Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Feb. 28, 2014 | Sep. 03, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'PERVASIP CORP | ' |
Entity Central Index Key | '0000090721 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 28-Feb-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--11-30 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 1,007,549,997 |
Document Fiscal Period Focus | 'Q1 | ' |
Document Fiscal Year Focus | '2014 | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Feb. 28, 2014 | Nov. 30, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $11,325 | $17,242 |
Accounts receivable, net | 68,486 | 67,919 |
Prepaid expenses and other current assets | 20,153 | 26,123 |
Total current assets | 99,964 | 111,284 |
Other assets | 106,375 | 90,108 |
Total assets | 206,339 | 201,392 |
Current liabilities: | ' | ' |
Current portion of long-term debt | 3,802,982 | 3,766,468 |
Accounts payable and accrued liabilities | 1,910,534 | 2,409,194 |
Accounts payable and other accrued liabilities - related party | 365,533 | 303,454 |
Due to Pension Benefit Guaranty Corporation | 1,938,027 | 1,914,392 |
Related party debt | 668,505 | 634,756 |
Derivative liabilities- current portion | 1,316,785 | 362,389 |
Total current liabilities | 10,002,365 | 9,390,653 |
Long-term debt less current portion | 2,209 | 13,660 |
Derivative liabilities - long term portion | ' | 1,309,955 |
Total liabilities | 10,004,574 | 10,714,268 |
Stockholders' equity deficiency: | ' | ' |
Preferred stock, $.001 par value; 21,000,010 shares authorized, 51 shares issued and outstanding | ' | ' |
Common stock, $.001 par value; 8,978,999,990 shares authorized, 1,007,549,997 and 799,549,997 shares issued and outstanding in 2014 and 2013 | 1,007,550 | 799,550 |
Capital in excess of par value | 40,511,168 | 40,424,222 |
Accumulated other comprehensive income | 1,183 | 1,183 |
Deficit | -51,318,136 | -51,737,831 |
Total stockholders' equity deficiency | -9,798,235 | -10,512,876 |
Total liabilities and stockholders' equity deficiency | $206,339 | $201,392 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Feb. 28, 2014 | Nov. 30, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 21,000,010 | 1,000,000 |
Preferred stock, shares issued | 51 | 51 |
Preferred stock, shares outstanding | 51 | 51 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 8,978,999,990 | 800,000,000 |
Common stock, shares issued | 1,007,549,997 | 799,549,997 |
Common stock, shares outstanding | 1,007,549,997 | 799,549,997 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
Income Statement [Abstract] | ' | ' |
Revenues | $213,662 | $238,565 |
Costs and expenses: | ' | ' |
Cost of services | 124,034 | 110,871 |
Selling, general and administrative | 377,425 | 380,549 |
Total costs and expenses | 501,459 | 491,420 |
Loss from operations | -287,797 | -252,855 |
Other income (expense): | ' | ' |
Interest expense | -518,851 | -1,116,429 |
Gain on troubled debt restructuring | ' | 2,714,461 |
Gain on sale of subsidiary | 640,180 | ' |
Gain on settlement of liabilities | 300,686 | 216,228 |
Gain (loss) on change in value of derivative liabilities | 285,477 | -3,436,119 |
Total other income (expense) | 707,492 | -1,621,859 |
Net income (loss) | $419,695 | ($1,874,714) |
Basic earnings (loss) per share | $0 | ($0.01) |
Diluted earnings (loss) per share | $0 | ($0.01) |
Weighted average number of shares outstanding: Basic | 884,733,330 | 355,594,056 |
Weighted average number of shares outstanding: Diluted | 2,097,022,786 | 355,594,056 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
Comprehensive Income (Loss) | ' | ' |
Net income (loss) | $419,695 | ($1,874,714) |
Other Comprehensive income (loss): | ' | ' |
Foreign currency translation adjustment | ' | ' |
Comprehensive income (loss) | $419,695 | ($1,874,714) |
Consoldiated_Statements_of_Cas
Consoldiated Statements of Cash Flows (USD $) | 3 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
Cash flow from operating activities: | ' | ' |
Net income (loss) | $419,695 | ($1,874,714) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ' | ' |
Stock-based compensation | 7,946 | 6,720 |
Provision for bad debts | -1,107 | ' |
Amortization of debt discount | 373,225 | 1,110,047 |
Gain on troubled debt restructuring | ' | -2,714,461 |
Gain on sale of subsidiary | -640,180 | ' |
Gain on settlement of liabilities | -300,686 | -216,228 |
Change in fair value of derivative liabilities | -285,477 | 3,436,119 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 540 | -1,417 |
Prepaid expenses and other assets | 5,970 | -49,076 |
Accounts payable, other accrued liabilities and pension related liabilities | 252,025 | 104,306 |
Net cash used in operating activities | -168,049 | -198,704 |
Cash flows from financing activities: | ' | ' |
Principal payments of debt | -60,368 | -5,827 |
Proceeds from borrowings | 222,500 | 215,500 |
Net cash provided by financing activities | 162,132 | 209,673 |
Increase (decrease) in cash and cash equivalents | -5,917 | 10,969 |
