Greenwood Hall (ELRN) 10-Q 18 Jul 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	9 Months Ended
	May 31, 2016shares
Document And Entity Information
Entity Registrant Name	GREENWOOD HALL, INC.
Entity Central Index Key	1,557,644
Document Type	10-Q
Trading Symbol	ELRN
Document Period End Date	May 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--08-31
Entity a Well-known Seasoned Issuer	Yes
Entity a Voluntary Filer	Yes
Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding	49,824,629
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	May 31, 2016	Aug. 31, 2015
CURRENT ASSETS
Cash and cash equivalents		$ 211,725
Accounts receivable, net	$ 726,731	594,035
Prepaid expenses and other current assets	79,087	125,891
Current assets to be disposed of	36,860	36,860
TOTAL CURRENT ASSETS	842,678	968,511
PROPERTY AND EQUIPMENT, net	93,799	142,872
OTHER ASSETS
Deposits and other assets	74,783	75,034
TOTAL OTHER ASSETS	74,783	75,034
TOTAL ASSETS	1,011,260	1,186,417
CURRENT LIABILITIES
Accounts payable	1,706,812	1,332,057
Accrued expenses	917,296	634,780
Accrued payroll and related expenses	886,026	441,279
Bank Overdraft	445,117
Deferred revenue	360,848	11,100
Accrued interest	628,979	251,751
Due to stockholders / officer	252,019	169,970
Notes payable, net of discount of $385,624 and $1,363,242, respectively	5,048,149	2,955,240
Line of Credit	2,000,000	2,000,000
Derivative liability	490,287	1,664,993
Current liabilities to be disposed of	335,857	335,857
TOTAL CURRENT LIABILITIES	13,071,390	9,797,027
Notes payable, non-current	6,787	552,329
TOTAL LIABILITIES	13,078,177	10,349,356
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.001 par value; 937,500,000 shares authorized, 49,824,629 and 45,114,297 shares issued and outstanding, respectively	49,825	45,115
Subscription Receivable	(190,000)
Additional paid-in capital	14,222,699	9,934,174
Accumulated deficit	(26,149,441)	(19,142,228)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)	(12,066,917)	(9,162,939)
Noncontrolling interest
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)	(12,066,917)	(9,162,939)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$ 1,011,260	$ 1,186,417

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)	May 31, 2016	Aug. 31, 2015
Statement of Financial Position [Abstract]
Notes payable, discount	$ 385,624	$ 1,364,771
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized	937,500,000	937,500,000
Common stock, issued	49,824,629	45,114,297
Common stock, outstanding	49,824,629	45,114,297

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended		9 Months Ended
	May 31, 2016	May 31, 2015	May 31, 2016	May 31, 2015
Income Statement [Abstract]
REVENUES	$ 2,155,082	$ 2,170,894	$ 4,823,251	$ 6,316,282
OPERATING EXPENSES
Direct cost of services	1,212,169	1,364,392	3,396,866	4,374,366
Personnel	809,815	1,223,359	2,121,787	2,623,125
Selling, general and administrative	457,335	283,091	2,083,371	2,332,068
Equity-based expense	222,566	1,031,226	748,992	1,031,226
TOTAL OPERATING EXPENSES	2,701,885	3,902,068	8,351,016	10,360,785
INCOME (LOSS) FROM OPERATIONS	(546,803)	(1,731,174)	(3,527,765)	(4,044,503)
OTHER INCOME (EXPENSE)
Interest expense	(550,801)	(198,477)	(3,240,317)	(510,275)
Change in value of derivatives	(412,115)	(57,956)	(189,380)	(194,826)
Miscellaneous income (expense), net	(16,482)	10,518	(49,752)	(21,343)
TOTAL OTHER INCOME (EXPENSE)	(979,398)	(245,915)	(3,479,449)	(726,444)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE PROVISION FOR (BENEFIT FROM) INCOME TAXES	(1,526,201)	(1,977,089)	(7,007,214)	(4,770,947)
Provision for income taxes		(111)		(111)
INCOME (LOSS) FROM CONTINUING OPERATIONS	(1,526,201)	(1,977,200)	(7,007,214)	(4,771,058)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax
NET INCOME (LOSS)	(1,526,201)	(1,977,200)	(7,007,214)	(4,771,058)
Net income (loss) attributable to non-controlling interests
Net income (loss) attributable to Greenwood Hall, Inc. common stockholders	$ (1,526,201)	$ (1,977,200)	$ (7,007,214)	$ (4,771,058)
Earnings per share - basic and diluted
Income (loss) from continuing operations attributable to Greenwood Hall, Inc. common stockholders	$ (0.03)	$ (0.05)	$ (0.14)	$ (0.12)
Income (loss) from discontinuing operations attributable to Greenwood Hall, Inc. common stockholders
Net income (loss) attributable to Greenwood Hall, Inc. common stockholders (in dollars per share)	$ (0.03)	$ (0.05)	$ (0.14)	$ (0.12)
Weighted average common shares - basic and diluted (in shares)	49,281,151	41,221,068	48,397,602	40,048,299

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED) - USD ($)	9 Months Ended
	May 31, 2016	May 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (7,007,214)	$ (4,771,058)
Net (income) loss from discontinued operations
Net income (loss) from continuing operations	(7,007,214)	(4,771,058)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities of continuing operations:
Non-cash interest on convertible promissory notes	1,091,761	98,945
Warrants issued for services	123,772	656,798
Stock-based compensation	170,215	140,461
Shares issued for services	455,176	765,765
Shares issued for settlement	1,572,675
Depreciation	49,073	47,866
Change in value of derivatives	189,380	194,826
Changes in operating assets and liabilities:
Accounts receivable	(132,696)	311,925
Prepaid expenses and other current assets	46,804	230,903
Deposits and other assets	251
Accounts payable	374,755	124,544
Accrued expenses	280,976	117,592
Accrued payroll and related	444,747	31,548
Deferred revenue	349,748	(1,102,500)
Accrued interest	377,228	65,859
Advances from officers, net	82,049	60,882
Net cash provided by (used in) operating activities of continuing operations	(1,531,300)	(3,025,644)
Net cash provided by (used in) operating activities of discontinued operations
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	(1,531,300)	(3,025,644)
CASH FLOWS FROM FINANCING ACTIVITIES:
Bank Overdraft	445,117	173,948
Proceeds from issuance of notes payable	595,000	1,701,500
Payments on notes payable	(30,542)	(455,535)
Repurchase of common stock
Proceeds from the sale of stock	310,000
Proceeds from the sale of units		1,238,445
Net cash provided by (used in) financing activities of continuing operations	1,319,575	2,658,358
Net cash provided by (used in) financing activities of discontinued operations
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	1,319,575	2,658,358
NET INCREASE (DECREASE) IN CASH FROM CONTINUING OPERATIONS	(211,725)	(367,286)
NET INCREASE (DECREASE) IN CASH FROM DISCONTINUED OPERATIONS
NET INCREASE (DECREASE) IN CASH	(211,725)	(367,286)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	211,725	367,286
CASH AND CASH EQUIVALENTS, END OF PERIOD
Supplemental disclosures:
Interest paid in cash	181,340	297,009
Income taxes paid in cash
Supplemental disclosure of non-cash investing and financing activities:
Conversion of convertible note and accrued interest into common stock	$ 80,000

