Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Apr. 30, 2016 | Jun. 13, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Gawk Inc. | |
Entity Central Index Key | 1,546,392 | |
Trading Symbol | gawk | |
Current Fiscal Year End Date | --01-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 357,651,221 | |
Document Type | 10-Q | |
Document Period End Date | Apr. 30, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Apr. 30, 2016 | Jan. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 95,669 | $ 64,944 |
Accounts receivable | 120,537 | 45,721 |
Marketable securities - available for sale | 96,000 | 78,300 |
Deposit - CipherLoc | 562,500 | 562,500 |
Prepaid and other current assets | 32,200 | 32,200 |
Total Current Assets | 906,906 | 783,665 |
Equipment, net of depreciation of $88,488 and $73,740 | 88,487 | 103,235 |
Intangible assets and proprietary technology, net of amortization $528,716 and $312,173 | 2,069,802 | 2,286,345 |
Goodwill | 4,076,505 | 4,076,505 |
TOTAL ASSETS | 7,141,700 | 7,249,750 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 813,030 | 717,469 |
Note payable | 85,000 | 85,000 |
Current portion of note payable -related party | 933,917 | 868,361 |
Current portion of convertible notes payable, net of discount $297,353 and $148,069 | 1,875,222 | 1,934,932 |
Investor payable - common shares | 658,000 | 658,000 |
Preferred shares payable | 13,438 | |
Contingent Consideration | 1,000,000 | 1,000,000 |
Due to related parties | 164,439 | 27,942 |
Derivative liabilities | 670,645 | 620,237 |
Total Current Liabilities | 6,200,253 | 5,925,379 |
Long-Term Liabilities | ||
Convertible note payable, net of discount $6,517 and $56,358 | 38,983 | 10,307 |
Note payable -related party | 222,222 | 388,889 |
TOTAL LIABILITIES | 6,461,458 | 6,324,575 |
Stockholders' Equity | ||
Common stock, $0.001 par value, 1,400,000,000 shares authorized; 342,254,092 and 261,863,258 issued and outstanding, respectively | 342,254 | 261,863 |
Additional paid in capital | 15,141,263 | 14,670,962 |
Accumulated deficit | (14,871,464) | (14,057,651) |
Total Stockholders' Equity | 680,242 | 925,175 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 7,141,700 | 7,249,750 |
Series A Preferred stock | ||
Stockholders' Equity | ||
Preferred stock, value | 1 | 1 |
Series B Preferred stock | ||
Stockholders' Equity | ||
Preferred stock, value | $ 68,188 | $ 50,000 |
Series C Preferred stock | ||
Stockholders' Equity | ||
Preferred stock, value |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) | Apr. 30, 2016 | Jan. 31, 2016 |
Accumulated depreciation on equipment (in dollars) | $ 88,488 | $ 73,740 |
Accumulated amortization on intangible assets (in dollars) | 528,716 | 312,173 |
Discount on convertible note payable (in dollars) | 297,353 | 148,069 |
Discount on convertible note payable, non current portion (in dollars) | $ 6,517 | $ 56,358 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,400,000,000 | 1,400,000,000 |
Common stock, shares issued | 342,254,092 | 261,863,258 |
Common stock, shares outstanding | 342,254,092 | 261,863,258 |
Series A Preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000 | 1,000 |
Preferred stock, shares issued | 1,000 | 1,000 |
Preferred stock, shares outstanding | 1,000 | 1,000 |
Series B Preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 95,000,000 | 95,000,000 |
Preferred stock, shares issued | 68,187,500 | 50,000,000 |
Preferred stock, shares outstanding | 68,187,500 | 50,000,000 |
Series C Preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100 | 100 |
Preferred stock, shares issued | 14 | 14 |
Preferred stock, shares outstanding | 14 | 14 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Apr. 30, 2016 | Apr. 30, 2015 | |
Consolidated Statements of Operations and Comprehensive Income (Loss) [Abstract] | ||
Revenue | $ 1,460,653 | $ 58,582 |
Cost of revenue | 1,055,033 | |
Gross profit | 405,620 | 58,582 |
Operating Expenses | ||
General and administration | 525,240 | 304,276 |
Depreciation and amortization | 231,291 | 51,497 |
Total operating expenses | 756,531 | 355,773 |
Net loss from operations | (350,911) | (297,191) |
Other income (expense) | ||
Other income | 5,608 | |
Interest expense, net | (431,320) | (134,147) |
Unrealized gain on marketable securities | 17,700 | 106,050 |
Change in fair value of derivative liabilities | (54,890) | |
Total other expense | (462,902) | (28,097) |
Net loss | $ (813,813) | $ (325,288) |
Basic and dilutive loss per common share (in dollars per share) | $ 0 | $ 0 |
Weighted average number of common shares outstanding (in shares) | 298,186,922 | 172,555,864 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Apr. 30, 2016 | Apr. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (813,813) | $ (325,288) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Common stock and warrants issued for services | 57,083 | |
Common stock issued for legal settlement | 54,000 | |
Amortization of debt discount and deferred financing fees | 271,349 | 89,550 |
Unrealized gain on marketable securities | (17,700) | (106,050) |
Depreciation and amortization | 231,291 | 51,497 |
Change in fair value of derivative liabilities | 54,890 | |
(Increase) decrease in operating assets: | ||
Accounts receivable | (74,816) | 5,053 |
Increase (decrease) in operating liabilities: | ||
Accounts payable and accrued liabilities | 112,355 | 44,599 |
Due to related parties | 136,497 | |
Net Cash Used In Operating Activities | $ (99,947) | $ (129,556) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Net Cash (Used in) Investing Activities | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from convertible notes, net of discounts and deferred financing fees | $ 245,116 | |
Payment of notes payable - related party, net | (101,111) | |
Payment of convertible notes payable | (33,333) | |
Proceeds from issuance of Series B Preferred stock | 20,000 | |
Net Cash Provided By Financing Activities | 130,672 | |
Net increase (decrease) in cash and cash equivalents | 30,725 | $ (129,556) |
Cash and cash equivalents, beginning of period | 64,944 | 255,455 |
Cash and cash equivalents, end of period | 95,669 | $ 125,899 |
Supplemental cash flow information | ||
Cash paid for interest | $ 100,834 | |
Cash paid for taxes | ||
Non-cash financing transactions: | ||
Series C Preferred shares issued to settle preferred share payable | $ 13,438 | |
Preferred shares payable for acquisition | $ 1,000,000 | |
Issuance of common stock for conversion of debt and accrued interest | 205,965 | |
Debt discount from derivative liability | 324,995 | |
Derivative resolution - conversion | 329,477 | |
Accrued interest added to principal | $ 1,159 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 3 Months Ended |
Apr. 30, 2016 | |
Description of Business [Abstract] | |
DESCRIPTION OF BUSINESS | NOTE 1 - DESCRIPTION OF BUSINESS Gawk Incorporated (“we”, “our”, the “Company”) was incorporated in the state of Nevada on January 6, 2011 with principal business address at 5300 Melrose Avenue, Suite 42, Los Angeles, CA. The Company offers a suite of cloud communications, cloud connectivity, cloud computing, and managed cloud-based applications solutions to small, medium, and large businesses; and offers domestic and international voice services to communications carriers worldwide. It offers a suite of advanced data center and cloud-based services, including fault tolerant, high availability cloud servers, which comprise platform as a service, infrastructure as a service, and a content delivery network; managed network services that converge voice and data applications, structured cabling, wireless, and security services, as well as include Internet access via Ethernet or fiber at speeds ranging from 10 Mbps to 10 Gbps; and data center solutions, including cloud services, colocation services, and business continuity services, such as storage and security. Our website is located at www.gawkinc.com |