Cash and cash equivalents at beginning of period | 17,242 | 12,366 |
Cash and cash equivalents at the end of period | 11,325 | 23,335 |
Supplemental disclosure of cash flow information: | ' | ' |
Cash paid during the period for: Income taxes | ' | ' |
Cash paid during the period for: Interest | 34,493 | ' |
Non-cash financing transactions: | ' | ' |
Fair value of new derivative liabilities | $230,847 | $1,946,880 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Feb. 28, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Presentation | ' |
Note 1– Basis of Presentation | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission for quarterly reports on Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended February 28, 2014, are not necessarily indicative of the results that may be expected for the year ended November 30, 2014. For further information, refer to the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended November 30, 2013. | |
During the three months ended February 28, 2014, the Company sold a non-operating subsidiary for $100. In connection with the sale, the Company recorded a gain of $640,180, which represented the difference of the proceeds received and the net liabilities of the subsidiary that was sold. |
Going_Concern_Matters_and_Real
Going Concern Matters and Realization of Assets | 3 Months Ended | ||
Feb. 28, 2014 | |||
Going Concern Matters and Realization of Assets [Abstract] | ' | ||
Going Concern Matters and Realization of Assets | ' | ||
Note 2 – Going Concern Matters and Realization of Assets | |||
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the ordinary course of business. However, the Company has sustained substantial losses from its continuing operations in recent years and as of February 28, 2014, the Company has negative working capital of $9,902,401 and a stockholders’ deficit of $9,798,235. In addition, the Company is unable to meet its obligations as they become due and sustain its operations. The Company believes that its existing cash resources are not sufficient to fund its continuing operating losses, capital expenditures, lease and debt payments and working capital requirements. | |||
The Company may not be able to raise sufficient additional debt, equity or other cash on acceptable terms, if at all. Failure to generate sufficient revenues, achieve certain other business plan objectives or raise additional funds could have a material adverse effect on the Company’s results of operations, cash flows and financial position, including its ability to continue as a going concern, and may require it to significantly reduce, reorganize, discontinue or shut down its operations. | |||
In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company which, in turn, is dependent upon the Company’s ability to meet its financing requirements on a continuing basis, and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in its existence. | |||
Management’s plans include: | |||
1 | Seek to raise debt or equity for working capital purposes and to pay off existing debt agreements. With sufficient additional cash available to the Company, it can begin to cover monthly cash losses and allocate funds toward marketing its products to achieve additional sales and consequently cut monthly operating losses. | ||
2 | Continue to create new variations of our mobile VoIP app to obtain new subscribers. The Company’s mobile VoIP application allows for low-cost calling to any landline or cell phone in the world. The Company recently added the ability for a subscriber to buy telephone numbers from dozens of countries and download the number to his or her smart phone or tablet. This feature allows people who do not use the VoIP application to call VoIP application user for the cost of a local call, even when he or she is overseas, and receiving calls on a mobile phone. | ||
3 | Continue to develop new uses and distribution channels for its mobile VoIP service. The Company’s mobile VoIP application allows for low-cost calling to any landline or cell phone in the world. In addition to ad words marketing initiatives, the Company is negotiating with cable television companies to resell its mobile app products via a white-labeled solution. | ||
There can be no assurance that the Company will be able to achieve its business plan objectives or be able to achieve or maintain cash-flow-positive operating results. If the Company is unable to generate adequate funds from operations or raise sufficient additional funds, the Company may not be able to repay its existing debt, continue to operate its network, respond to competitive pressures or fund its operations. As a result, the Company may be required to significantly reduce, reorganize, discontinue or shut down its operations. The financial statements do not include any adjustments that might result from this uncertainty. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 3 Months Ended |
Feb. 28, 2014 | |
Accounting Changes and Error Corrections [Abstract] | ' |
Recent Accounting Pronouncements | ' |