ORGANIZATION AND SUMMARY OF SIG

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	May 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Greenwood Hall, Inc., a Nevada corporation (hereinafter referred to as the “Company”, “Greenwood Hall”, “we”, “us” or “our”) is an education technology company. We provide technology-enabled solutions that enable public and private not-for-profit colleges and universities to support student learning anywhere by offering the services and technology that enable schools to revolutionize the way they manage the student lifecycle. Each one of our solutions is designed to help our education partners increase revenue, improve efficiencies, enhance student experience, and improve student outcomes. Since 2006, we have developed and customized turnkey solutions that combine strategy, personnel, proven processes and robust technology to help schools effectively and efficiently improve student outcomes, expand into new markets such as online learning, increase revenues, and deliver enhanced student experiences. The Company currently has 136 employees and has served more than 60 education clients and over 75 degree programs. Basis of Presentation This Quarterly Report on Form 10-Q for the quarter ended May 31, 2016 should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended August 31, 2015, filed with the Securities and Exchange Commission (“SEC”) on December 12, 2015. As contemplated by the SEC under Article 8 of Regulation S-X, the accompanying consolidated financial statements and footnotes have been condensed and therefore do not contain all disclosures required by generally accepted accounting principles. The interim financial data are unaudited; however, in the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. Results for interim periods are not necessarily indicative of those to be expected for the full year. Reclassifications Certain amounts from prior years have been reclassified to conform to current year presentation. Principles of Consolidation The consolidated financial statements include the accounts of Greenwood Hall, PCS Link, a wholly owned subsidiary of Greenwood Hall (“PCS Link”), and University Financial Aid Solutions, LLC (“UFAS”), collectively referred to herein as the “Company”, “we”, “us”, “our”, or “Greenwood Hall”. All significant intercompany accounts and transactions have been eliminated in consolidation. Through our affiliate UFAS we provided complete financial aid solutions. During 2013, UFAS ceased operations and is presently winding down its affairs. As a result, UFAS is presented in the accompanying consolidated financial statements as discontinued operations. Going Concern The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“ US GAAP The Company has historically funded its activities through cash generated from operations, debt financing, the issuance of equity for cash, and advances from stockholders. During the nine months ended May 31, 2016, the Company generated $1,319,575 from financing activities. Management is in the process of evaluating various financing alternatives in order to finance our growth and general and administrative expenses as well as materially reducing the Company’s debt. These alternatives include raising funds through public or private equity markets and either through institutional or retail investors. Although there is no assurance that the Company will be successful with our fund raising initiatives, Management believes that the Company will be able to secure the necessary financing as a result of ongoing financing discussions with third party investors and existing stockholders. There can be no assurance that potential financing will be obtained on terms acceptable to Management and future financing may substantially dilute the ownership of existing stockholders. Management intends to restore profitability by continuing to grow our operations and customer base while maintaining the overhead savings we achieved during our recent restructuring. Management intends to also restructure the Company’s debt in order to reduce the Company’s debt load. Management believes that the actions presently being taken to further implement its business plan, generate additional revenues, and restructure certain liabilities provide the opportunity for the Company to continue as a going concern. If the Company is not successful in becoming profitable, it may have to further delay or reduce expenses, or curtail operations. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that could result should the Company not continue as a going concern. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures. Management uses its historical records and knowledge of its business in making these estimates. Accordingly, actual results may differ from these estimates. Cash and Cash Equivalents For the purpose of the statement of cash flows, the Company considers cash equivalents to include short-term, highly liquid investments with an original maturity of three months or less. Research and Development Costs relating to designing and developing new products are expensed in the period incurred. Revenue Recognition The Company’s contracts are typically structured into two categories, (i) fixed-fee service contracts that span a period of time, often in excess of one year, and (ii) service contracts at agreed-upon rates based on the volume of service provided or a flat monthly subscription fee. Some of the Company’s service contracts are subject to guaranteed minimum amounts of service volume. The Company recognizes revenue when all of the following have occurred: persuasive evidence of an agreement with the customer exists, services have been rendered, the selling price is fixed or determinable, and collectability of the selling price is reasonably assured. For fixed-fee service contracts, the Company recognizes revenue on a straight-line basis over the period of contract performance. Costs incurred under these service contracts are expensed as incurred. Deferred Revenue Deferred revenue primarily consists of prepayments received from customers for which the Company’s revenue recognition criteria have not been met. The deferred revenue will be recognized as revenue once the criteria for revenue recognition have been met. Accounts Receivable The Company extends credit to its customers. An allowance for doubtful accounts is maintained for estimated losses resulting from the inability of the Company’s customers to make required payments. Management specifically analyzes the age of customer balances, historical bad debt experience, customer credit-worthiness, and changes in customer payment terms when making estimates of the collectability of the Company’s trade accounts receivable balances. If the Company determines that the financial condition of any of its customers has deteriorated, whether due to customer specific or general economic issues, an increase in the allowance may be made. After all attempts to collect a receivable have failed, the receivable is written off. Based on the information available, management believes the Company’s accounts receivable, net of the allowance for doubtful accounts, are collectable. Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are being provided using the straight-line method over the estimated useful lives of the assets. The estimated useful lives used are as follows: Classification Life Equipment 5-7 Years Computer equipment 7 Years Expenses for repairs and maintenance are charged to expense as incurred, while renewals and betterments are capitalized. Income Taxes The Company accounts for income taxes in accordance with ASC 740-10, “Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Earnings (Loss) per Share Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Potential dilutive instruments including warrants, stock options, and shares issuable upon conversion of promissory notes, have been excluded from the computation of diluted shares as their effect is anti-dilutive during fiscal 2016 and 2015. Marketing and Advertising Marketing and advertising costs are expensed as incurred. Marketing and advertising amounted to $53,689 and $117,596 for the nine months ended May 31, 2016, and the nine months ended May 31, 2015, respectively, and are included in selling, general and administrative expenses. Stock-Based Compensation Compensation costs related to stock options and other equity awards are determined in accordance with FASB ASC 718-10, “Compensation-Stock Compensation.” Under this method, compensation cost is calculated based on the grant-date fair value estimated in accordance FASB ASC 718-10, amortized on a straight-line basis over the awards’ vesting period. Stock-based compensation was $170,215 and $1,565,723 for the nine months ended May 31, 2016 and the nine months ended May 31, 2015, respectively. This expense is included in the condensed consolidated statements of operations as Equity-based expense. Derivative Liabilities We account for warrants as either equity or liabilities based upon the characteristics and provisions of each instrument. Warrants classified as equity are recorded as additional paid-in capital on our Consolidated Balance Sheet and no further adjustments to their valuation are made. Some of our warrants were determined to be ineligible for equity classification due to provisions that may result in an adjustment to their exercise price. Warrants classified as derivative liabilities and other derivative financial instruments that require separate accounting as assets or liabilities are recorded on our Consolidated Balance Sheet at their fair value on the date of issuance and are revalued on each subsequent balance sheet date until such instruments are exercised or expired, with any changes in the fair value between reporting periods recorded as other income or expense. We estimate the fair value of these liabilities using option pricing models that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for expected volatility, expected life and risk-free interest rate. Fair Value of Financial Instruments The Company groups financial assets and financial liabilities measured at fair value into three levels of hierarchy in accordance with ASC 820-10, “Fair Value Measurements and Disclosure.” Assets and liabilities recorded at fair value in the accompanying balance sheet are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Level Input: Input Definition: Level I Observable quoted prices in active markets for identical assets and liabilities. Level II Observable quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level III Model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models, and similar techniques. For certain of our financial instruments, including working capital instruments, the carrying amounts are approximate fair value due to their short-term nature. Our notes payable approximate fair value based on prevailing interest rates. The following table summarizes fair value measurements at May 31, 2016 and August 31, 2015 for assets and liabilities measured at fair value on a recurring basis. May 31, 2016 Level 1 Level 2 Level 3 Total Derivative Liabilities $ — $ — $ 490,287 $ 490,287 August 31, 2015 Level 1 Level 2 Level 3 Total Derivative Liabilities $ — $ — $ 1,664,993 $ 1,664,993 The assumptions used in valuing derivative instruments issued during the nine months ended May 31, 2016 were as follows: Risk free interest rate 0.51% - 1.22% Expected life .01 Years-5.00 years Dividend yield None Volatility 68% - 137% The following is a reconciliation of the derivative liability related to these instruments for the nine months ended May 31, 2016: Value at August 31, 2015 $ 1,664,993 Issuance of instruments 1,313 Change in value 189,380 Net settlements (1,365,399 ) Value as of May 31, 2016 $ 490,287 The derivative liabilities are estimated using option pricing models that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for expected volatility, expected life and risk-free interest rate. Changes in the assumptions used could have a material impact on the resulting fair value. The primary input affecting the value of our derivatives liabilities is the Company’s stock price, term and volatility. Other inputs have a comparatively insignificant effect. Effect of Recently Issued Accounting Standards In May 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In April 2015, the FASB issued ASU No 2015-3, Simplifying the Presentation of Debt Issuance Costs. In January 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-01, Financial Instruments – Overall In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In April 2016, the FASB issued AS 2016-10, Revenue from Contracts with Customers (Topic 606)

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	9 Months Ended
	May 31, 2016
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT	2. PROPERTY AND EQUIPMENT Depreciation and amortization of the Company’s property and equipment amounted to $49,073 and $47,866 for the nine months ended May 31, 2016 and the nine months ended May 31, 2015, respectively, and is included in the accompanying consolidated statements of operations in selling, general and administrative expenses. At May 31, 2016 and August 31 2015, property and equipment consists of the following: May August Computer equipment $ 553,255 553,255 Software and Equipment 39,400 39,400 Furniture & Fixtures 9,177 9,177 601,832 601,832 Accumulated depreciation (508,033 ) (458,960 ) Net property and equipment $ 93,799 142,872