BASIS OF PRESENTATION OF INTERI
BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS | 3 Months Ended |
Apr. 30, 2016 | |
Basis of Presentation of Interim Financial Statements [Abstract] | |
BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS | NOTE 2 - BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS Basis of Presentation of Interim Financial Statements The accompanying interim unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended April 30, 2016 are not necessarily indicative of the results that may be expected for the year ending January 31, 2017. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited consolidated financial statements for fiscal year 2016 have been omitted. This report should be read in conjunction with the audited consolidated financial statements and the footnotes thereto for the fiscal year ended January 31, 2016 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on May 24, 2016. Use of Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("GAAP") requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net revenues and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates. Revenue Recognition The Company pursues opportunities to realize revenues from consulting services. It is the company’s policy that revenues and gains will be recognized in accordance with ASC Topic 605-10-25, “Revenue Recognition.” Under ASC Topic 605-10-25, revenue earning activities are recognized when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. Our Business Services revenue includes monthly recurring charges (“MRC”) to customers, for whom charges are contracted over a specified period of time, and variable usage fees charged to customers that purchase our business products and services. Revenue recognition commences after the provisioning, testing and acceptance of the service by the customer. MRCs continue until the expiration of the contract, or until cancellation of the service by the customer. To the extent that payments received from a customer are related to a future period, the payment is recorded as deferred revenue until the service is provided or the usage occurs. Our Carrier Services revenue is primarily derived from usage fees charged to other carriers that terminate voice traffic over our network. Variable revenue is earned based on the length of a call, as measured by the number of minutes of duration. It is recognized upon completion of the call, and is adjusted to reflect the allowance for billing adjustments. Revenue for each customer is calculated from information received through our network switches. Our customized software tracks the information from the switches and analyzes the call detail records against stored detailed information about revenue rates. This software provides us with the ability to complete a timely and accurate analysis of revenue earned in a period. We believe that the nature of this process is such that recorded revenues are unlikely to be revised in future periods. Fair Value of Financial Instruments The Company's financial instruments consist primarily of cash, accounts receivable, accounts payable and accrued liabilities, and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. The Company adopted ASC Topic 820, Fair Value Measurements The three-level hierarchy for fair value measurements is defined as follows: · Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; liabilities in active markets; · Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active; · Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement The following table summarizes fair value measurements by level at April 30, 2016 and January 31, 2016 measured at fair value on a recurring basis: Carrying Value at April 30, 2016 April 30, 2016 Level 1 Level 2 Level 3 Total Marketable securities - available for sale 96,000 - - 96,000 Total assets 96,000 - - 96,000 Derivative liabilities - - 670,645 670,645 Total liabilities - - 670,645 670,645 Carrying Value at January 31, 2016 January 31, 2016 Level 1 Level 2 Level 3 Total Marketable securities - available for sale 78,300 - - 78,300 Total assets 78,300 - - 78,300 Derivative liabilities - - 620,237 620,237 Total liabilities - - 620,237 620,237 Recent Accounting Pronouncements No accounting standards or interpretations issued recently are expected to a have a material impact on the Company's financial position, operations or cash flows. |
GOING CONCERN
GOING CONCERN | 3 Months Ended |
Apr. 30, 2016 | |
Going Concern Issues [Abstract] | |
GOING CONCERN | NOTE 3 - GOING CONCERN The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has a net loss for the three months ended April 30, 2016 of $813,813, an accumulated deficit of $14,871,464, cash flows used in operating activities of $99,947 and needs additional cash to maintain its operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company's continued existence is dependent upon management's ability to develop profitable operations, continued contributions from the Company's executive officers to finance its operations and the ability to obtain additional funding sources to explore potential strategic relationships and to provide capital and other resources for the further development and marketing of the Company's products and business. |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Apr. 30, 2016 | |
Convertible Notes Payable and Notes Payable [Abstract] | |
NOTES PAYABLE | NOTE 4 - NOTES PAYABLE The Company had the following notes payable and notes payable – related party outstanding as of April 30, 2016 and January 31, 2016: Note Payable April 30, 2016 January, 31, 2016 Dated – October 30, 2014 $ 10,000 $ 10,000 Dated – June 3, 2015 25,000 25,000 Dated – December 11, 2015 50,000 50,000 Total notes payable 85,000 85,000 Less: current portion of notes payable (85,000 ) (85,000 ) Long-term notes payable $ - $ - Dated – October 30, 2014 On October 30, 2014 the Company exercised the comprehensive acquisition agreement of Webrunner, LLC (“Webrunner”) and in the acquisition the Company assumed the debt of RNC Media in the amount of $10,000. The Note does not have any interest payable and is due upon demand. Dated – June 3, 2015 and December 11, 2015 The two notes were issued to Mr. Doyle Knudson, are subject to annual interest of 15% and are convertible into a total of 863,000 common shares. The note issued on June 3, 2015 matured in December 2015 and is currently past due. Note Payable - related party April 30, 2016 January, 31, 2016 Dated – April 23, 2015 $ 267,250 $ 282,250 Dated - January 18, 2016 888,889 975,000 Total notes payable 1,156,139 1,257,250 Less: current portion of notes payable (933,917 ) (868,361 ) Long-term notes payable $ 222,222 $ 388,889 Dated – April 23, 2015 On May 1, 2015, in connection with the acquisition of the assets of Net D Consulting, Inc. (“Net D”), the Company issued a $350,000 note which bears no interest and matures on October 7, 2016. The Company made repayments on the note of $15,000 during the three months ended April 30, 2016. Dated – January 18, 2016 On January 18, 2016, in connection with the acquisition of Connexum, the Company issued a $1,000,000 note to Net D which bears annual interest of 18%. The Company is required to make monthly principal and interest payments of $63,806 for a period of 18 months through August 1, 2017. The Company paid principal and interest payments of $127,612 for the three months ended April 30, 2016. |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 3 Months Ended |