Note 3 – Recent Accounting Pronouncements | |
There were no recent accounting pronouncements that have had a material effect on the Company’s financial position or results of operations. |
Major_Customers
Major Customers | 3 Months Ended |
Feb. 28, 2014 | |
Risks and Uncertainties [Abstract] | ' |
Major Customers | ' |
Note 4 – Major Customers | |
During the three-month periods ended February 28, 2014 and February 28, 2013, one customer accounted for approximately 38% and 37% of our revenues, respectively. At February 28, 2014 and November 30, 2013, accounts receivable owed to us from our major customer accounted for 0% and 45%, respectively, of our total accounts receivable balances. |
Net_Income_Loss_Per_Common_Sha
Net Income (Loss) Per Common Share | 3 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Net Income (Loss) Per Common Share | ' | ||||||||
Note 5 – Net Income (Loss) Per Common Share | |||||||||
Basic net income (loss) per share is computed by dividing net income available to common stockholders (numerator) by the weighted average number of vested, common shares outstanding during the period (denominator). Diluted net income (loss) per share is computed on the basis of the weighted average number of shares of common stock outstanding plus the effect of dilutive potential common shares outstanding during the period using the if-converted method. Dilutive potential common shares include shares issuable upon exercise of outstanding stock options, warrants and convertible debt agreements. | |||||||||
Three Months Ended | Three Months Ended | ||||||||
Feb. 28, 2014 | Feb. 28, 2013 | ||||||||
Net income (loss) – numerator basic | $ | 419,695 | $ | (1,874,714 | ) | ||||
Interest expense attributable to convertible notes, net | 373,225 | ||||||||
Net income plus interest expense attributable to convertible notes, net – numerator diluted | $ | 792,920 | $ | (1,874,714 | ) | ||||
Weighted average common shares outstanding – denominator basic | 884,733,330 | 355,594,056 | |||||||
Effect of dilutive securities | 1,212,289,456 | — | |||||||
Weighted average dilutive common shares outstanding – denominator diluted | 2,097,022,786 | 355,594,056 | |||||||
Net income per common share – basic | $ | 0 | $ | (0.01 | ) | ||||
Net income per common share – diluted | $ | 0 | $ | (0.01 | ) | ||||
Approximately 86,918,833 and 22,103,000 shares of common stock issuable upon the exercise of our outstanding stock options, warrants or convertible debt that were excluded from the calculation of net income per share for the three-month periods ended February 28, 2014 and 2013, respectively, because the effect would be anti-dilutive. | |||||||||
The number of dilutive common shares exceeds the Company’s authorized shares. The company has evaluated its securities in the event the company cannot settle. See note 10. |
StockBased_Compensation_Plans
Stock-Based Compensation Plans | 3 Months Ended |
Feb. 28, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Stock-Based Compensation Plans | ' |
Note 6 – Stock-Based Compensation Plans | |
The Company issues stock options to its employees, consultants and outside directors pursuant to stockholder-approved and non-approved stock option programs and records the applicable expense in accordance with the authoritative guidance of the Financial Accounting Standards Board. This expense is a non-cash expense and it derives from the issuance of stock options, stock purchase warrants and restricted stock. For the three-month periods ended February 28, 2014 and February 28, 2013, the Company recorded $7,946 and $6,720, respectively, in stock-based compensation expense. As of February 28, 2014, there was $19,221 of unrecognized employee stock-compensation expense for previously granted unvested options. |
Accounts_Payable_and_Accrued_E
Accounts Payable and Accrued Expenses | 3 Months Ended |
Feb. 28, 2014 | |
Payables and Accruals [Abstract] | ' |
Accounts Payable and Accrued Expenses | ' |
Note 7 – Accounts Payable and Accrued Expenses | |
When the Company sold certain subsidiaries in December 2006, the Company agreed to reimburse the purchaser for certain disputed claims on the books of the subsidiaries, if the sold subsidiaries were required to pay such claims. At February 28, 2014 and November 30, 2013, the Company has recorded a payable of $796,499 in conjunction with the sale of the subsidiaries. The subsidiary filed for bankruptcy on September 23, 2008, which is still ongoing. If claims are reduced or eliminated by the subsidiaries, and the purchaser provides the Company with appropriate documentation that the Company’s liability has been reduced, such reduction will be reflected on the books of the Company. |
Defined_Benefit_Plan
Defined Benefit Plan | 3 Months Ended |
Feb. 28, 2014 | |
Compensation and Retirement Disclosure [Abstract] | ' |
Defined Benefit Plan | ' |
Note 8 – Defined Benefit Plan | |