NOTES PAYABLE

NOTES PAYABLE	9 Months Ended
	May 31, 2016
Debt Disclosure [Abstract]
NOTES PAYABLE	3. NOTES PAYABLE Opus Bank: On May 28, 2014, the Company entered into a Credit Agreement (the “ Opus Credit Agreement Opus CFG CUB On April 13, 2015, the Company and certain lenders executed a second amendment (“ Second Amendment Lenders As of May 31, 2016 and August 31, 2015, the balance outstanding on the term loan and line of credit under the Opus Credit Agreement, as amended, amounted to $1,583,156 and $2,085,670, respectively. At May 31, 2016, amounts owed pursuant to the Opus Credit Agreement continue to bear interest at a rate of 8.00% per annum. In connection with the Opus Credit Agreement, the Company issued warrants to purchase 248,011 shares of Common Stock at an exercise price of $1.00 per share, which increased to 375,000 shares as a result of dilutive issuances of equity by the Company during the eight months ended August 31, 2014 . The warrants are exercisable immediately. In the event of future dilutive issuances, the number of shares issuable thereunder shall be increased based on a specified formula. The warrants were valued at $78,281 on the date of issuance, which was recorded as a note discount. During the nine months ended May 31, 2016, the Company recognized $19,570 of amortization related to this discount, leaving a balance of $26,094 at May 31, 2016. On September 24, 2015, PCS Link, Inc. dba Greenwood & Hall, a subsidiary of Greenwood Hall, Inc. (“ PCS Link Third Amendment · Opus waives all prior covenant defaults. · Opus shall have no obligation to advance any further credit to PCS Link, either by way of overdraft coverage or advances on any loans currently outstanding. · The maturity date (“ Maturity Date · By October 2, 2015, PCS Link will have issued equity and/or unsecured debt resulting in aggregate gross proceeds not less than $1,250,000. · PCS Link shall have no further obligation to comply with the financial covenants under the Credit Agreement. · PCS Link shall not be required to make any principal payments until the Maturity Date. All principal, along with all accrued and unpaid interest, shall be due and payable in full on the Maturity Date. · The outstanding balance owed by PCS Link shall accrue interest at the rate of 8% per annum beginning on August 1, 2015. PCS Link shall make such interest payments on a monthly basis commencing as of September 1, 2015. · Opus will receive a warrant to purchase 1,200,000 shares of Common Stock of the Company at an exercise price of $1.00 per share, not to include anti-dilution or cashless exercise provisions. Opus’s existing warrant, issued on July 18, 2014, shall be surrendered upon issuance of the 1,200,000 warrants. On July 11, 2016, PCS Link, the Company, and Opus agreed to terms to amend the Third Amendment, Waiver and Ratification Agreement (the “ Fourth Amendment California United Bank: In October 2010, the Company issued a promissory note to California United Bank (“ CUB CUB Note On May 22, 2014, the Company and CUB amended the CUB Note to extend the maturity date to the earlier of i) October 31, 2014 or ii) the completion of specified debt / equity funding. CUB also agreed to subordinate its security interest to another lender if certain criteria were met. In December 2014, the Company entered into a Change in Terms Agreement with CUB, which included another extension of the maturity date of the CUB Note to April 30, 2015 and an adjustment of the interest rate to 5% in excess of the Wall Street Prime Interest Rate. Pursuant to the Second Amendment to the Opus Credit Agreement, CUB agreed to waive any and all covenant violations that existed prior to the Second Amendment or that may occur through June 30, 2015. The Amendment also forgave the Company’s obligation to make principal and/or interest payments to the Lenders through August 1, 2015, provided there were no Events of Default by the Company and further extended the maturity date of the facility to April 15, 2016. In conjunction with the Third Amendment to the Opus Credit Agreement, CUB agreed to the following terms: · CUB will grant the Company a forbearance period beginning September 1, 2015 and continuing through April 15, 2016 (the “ Forbearance Period · CUB will receive monthly interest payments of interest, in full, during the Forbearance Period. · CUB shall be paid deferred interest due upon the Company raising $2,000,000 in working capital if the Company has satisfied its obligations in accordance with Company’s prepared cash projections. · CUB will receive a full payoff of all outstanding principal, interest (including accrued and unpaid interest as of the date of the Third Amendment), fees, and expenses (including, but not limited to, CUB’s outside counsel legal fees and costs) under the CUB Note by April 15, 2016 or at the successful consummation of any public offering, strategic private investments, or take private scenario, whichever occurs first. · CUB will receive a warrant to purchase 523,587 shares of Common Stock of the Company at an exercise price of $1.00 per share, not to include anti-dilution or cash-less exercise provisions. As of May 31, 2016, the balance remaining under the CUB Note is $925,907. On July 14, 2016, CUB extended the Maturity Date of the CUB Note to October 31, 2016. Colgan Financial Group, Inc.: During 2013, the Company entered into a Loan and Security Agreement with Colgan Financial Group, Inc. (“ CFG 2013 CFG Note In December 2014, the Company issued to CFG and Robert Logan a promissory note with a principal amount of $500,000 (the “ 2014 CFG Note In connection with the 2014 CFG Note, the Company granted to CFG the right to receive a warrant to purchase shares of Common Stock upon the full payment or conversion of the principal under the 2014 CFG Note. The conversion feature and warrants both include provisions that call for the respective instruments to be converted or exercised, as applicable, into equity at a price equal to the lesser of i) $1.50 per share or ii) 85% of the weighted average price per share of the Company’s trading price for the ten (10) trading days prior to conversion / exercise. As a result of this feature, the warrant and conversion feature are subject to derivative accounting pursuant to ASC 815. Accordingly, the fair value of the warrant and conversion feature on the date of issuance was estimated using an option pricing model and recorded on the Company’s Consolidated Balance Sheet as a derivative liability and a note discount. The fair value of the discount on the issuance date was estimated at approximately $323,000 and is being amortized over the term of the note using the effective interest method. Amortization of the 2014 CFG Note discount during the nine months ended May 31, 2016 amounted to approximately $185,000. In April 2015, the Company issued to CFG a promissory note for the principal amount of $200,000 (the “ 2015 CFG Note Pursuant to the Second Amendment to the Opus Credit Agreement, CFG agreed to waive any and all covenant violations that existed prior to the Second Amendment or that may occur through June 30, 2015. The Second Amendment also forgave the Company’s obligation to make any principal and/or interest payments to CFG under the 2013 CFG Note, the 2014 CFG Note or the 2015 CFG Note through August 1, 2015, provided there were no Events of Default by the Company. In connection therewith, the Company entered into Amendment No. 4 to the Loan and Security Agreement with CFG (the “ CFG Fourth Amendment Consolidated CFG Note On July 12, 2016, CFG extended the Maturity Date of the Consolidated CFG Note to October 31, 2016. Redwood Fund, LP: On or about March 31, 2015, the Company entered into a Convertible Note Purchase Agreement with Redwood Fund, LP (“ Redwood March 2015 Redwood Note On August 14, 2015, the Company issued a one-year unsecured convertible promissory note to Redwood in the principal amount of $588,236 (the “ August 2015 Redwood Note On November 6, 2015, the Company issued a six-month unsecured promissory note to Redwood in the principal amount of $125,000, at an original issue discount of 20%, or $25,000. Interest will accrue monthly at a rate of 10% per annum. During the nine months ended May 31, 2016, the Company recognized approximately $25,000 of amortization of note discount and $7,089 accrued interest. On December 14, 2015, the Company issued a short-term unsecured promissory note to Redwood in the principal amount of $30,000, and subsequently amended the principal amount for an additional $15,000 on January 18, 2016. Interest will accrue monthly at a rate of 18% per annum. During the nine months ended May 31, 2016, the Company recognized approximately $3,400 of accrued interest. Principal and interest on this Note shall be due and payable on the earlier of (a) the closing of financing round , whether debt, equity, or convertible debt of at least Two Hundred Fifty Thousand Dollars ($250,000.00) or (b) March 21, 2016 at 5:00P.M. Pacific Standard Time. On February 4, 2016, the Company issued a one-year unsecured promissory note, personally guaranteed by the Chairman and Chief Executive Officer of the Company, to Redwood in the principal amount of $235,294, at an original issue discount of 15%, or $35,294. Interest will accrue monthly at a rate of 10% per annum. During the nine months ended May 31, 2016, the Company recognized approximately $11,000 of amortization of note discount and $8,000 of accrued interest. Lincoln Park Capital Fund, LLP: In April 2015, the Company issued a convertible promissory note to Lincoln Park Capital Fund, LLP (“ Lincoln Park April 2015 Lincoln Park Note On August 21, 2015, the Company issued a one-year unsecured convertible promissory note to Lincoln Park in the principal amount of $295,000 (the “ August 2015 Lincoln Park Note On July 15, 2016, Lincoln Park agreed to extend the maturity date of both Lincoln Park Notes to October 31, 2016. FirstFire Global Opportunities Fund, LLC: In December 2015, the Company issued a convertible promissory note to FirstFire Global Opportunities Fund, LLC (“ FirstFire FirstFire Note Fixed Conversion Price Primary Offering On June 30, 2016, FirstFire agreed to extend the maturity date of the FirstFire Note to August 28, 2016. Other Promissory Notes The Company also finances the purchases of small equipment through the sale of promissory notes. The amount of such notes is not deemed significant at May 31, 2016. The following is a schedule, by year, of future minimum principal payments required under notes payable as of May 31, 2016: Years Ending 2016 $ 7,433,773 2017 $ 6,787 2018 2019 — Total 7,440,560 Note discount (385,624 ) $ 7,054,936

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	9 Months Ended
	May 31, 2016
Stockholders' Equity Note [Abstract]
STOCKHOLDERS' EQUITY	4. STOCKHOLDERS’ EQUITY The Company is authorized to issue one class of stock, which represents 937,500,000 shares of Common Stock, par value $0.001. Common Stock On September 16, 2015, pursuant to the termination of a registration rights agreement between the Company, Rogers , and Byrne United S.A. ("Byrne"), the Company agreed to issue 625,000 shares of Common Stock to Rogers and 625,000 shares of Common Stock to Byrne. The Company recognized an interest expense of $ 1,500,000 associated with this issuance. On September 24, 2015, CFG converted $ 80,000 in debt at a price of $ 0.10 per share of Common Stock, pursuant to the Third Amendment to the Opus Agreement. This resulted in an increase to equity of $1,365,391 upon settlement of the related derivative liability. Stock Issued for Services During the nine months ended May 31, 2016, the Company entered into consulting agreements with multiple vendors for advisory and consulting services. The Company issued and granted to Ignite Capital 500,000 shares of Common Stock valued at $317,500. The Company issued to Uptick Capital 410,332 shares of Common Stock valued at $97,676 to EMC, LLC 500,000 shares of Common Stock valued at $40,000. The foregoing issuances were exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act inasmuch as the shares and warrants were offered and sold solely to accredited investors and the Company did not engage in any form of general solicitation or general advertising in making the offering. Stock Option Plan In July 2014, the Board of Directors adopted, and the stockholders approved, the 2014 Stock Option Plan under which a total of 5,000,000 shares of Common Stock are reserved for issuance. The 2014 Stock Option Plan will terminate in September 2024. Stock Options As of May 31, 2016, the members of the Board of Directors hold options to purchase an aggregate of 1,750,000 shares of Common Stock at exercise prices ranging from $0.01 to $0.75, which were granted prior to August 31, 2015. An additional 910,000 shares at an exercise price of $0.35 were granted to members of the Board of Directors during the nine months ended May 31, 2016. Employee Stock Options were granted on February 24, 2016 to purchase 1,825,000 shares at a price of $0.08. Employee Stock Options were granted on April 1, 2016 to purchase 500,000 shares at a price of $0.11. Transactions in 9 Mos 2016 Quantity Weighted- Weighted- Outstanding, August 31, 2015 1,750,000 $ 0.37 8.54 Granted 3,235,000 $ 0.16 9.67 Exercised - - - Cancelled/Forfeited - - - Outstanding, May 31, 2016 4,985,000 $ 0.23 9.28 Exercisable, May 31, 2016 1,750,000 $ 0.37 8.54 The fair value of these options was estimated at the date of grant using the Black Scholes option pricing model with the following assumptions: no dividends, expected volatility of 30% to 100 %, risk free interest rate between 1.21% and 2.72%, and expected life of 5.5 years. The weighted average remaining contractual life of options outstanding issued under the Plan was 9.28 years at May 31, 2016. The exercise prices for the options outstanding at May 31, 2016 ranged from $0.01 to $0.75, and the information relating to these options is as follows: OPTIONS OUTSTANDING OPTIONS EXERCISABLE Quantity Weighted- Weighted- Quantity Weighted- Weighted- 700,000 $ 0.01 8.15 700,000 0.01 8.15 600,000 $ 0.50 8.78 600,000 0.50 8.78 450,000 $ 0.75 8.84 450,000 0.75 8.84 910,000 $ 0.35 9.44 - - - 1,825,000 $ 0.08 9.74 - - - 500,000 $ 0.11 9.84 - - - 4,985,000 $ 0.23 9.28 1,750,000 $ 0.37 8.54 Warrants Outstanding The following is a summary of warrants outstanding at May 31, 2016: Exercise Price Number of Expiration Date $ 1.00 1,264,023 Nov 2024 $ 0.01 100,000 Jul 2016 $ 1.00 295,000 Apr 2020 $ 0.08 1,110,297 Dec 2017 $ 0.10 1,110,297 Dec 2017 $ 1.00 400,000 Aug 2020 $ 0.50 1,176,473 Aug 2020 $ 0.01 250,000 Dec 2020 $ 1.00 1,200,000 Aug 2021 $ 1.00 523,587 Aug 2021 $ 1.00 20,000 Aug 2021 $ 1.00 10,000 Aug 2021 $ 0.01 150,000 Feb 2018 $ 0.01 250,000 Dec 2019 $ 1.10 500,000 May 2021 Warrants were issued pursuant to certain consulting agreements and amendments to financing terms. Warrants are booked to additional paid in capital and to interest expense based on stock price at date of grant, exercise price, warrant life, risk free rate and annual volatility. During the nine months ended May 31, 2016, the Company granted warrants to purchase up to 2,653,587 shares of Common Stock, valued at $123,772. During the period ended May 31, 2015, the Company issued 1,264,023 warrants to a consultant for services, valued at $493,329. Also during the nine months ended May 31, 2015, Mr. Kyle Murphy agreed to accept 250,000 warrants in exchange for previously agreed to stock-based compensation upon his resignation from the Company.