Apr. 30, 2016 | |
Convertible Notes Payable and Notes Payable [Abstract] | |
CONVERTIBLE NOTES PAYABLE | NOTE 5 - CONVERTIBLE NOTES PAYABLE The Company had the following convertible notes payable outstanding as of April 30, 2016 and January 31, 2016: April 30, 2016 January, 31, 2016 Dated – August 22, 2014 $ 1,700,000 $ 1,700,000 Dated – July 31, 2015 - 65,000 Dated - August 12, 2015 and December 15, 2015 - 66,666 Dated - August 18, 2015 - 38,000 Dated - September 29, 2015 - 27,500 Dated - October 7, 2015 - 26,500 Dated - October 26, 2015 29,659 28,500 Dated - November 6, 2015 34,000 34,000 Dated - November 18, 2015 50,000 50,000 Dated - December 29, 2015 35,000 35,000 Dated - January 4, 2016 40,000 40,000 Dated - January 20, 2016 38,500 38,500 Dated - February 9, 2016 43,171 - Dated - February 24, 2016 30,877 - Dated - March 2, 2016 57,000 - Dated - March 29, 2016 35,380 - Dated - April 4, 2016 – (two notes) 43,222 - Dated - April 21, 2016 28,500 - Dated - April 27, 2016 45,500 - Dated - April 27, 2016 7,266 - Total convertible notes payable 2,218,075 2,149,666 Less: debt discount and deferred financing fees (303,870 ) (204,427 ) 1,914,205 1,945,239 Less: current portion of convertible notes payable 1,875,222 1,934,932 Long-term convertible notes payable $ 38,983 $ 10,307 The Company recognized amortization expense related to the debt discount and deferred financing fees of $271,349 and $89,550 for the three months ended April 30, 2016 and 2015, respectively, which are included in interest expense in the consolidated statements of operations. Dated – August 22, 2014 In connection with the settlement agreement entered into with Doyle Knudson, an investor, in 2014, the Company issued a $1.8 million convertible promissory note with a conversion price of $0.10 per share. The note is subject to annual interest of 10%, matured in August 2015 and is currently past due. In May and December 2015, a total of $100,000 note principal was transferred to another lender. The Company recorded a discount on the convertible note due to a beneficial conversion feature of $358,200 and amortized $0 and $89,550 for the three months ended April 30, 2016 and 2015, respectively. Dated – Issued in fiscal year 2016 During the year ended January 31, 2016, the Company issued a total of $449,666 notes with the following terms: · Terms ranging from 9 months to 2 years · Annual interest rates ranging from 5% to 12% · Convertible at the option of the holders either at issuance or180 days from issuance. The note dated September 29, 2015 is convertible at the later of the maturity date or date of default. · Conversion prices are typically based on the discounted (50% to 60% discount) lowest trading prices of the Company’s shares during various periods prior to conversion. Certain notes allow for the conversion price to be the lower of $0.01 or the discounted trading price Certain notes allow the Company to redeem the notes at rates ranging from 118% to 148% depending on the redemption date provided that no redemption is allowed after the 180 th The Company determined that the conversion feature met the definition of a liability in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and therefore bifurcated the embedded conversion option once the note becomes convertible and accounted for it as a derivative liability. The fair value of the conversion feature was recorded as a debt discount and amortized to interest expense over the term of the note. The Company valued the conversion feature using the Black Scholes valuation model. The fair value of the derivative liability for all the notes that became convertible during the year amounted to $459,733. $209,000 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $250,733 was recognized as a “day 1” derivative loss. During the three months ended April 30, 2016, the Company repaid notes with principal amounts totaling to $33,333 and converted notes with principal amounts of $190,333 and accrued interest of $15,632 into 80,390,834 shares of common stock. The corresponding derivative liability at the date of conversion of $329,477 was credited to additional paid in capital. During the three months ended April 30, 2016, the Company assigned 7 notes with principal amounts totaling to $263,250 to one lender which resulted to the payment of prepayment penalties amounting to $84,995. Dated – Issued in fiscal year 2017 During the three months ended April 30, 2016, the Company issued a total of $290,917 notes with the following terms: · Terms ranging from 9 months to 20 months · Annual interest rates ranging from 8% to 12% · Convertible at the option of the holders either at issuance or 180 days from issuance. · Conversion prices are typically based on the discounted (50% discount) lowest trading prices of the Company’s shares during various periods prior to conversion. Certain notes allow for the conversion price to be a floor of $0.0005 per share. Certain notes allow the Company to redeem the notes at rates ranging from 125% to 150% depending on the redemption date provided that no redemption is allowed after the 180 th The Company determined that the conversion feature met the definition of a liability in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and therefore bifurcated the embedded conversion option once the note becomes convertible and accounted for it as a derivative liability. The fair value of the conversion feature was recorded as a debt discount and amortized to interest expense over the term of the note. The Company valued the conversion feature using the Black Scholes valuation model. The fair value of the derivative liability for all the notes that became convertible during the three months ended April 30, 2016 amounted to $586,215. $324,995 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $261,220 was recognized as a “day 1” derivative loss. |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 3 Months Ended |
Apr. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITIES | NOTE 6 - DERIVATIVE LIABILITIES The Company analyzed the conversion option for derivative accounting consideration under ASC 815, Derivatives and Hedging, and hedging, and determined that the instrument should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item. The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of April 30, 2016. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note is estimated using the Black-Scholes valuation model. The following weighted-average assumptions were used in the April 30, 2016 and January 31, 2016 valuations: Three Months Ended Year Ended April 30 ,2016 January 31, 2016 Expected term 0.23 - 1.50 years 0.4 - 2 years Expected average volatility 126% - 296 % 249% - 328 % Expected dividend yield - - Risk-free interest rate 0.00% - 0.58 % 0.05% - 0.83 % At April 30, 2016, the estimated fair values of the liabilities measured on a recurring basis are as follows: April 30, 2016 Level 1 Level 2 Level 3 Total Dated – August 22, 2014 $ - $ - $ 62,900 $ 62,900 Dated - October 26, 2015 - - 41,625 41,625 Dated - December 29, 2015 - - 67,660 67,660 Dated - January 20, 2016 - - 72,365 72,365 Dated - February 9, 2016 - - 68,974 68,974 Dated - February 24, 2016 - - 50,237 50,237 Dated - March 2, 2016 - - 93,983 93,983 Dated - March 29, 2016 - - 63,440 63,440 Dated - April 4, 2016 (two notes) - - 79,021 79,021 Dated - April 21, 2016 - - 38,821 38,821 Dated - April 27, 2016 - - 13,655 13,655 Warrants dated - November 9 - - 17,964 17,964 Total liabilities $ - $ - $ 670,645 $ 670,645 Fair Value Measurements Using Significant Observable Inputs (Level 3) Balance - January 31, 2016 $ 620,237 Addition of new derivatives recognized as debt discounts 324,995 Addition of new derivatives recognized as loss on derivatives 261,220 Derivatives settled upon conversion of debt (329,477 ) Loss on change in fair value of the derivative (206,330 ) Balance - April 30, 2016 $ 670,645 The net loss on derivatives during the three months ended April 30, 2016 and 2015 was $54,890 and $0, respectively. |