The Company received a letter dated July 27, 2011 from the Pension Benefit Guaranty Corporation, (“PBGC”), stating that the Company’s defined benefit pension plan (the “Plan”) was terminated as of September 30, 2010, and the PBGC was appointed trustee of the Plan. Pursuant to the agreement, the PBGC has a claim to the Company for the total amount of the unfunded benefit liabilities of the Plan of plus accrued interest. The PBGC has notified the Company that the liability is due and payable as of the termination date, and interest accrues on the unpaid balance at the applicable rate provided under Section 6621(a) of the Internal Revenue Code. The total amount outstanding to the PBGC at February 28, 2014 and November 30, 2013 was $1,938,027 and $1,914,392, respectively, including accrued interest, which is recorded as a current liability. The Company made no payments to the Plan in the three-months periods ended February 28, 2014 and 2013. The Plan covers approximately 40 former employees. | |
Effective June 30, 1995, the Plan was frozen, ceasing all benefit accruals and resulting in a plan curtailment. There was no pension expense recorded in the three-month periods ended February 28, 2014 and 2013. |
Principal_Financing_Arrangemen
Principal Financing Arrangements | 3 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Principal Financing Arrangements | ' | ||||||||
Note 9 – Principal Financing Arrangements | |||||||||
28-Feb-14 | 30-Nov-13 | ||||||||
Debt due to Laurus | $ | 2,146,023 | $ | 2,108,498 | |||||
Convertible debt due to Factor Fund | 1,945,190 | 2,182,690 | |||||||
Convertible debt due to various lenders | 395,750 | 243,250 | |||||||
Other short-term debt due to various lenders | 178,719 | 248,592 | |||||||
Total debt | 4,665,682 | 4,783,030 | |||||||
Less: current portion of long-term debt | (3,802,982 | ) | (3,766,468 | ) | |||||
Less: discount on debt | (860,491 | ) | (1,002,902 | ) | |||||
Total long-term debt, net of discounts | $ | 2,209 | $ | 13,660 | |||||
Debt due to Laurus | |||||||||
As of February 28, 2014 and November 30, 2013, the Company owed a third party lender, LV Administrative Services, Ltd., as agent for Laurus Master Fund, Ltd. and various affiliates thereof (“Laurus”), $2,146,023 and $2,108,498, respectively. Pursuant to two assignment agreements, in which the Company and Laurus agreed to assign the debt to a third party, the interest rate on the debt was changed to zero percent from January 31, 2012 to April 12, 2013. Beginning on April 12, 2013, the interest rate on the Laurus debt reverted to the rate charged in the original note agreements, which ranges from 5.25% to 20% per annum. The Company has not made payments of principal or interest when due, and is not in compliance with its agreements with Laurus. Laurus has not issued a default notice and has signed an agreement, on two separate occasions, to sell all of its debt at a discount to a third party, however the third parties have not fulfilled all of their terms of the agreements and $2,146,023 and $2,108,498 of debt remains due to Laurus at February 28, 2014 and November 30, 2013, respectively. | |||||||||
During the three months ended February 2013, the Company recorded a troubled debt restructuring gain of $2,714,461. The Company recorded this troubled debt restructuring gain as a result of debt forgiveness by Laurus in exchange for repayments of reduced amounts from other lenders. | |||||||||
Convertible debt due to Factor Fund | |||||||||
In March 2013, 112359 Factor Fund, LLC (the “Fund”), was assigned the $6,368,078 of outstanding debt owed to Laurus, which the Fund could satisfy in full by making certain payments to Laurus. Factor Fund has not met the contractual terms of the assignment agreement, therefore, at November 30, 2013, the Company is still obligated to Laurus as noted above. | |||||||||
During February 2013, the Company entered into a securities purchase agreement with the Fund pursuant to which the Company issued to the Fund (i) an amended convertible debenture in the principal amount of $1,000,000 (“Amended Note 1”) and (ii) a second amended convertible debenture in the principal balance of $1,000,000 (“Amended Note 2” and together with Amended Note 1, the “Amended Notes”). The Amended Notes were sold to the Fund by the Company in exchange for the Fund’s assumption and payment of the Laurus assignment agreement (which required the Fund to make payments totaling $350,000, of which $250,000 was paid, to Laurus), payment to the Company of $150,000, and the agreement to purchase from another lender and cancel an existing convertible debenture in the amount of approximately $35,000. | |||||||||
Absent earlier redemption the Amended Notes mature on December 31, 2014. Interest accrues on the unpaid principal and interest on the notes at a rate per annum equal to 6% for Amended Note 1 and 2% for Amended Note 2. | |||||||||