CONCENTRATIONS

CONCENTRATIONS	9 Months Ended
	May 31, 2016
Risks and Uncertainties [Abstract]
CONCENTRATIONS	5. CONCENTRATIONS Concentration of Credit Risk The Company maintains its cash and cash equivalents at a financial institution which may, at times, exceed federally insured limits. Historically, the Company has not experienced any losses in such accounts. Major Customers For the nine months ended May 31, 2016, five (5) customers represented 59.6% of net revenues and for the nine months ended May 31, 2015, one (1) customer and three (3) of such customer’s specific projects represented a total of 41% of revenues. A decision by this customer to cease business relations with the Company may have a material adverse effect on the Company’s financial condition and results of operations.

INCOME TAXES

INCOME TAXES	9 Months Ended
	May 31, 2016
Income Tax Disclosure [Abstract]
INCOME TAXES	6 . INCOME TAXES The difference between income tax expense attributable to continuing operations and the amount of income tax expense that would result from applying domestic federal statutory rates to pre-tax income (loss) is mainly related to an increase in the valuation allowance, partially offset by state income taxes. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized. Deferred income tax assets are mainly related to net operating loss carryforwards. Management has chosen to take a 100% valuation allowance against the deferred income tax asset until such time as management believes that its projections of future profits make the realization of the deferred income tax assets more likely than not. Significant judgment is required in the evaluation of deferred income tax benefits and differences in future results from management’s estimates could result in material differences. A majority of the Company’s deferred tax asset is comprised of net operating loss carryforwards, offset by a 100% valuation allowance at May 31, 2016. As of May 31, 2016, the Company is in process of determining the amount of Federal and State net operating loss carry forwards (“ NOL Due to the existence of the valuation allowance, future changes in the Company’s unrecognized tax benefits will not impact its effective tax rate. Any carryforwards that expire prior to utilization as a result of such limitations will be removed, if applicable, from deferred tax assets with a corresponding reduction of the valuation allowance.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	May 31, 2016
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	7. COMMITMENTS AND CONTINGENCIES Lease Commitments The Company leases its operating facilities under non-cancelable operating leases that expire through 2024. Total rent expense for the nine months ended May 31, 2016 and the nine months ended May 31, 2015, amounted to $553,983 and $398,708, respectively. The Company is responsible for certain operating expenses in connection with these leases. The following is a schedule, by year, of future minimum lease payments required under non-cancelable operating leases as of May 31, 2016: Years Ending 2016 (remaining) $ 166,830 2017 676,850 2018 695,282 2019 714,178 2020 717,192 Thereafter 1,642,396 $ 4,612,728 Employment Agreements At May 31, 2016, the Company maintained an employment agreement with an officer, the terms of which may require the payment of severance benefits upon termination. Legal Matters The Company is involved from time to time in various legal proceedings in the normal conduct of its business. On April 18, 2016, the Company’s subsidiary, PCS Link, Inc. (“PCS Link”) entered into a confidential settlement agreement (the "F500 Settlement Agreement") with Finance 500, Inc. (“F500”) and Bridgewater Capital Corporation (“BCC”) related to the resolution of disputes arising under a consulting agreement dated August 5, 2013 (the "F500 Consulting Agreement") between PCS Link, F500, and BCC. Pursuant to the F500 Settlement Agreement and in order avoid the continued cost and uncertainty of litigation, the Company agreed to issue a total of 750,000 shares of Common Stock to F500 and BCC, in return for (a) general release of all claims F500 and BCC may have against PCS Link and (b) F500 and BCC’s dismissal of the lawsuit filed against the Company and referenced in the Company’s Annual Report on Form 10-K and the Quarterly Report on Form 10-Q, filed with the SEC on December 15, 2015 and April 14, 2016, respectively. The Common Stock constitutes "restricted shares" and may only be resold after registration of such shares or the availability of an exemption from registration, including under Rule 144 of the Securities Act of 1933 as amended (the "Securities Act"). The Company shall also pay to F500 and BCC a total $ 130,000, over a twelve-month period commencing on June 12, 2016. The $ 130,000 settlement amount was fully accrued during the nine months ending on May 31, 2016 On July 5, 2016, PCS Link entered into a confidential settlement agreement (“Robin Hood Settlement Agreement”) with the Robin Hood Foundation (“Robin Hood”) and Patriot Communications, LLC (“Patriot”), a client of the Company, regarding, among other things, the resolution of all claims associated with a lawsuit filed by Robin Hood against Patriot and PCS Link. The suit was filed on August 31, 2013 in the Superior Court of the State of California for the County of Los Angeles (Central District) for breach of contract and failure to perform, including, among other things, intentional tort claims, seeking relief in an amount of not less than $5,000,000 (collectively, the “Action”). Since the Action was filed, both Patriot and PCS Link have denied all claims made thereunder and engaged in a rigorous defense. Neither Robin Hood, PCS Link, Patriot, nor the other defendants named in the Action admitted to any guilt, wrong-doing, or liability as part of the Robin Hood Settlement Agreement. Pursuant to the Robin Hood Settlement Agreement and in order to avoid the continued cost and uncertainty of litigation, the Company agreed to contribute to an omnibus settlement amount (“Omnibus Settlement Amount”) that will be paid to Robin Hood and funded by the Company, Patriot, and other defendants in the Acton. The Company’s direct cash contribution to settle the Action was $ 400,000 (“PCS Settlement Contribution”). Approximately $380,000 of the PCS Settlement Contribution is to be paid by the Company’s insurance carrier, and the remaining $20,000 will be paid by the Company. In return for the Omnibus Settlement Amount, Robin Hood agreed to (a) release the Company and the Company’s Chief Executive Officer, John Hall (“Hall”), in his individual capacity, from all claims, (b) dismiss the Action against the Company within ten (10) days of executing the Robin Hood Settlement Agreement, and (c) refrain from pursuing an appeal of Hall’s dismissal from the Action by the Superior Court. The Action also included a cross-complaint filed by Patriot against PCS Link. As part of a full resolution of the Action and in order to avoid the continued cost and uncertainty of litigation, PCS Link entered into a separate confidential settlement agreement (“the Patriot Settlement Agreement”) with Patriot, pursuant to which PCS Link agreed to enter into a new five (5) year Master Services Agreement (“MSA”) with Patriot that extends the current service relationship between the Company and Patriot. The MSA shall provide certain preferential pricing and terms to Patriot and shall require PCS Link to provide services to Patriot through October of 2021. In return, Patriot has agreed to (a) release all claims against PCS Link and (b) dismiss its counter-complaint against PCS Link within ten (10) days of execution of the Robin Hood Settlement Agreement. The Company is the subject of pending litigation, which could cause it to incur significant costs in defending such litigation or in resulting actions or judgments. StoryCorp Consulting, Inc. and David R. Wells filed suit against the Company and the Company’s CEO, John R. Hall, in his individual capacity, on March 11, 2016, in the Superior Court of the State of California for the County of Los Angeles (Central District) for breach of contract and promissory fraud/false promise, among other things, seeking an the amount of not less than $ 100,000. The Company believes that it has a strong defenses and is vigorously defending against this lawsuit, but the potential range of loss related to this matter cannot be determined, as the pleadings are still not resolved, and will not be resolved until 2017, at the earliest. No trial date has been set. If we fail in defending any such claims or settling those claims, in addition to paying monetary damages or a settlement payment, the outcome of this matter could have a materially adverse effect on our business, financial condition and results of operations.

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS	9 Months Ended
	May 31, 2016
Discontinued Operations and Disposal Groups [Abstract]
DISCONTINUED OPERATIONS	8. DISCONTINUED OPERATIONS During 2013, we ceased operations in our affiliated company, UFAS. The operations of UFAS are now presented as discontinued operations in the accompanying consolidated financial statements. UFAS has been inactive since 2013. During the nine months ending May 31, 2016 and nine months ending May 31, 2015 there was no activity. There are current assets to be disposed of approximately $37,000 and current liabilities to be disposed of approximately $336,000 as of May 31, 2016 and August 31, 2015, respectively.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	May 31, 2016
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	9. SUBSEQUENT EVENTS On June 23, 2016, CFG elected to exercise its existing conversion rights under the 2014 CFG Note and exercise the corresponding warrant, which resulted in an issuance of 1,342,063 additional shares of Common Stock to CFG and 1,842,063 shares to CFG’s designate, Robert Logan. In conjunction with CFG’s conversion, the Company issued to CFG and Mr. Logan warrants that can be exercised for 1,592,063 shares of Common Stock at an exercise price of $0.04 per share and 1,592,063 shares of Common Stock at an exercise price of $ 0.032 per share. After this conversion, the balance of the 2014 CFG Note is $ 400,000. On June 30, 2016, the Company entered into an Amendment and Waiver Agreement (“Amendment”) of its Securities Purchase Agreement (the “SPA”) with FirstFire and corresponding FirstFire Note. The Amendment extends the maturity date of the FirstFire Note until August 28, 2016. In consideration of the extension of the maturity date of the Note, FirstFire will receive an additional warrant for the purchase of 100,000 shares of the Company’s Common Stock with an exercise price of $ 0.05 per share. If the Company pays the outstanding principal plus interest accrued under the FirstFire Note on or before July 29, 2016, the principal amount thereunder will be increased by $15,000. If the Company does not make such payment on or before July 29, 2016, the principal amount due thereunder shall be increased by $25,000. On July 5, 2016, PCS Link entered into a confidential settlement agreement (“Robin Hood Settlement Agreement") with the Robin Hood Foundation (“Robin Hood”) and Patriot Communications, LLC. (“Patriot”), a client of the Company, regarding, among other things, the resolution of all claims associated with a lawsuit filed by Robin Hood against Patriot. The suit is described above under the heading “Legal Matters”. On July 12, 2016, Opus Bank and the Company agreed to extend the Maturity Date of their Promissory Note to October 31, 2016. On July 13, 2016, California United Bank and Colgan Financial Group agreed to extend the Maturity Dates of its Promissory Notes to October 31, 2016.