EQUITY
EQUITY | 3 Months Ended |
Apr. 30, 2016 | |
Equity [Abstract] | |
EQUITY | NOTE 7 - EQUITY Preferred Stock Series A Preferred Stock There were no issuances of the Series A Preferred Stock during the three months ended April 30, 2016 Series B Convertible Preferred Stock During the three months ended April 30, 2016, the Company issued Series B Preferred shares, as follows: · On December 21, 2015, the Company recorded preferred stock payable of $13,438 for 13,437,500 Series B Preferred shares related to the acquisition of the assets of Net D. During the three months ended April 30, 2016 the Company issued 13,437,500 Series B Preferred shares to settle this payable. · On February 3, 2016, 4,750,000 shares were sold for cash of $20,000. Series C Convertible Preferred Stock There were no issuances of the Series C Preferred Stock during the three months ended April 30, 2016. Common stock During the three months ended April 30, 2016, the Company issued common shares, as follows: · 80,390,834 common shares were issued for the conversion of debt and accrued interest of $205,965. Warrants and Options There were no warrants or options that were granted and none that expired or were forfeited during the three months ended April 30, 2016. The following table summarizes information relating to outstanding and exercisable stock options as of April 30, 2016: Options Outstanding Options Exercisable Number of Shares Weighted Average Remaining Contractual life (in years) Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price 9,100,000 3.50 $ 0.10 9,100,000 $ 0.10 27,000,000 0.59 $ 0.005 27,000,000 $ 0.005 36,100,000 1.32 0.03 36,100,000 0.03 The options have an intrinsic value at April 30, 2016 and January 31, 2016 of $0 and $59,400, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Apr. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 8 - RELATED PARTY TRANSACTIONS As of April 30, 2016 and January 31, 2016, the CEO had accrued salaries of $68,000 and $0, respectively. During the three months ended April 30, 2016 and 2015, the CEO advanced the Company cash of $200 and $0, respectively. As of April 30, 2016 and January 31, 2016, the amount owed to the CEO for advances was $200 and $0, respectively. As of April 30, 2016, the Company has outstanding notes payable to Net D totaling to $1,156,139 in connection with the Company’s acquisition of Connexum and certain assets of Net D. The sole owner of Net D is a director of the Company. Net D also performs certain services for the Company in connection with the latter’s Carrier Services business. During the period ended April 30, 2016, the Company incurred total fees in connection with such services of $33,822. As of April 30, 2016 and January 31, 2016, the Company owed related parties $164,439 and $27,942, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Apr. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 9 - COMMITMENTS AND CONTINGENCIES Licensing Agreement / Deposit On June 11, 2014 we entered into a license and subscription agreement with Cloud Medical Doctor Software Corporation formerly National Scientific Corporation (NSCT) which changed its name to Cipher Loc Corporation and ticker symbol to (CLOK) ("Cloud") for $1,125,000. The agreement grants to us a non-exclusive encryption license agreement which entitles us to utilize Cloud's encryption software solution within the Customer's business. We purchased a 48 months encryption licensing agreement to incorporate into our existing web based software. The licensing agreement will protect members of our platform from hackers and other privacy intrusion vehicles. CipherLoc has various features that will further protect our members and end users of our web developed platform. During the year ended January 31, 2016, the Company wrote off 50% of the deposit amounting to $562,500 to impairment expense. As of April 30, 2016, the software has not been delivered to the Company and the remaining amount of $562,500 continues to be reported as a deposit in the consolidated balance sheet. Contingency Connexum, LLC. On January 18, 2016, the Company entered into an acquisition agreement with Net D, whereby the Company acquired 100% of the membership interest of Connexum, LLC (“Connexum”). The agreement also provided for contingent consideration of 1 Series C Preferred share convertible into $1,000,000 common shares if Connexum achieves 80% of anticipated revenue and another 1 Series C Preferred share convertible into $1,000,000 common shares if Connexum achieves 100% of anticipated revenue within one year from the date of acquisition. The Company determined that Connexum will meet 80% of the anticipated revenue and has recognized the fair value of the contingent consideration of $1,000,000 both as of April 30, 2016 and January 31, 2016. Windstream Holdings, Inc. At the time of acquisition of Connexum, Windstream Holdings, Inc. ("Windstream"), a provider of voice and data network communications, and managed services, to businesses in the United States, claimed that Connexum owed them $600,000, which charges Connexum denies. In 2015, Connexum contracted with Windstream to purchase high cost long distance services. When receiving the initial invoices Connexum noticed the bill was not what was expected and issued a dispute for the incorrect charges and paid the non-disputed amount of just over $20,000. Then, without notice, Windstream turned off services. Shortly thereafter Windstream and Connexum disputed over high cost traffic. Windstream continued to bill Connexum for many months even after disconnecting its service, which ended up totaling nearly $580,000 of disputed fees. At the time of disconnection, there was approximately $20,000 in actual unpaid usage fees. It is unlikely that the Company would pay these fees. Windstream has not threatened litigation at this point and Connexum is actively working to settle the disputed amount. Tarpon Bay Partners LLC On May 26, 2016, Tarpon Bay Partners, LLC (“Tarpon Bay”) initiated action against the Company in New York State Supreme Court, case #652178/2016. Tarpon Bay has elected for summary judgment in lieu of complaint. Tarpon Bay is claiming, inter alia, that the Company owes $93,500 in unpaid notes and services. The claims stems from intended transactions the Company was to enter with Tarpon Bay. Tarpon Bay was to provide the Company with funding and certain services in exchange for promissory notes from the Company. The notes were executed by the Company, but Tarpon Bay provided no funding or services and is not entitled to repayment of any note given by the Company. The Company intends to vehemently defend the foregoing action. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 3 Months Ended |