Principal and interest payments on Amended Note 1 can be made at any time by the Company, with a 30% prepayment premium, or the Fund can elect at any time to convert any portion of Amended Note 1 into shares of common stock of the Company at 100% of the average of the five lowest days’ volume weighted average price of the common stock for the 30 trading days immediately prior to the conversion date. During the three-month periods ending February 28, 2014 and 2013, the Fund converted $277,500 and $78,690 of principal into 203,000,000 and 39,345,576 shares of common stock of the Company, respectively. | |||||||||
The conversion price of Amended Note 1 is based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 - 40. The fair value of the note was recognized as a derivative instrument at the issuance date and was measured at fair value at each reporting period. | |||||||||
Amended Note 2 converts into shares of common stock of the Company in an amount equal to the lesser of the outstanding balance of Amended Note 2 divided by $0.01. Any principal or interest amount can be paid in cash. | |||||||||
During the year ended November 30, 2013, the Fund loaned the Company amounts of $50,000, $35,000 and $12,000 (the “Bridge Notes”). In June 2013, the Fund refinanced the Bridge Notes with additional funding into another note of $665,000 (the “New Note”). The additional funding under the New Note provided cash to purchase two outstanding convertible debentures for an aggregate price of $99,360; cash for operations of $60,000; and $40,000 in cash each month for the months of July 2013 through December 2013. The Company incurred $68,640 in finder fees and legal fees in connection with the New Note, and a $100,000 original issuance discount. The New Note bears interest at 6% per annum and is due December 31, 2014. The Fund can elect at any time to convert any portion of the New Note into shares of common stock of the Company at 60% of the lowest volume weighted average price of the common stock for the 20 trading days immediately prior to the conversion date. The Company received an aggregate of $300,000 in cash in the months of June through December 2013 under the New Note. | |||||||||
The conversion price of the $665,000 of variable conversion price note is based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 - 40. The fair value of the note was recognized as a derivative instrument at the issuance date and is measured at fair value at each reporting period. The Company determined that the fair value of the conversion feature was $67,123 at the issuance date. Debt discount was recorded up to the $40,000 face amount of the note and is amortized to interest expense over the term of the note. The fair value of the conversion feature in excess of the principal amount allocated to the notes was $27,123 and was recognized immediately as additional interest expense. | |||||||||
In conjunction with the New Note, the Company agreed to implement a salary deferral plan to reduce the cash expenditures for personnel, to limit its cash expenditures to certain pre-approved items, and to accrue an additional fee to the Fund of $150,000, which was recorded as interest expense and has been added to the principal balance of Amended Note 1. The Fund agreed to limit its sales of the Company’s common stock, to not engage in any short transactions involving the Company’s common stock, and to not require the Company to increase its authorized shares of common stock for a certain time period, even though the Financing documents require the Company to reserve authorized shares for issuance to the Fund, if the Fund desires to convert existing debt into shares of common stock. | |||||||||
The Amended Notes and New Note are secured by a blanket lien on substantially all of the Company’s assets pursuant to the terms of security agreements executed by the Company and its subsidiaries in favor of the Fund. In addition, the Company’s chief executive officer and chief information officer pledged their combined voting control of the Company pursuant to a stock pledge agreement executed by the two officers in favor of the Fund, to further secure the Company’s obligations under the Amended Notes. If an event of default occurs under the security agreement, the stock pledge agreement, the Amended Notes or the New Note, the secured parties have the right to accelerate payments under such promissory notes and, in addition to any other remedies available to them, to foreclose upon the assets securing such promissory notes. | |||||||||
In connection with the financings, the Company has agreed, for as long as 25% of the principal amount of the financings are outstanding, to certain restrictive covenants, including, among others, that the Company will not declare or pay any dividends, issue any preferred stock that is subject to mandatory redemption prior to the one year anniversary of the maturity date as defined in the agreement, redeem any of its preferred stock or other equity interests, dissolve, liquidate or merge with any other party unless, in the case of a merger, the Company is the surviving entity, materially alter or change the scope of the Company’s business incur any indebtedness except as defined in the agreement, or assume, guarantee, endorse or otherwise become directly or contingently liable in connection with any other party’s obligations. To secure the payment of all obligations to the lender, the Company entered into a Master Security Agreement that assigns and grants to the lender a continuing security interest and first lien on all of the assets of the Company and its subsidiaries. | |||||||||