ORGANIZATION AND SUMMARY OF S15

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	May 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	Organization Greenwood Hall, Inc., a Nevada corporation (hereinafter referred to as the “Company”, “Greenwood Hall”, “we”, “us” or “our”) is an education technology company. We provide technology-enabled solutions that enable public and private not-for-profit colleges and universities to support student learning anywhere by offering the services and technology that enable schools to revolutionize the way they manage the student lifecycle. Each one of our solutions is designed to help our education partners increase revenue, improve efficiencies, enhance student experience, and improve student outcomes. Since 2006, we have developed and customized turnkey solutions that combine strategy, personnel, proven processes and robust technology to help schools effectively and efficiently improve student outcomes, expand into new markets such as online learning, increase revenues, and deliver enhanced student experiences. The Company currently has 136 employees and has served more than 60 education clients and over 75 degree programs.
Basis of Presentation	Basis of Presentation This Quarterly Report on Form 10-Q for the quarter ended May 31, 2016 should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended August 31, 2015, filed with the Securities and Exchange Commission (“SEC”) on December 12, 2015. As contemplated by the SEC under Article 8 of Regulation S-X, the accompanying consolidated financial statements and footnotes have been condensed and therefore do not contain all disclosures required by generally accepted accounting principles. The interim financial data are unaudited; however, in the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. Results for interim periods are not necessarily indicative of those to be expected for the full year.
Reclassifications	Reclassifications Certain amounts from prior years have been reclassified to conform to current year presentation.
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of Greenwood Hall, PCS Link, a wholly owned subsidiary of Greenwood Hall (“PCS Link”), and University Financial Aid Solutions, LLC (“UFAS”), collectively referred to herein as the “Company”, “we”, “us”, “our”, or “Greenwood Hall”. All significant intercompany accounts and transactions have been eliminated in consolidation. Through our affiliate UFAS we provided complete financial aid solutions. During 2013, UFAS ceased operations and is presently winding down its affairs. As a result, UFAS is presented in the accompanying consolidated financial statements as discontinued operations.
Going Concern	Going Concern The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“ US GAAP The Company has historically funded its activities through cash generated from operations, debt financing, the issuance of equity for cash, and advances from stockholders. During the nine months ended May 31, 2016, the Company generated $1,319,575 from financing activities. Management is in the process of evaluating various financing alternatives in order to finance our growth and general and administrative expenses as well as materially reducing the Company’s debt. These alternatives include raising funds through public or private equity markets and either through institutional or retail investors. Although there is no assurance that the Company will be successful with our fund raising initiatives, Management believes that the Company will be able to secure the necessary financing as a result of ongoing financing discussions with third party investors and existing stockholders. There can be no assurance that potential financing will be obtained on terms acceptable to Management and future financing may substantially dilute the ownership of existing stockholders. Management intends to restore profitability by continuing to grow our operations and customer base while maintaining the overhead savings we achieved during our recent restructuring. Management intends to also restructure the Company’s debt in order to reduce the Company’s debt load. Management believes that the actions presently being taken to further implement its business plan, generate additional revenues, and restructure certain liabilities provide the opportunity for the Company to continue as a going concern. If the Company is not successful in becoming profitable, it may have to further delay or reduce expenses, or curtail operations. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that could result should the Company not continue as a going concern.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures. Management uses its historical records and knowledge of its business in making these estimates. Accordingly, actual results may differ from these estimates.
Cash and Cash Equivalents	Cash and Cash Equivalents For the purpose of the statement of cash flows, the Company considers cash equivalents to include short-term, highly liquid investments with an original maturity of three months or less.
Research and Development	Research and Development Costs relating to designing and developing new products are expensed in the period incurred.
Revenue Recognition	Revenue Recognition The Company’s contracts are typically structured into two categories, (i) fixed-fee service contracts that span a period of time, often in excess of one year, and (ii) service contracts at agreed-upon rates based on the volume of service provided or a flat monthly subscription fee. Some of the Company’s service contracts are subject to guaranteed minimum amounts of service volume. The Company recognizes revenue when all of the following have occurred: persuasive evidence of an agreement with the customer exists, services have been rendered, the selling price is fixed or determinable, and collectability of the selling price is reasonably assured. For fixed-fee service contracts, the Company recognizes revenue on a straight-line basis over the period of contract performance. Costs incurred under these service contracts are expensed as incurred.
Deferred Revenue	Deferred Revenue Deferred revenue primarily consists of prepayments received from customers for which the Company’s revenue recognition criteria have not been met. The deferred revenue will be recognized as revenue once the criteria for revenue recognition have been met.
Accounts Receivable	Accounts Receivable The Company extends credit to its customers. An allowance for doubtful accounts is maintained for estimated losses resulting from the inability of the Company’s customers to make required payments. Management specifically analyzes the age of customer balances, historical bad debt experience, customer credit-worthiness, and changes in customer payment terms when making estimates of the collectability of the Company’s trade accounts receivable balances. If the Company determines that the financial condition of any of its customers has deteriorated, whether due to customer specific or general economic issues, an increase in the allowance may be made. After all attempts to collect a receivable have failed, the receivable is written off. Based on the information available, management believes the Company’s accounts receivable, net of the allowance for doubtful accounts, are collectable.
Property and Equipment	Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are being provided using the straight-line method over the estimated useful lives of the assets. The estimated useful lives used are as follows: Classification Life Equipment 5-7 Years Computer equipment 7 Years Expenses for repairs and maintenance are charged to expense as incurred, while renewals and betterments are capitalized.
Income Taxes	Income Taxes The Company accounts for income taxes in accordance with ASC 740-10, “Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
Earnings (Loss) per Share	Earnings (Loss) per Share Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Potential dilutive instruments including warrants, stock options, and shares issuable upon conversion of promissory notes, have been excluded from the computation of diluted shares as their effect is anti-dilutive during fiscal 2016 and 2015.
Marketing and Advertising	Marketing and Advertising Marketing and advertising costs are expensed as incurred. Marketing and advertising amounted to $53,689 and $117,596 for the nine months ended May 31, 2016, and the nine months ended May 31, 2015, respectively, and are included in selling, general and administrative expenses.
Stock-Based Compensation	Stock-Based Compensation Compensation costs related to stock options and other equity awards are determined in accordance with FASB ASC 718-10, “Compensation-Stock Compensation.” Under this method, compensation cost is calculated based on the grant-date fair value estimated in accordance FASB ASC 718-10, amortized on a straight-line basis over the awards’ vesting period. Stock-based compensation was $170,215 and $1,565,723 for the nine months ended May 31, 2016 and the nine months ended May 31, 2015, respectively. This expense is included in the condensed consolidated statements of operations as Equity-based expense.
Derivative Liabilities	Derivative Liabilities We account for warrants as either equity or liabilities based upon the characteristics and provisions of each instrument. Warrants classified as equity are recorded as additional paid-in capital on our Consolidated Balance Sheet and no further adjustments to their valuation are made. Some of our warrants were determined to be ineligible for equity classification due to provisions that may result in an adjustment to their exercise price. Warrants classified as derivative liabilities and other derivative financial instruments that require separate accounting as assets or liabilities are recorded on our Consolidated Balance Sheet at their fair value on the date of issuance and are revalued on each subsequent balance sheet date until such instruments are exercised or expired, with any changes in the fair value between reporting periods recorded as other income or expense. We estimate the fair value of these liabilities using option pricing models that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for expected volatility, expected life and risk-free interest rate.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The Company groups financial assets and financial liabilities measured at fair value into three levels of hierarchy in accordance with ASC 820-10, “Fair Value Measurements and Disclosure.” Assets and liabilities recorded at fair value in the accompanying balance sheet are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Level Input: Input Definition: Level I Observable quoted prices in active markets for identical assets and liabilities. Level II Observable quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level III Model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models, and similar techniques. For certain of our financial instruments, including working capital instruments, the carrying amounts are approximate fair value due to their short-term nature. Our notes payable approximate fair value based on prevailing interest rates. The following table summarizes fair value measurements at May 31, 2016 and August 31, 2015 for assets and liabilities measured at fair value on a recurring basis. May 31, 2016 Level 1 Level 2 Level 3 Total Derivative Liabilities $ — $ — $ 490,287 $ 490,287 August 31, 2015 Level 1 Level 2 Level 3 Total Derivative Liabilities $ — $ — $ 1,664,993 $ 1,664,993 The assumptions used in valuing derivative instruments issued during the nine months ended May 31, 2016 were as follows: Risk free interest rate 0.51% - 1.22% Expected life .01 Years-5.00 years Dividend yield None Volatility 68% - 137% The following is a reconciliation of the derivative liability related to these instruments for the nine months ended May 31, 2016: Value at August 31, 2015 $ 1,664,993 Issuance of instruments 1,313 Change in value 189,380 Net settlements (1,365,399 ) Value as of May 31, 2016 $ 490,287 The derivative liabilities are estimated using option pricing models that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for expected volatility, expected life and risk-free interest rate. Changes in the assumptions used could have a material impact on the resulting fair value. The primary input affecting the value of our derivatives liabilities is the Company’s stock price, term and volatility. Other inputs have a comparatively insignificant effect.
Effect of Recently Issued Accounting Standards	Effect of Recently Issued Accounting Standards In May 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In April 2015, the FASB issued ASU No 2015-3, Simplifying the Presentation of Debt Issuance Costs. In January 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-01, Financial Instruments – Overall In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In April 2016, the FASB issued AS 2016-10, Revenue from Contracts with Customers (Topic 606)

ORGANIZATION AND SUMMARY OF S16

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	May 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of estimated useful lives of property and equipment	The estimated useful lives used are as follows: Classification Life Equipment 5-7 Years Computer equipment 7 Years
Schedule of fair value measurements	The following table summarizes fair value measurements at May 31, 2016 and August 31, 2015 for assets and liabilities measured at fair value on a recurring basis. May 31, 2016 Level 1 Level 2 Level 3 Total Derivative Liabilities $ — $ — $ 490,287 $ 490,287 August 31, 2015 Level 1 Level 2 Level 3 Total Derivative Liabilities $ — $ — $ 1,664,993 $ 1,664,993
Schedule of derivative instruments	The assumptions used in valuing derivative instruments issued during the nine months ended May 31, 2016 were as follows: Risk free interest rate 0.51% - 1.22% Expected life .01 Years-5.00 years Dividend yield None Volatility 68% - 137%
Schedule of reconciliation of the derivative liability	The following is a reconciliation of the derivative liability related to these instruments for the nine months ended May 31, 2016: Value at August 31, 2015 $ 1,664,993 Issuance of instruments 1,313 Change in value 189,380 Net settlements (1,365,399 ) Value as of May 31, 2016 $ 490,287