Apr. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | NOTE 10 - SUBSEQUENT EVENT On May 25, 2016, the Company issued 15,397,129 shares of common stock for the conversion of debt and accrued interest of $27,715. |
BASIS OF PRESENTATION OF INTE16
BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS (Policies) | 3 Months Ended |
Apr. 30, 2016 | |
Basis of Presentation of Interim Financial Statements [Abstract] | |
Basis of Presentation of Interim Financial Statements | Basis of Presentation of Interim Financial Statements The accompanying interim unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended April 30, 2016 are not necessarily indicative of the results that may be expected for the year ending January 31, 2017. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited consolidated financial statements for fiscal year 2016 have been omitted. This report should be read in conjunction with the audited consolidated financial statements and the footnotes thereto for the fiscal year ended January 31, 2016 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on May 24, 2016. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("GAAP") requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net revenues and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates. |
Revenue Recognition | Revenue Recognition The Company pursues opportunities to realize revenues from consulting services. It is the company’s policy that revenues and gains will be recognized in accordance with ASC Topic 605-10-25, “Revenue Recognition.” Under ASC Topic 605-10-25, revenue earning activities are recognized when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. Our Business Services revenue includes monthly recurring charges (“MRC”) to customers, for whom charges are contracted over a specified period of time, and variable usage fees charged to customers that purchase our business products and services. Revenue recognition commences after the provisioning, testing and acceptance of the service by the customer. MRCs continue until the expiration of the contract, or until cancellation of the service by the customer. To the extent that payments received from a customer are related to a future period, the payment is recorded as deferred revenue until the service is provided or the usage occurs. Our Carrier Services revenue is primarily derived from usage fees charged to other carriers that terminate voice traffic over our network. Variable revenue is earned based on the length of a call, as measured by the number of minutes of duration. It is recognized upon completion of the call, and is adjusted to reflect the allowance for billing adjustments. Revenue for each customer is calculated from information received through our network switches. Our customized software tracks the information from the switches and analyzes the call detail records against stored detailed information about revenue rates. This software provides us with the ability to complete a timely and accurate analysis of revenue earned in a period. We believe that the nature of this process is such that recorded revenues are unlikely to be revised in future periods. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company's financial instruments consist primarily of cash, accounts receivable, accounts payable and accrued liabilities, and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. The Company adopted ASC Topic 820, Fair Value Measurements The three-level hierarchy for fair value measurements is defined as follows: · Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; liabilities in active markets; · Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active; · Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement The following table summarizes fair value measurements by level at April 30, 2016 and January 31, 2016 measured at fair value on a recurring basis: Carrying Value at April 30, 2016 April 30, 2016 Level 1 Level 2 Level 3 Total Marketable securities - available for sale 96,000 - - 96,000 Total assets 96,000 - - 96,000 Derivative liabilities - - 670,645 670,645 Total liabilities - - 670,645 670,645 Carrying Value at January 31, 2016 January 31, 2016 Level 1 Level 2 Level 3 Total Marketable securities - available for sale 78,300 - - 78,300 Total assets 78,300 - - 78,300 Derivative liabilities - - 620,237 620,237 Total liabilities - - 620,237 620,237 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements No accounting standards or interpretations issued recently are expected to a have a material impact on the Company's financial position, operations or cash flows. |
BASIS OF PRESENTATION OF INTE17
BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS (Tables) | 3 Months Ended |
Apr. 30, 2016 | |
Basis of Presentation of Interim Financial Statements [Abstract] | |
Schedule of summary of fair value measured on recurring basis | April 30, 2016 Level 1 Level 2 Level 3 Total Marketable securities - available for sale 96,000 - - 96,000 Total assets 96,000 - - 96,000 Derivative liabilities - - 670,645 670,645 Total liabilities - - 670,645 670,645 January 31, 2016 Level 1 Level 2 Level 3 Total Marketable securities - available for sale 78,300 - - 78,300 Total assets 78,300 - - 78,300 Derivative liabilities - - 620,237 620,237 Total liabilities - - 620,237 620,237 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Apr. 30, 2016 | |
Convertible Notes Payable and Notes Payable [Abstract] | |
Schedule of summary of notes payable | Note Payable April 30, 2016 January, 31, 2016 Dated – October 30, 2014 $ 10,000 $ 10,000 Dated – June 3, 2015 25,000 25,000 Dated – December 11, 2015 50,000 50,000 Total notes payable 85,000 85,000 Less: current portion of notes payable (85,000 ) (85,000 ) Long-term notes payable $ - $ - |
Schedule of note payable related party | Note Payable - related party April 30, 2016 January, 31, 2016 Dated – April 23, 2015 $ 267,250 $ 282,250 Dated - January 18, 2016 888,889 975,000 Total notes payable 1,156,139 1,257,250 Less: current portion of notes payable (933,917 ) (868,361 ) Long-term notes payable $ 222,222 $ 388,889 |
CONVERTIBLE NOTES PAYABLE (Tabl
CONVERTIBLE NOTES PAYABLE (Tables) | 3 Months Ended |
Apr. 30, 2016 | |
Convertible Notes Payable and Notes Payable [Abstract] | |
Schedule of convertible notes payable | April 30, 2016 January, 31, 2016 Dated – August 22, 2014 $ 1,700,000 $ 1,700,000 Dated – July 31, 2015 - 65,000 Dated - August 12, 2015 and December 15, 2015 - 66,666 Dated - August 18, 2015 - 38,000 Dated - September 29, 2015 - 27,500 Dated - October 7, 2015 - 26,500 Dated - October 26, 2015 29,659 28,500 Dated - November 6, 2015 34,000 34,000 Dated - November 18, 2015 50,000 50,000 Dated - December 29, 2015 35,000 35,000 Dated - January 4, 2016 40,000 40,000 Dated - January 20, 2016 38,500 38,500 Dated - February 9, 2016 43,171 - Dated - February 24, 2016 30,877 - Dated - March 2, 2016 57,000 - Dated - March 29, 2016 35,380 - Dated - April 4, 2016 – (two notes) 43,222 - Dated - April 21, 2016 28,500 - Dated - April 27, 2016 45,500 - Dated - April 27, 2016 7,266 - Total convertible notes payable 2,218,075 2,149,666 Less: debt discount and deferred financing fees (303,870 ) (204,427 ) 1,914,205 1,945,239 Less: current portion of convertible notes payable 1,875,222 1,934,932 Long-term convertible notes payable $ 38,983 $ 10,307 |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 3 Months Ended |