As of February 28, 2014 and November 30, 2013, the Company owed the Fund $1,945,190 and $2,182,690, respectively. | |||||||||
Convertible Debt due to various lenders | |||||||||
At February 28, 2014, convertible debt due to various lenders consists of notes for $120,000, $98,000, $67,750, $40,000, $37,500 and $32,500, for a total of $395,750. Four of these six notes were outstanding at November 30, 2013. The $120,000 and the $32,500 notes were issued in the first quarter of fiscal 2014. | |||||||||
Convertible debt with a fixed conversion rate | |||||||||
At February 28, 2014 and November 30, 2013, the Company owed a lender $138,000 in connection two notes that are past due, are in default, bear a default interest rate of 18% per annum, and are convertible at prices of $0.015 and $0.02 cents per share. | |||||||||
During the first quarter of fiscal 2013, lenders were assigned $31,000 of debt previously owed to the CEO of the Company which was modified to be convertible debt with a conversion rate of $0.001 to $0.005 per common share and a 0% to 24% interest rate. During the quarter ended February 28, 2013, all of the $31,000 of debt was converted into 11,000,000 shares of common stock of the Company. No conversions of debt with a fixed conversion rate occurred in the first quarter of fiscal 2014. | |||||||||
Convertible debt with a variable conversion rate issued for cash | |||||||||
During the first quarter of fiscal 2014, the Company received a total of $152,500 in cash from lenders for convertible debt. The convertible debt bears interest at 8% and is due between September and October 2014. The lenders can elect at any time to convert any portion of such debt into shares of common stock of the Company at discounts ranging from 30% to 42% of the market price of the common stock as defined in the agreements. | |||||||||
The conversion price of the $152,500 notes is based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 - 40. The fair value of the notes was recognized as a derivative instrument at the issuance date and is measured at fair value at each reporting period. The Company determined that the fair value of the notes was $163,714 at the issuance dates. The debt was recorded a debt discount of $152,500 and is amortized to interest expense over the term of the note. The variance to the fair value of $11,214 was recognized as an initial loss and recorded to change in fair value of derivative liabilities | |||||||||
During the quarter ended February 28, 2013, the Company received $60,000 in cash from a lender for convertible debt. The convertible debt bears interest at 8% and was due between September and October 2013. The lender can elect at any time to convert any portion of the debt into shares of common stock of the Company at a price discount of 42% of the market price of the Company’s common stock, as defined in the agreement. | |||||||||
The conversion price of the $60,000 price notes is based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 - 40. The fair value of the notes was recognized as a derivative instrument at the issuance date and is measured at fair value at each reporting period. | |||||||||
Convertible debt with a variable conversion rate assigned to lenders. | |||||||||
During the quarters ended February 28, 2014 and 2013, no other debt with a variable conversion rate was assigned to a lender. At February 28, 2014 and November 30, 2014, the Company owes one lender $67,750 as a result of an assignment is fiscal 2012. The convertible debt bears interest at 0% and is past due. The lender can elect at any time to convert any portion of the debt into shares of common stock of the Company at a price discount of 55% of the market price of the Company’s common stock as defined in the agreements. | |||||||||
Other short-term debt due to various lenders | |||||||||
During the quarters ended February 28, 2014 and 2013, the Company received $30,000 and $0, respectively from lenders in exchange for notes payable. | |||||||||
At February 28, 2014 and November 30, 2013, the Company owed various lenders $178,719 and $248,592, respectively. Cash payments of $60,368 and $5,827 were made during the quarters ended February 28, 2014 and 2013, respectively, on these notes. Other short-term debt carriers an interest rate of approximately 35% to 45% over the term of the loans. Certain of these notes are secured by assets of the Company. These notes are currently in default. | |||||||||
During the three months ended February 28, 2014 and 2013, the Company recorded a gain on the settlement of liabilities of $300,686 and $216,228, respectively. |
Derivative_Liabilities