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)	9 Months Ended
	May 31, 2016
Property, Plant and Equipment [Abstract]
Schedule of property and equipment	At May 31, 2016 and August 31 2015, property and equipment consists of the following: May August Computer equipment $ 553,255 553,255 Software and Equipment 39,400 39,400 Furniture & Fixtures 9,177 9,177 601,832 601,832 Accumulated depreciation (508,033 ) (458,960 ) Net property and equipment $ 93,799 142,872

NOTES PAYABLE (Tables)

NOTES PAYABLE (Tables)	9 Months Ended
	May 31, 2016
Debt Disclosure [Abstract]
Schedule of future minimum principal payments	The following is a schedule, by year, of future minimum principal payments required under notes payable as of May 31, 2016: Years Ending 2016 $ 7,433,773 2017 $ 6,787 2018 2019 — Total 7,440,560 Note discount (385,624 ) $ 7,054,936

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	9 Months Ended
	May 31, 2016
Stockholders' Equity Note [Abstract]
Schedule of stock options activity	As of May 31, 2016, the members of the Board of Directors hold options to purchase 1,750,000 shares of common stock at exercise prices ranging from $0.35 to $0.75, which were granted prior to August 31, 2015. An additional 910,000 shares at exercise price of $0.35 were granted to Board of Directors during the nine months ended May 31, 2016. Employee Stock Options were granted on May 24, 2016 to purchase 1,675,000 shares at a price of $0.08. Transactions in 9 Mos 2016 Quantity Weighted- Weighted- Outstanding, August 31, 2015 1,750,000 $ 0.37 8.54 Granted 3,235,000 $ 0.16 9.67 Exercised - - Cancelled/Forfeited - - Outstanding, May 31, 2016 4,985,000 $ 0.23 9.28 Exercisable, May 31, 2016 1,750,000 $ 0.37 8.54
Schedule of stock options, exercise price	The weighted average remaining contractual life of options outstanding issued under the Plan was 9.45 years at May 31, 2016. The exercise prices for the options outstanding at May 31, 2016 ranged from $0.01 to $0.75, and the information relating to these options is as follows: OPTIONS OUTSTANDING OPTIONS EXERCISABLE Quantity Weighted- Weighted- Quantity Weighted- Weighted- 700,000 $ 0.01 8.15 700,000 0.01 8.15 600,000 $ 0.50 8.78 600,000 0.50 8.78 450,000 $ 0.75 8.84 450,000 0.75 8.84 910,000 $ 0.35 9.44 - - - 1,825,000 $ 0.08 9.74 - - - 500,000 $ 0.11 9.84 - - - 4,985,000 $ 0.23 9.28 1,750,000 $ 0.37 8.54
Schedule of warrants outstanding	The following is a summary of warrants outstanding at May 31, 2016: Exercise Price Number of Expiration Date $ 1.00 1,264,023 Nov 2024 $ 0.01 100,000 Jul 2016 $ 1.00 295,000 Apr 2020 $ 0.08 1,110,297 Dec 2017 $ 0.10 1,110,297 Dec 2017 $ 1.00 400,000 Aug 2020 $ 0.50 1,176,473 Aug 2020 $ 0.01 250,000 Dec 2020 $ 1.00 1,200,000 Aug 2021 $ 1.00 523,587 Aug 2021 $ 1.00 20,000 Aug 2021 $ 1.00 10,000 Aug 2021 $ 0.01 150,000 Feb 2018 $ 0.01 250,000 Dec 2019 $ 1.10 500,000 May 2021

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	9 Months Ended
	May 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Schedule of future minimum rental payments for operating leases	The following is a schedule, by year, of future minimum lease payments required under non-cancelable operating leases as of May 31, 2016: Years Ending 2016 (remaining) $ 166,830 2017 676,850 2018 695,282 2019 714,178 2020 717,192 Thereafter 1,642,396 $ 4,612,728

ORGANIZATION AND SUMMARY OF S21

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	9 Months Ended
	May 31, 2016
Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful life	5 years
Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful life	7 years
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Useful life	7 years

ORGANIZATION AND SUMMARY OF S22

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($)	May 31, 2016	Aug. 31, 2015
Derivative Liabilities	$ 490,287	$ 1,664,993
Level 1 [Member]
Derivative Liabilities
Level 2 [Member]
Derivative Liabilities
Level 3 [Member]
Derivative Liabilities	$ 490,287	$ 1,664,993

ORGANIZATION AND SUMMARY OF S23

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2)	9 Months Ended
	May 31, 2016
Dividend yield
Minimum [Member]
Risk free interest rate	0.51%
Expected life	4 days
Volatility	68.00%
Maximum [Member]
Risk free interest rate	1.22%
Expected life	5 years
Volatility	137.00%

ORGANIZATION AND SUMMARY OF S24

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3)	9 Months Ended
	May 31, 2016USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Value at beginning	$ 1,664,993
Issuance of instruments	1,313
Change in value	189,380
Net settlements	(1,365,399)
Value at ending	$ 490,287

ORGANIZATION AND SUMMARY OF S25

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	9 Months Ended
	May 31, 2016	May 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Marketing and advertising expense	$ 53,689	$ 117,596
Net cash from financing activities	$ 1,319,575	2,658,358
Description of organization	The Company currently has 136 employees and has served more than 60 education clients and over 75 degree programs.
Stock-based compensation	$ 170,215	$ 140,461

PROPERTY AND EQUIPMENT (Details

PROPERTY AND EQUIPMENT (Details) - USD ($)	May 31, 2016	Aug. 31, 2015
Gross property and equipment	$ 601,832	$ 601,832
Accumulated depreciation	(508,033)	(458,960)
Net property and equipment	93,799	142,872
Computer Equipment [Member]
Gross property and equipment	553,255	553,255
Software And Equipment [Member]
Gross property and equipment	39,400	39,400
Furniture & Fixtures [Member]
Gross property and equipment	$ 9,177	$ 9,177

PROPERTY AND EQUIPMENT (Detai27

PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	9 Months Ended
	May 31, 2016	May 31, 2015
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense	$ 49,073	$ 47,866

NOTES PAYABLE (Details)

NOTES PAYABLE (Details) - USD ($)	May 31, 2016	Aug. 31, 2015
Years Ending August 31,
2,016	$ 7,433,773
2,017	6,787
2,018
2,019
Total	7,440,560
Note discount	(385,624)	$ (1,364,771)
Long-term Debt	$ 7,054,936

NOTES PAYABLE (Details Narrativ

NOTES PAYABLE (Details Narrative) - USD ($)

Dec. 14, 2016

Jul. 15, 2016

Jul. 14, 2016

Jul. 11, 2016

Jun. 23, 2016

Feb. 04, 2016

Nov. 06, 2015

Sep. 24, 2015

Aug. 14, 2015

Dec. 31, 2014

May 22, 2014

Dec. 31, 2015

Aug. 21, 2015

Apr. 30, 2015

Mar. 31, 2015

Aug. 31, 2014

May 31, 2016

Aug. 31, 2015

Dec. 31, 2014

Jan. 18, 2016

Dec. 14, 2015

Apr. 13, 2015

Jul. 31, 2014

May 28, 2014

Dec. 31, 2013

Oct. 31, 2010

Debt Instrument unamortized discount

$ 385,624

$ 1,364,771

Interest expense

1,500,000

Debt carrying value

$ 7,440,560

Weighted average price per share

$ 0.16

Common stock issued

49,824,629

45,114,297

Opus Bank [Member] | Opus Credit Agreement [Member]

Outstanding amount

$ 1,583,156

$ 1,583,156

Line of credit amount

2,085,670

2,085,670

Opus Bank [Member] | Credit Agreement (Second Amendment) [Member]

Amortization of debt discount

$ 19,570

Warrants value

$ 78,281

Exercise price of warrant (in dollars per share)

$ 1

Number of shares for dilutive issuances

375,000

Debt Instrument unamortized discount

$ 26,094

Line of credit interest rate

8.00%

Opus Bank [Member] | Credit Agreement (Second Amendment) [Member] | Warrant [Member]

Number of shares issued

248,011

Opus Bank [Member] | Credit Agreement (Second Amendment) [Member] | Lenders [Member]

Lone of credit maximum borrowing amount

$ 3,000,000

Opus Bank [Member] | Opus Credit Agreement (Third Amendment) [Member] | PCS Link, Inc. [Member]

Interest rate

8.00%

Exercise price of warrant (in dollars per share)

$ 1

Unsecured debt aggregate gross proceeds

$ 1,250,000

Opus Bank [Member] | Opus Credit Agreement (Third Amendment) [Member] | Warrant [Member] | PCS Link, Inc. [Member]

Number of shares issued

1,200,000

Opus Bank [Member] | Opus Credit Agreement (Fourth Amendment) [Member] | PCS Link, Inc. [Member] | Subsequent Event [Member]

Maturity date

Oct. 31, 2016

Opus Bank [Member] | Promissory Note [Member] | Opus Credit Agreement [Member]

Outstanding amount

$ 2,000,000

California United Bank [Member]

Debt instrument fee amount

$ 925,907

California United Bank [Member] | Opus Credit Agreement [Member] | Subsequent Event [Member]

Maturity date

Oct. 31, 2016

California United Bank [Member] | Opus Credit Agreement (Third Amendment) [Member]

Exercise price (in dollars per share)

$ 1

Exercisable warrant issued

523,587

Deferred interest due upon raising working capital

$ 2,000,000

California United Bank [Member] | Promissory Note [Member]

Description of debt interest rate

Five percent (5%) in excess of the Prime Rate.

California United Bank [Member] | 2013 CUB Promissory Note [Member]

Face amount

$ 1,250,000

Interest rate

7.25%

Colgan Financial Group, Inc [Member]

Amortization of the note discount

$ 185,000

Description of conversion price

The conversion feature and warrants both include provisions that call for the instrument to be converted to equity at a price equal to the lesser of (i) $1.50 per share or (ii) 85% of the weighted average price per share of the Company’s trading price for the 10 trading days prior to conversion / exercise.

