	Oct. 31, 2014
4.92 Years
Exercise Price Outstanding	$0.30
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value	$0.17
Number of Options Outstanding	3,250,000
Remaining Contractual Term	4.92
2.92 Years
Exercise Price Outstanding	$0.30
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value	$0.10
Number of Options Outstanding	670,000
Remaining Contractual Term	2.92
1.92 Years
Exercise Price Outstanding	$0.30
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value	$0.06
Number of Options Outstanding	880,000
Remaining Contractual Term	1.92

Note_6_Stock_Options_Fair_Valu1

Note 6 - Stock Options: Fair Value Assumptions Nonderivative1 (Details)	3 Months Ended
	Oct. 31, 2014
2 year term
Contractual Term Remaining	1
Fair Value Assumptions, Expected Dividend Rate	0.00%
Fair Value Assumptions, Expected Volatility Rate	52.80%
Fair Value Assumptions, Risk Free Interest Rate	0.13%
3 year term
Contractual Term Remaining	1.5
Fair Value Assumptions, Expected Dividend Rate	0.00%
Fair Value Assumptions, Expected Volatility Rate	69.50%
Fair Value Assumptions, Risk Free Interest Rate	0.58%
5 year term
Contractual Term Remaining	2.5
Fair Value Assumptions, Expected Dividend Rate	0.00%
Fair Value Assumptions, Expected Volatility Rate	98.70%
Fair Value Assumptions, Risk Free Interest Rate	1.07%

Note_7_Convertible_Notes_Detai

Note 7 - Convertible Notes (Details) (USD $)	3 Months Ended
	Oct. 31, 2014
Details
Debt Instrument, Convertible, Terms of Conversion Feature	In the three months ended October 31, 2014 (Q1 ’15), the Board authorized the Company’s Chairman, President and CEO to enter the Company into various convertible notes for the purposes of (1) retiring existing debts and (2) taking on new debts for services rendered. The conversion basis is set at $0.30 per share, up to an aggregate total of 8,000,000 shares, hence a total potential value of $2,400,000. Such notes have been entered into with various parties for a total principal value convertible to 6,216,000 shares before accrual of interest (rounded up to the nearest 1,000 shares for each holder). Notes for the remaining authorized 1,784,000 shares have not been entered into. The notes do not specify any repayment term, have an interest rate of 8%, and do not involve any collateral; accordingly they are considered short term liabilities.
Other Noncash Expense	$613,000

Note_7_Convertible_Notes_Conve1

Note 7 - Convertible Notes: Convertible Debt (Details) (Convertible Notes Payable, Payable, USD $)	Oct. 31, 2014
Chairman, President and CEO
Convertible Principal	$328,960
Convertible Interest	2,193
General Manager of Operations
Convertible Principal	72,251
Convertible Interest	482
Subtotal, Executive Officers
Convertible Principal	401,211
Convertible Interest	2,675
Licensor of XYO Technology
Convertible Principal	997,826
Convertible Interest	6,652
Marketing, Engineering and Administrative Services
Convertible Principal	464,500
Convertible Interest	3,097
Subtotal, Non-Executive Officers
Convertible Principal	1,462,326
Convertible Interest	9,749
Total
Convertible Principal	1,863,537
Convertible Interest	$12,424

Note_9_Accrued_Expenses_Schedu1

Note 9 - Accrued Expenses: Schedule of Accrued Liabilities (Details) (USD $)	Oct. 31, 2014	Jul. 31, 2014
Details
Accrued License Fees	$6,667	$287,873
Accrued Royalties, Current	6,250	475,000
Accrued Interest	8,287	204,200
Accrued Management Fees		151,000
Accrued Legal Fees	125,000	125,000
Accrued Audit Fees	79,066	87,067
Total Accrued Expenses	$225,270	$1,330,140

Note_10_Related_Party_Transact4

Note 10 - Related Party Transactions and Commitments (Details) (USD $)	3 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Jul. 31, 2014
Professional Contract Services Expense	$138,000	$39,000
Royalty Expense	18,750	18,750
AccruedRoyaltyExpense	6,250		475,000
License Expense	20,000	17,500
Accrued License Expense	6,667		287,873
Accrued Interest Expense	194		199,267
President2
Other Deferred Compensation Arrangements, Liability, Current			151,000
President
Accrued Salaries, Current	182,000
General Manager
Accrued Salaries, Current	77,000
Shareholder
Marketing and Advertising Expense	$600	$0

Note_10_Related_Party_Transact5

Note 10 - Related Party Transactions and Commitments: Schedule of Related Party Transactions (Details) (USD $)	3 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Details
Management Fees Expense	$138,449	$39,049
Airfare Reimbursement	1,207	451
Advertising Expense	600
Royalty and License Expense	38,750	36,250
Marketing Expense		2,402
Operating Leases, Rent Expense	8,145	8,678
Total Related Party Expenses	$187,151	$86,830

Note_11_Debenture_With_Nonaffi1

Note 11 - Debenture With Non-affiliated Shareholder (Details) (USD $)	3 Months Ended
	Oct. 31, 2014	Oct. 01, 2013
Details
Debt Instrument, Fair Value Disclosure		$100,000
Issuance of Stock to Retire Debt and Interest	$111,000
Issuance of Stock to Retire Debt and Interest, shares	370,000
Issuance of Stock to Retire Debt and Interest, price per share	$0.30

Note_12_Marketing_Engagements_1

Note 12 - Marketing Engagements With Non-affiliated Shareholders (Details) (USD $)	3 Months Ended
	Oct. 31, 2014
Publicity Services
Stock Issued During Period, Shares, Issued for Services	30,000
Stock Issued During Period, Price Per Share, Issued for Services	$0.30
Publicity Services Expense	$5,575
Public Relations Campaign
Stock Issued During Period, Shares, Issued for Services	254,000
Stock Issued During Period, Price Per Share, Issued for Services	$0.75
Public Relations Expense	$10,500

Note_13_Customer_Concentration1

Note 13 - Customer Concentrations (Details) (USD $)	3 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Details
Total Revenue	$0	$119,000