Apr. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of weighted-average assumptions used in Black-Scholes valuation model | Three Months Ended Year Ended April 30 ,2016 January 31, 2016 Expected term 0.23 - 1.50 years 0.4 - 2 years Expected average volatility 126% - 296 % 249% - 328 % Expected dividend yield - - Risk-free interest rate 0.00% - 0.58 % 0.05% - 0.83 % |
Schedule of estimated fair values of liabilities measured on a recurring basis | April 30, 2016 Level 1 Level 2 Level 3 Total Dated – August 22, 2014 $ - $ - $ 62,900 $ 62,900 Dated - October 26, 2015 - - 41,625 41,625 Dated - December 29, 2015 - - 67,660 67,660 Dated - January 20, 2016 - - 72,365 72,365 Dated - February 9, 2016 - - 68,974 68,974 Dated - February 24, 2016 - - 50,237 50,237 Dated - March 2, 2016 - - 93,983 93,983 Dated - March 29, 2016 - - 63,440 63,440 Dated - April 4, 2016 (two notes) - - 79,021 79,021 Dated - April 21, 2016 - - 38,821 38,821 Dated - April 27, 2016 - - 13,655 13,655 Warrants dated - November 9 - - 17,964 17,964 Total liabilities $ - $ - $ 670,645 $ 670,645 |
Schedule of changes in derivative liabilities | Fair Value Measurements Using Significant Observable Inputs (Level 3) Balance - January 31, 2016 $ 620,237 Addition of new derivatives recognized as debt discounts 324,995 Addition of new derivatives recognized as loss on derivatives 261,220 Derivatives settled upon conversion of debt (329,477 ) Loss on change in fair value of the derivative (206,330 ) Balance - April 30, 2016 $ 670,645 |
EQUITY (Tables)
EQUITY (Tables) | 3 Months Ended |
Apr. 30, 2016 | |
Equity [Abstract] | |
Schedule of outstanding and exercisable stock options activity | Options Outstanding Options Exercisable Number of Shares Weighted Average Remaining Contractual life (in years) Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price 9,100,000 3.50 $ 0.10 9,100,000 $ 0.10 27,000,000 0.59 $ 0.005 27,000,000 $ 0.005 36,100,000 1.32 0.03 36,100,000 0.03 |
BASIS OF PRESENTATION OF INTE22
BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS (Details) - USD ($) | Apr. 30, 2016 | Jan. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities - available for sale | $ 96,000 | $ 78,300 |
Total assets | 96,000 | 78,300 |
Derivative liabilities | 670,645 | 620,237 |
Total liabilities | 670,645 | 620,237 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities - available for sale | 96,000 | 78,300 |
Total assets | $ 96,000 | $ 78,300 |
Derivative liabilities | ||
Total liabilities | ||
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities - available for sale | ||
Total assets | ||
Derivative liabilities | ||
Total liabilities | ||
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities - available for sale | ||
Total assets | ||
Derivative liabilities | $ 670,645 | $ 620,237 |
Total liabilities | $ 670,645 | $ 620,237 |
GOING CONCERN (Detail Textuals)
GOING CONCERN (Detail Textuals) - USD ($) | 3 Months Ended | ||
Apr. 30, 2016 | Apr. 30, 2015 | Jan. 31, 2016 | |
Going Concern Issues [Abstract] | |||
Net loss | $ (813,813) | $ (325,288) | |
Accumulated deficit | (14,871,464) | $ (14,057,651) | |
Net cash used in operating activities | $ 99,947 | $ 129,556 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Apr. 30, 2016 | Jan. 31, 2016 |
Short-term Debt [Line Items] | ||
Total notes payable | $ 85,000 | $ 85,000 |
Less: current portion of notes payable | $ 85,000 | $ 85,000 |
Long-term notes payable | ||
Dated - October 30, 2014 | ||
Short-term Debt [Line Items] | ||
Total notes payable | $ 10,000 | $ 10,000 |
Dated - June 3, 2015 | ||
Short-term Debt [Line Items] | ||
Total notes payable | 25,000 | 25,000 |
Dated - December 11, 2015 | ||
Short-term Debt [Line Items] | ||
Total notes payable | $ 50,000 | $ 50,000 |
NOTES PAYABLE (Details 1)
NOTES PAYABLE (Details 1) - USD ($) | Apr. 30, 2016 | Jan. 31, 2016 |
Short-term Debt [Line Items] | ||
Total notes payable | $ 85,000 | $ 85,000 |
Less: current portion of notes payable | $ 85,000 | $ 85,000 |
Long-term notes payable | ||
Note Payable related party | ||
Short-term Debt [Line Items] | ||
Total notes payable | $ 1,156,139 | $ 1,257,250 |
Less: current portion of notes payable | (933,917) | (868,361) |
Long-term notes payable | 222,222 | 388,889 |
Dated - April 23, 2015 | Note Payable related party | ||
Short-term Debt [Line Items] | ||
Total notes payable | 267,250 | 282,250 |
Dated - January 18, 2016 | Note Payable related party | ||
Short-term Debt [Line Items] | ||
Total notes payable | $ 888,889 | $ 975,000 |
NOTES PAYABLE (Details Textuals
NOTES PAYABLE (Details Textuals) | Feb. 03, 2016shares | Jan. 18, 2016USD ($) | Apr. 30, 2016USD ($)Notesshares | Jan. 31, 2016USD ($) | May 01, 2015USD ($) |
Short-term Debt [Line Items] | |||||
Note payable | $ 85,000 | $ 85,000 | |||
Number of convertible common shares | shares | 80,390,834 | ||||
Dated - October 30, 2014 | |||||
Short-term Debt [Line Items] | |||||
Note payable | $ 10,000 | $ 10,000 | |||
Mr. Knudson | Dated - June 3, 2015 and December 11, 2015 | |||||
Short-term Debt [Line Items] | |||||
Interest rate per annum | 15.00% | ||||
Number of convertible common shares | shares | 863,000 | ||||
Number of notes payable | Notes | 2 | ||||
Net D | Asset purchase and sale agreement | |||||
Short-term Debt [Line Items] | |||||
Note payable | $ 350,000 | ||||
Amount payable in cash of asset purchase and sale agreement | $ 15,000 | ||||
Net D | Purchase Of Connexum | |||||
Short-term Debt [Line Items] | |||||
Principal amount of note agreement | $ 1,000,000 | ||||
Interest rate per annum | 18.00% | ||||
Principal and interest payment | $ 63,806 | $ 127,612 |
CONVERTIBLE NOTES PAYABLE (Deta
CONVERTIBLE NOTES PAYABLE (Details) - USD ($) | Apr. 30, 2016 | Jan. 31, 2016 |
Short-term Debt [Line Items] | ||
Total convertible notes payable | $ 2,218,075 | $ 2,149,666 |
Less: debt discount and deferred financing fees | (303,870) | (204,427) |
Long-term notes payable | 1,914,205 | 1,945,239 |
Less: current portion of convertible notes payable | 1,875,222 | 1,934,932 |
Long-term convertible notes payable | 38,983 | 10,307 |
Dated - August 22, 2014 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | $ 1,700,000 | 1,700,000 |
Dated - July 31, 2015 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | 65,000 | |
Dated - August 12, 2015 and December 15, 2015 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | 66,666 | |
Dated - August 18, 2015 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | 38,000 | |
Dated - September 29, 2015 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | 27,500 | |
Dated - October 7, 2015 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | 26,500 | |
Dated - October 26, 2015 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | $ 29,659 | 28,500 |
Dated - November 6, 2015 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | 34,000 | 34,000 |
Dated - November 18, 2015 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | 50,000 | 50,000 |
Dated - December 29, 2015 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | 35,000 | 35,000 |
Dated - January 4, 2016 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | 40,000 | 40,000 |
Dated - January 20, 2016 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | 38,500 | $ 38,500 |
Dated - February 9, 2016 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | 43,171 | |
Dated - February 24, 2016 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | 30,877 | |
Dated - March 2, 2016 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | 57,000 | |
Dated - March 29, 2016 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | 35,380 | |
Dated - April 4, 2016 - (two notes) | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | 43,222 | |