Colgan Financial Group, Inc [Member] | Warrant [Member] | Subsequent Event [Member]

Number of shares issued

1,592,063

Colgan Financial Group, Inc [Member] | 2014 CFG Promissory Note [Member]

Face amount

$ 500,000

$ 500,000

Interest rate

12.00%

12.00%

Debt terms

3 years

Fair value issunace of note

$ 323,000

Description of conversion price

The conversion feature and warrants both include provisions that call for the instrument to be converted to equity at a price equal to the lesser of (i) $1.50 per share or (ii) 85% of the weighted average price per share of the Company’s trading price for the 10 trading days prior to conversion / exercise.

Colgan Financial Group, Inc [Member] | Promissory Note [Member] | Loan and Security Agreement [Member]

Face amount

$ 688,120

Maturity date

Apr. 15, 2016

Debt carrying value

$ 842,947

Weighted average price per share

$ 1.50

Amortization of the note discount

$ 117,000

Conversion feature derivative liability value

188,000

Convertible promissory notes

200,000

Description of conversion price

i) 85% of the weighted average price per share of the Company’s common stock as reported by the exchange or over the counter market for the ten (10) trading days prior to the date of the notice of conversion or (ii) $1.50. The conversion feature is accounted for as a derivative liability in accordance with ASC 815.

Colgan Financial Group, Inc [Member] | 2015 CFG Promissory Note [Member] | Loan and Security Agreement [Member]

Debt instrument increase additional borrowings

$ 200,000

Colgan Financial Group, Inc [Member] | 2013 CFG Promissory Note [Member] | Loan and Security Agreement [Member]

Face amount

$ 600,000

Interest rate

2.50%

Paydown amount in connection with an equity funding

$ 144,000

Redwood Fund LP [Member]

Debt accrued interest

8,000

Amortization of debt discount

11,000

Redwood Fund LP [Member] | Promissory Note [Member]

Face amount

$ 235,294

$ 30,000

Interest rate

10.00%

18.00%

Description of payment terms

Principal and interest on this Note shall be due and payable on the earlier of (a) the closing of financing round , whether debt, equity, or convertible debt of at least Two Hundred Fifty Thousand Dollars ($250,000.00) or (b) March 21, 2016 at 5:00P.M. Pacific Standard Time.

Debt instrument increase additional borrowings

$ 15,000

Debt terms

1 year

Debt accrued interest

3,400

Description of original issue discount

15% or $35,294.

Redwood Fund LP [Member] | Convertible Note [Member]

Face amount

$ 125,000

$ 588,236

Interest rate

10.00%

10.00%

Debt instrument increase additional borrowings

$ 250,000

Debt terms

6 months

5 years

Exercise price (in dollars per share)

$ 1

Debt accrued interest

7,089

Interest expense

$ 1,165,202

$ 2,346,461

Amortization of the note discount

$ 25,000

441,000

$ 177,647

Common stock issued

200,000

Convertible promissory notes

$ 250,000

Issued shares of common stock

3,359,775

Description of conversion price

The conversion feature includes provisions that call for the instrument to be converted to equity at a price equal to (i) $1.00 if the Company’s common stock price closes above $1.00; (ii) the average of the publicly reported closing bid and ask price if the Company’s publicly reported common stock price closes between $0.50 and $0.99; or (iii) $0.50 if the Company’s publicly reported common stock price closes below $0.50.

Description of original issue discount

20% or $25,000 .

Redwood Fund LP [Member] | Convertible Note [Member] | Warrant [Member]

Number of shares issued

295,000

Lincoln Park Capital Fund LLP [Member]

Recognized amortization of the note discount

185,000

Lincoln Park Capital Fund LLP [Member] | Convertible Note [Member]

Face amount

$ 295,000

295,000

Interest rate

10.00%

Debt instrument increase additional borrowings

$ 247,000

Debt terms

1 year

Exercisable warrant issued

400,000

Exercise price of warrant (in dollars per share)

$ 1

Exercisable period of warrant

5 years

Amortization of the note discount

$ 215,000

Description of conversion price

The conversion feature includes provisions that call for the instrument to be converted to equity at a price equal to (i) $1.00 if the Company’s common stock price closes above $1.00; (ii) the average of the publicly reported closing bid and ask price if the Company’s publicly reported common stock price closes between $0.50 and $0.99; or (iii) $0.50 if the Company’s publicly reported common stock price closes below $0.50.

Recognized amortization of the note discount

153,000

Lincoln Park Capital Fund LLP [Member] | Convertible Note [Member] | Subsequent Event [Member]

Maturity date

Oct. 31, 2016

First Fire Global Opportunities Fund, LLC [Member] | Convertible Note [Member]

Face amount

$ 275,000

Amortization of debt discount

$ 52,320

$ 6,000

Exercisable warrant issued

250,000

Exercise price of warrant (in dollars per share)

$ 0.01

Description of conversion price

The conversion feature includes provisions that call for the instrument to be converted to equity at a price equal to (i) shall be equal to $0.40 (the “Fixed Conversion Price”);provided, however that from and after the occurrence of any Event of Default hereunder, the Conversion Price shall be the lower of: (i) the Fixed Conversion Price or (ii) 75% multiplied by the lowest sales price of the Common Stock in a public market during the twenty-one (21) consecutive Trading Day period immediately preceding the Trading Day that the Company receives a Notice of Conversion; and provided, further, however, and notwithstanding the above calculation of the Conversion Price, if, prior to the repayment or conversion of this Note, in the event the Borrower consummates a registered or unregistered primary offering of its securities for capital raising purposes (a “Primary Offering”), the Holder shall have the right, in its discretion, to (x) demand repayment in full of an amount equal to any outstanding Principal Amount and interest (including Default Interest) under this Note as of the closing date of the Primary Offering or (y) convert any outstanding Principal Amount and interest (including any Default Interest) under this Note into Common Stock at the closing of such Primary Offering at a Conversion Price equal to the lower of (A) the Fixed Conversion Price and (B) a ten percent (10%) discount to the offering price to investors in the Primary Offering; provided, however, that from and after the occurrence of any Event of Default hereunder, the Conversion Price shall equal the lower of (Y) the Fixed Conversion Price and (Z) a twenty percent (20%) discount to the offering price to investors in the Primary Offering.

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details)	9 Months Ended
	May 31, 2016$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding, beginning balance | shares	1,750,000
Granted | shares	3,235,000
Exercised | shares
Cancelled/Forfeited | shares
Outstanding, ending balance | shares	4,985,000
Exercisable, ending balance | shares	1,750,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll forward]
Outstanding, beggining balance | $ / shares	$ 0.37
Granted | $ / shares	0.16
Exercised | $ / shares
Cancelled/Forfeited | $ / shares
Outstanding, ending balance | $ / shares	0.23
Exercisable, ending balance | $ / shares	$ 0.37
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted-Average Remaining Contractual Life [Roll-Forward]
Outstanding, beginning balance	8 years 6 months 14 days
Granted	9 years 8 months 1 day
Outstanding, ending balance	9 years 3 months 11 days
Exercisable, ending balance	8 years 6 months 14 days

STOCKHOLDERS' EQUITY (Details 1

STOCKHOLDERS' EQUITY (Details 1) - $ / shares	9 Months Ended
	May 31, 2016	Apr. 01, 2016	Feb. 24, 2016	Aug. 31, 2015
Option Outstanding	4,985,000			1,750,000
Option Exercise Price	$ 0.23			$ 0.37
Option Remaining Contractual Life	9 years 3 months 11 days
Option Exercisable	1,750,000
Option Exercisable, Price	$ 0.37
Option Exercisable, Remaining Contractual Life	8 years 6 months 14 days
Employee Stock Options [Member]
Option Outstanding	4,985,000	500,000	1,675,000
Option Exercise Price	$ 0.23
Option Remaining Contractual Life	9 years 3 months 11 days
Option Exercisable	1,750,000
Option Exercisable, Price	$ 0.37
Option Exercisable, Remaining Contractual Life	8 years 6 months 14 days
Exercise Price $ 0.01 [Member] | Employee Stock Options [Member]
Option Outstanding	700,000
Option Exercise Price	$ 0.01
Option Remaining Contractual Life	8 years 1 month 24 days
Option Exercisable	700,000
Option Exercisable, Price	$ 0.01
Option Exercisable, Remaining Contractual Life	8 years 1 month 24 days
Exercise Price $ 0.50 [Member] | Employee Stock Options [Member]
Option Outstanding	600,000
Option Exercise Price	$ 0.5
Option Remaining Contractual Life	8 years 9 months 11 days
Option Exercisable	600,000
Option Exercisable, Price	$ 0.5
Option Exercisable, Remaining Contractual Life	8 years 9 months 11 days
Exercise Price $ 0.75 [Member] | Employee Stock Options [Member]
Option Outstanding	450,000
Option Exercise Price	$ 0.75
Option Remaining Contractual Life	8 years 10 months 2 days
Option Exercisable	450,000
Option Exercisable, Price	$ 0.75
Option Exercisable, Remaining Contractual Life	8 years 10 months 2 days
Exercise Price $ 0.35 [Member] | Employee Stock Options [Member]
Option Outstanding	910,000
Option Exercise Price	$ 0.35
Option Remaining Contractual Life	9 years 5 months 8 days
Exercise Price $ 0.08 [Member] | Employee Stock Options [Member]
Option Outstanding	1,825,000
Option Exercise Price	$ 0.08
Option Remaining Contractual Life	9 years 8 months 26 days
Exercise Price $ 0.11 [Member] | Employee Stock Options [Member]
Option Outstanding	500,000
Option Exercise Price	$ 0.11
Option Remaining Contractual Life	9 years 10 months 2 days