Derivative Liabilities | 3 Months Ended | ||||||||||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||||||||||
Derivative Liabilities | ' | ||||||||||||||||||||||||
Note 10. Derivative Liabilities | |||||||||||||||||||||||||
The Company evaluated their convertible note agreements pursuant to ASC 815 and due to there being no minimum or fixed conversion price resulting in an indeterminate number of shares to be issued in the future, the Company determined an embedded derivative existed and ASC 815 applied for their convertible notes. The Company valued the embedded derivatives using the Black-Scholes valuation model. | |||||||||||||||||||||||||
Convertible debt with a variable conversion feature | |||||||||||||||||||||||||
In 2014, we estimated the fair value of the derivatives using the Black-Scholes valuation method with assumptions including: (1) term of 0 to 1.25 years; (2) a computed volatility rate of 201% (3) a discount rate of 1% and (4) zero dividends. Upon settlement the valuation of this embedded derivative was recorded as gain/loss on derivative liability. | |||||||||||||||||||||||||
In 2013, we estimated the fair value of the derivatives using the Black-Scholes valuation method with assumptions including: (1) term of 0.7 to 3 years; (2) a computed volatility rate of 229 to 283% (3) a discount rate of 0.13 to 0.25% and (4) zero dividends. Upon settlement the valuation of this embedded derivative was recorded as gain/loss on derivative liability. | |||||||||||||||||||||||||
Tainted conventional convertible debt | |||||||||||||||||||||||||
In 2014, we estimated the fair value of the derivative using the Black-Scholes valuation method with assumptions including: (1) term of 0 to 1.75 years; (2) a computed volatility rate of 201% (3) a discount rate of 1% and (4) zero dividends. The valuation of this embedded derivative was recorded with an offsetting gain/loss on derivative liability. | |||||||||||||||||||||||||
In 2013, we estimated the fair value of the derivative using the Black-Scholes valuation method with assumptions including: (1) term of 0 to 1.0 years; (2) a computed volatility rate of 232 to 243% (3) a discount rate of 1% and (4) zero dividends. The valuation of this embedded derivative was recorded with an offsetting gain/loss on derivative liability. | |||||||||||||||||||||||||
Tainted stock options and warrants | |||||||||||||||||||||||||
The Company also evaluated all outstanding warrants and options to determine whether these instruments may be tainted. All warrants outstanding were considered tainted as a result of the tainted equity environment and potential inability of the Company to settle the instruments with shares of the Company’s stock as the number of shares issuable cannot be estimated and could exceed that amount of authorized shares available to be issued by the Company. The Company valued the embedded derivatives within the stock options and warrants using the Black-Scholes valuation model. | |||||||||||||||||||||||||
In 2014, we estimated the fair value of the derivative using the Black-Scholes valuation method with assumptions including: (1) term of 0 to 8.25 years; (2) a computed volatility rate of 201% (3) a discount rate of 1% and (4) zero dividends. The valuation of this embedded derivative was recorded with an offsetting gain/loss on derivative liability. | |||||||||||||||||||||||||
In 2013, we estimated the fair value of the derivative using the Black-Scholes valuation method with assumptions including: (1) term of 1.0 to 7.5 years; (2) a computed volatility rate of 232% (3) a discount rate of 1% and (4) zero dividends. The valuation of this embedded derivative was recorded with an offsetting gain/loss on derivative liability. | |||||||||||||||||||||||||
Activity for embedded derivative instruments during the three months ended February 28, 2014 was as follows: | |||||||||||||||||||||||||
Initial valuation | |||||||||||||||||||||||||
of derivative | |||||||||||||||||||||||||
liabilities upon | Change in | Exercise | |||||||||||||||||||||||
Balance at | issuance of new | fair value of | of stock | Conversion | Balance at | ||||||||||||||||||||
November 30, | securities during | derivative | options/ | of debt | February 28, | ||||||||||||||||||||
2013 | the period | liabilities | warrants | to equity | 2014 | ||||||||||||||||||||
Variable convertible debt | $ | 1,467,182 | $ | 230,837 | $ | (117,289 | ) | $ | — | $ | (300,920 | ) | $ | 1,279,810 | |||||||||||
Tainted convertible debt | 139,953 | — | (121,361 | ) | — | — | 18,592 | ||||||||||||||||||
Tainted stock options | 30,343 | — | (20,898 | ) | — | — | 9,445 | ||||||||||||||||||
Tainted warrants | 34,866 | — | (25,929 | — | 8,937 | ||||||||||||||||||||
$ | 1,672,344 | $ | 230,837 | $ | (285,477 | ) | $ | — | $ | (300,920 | ) | $ | 1,316,784 | ||||||||||||
Activity for embedded derivative instruments during the three months ended February 28, 2013 was as follows: | |||||||||||||||||||||||||
Initial valuation | |||||||||||||||||||||||||
of derivative | |||||||||||||||||||||||||