Dated - April 21, 2016 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | 28,500 | |
Dated - April 27, 2016 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | 45,500 | |
Dated - April 27, 2016 | ||
Short-term Debt [Line Items] | ||
Total convertible notes payable | $ 7,266 |
CONVERTIBLE NOTES PAYABLE (De28
CONVERTIBLE NOTES PAYABLE (Detail Textuals) - USD ($) | Feb. 03, 2016 | Apr. 30, 2016 | Apr. 30, 2015 | Jan. 31, 2016 | Dec. 31, 2015 | Aug. 22, 2014 |
Short-term Debt [Line Items] | ||||||
Amortization of debt discount and deferred financing fees | $ 271,349 | $ 89,550 | ||||
Number of common shares issued under debt conversion | 80,390,834 | |||||
Derivative liability | 670,645 | $ 620,237 | ||||
Convertible Promissory Note | ||||||
Short-term Debt [Line Items] | ||||||
Convertible notes payable | 263,250 | |||||
Dated - August 22, 2014 | Mr. Knudson | Convertible Promissory Note | ||||||
Short-term Debt [Line Items] | ||||||
Amortization of debt discount and deferred financing fees | 0 | $ 89,550 | ||||
Convertible notes payable | $ 1,800,000 | |||||
Conversion price | $ 0.10 | |||||
Interest rate per annum | 10.00% | |||||
Beneficial conversion feature | $ 358,200 | |||||
Dated - May and December 2015 | Convertible Promissory Note | ||||||
Short-term Debt [Line Items] | ||||||
Convertible notes payable | $ 100,000 |
CONVERTIBLE NOTES PAYABLE (De29
CONVERTIBLE NOTES PAYABLE (Detail Textuals 1) | Feb. 03, 2016shares | Apr. 30, 2016USD ($)Notes$ / sharesshares | Jan. 31, 2016USD ($)$ / shares |
Short-term Debt [Line Items] | |||
Derivative liabilities | $ 670,645 | $ 620,237 | |
Debt discount on convertible debenture | 297,353 | 148,069 | |
Payment of convertible notes payable | 33,333 | ||
Number of common shares issued under debt conversion | shares | 80,390,834 | ||
Derivative resolution - conversion | 329,477 | ||
Convertible Promissory Note | |||
Short-term Debt [Line Items] | |||
Convertible notes payable | $ 263,250 | ||
Number of convertible notes issued to an unrelated party | Notes | 7 | ||
Penalty for prepayment of convertible notes | $ 84,995 | ||
Issued In Fiscal Year 2016 | Convertible Promissory Note | |||
Short-term Debt [Line Items] | |||
Convertible notes payable | 190,333 | $ 449,666 | |
Convertible notes payable, term | 9 months to 2 years | ||
Derivative liabilities | $ 459,733 | ||
Derivative loss | 250,733 | ||
Debt discount on convertible debenture | 209,000 | ||
Amount of original issuance discount | 24,166 | ||
Deferred financing costs | $ 55,142 | ||
Payment of convertible notes payable | 33,333 | ||
Accrued interest | $ 15,632 | ||
Number of common shares issued under debt conversion | shares | 80,390,834 | ||
Issued In Fiscal Year 2016 | Convertible Promissory Note | Minimum | |||
Short-term Debt [Line Items] | |||
Interest rate per annum | 5.00% | ||
Convertible notes payable redemption percentage | 118.00% | ||
Discounted conversion price | 50.00% | ||
Conversion price | $ / shares | $ 0.01 | ||
Issued In Fiscal Year 2016 | Convertible Promissory Note | Maximum | |||
Short-term Debt [Line Items] | |||
Interest rate per annum | 12.00% | ||
Convertible notes payable redemption percentage | 148.00% | ||
Discounted conversion price | 60.00% | ||
Issued In Fiscal Year 2017 | Convertible Promissory Note | |||
Short-term Debt [Line Items] | |||
Convertible notes payable | $ 290,917 | ||
Convertible notes payable, term | 9 months to 20 months | ||
Derivative liabilities | $ 586,215 | ||
Derivative loss | 261,220 | ||
Debt discount on convertible debenture | 324,995 | ||
Amount of original issuance discount | 26,050 | ||
Deferred financing costs | $ 19,750 | ||
Discounted conversion price | 50.00% | ||
Conversion price | $ / shares | $ 0.0005 | ||
Issued In Fiscal Year 2017 | Convertible Promissory Note | Minimum | |||
Short-term Debt [Line Items] | |||
Interest rate per annum | 8.00% | ||
Convertible notes payable redemption percentage | 125.00% | ||
Issued In Fiscal Year 2017 | Convertible Promissory Note | Maximum | |||
Short-term Debt [Line Items] | |||
Interest rate per annum | 12.00% | ||
Convertible notes payable redemption percentage | 150.00% |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details) | 3 Months Ended | 12 Months Ended |
Apr. 30, 2016 | Jan. 31, 2016 | |
Derivative [Line Items] | ||
Expected dividend yield | ||
Minimum | ||
Derivative [Line Items] | ||
Expected term | 2 months 23 days | 4 months 24 days |
Expected average volatility | 126.00% | 249.00% |
Risk-free interest rate | 0.00% | 0.05% |
Maximum | ||
Derivative [Line Items] | ||
Expected term | 1 year 6 months | 2 years |
Expected average volatility | 296.00% | 328.00% |
Risk-free interest rate | 0.58% | 0.83% |
DERIVATIVE LIABILITIES (Detai31
DERIVATIVE LIABILITIES (Details 1) - USD ($) | Apr. 30, 2016 | Jan. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ 670,645 | $ 620,237 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ 670,645 | $ 620,237 |
Recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 670,645 | |
Recurring basis | Dated - August 22, 2014 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 62,900 | |
Recurring basis | Dated - October 26, 2015 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 41,625 | |
Recurring basis | Dated - December 29, 2015 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 67,660 | |
Recurring basis | Dated - January 20, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 72,365 | |
Recurring basis | Dated - February 9, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 68,974 | |
Recurring basis | Dated - February 24, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 50,237 | |
Recurring basis | Dated - March 2, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 93,983 | |
Recurring basis | Dated - March 29, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 63,440 | |
Recurring basis | Dated - April 4, 2016 - (two notes) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 79,021 | |
Recurring basis | Dated - April 21, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 38,821 | |
Recurring basis | Dated - April 27, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 13,655 | |
Recurring basis | Warrants dated - November 9 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ 17,964 | |
Recurring basis | Level 1 | Dated - August 22, 2014 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 1 | Dated - October 26, 2015 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 1 | Dated - December 29, 2015 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 1 | Dated - January 20, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 1 | Dated - February 9, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 1 | Dated - February 24, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 1 | Dated - March 2, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 1 | Dated - March 29, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 1 | Dated - April 4, 2016 - (two notes) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 1 | Dated - April 21, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 1 | Dated - April 27, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 1 | Warrants dated - November 9 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 2 | Dated - August 22, 2014 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 2 | Dated - October 26, 2015 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 2 | Dated - December 29, 2015 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 2 | Dated - January 20, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 2 | Dated - February 9, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 2 | Dated - February 24, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 2 | Dated - March 2, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 2 | Dated - March 29, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 2 | Dated - April 4, 2016 - (two notes) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 2 | Dated - April 21, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 2 | Dated - April 27, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 2 | Warrants dated - November 9 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Recurring basis | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ 670,645 | |