STOCKHOLDERS' EQUITY (Details 2

STOCKHOLDERS' EQUITY (Details 2) - Warrant [Member]	9 Months Ended
	May 31, 2016$ / sharesshares
Exercise Price $ 1.00 [Member]
Warrants Outstanding Exercise Price | $ / shares	$ 1
Number of Warrants Outstanding | shares	1,264,023
Warrants Outstanding Expiration Date	Nov. 30, 2024
Exercise Price $ 0.01 [Member]
Warrants Outstanding Exercise Price | $ / shares	$ 0.01
Number of Warrants Outstanding | shares	100,000
Warrants Outstanding Expiration Date	Jul. 31, 2016
Exercise Price $ 1.00 [Member]
Warrants Outstanding Exercise Price | $ / shares	$ 1
Number of Warrants Outstanding | shares	295,000
Warrants Outstanding Expiration Date	Apr. 30, 2020
Exercise Price $ 0.08 [Member]
Warrants Outstanding Exercise Price | $ / shares	$ 0.08
Number of Warrants Outstanding | shares	1,110,297
Warrants Outstanding Expiration Date	Dec. 31, 2017
Exercise Price $ 0.10 [Member]
Warrants Outstanding Exercise Price | $ / shares	$ 0.10
Number of Warrants Outstanding | shares	1,110,297
Warrants Outstanding Expiration Date	Dec. 31, 2017
Exercise Price $ 1.00 [Member]
Warrants Outstanding Exercise Price | $ / shares	$ 1
Number of Warrants Outstanding | shares	400,000
Warrants Outstanding Expiration Date	Aug. 31, 2020
Exercise Price $ 0.50 [Member]
Warrants Outstanding Exercise Price | $ / shares	$ 0.50
Number of Warrants Outstanding | shares	1,176,473
Warrants Outstanding Expiration Date	Aug. 31, 2020
Exercise Price $ 0.01 [Member]
Warrants Outstanding Exercise Price | $ / shares	$ 0.01
Number of Warrants Outstanding | shares	250,000
Warrants Outstanding Expiration Date	Dec. 31, 2020
Exercise Price $ 1.00 [Member]
Warrants Outstanding Exercise Price | $ / shares	$ 1
Number of Warrants Outstanding | shares	1,200,000
Warrants Outstanding Expiration Date	Aug. 31, 2021
Exercise Price $ 1.00 [Member]
Warrants Outstanding Exercise Price | $ / shares	$ 1
Number of Warrants Outstanding | shares	523,587
Warrants Outstanding Expiration Date	Aug. 31, 2021
Exercise Price $ 1.00 [Member]
Warrants Outstanding Exercise Price | $ / shares	$ 1
Number of Warrants Outstanding | shares	20,000
Warrants Outstanding Expiration Date	Aug. 31, 2021
Exercise Price $ 1.00 [Member]
Warrants Outstanding Exercise Price | $ / shares	$ 1
Number of Warrants Outstanding | shares	10,000
Warrants Outstanding Expiration Date	Aug. 31, 2021
Exercise Price $ 0.01 [Member]
Warrants Outstanding Exercise Price | $ / shares	$ 0.01
Number of Warrants Outstanding | shares	150,000
Warrants Outstanding Expiration Date	Feb. 28, 2018
Exercise Price $ 0.01 [Member]
Warrants Outstanding Exercise Price | $ / shares	$ 0.01
Number of Warrants Outstanding | shares	250,000
Warrants Outstanding Expiration Date	Dec. 31, 2019
Exercise Price $ 1.10 [Member]
Warrants Outstanding Exercise Price | $ / shares	$ 1.10
Number of Warrants Outstanding | shares	500,000
Warrants Outstanding Expiration Date	May 31, 2021

STOCKHOLDERS' EQUITY (Details N

STOCKHOLDERS' EQUITY (Details Narrative) - USD ($)	Sep. 24, 2015	Sep. 16, 2015	May 31, 2016	May 31, 2015	May 31, 2016	May 31, 2015	Apr. 01, 2016	Feb. 24, 2016	Aug. 31, 2015	Jul. 31, 2014
Common stock, authorized			937,500,000		937,500,000				937,500,000
Common stock, par value (in dollars per share)			$ 0.001		$ 0.001				$ 0.001
Number of shares outstanding			4,985,000		4,985,000				1,750,000
Excercise price of options outstanding			$ 0.23		$ 0.23				$ 0.37
Interest expense			$ 550,801	$ 198,477	$ 3,240,317	$ 510,275
Weighted average remaining contractual life					9 years 3 months 11 days
Interest expense					$ 1,500,000
2014 Stock Option Plan [Member]
Number of shares authorized										5,000,000
Maximum [Member] | Employee Stock Options [Member]
Risk free interest rate					2.72%
Volatility					100.00%
Maximum [Member] | Employee Stock Options [Member] | Board Of Directors [Member]
Exercise price			$ 0.01		$ 0.01
Excercise price of options outstanding			0.01		$ 0.01
Minimum [Member] | Employee Stock Options [Member]
Risk free interest rate					1.21%
Volatility					30.00%
Minimum [Member] | Employee Stock Options [Member] | Board Of Directors [Member]
Exercise price			0.75		$ 0.75
Excercise price of options outstanding			$ 0.75		$ 0.75
Employee Stock Options [Member]
Number of shares outstanding			4,985,000		4,985,000		500,000	1,675,000
Exercise price (in dollars per share)							$ 0.11	$ 0.08
Expected life					5 years 6 months
Excercise price of options outstanding			$ 0.23		$ 0.23
Weighted average remaining contractual life					9 years 3 months 11 days
Employee Stock Options [Member] | Board Of Directors [Member]
Number of shares outstanding			910,000		910,000
Additional number of shares outstanding			1,750,000		1,750,000
Exercise price (in dollars per share)			$ 0.35		$ 0.35
Rogers [Member] | Common Stock [Member]
Shares issued for common stock		625,000
Byrne [Member] | Common Stock [Member]
Shares issued for common stock		625,000
Colgan Financial Group, Inc [Member] | Common Stock [Member]
Interest expense	$ 1,365,391
Colgan Financial Group, Inc [Member] | Common Stock [Member] | Opus Credit Agreement (Third Amendment) [Member]
Exercise price	$ 0.10
Debt face amount	$ 80,000
Ignite Capital [Member] | Consulting Agreements [Member]
Number of shares issued for services (in shares)					500,000
Value of shares issued for services					$ 317,500
Uptick Capital [Member] | Consulting Agreements [Member]
Number of shares issued for services (in shares)					410,332
Value of shares issued for services					$ 97,676
EMC, LLC [Member] | Consulting Agreements [Member]
Number of shares issued for services (in shares)					500,000
Value of shares issued for services					$ 40,000
Warrant [Member]
Number of shares issued for services (in shares)					1,264,023
Value of shares issued for services					$ 493,329
Warrant [Member] | Consulting Agreements [Member]
Shares issued for common stock					2,653,587
Value of shares issued					$ 123,772
Warrant [Member] | Mr. Kyle Murphy [Member]
Shares issued for common stock					250,000

CONCENTRATIONS (Details Narrati

CONCENTRATIONS (Details Narrative) - Customer Concentration Risk [Member] - Sales Revenue, Services, Net [Member] - Number	9 Months Ended
	May 31, 2016	May 31, 2015
Concentration Risk [Line Items]
Percentage of concentration risk	59.60%	41.00%
Number of customer	5	1
Number of projects		3

INCOME TAXES (Details Narrative

INCOME TAXES (Details Narrative)	9 Months Ended
	May 31, 2016
Income Tax Disclosure [Abstract]
Percentage of valuation allowance	100.00%

COMMITMENTS AND CONTINGENCIES36

COMMITMENTS AND CONTINGENCIES (Details)	Aug. 31, 2015USD ($)
Commitments and Contingencies Disclosure [Abstract]
2016 (remaining)	$ 166,830
2,017	676,850
2,018	695,282
2,019	714,178
2,020	717,192
Thereafter	1,642,396
Total	$ 4,612,728

COMMITMENTS AND CONTINGENCIES37

COMMITMENTS AND CONTINGENCIES (Details Narratives) - USD ($)	Jul. 05, 2016	Jun. 12, 2016	Apr. 18, 2016	Mar. 11, 2016	May 31, 2016	May 31, 2015
Lease expiration period					2,024
Rent expense					$ 553,983	$ 398,708
Gain (loss) on contract termination				$ 100,000
F500 Settlement Agreement [Member]
Loss contingency loss in period		$ 130,000
Shares issued for common stock			750,000
Loss contingency lawsuit filing date			December 15, 2015 and April 14, 2016
Accured settlement amount					$ 130,000
Robin Hood Settlement Agreement [Member]
Loss contingency loss in period	$ 20,000
Gain (loss) on contract termination	$ 5,000,000
Loss contingency lawsuit filing date	August 31, 2013
Settlement Contribution paid by insurance carrier	Approximately $380,000 of the PCS Settlement Contribution is to be paid by the Company’s insurance carrier, and the remaining $20,000 will be paid by the Company.
Loss contingency period of occurrence	As part of a full resolution of the Action and in order to avoid the continued cost and uncertainty of litigation, PCS Link entered into a separate confidential settlement agreement (“the Patriot Settlement Agreement”) with Patriot, pursuant to which PCS Link agreed to enter into a new five (5) year Master Services Agreement (“MSA”) with Patriot that extends the current service relationship between the Company and Patriot. The MSA shall provide certain preferential pricing and terms to Patriot and shall require PCS Link to provide services to Patriot through October of 2021. In return, Patriot has agreed to (a) release all claims against PCS Link and (b) dismiss its counter-complaint against PCS Link within ten (10) days of execution of the Robin Hood Settlement Agreement.

DISCONTINUED OPERATIONS (Detail

DISCONTINUED OPERATIONS (Details Narrative) - USD ($)	May 31, 2016	Aug. 31, 2015
Discontinued Operations and Disposal Groups [Abstract]
Current assets to be disposed	$ 37,000	$ 37,000
Current liabilities to be disposed	$ 336,000	$ 336,000

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($)	Jul. 14, 2016	Jun. 30, 2016	Jun. 23, 2016
Securities Purchase Agreement [Member]
Maturity date		Aug. 28, 2016
California United Bank [Member] | Opus Credit Agreement [Member]
Maturity date	Oct. 31, 2016
Colgan Financial Group, Inc [Member] | Warrant [Member]
Number of shares issued			1,592,063
Warrants exercise price (in dollars per share)			$ 0.04
Colgan Financial Group, Inc [Member] | December 2014 Secured Convertible Promissory Note [Member]
Number of shares issued			1,342,063
Robert Logan [Member] | Warrant [Member]
Number of shares issued			1,592,063
Warrants exercise price (in dollars per share)			$ 0.032
Robert Logan [Member] | December 2014 Secured Convertible Promissory Note [Member]
Number of shares issued			1,842,063
First Fire Global Opportunities Fund [Member] | Promissory Note [Member]
Number of shares issued		100,000
Warrants exercise price (in dollars per share)		$ 0.05
Face amount		$ 25,000
Maximum increase in principle		$ 15,000