Recurring basis | Level 3 | Dated - August 22, 2014 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 62,900 | |
Recurring basis | Level 3 | Dated - October 26, 2015 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 41,625 | |
Recurring basis | Level 3 | Dated - December 29, 2015 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 67,660 | |
Recurring basis | Level 3 | Dated - January 20, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 72,365 | |
Recurring basis | Level 3 | Dated - February 9, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 68,974 | |
Recurring basis | Level 3 | Dated - February 24, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 50,237 | |
Recurring basis | Level 3 | Dated - March 2, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 93,983 | |
Recurring basis | Level 3 | Dated - March 29, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 63,440 | |
Recurring basis | Level 3 | Dated - April 4, 2016 - (two notes) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 79,021 | |
Recurring basis | Level 3 | Dated - April 21, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 38,821 | |
Recurring basis | Level 3 | Dated - April 27, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 13,655 | |
Recurring basis | Level 3 | Warrants dated - November 9 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ 17,964 |
DERIVATIVE LIABILITIES (Detai32
DERIVATIVE LIABILITIES (Details 2) | 3 Months Ended |
Apr. 30, 2016USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance - January 31, 2016 | $ 620,237 |
Addition of new derivatives recognized as debt discounts | 324,995 |
Addition of new derivatives recognized as loss on derivatives | 261,220 |
Derivatives settled upon conversion of debt | (329,477) |
Loss on change in fair value of the derivative | (206,330) |
Balance - April 30, 2016 | $ 670,645 |
DERIVATIVE LIABILITIES (Detail
DERIVATIVE LIABILITIES (Detail Textuals) | 3 Months Ended |
Apr. 30, 2016USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Net loss on derivatives | $ 54,890 |
EQUITY (Details)
EQUITY (Details) | 3 Months Ended |
Apr. 30, 2016$ / sharesshares | |
0.10 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options Outstanding, Number of Shares | shares | 9,100,000 |
Options Outstanding, Weighted Average Remaining Contractual life (in years) | 3 years 6 months |
Options Outstanding, Weighted Average Exercise Price | $ / shares | $ 0.10 |
Options Exercisable, Number of Shares | shares | 9,100,000 |
Options Exercisable, Weighted Average Exercise Price | $ / shares | $ 0.10 |
0.005 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options Outstanding, Number of Shares | shares | 27,000,000 |
Options Outstanding, Weighted Average Remaining Contractual life (in years) | 7 months 2 days |
Options Outstanding, Weighted Average Exercise Price | $ / shares | $ 0.005 |
Options Exercisable, Number of Shares | shares | 27,000,000 |
Options Exercisable, Weighted Average Exercise Price | $ / shares | $ 0.005 |
0.03 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options Outstanding, Number of Shares | shares | 36,100,000 |
Options Outstanding, Weighted Average Remaining Contractual life (in years) | 1 year 3 months 26 days |
Options Outstanding, Weighted Average Exercise Price | $ / shares | $ 0.03 |
Options Exercisable, Number of Shares | shares | 36,100,000 |
Options Exercisable, Weighted Average Exercise Price | $ / shares | $ 0.03 |
EQUITY (Detail Textuals)
EQUITY (Detail Textuals) - USD ($) | Feb. 03, 2016 | Dec. 21, 2015 | Apr. 30, 2016 | Jan. 31, 2016 |
Equity [Line Items] | ||||
Number of convertible common shares | 80,390,834 | |||
Accrued interest of convertible debt | $ 205,965 | |||
Intrinsic value of options | $ 0 | $ 59,400 | ||
Series B Preferred stock | ||||
Equity [Line Items] | ||||
Preferred stock payable | $ 13,438 | |||
Number of common shares issued as purchase consideration | 13,437,500 | 13,437,500 | ||
Stock issued, amount | $ 20,000 | |||
Number of convertible common shares | 4,750,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Detail Textuals) - USD ($) | 3 Months Ended | ||
Apr. 30, 2016 | Apr. 30, 2015 | Jan. 31, 2016 | |
Related Party Transaction [Line Items] | |||
Note payable | $ 85,000 | $ 85,000 | |
Due to related parties | 164,439 | 27,942 | |
Net D | Connexum Llc | |||
Related Party Transaction [Line Items] | |||
Note payable | 1,156,139 | ||
Total fees for services | 33,822 | ||
Chief Executive Officer | |||
Related Party Transaction [Line Items] | |||
Accrued salaries | 68,000 | 0 | |
Advance fund from CEO | 200 | $ 0 | |
Advance amount owed to CEO | $ 200 | $ 0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Detail Textuals) - Licensing Agreements - Software - USD ($) | Jun. 11, 2014 | Jan. 31, 2016 | Apr. 30, 2016 |
Commitments And Contingencies [Line Items] | |||
Cost of agreement | $ 1,125,000 | ||
Term of agreement | 48 months | ||
Written down value of software | 50.00% | ||
Impairment of intangible assets finitelived | $ 562,500 | ||
Security Deposit | $ 562,500 |
COMMITMENTS AND CONTINGENCIES38
COMMITMENTS AND CONTINGENCIES (Detail Textuals 1) - shares | 3 Months Ended | ||
Apr. 30, 2016 | Jan. 31, 2016 | Jan. 18, 2016 | |
Series C Preferred stock | |||
Commitments And Contingencies [Line Items] | |||
Share issued after conversion | 1,000,000 | 1,000,000 | |
Series C Preferred stock | 80% of anticipated revenue | |||
Commitments And Contingencies [Line Items] | |||
Share issued after conversion | 1,000,000 | ||
Series C Preferred stock | 100% of anticipated revenue | |||
Commitments And Contingencies [Line Items] | |||
Share issued after conversion | 1,000,000 | ||
Connexum Llc | |||
Commitments And Contingencies [Line Items] | |||
Membership interest | 100.00% | ||
Percentage of anticipated revenues achieved | 80.00% |
COMMITMENTS AND CONTINGENCIES39
COMMITMENTS AND CONTINGENCIES (Detail Textuals 2) - USD ($) | Jan. 15, 2015 | May 26, 2016 |
Commitments And Contingencies Disclosure [Line Items] | ||
Claim amount of unpaid notes and services | $ 600,000 | |
Actual unpaid usage fees | 20,000 | |
Fraudulent fees | $ 580,000 | |
Name of Plaintiff | Windstream Holdings, Inc | |
Name of Defendant | Connexum | |
Lawsuit Filing Date | In 2,015 | |
Tarpon Bay Partners LLC | Subsequent Event | ||
Commitments And Contingencies Disclosure [Line Items] | ||
Amount due in unpaid notes and services | $ 93,500 |
SUBSEQUENT EVENTS (Detail Textu
SUBSEQUENT EVENTS (Detail Textuals) - USD ($) | Feb. 03, 2016 | May 25, 2016 |
Subsequent Event [Line Items] | ||
Number of common shares issued under debt conversion | 80,390,834 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Number of common shares issued under debt conversion | 15,397,129 | |
Accrued interest | $ 27,715 |