liabilities upon | Change in | Exercise | |||||||||||||||||||||||
Balance at | issuance of new | fair value of | of stock | Conversion | Balance at | ||||||||||||||||||||
November 30, | securities during | derivative | options/ | of debt | February 28, | ||||||||||||||||||||
2012 | the period | liabilities | warrants | to equity | 2013 | ||||||||||||||||||||
Variable convertible debt | $ | 361,760 | $ | 1,946,880 | $ | 2,269,698 | $ | — | $ | (308,797 | ) | $ | 4,269,541 | ||||||||||||
Tainted convertible debt | 264,189 | 1,071,965 | — | (286 | ) | 1,335,868 | |||||||||||||||||||
Tainted stock options | 49,483 | 12,012 | — | — | 61,500 | ||||||||||||||||||||
Tainted warrants | 27,973 | 82,444 | — | — | 110,417 | ||||||||||||||||||||
$ | 703,405 | $ | 1,946,880 | $ | 3,436,119 | $ | — | $ | (309,083 | ) | $ | 5,777,326 | |||||||||||||
Income_Taxes
Income Taxes | 3 Months Ended |
Feb. 28, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
Note 11 – Income Taxes | |
At November 30, 2013, the Company had net operating loss carryforwards for federal income tax purposes of approximately $33,000,000 that expire in the years 2014 through 2032. The Company has provided an allowance for the full value of the related deferred tax asset since it is more likely than not that none of such benefit will be realized. Utilization of the net operating losses may be subject to annual limitations provided by Section 382 of the Internal Revenue Code and similar state provisions. | |
Under Section 108(a) of the Internal Revenue Code, for the three-month period ended February 28, 2014, any gain that is attributable to debt forgiveness is not included in taxable income to the Company as the Company is deemed insolvent for tax purposes. Consequently, the Company has recorded no income tax expense for this three-month period. |
Stockholders_Equity
Stockholders Equity | 3 Months Ended |
Feb. 28, 2014 | |
Equity [Abstract] | ' |
Stockholders Equity | ' |
Note 12 – Stockholders’ Equity | |
As discussed in Note 9, we entered into various transactions where we issued convertible notes to third parties in exchange for existing notes payable with various lenders. Such convertible notes allowed the new debt holders to convert outstanding debt principal into shares of the Company’s common stock at a discount to the trading price of the common stock. To the extent, if any, that there was a beneficial conversion feature associated with these debts, the beneficial conversion feature was bifurcated from the host instrument and accounted for as a freestanding derivative. As a result of such conversions, during the quarter ended February 2014, $366,174 of principal was converted into 203,000,000 shares of common stock, which was valued at $278,800 at the time of conversion, resulting in a gain of $87,374. Also during the first quarter of 2014, the Company’s CEO settled an outstanding debt payable of $10,565 for 5,000,000 shares of common stock, which was valued at $9,500 at the time of the conversion, resulting in a gain of $1,065. |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended |
Feb. 28, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
Note 13 – Related Party Transactions | |
In connection with software development costs, we paid fees to a third-party intellectual property development firm (the “Consultant”) for the three-month periods ended February 28, 2014 and February 28, 2013, of $48,000 and $47,500, respectively. One of our officers performed work for the Consultant, including the function of distributing such funds to appropriate vendors, for which he was not compensated. The fees for software development services performed by the Consultant were deemed to be operating costs. | |
At February 28, 2014 and November 30, 2013, we owed our chief executive officer $986,591 and $938,210, respectively for loans he provided to the Company, unpaid salary and unpaid business expenses. During the first quarter of 2014, the chief executive officer settled an outstanding debt payable of $10,565 for 5,000,000 shares of common stock, which was valued at $9,500 at the time of the conversion, resulting in a gain of $1,065. No such transaction occurred during the first quarter of 2013. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | ||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
Note 14 – Fair Value | |||||||||||||||||
The Fair Value Measurements Topic of the FASB Accounting Standards Codification establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: | |||||||||||||||||
Level 1: inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the company has the ability to access at the measurement date. | |||||||||||||||||
Level 2: inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. | |||||||||||||||||
Level 3: inputs are unobservable inputs for the asset or liability. | |||||||||||||||||
Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, we base fair value on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements, in accordance with the fair value hierarchy. Fair value measurements for assets and liabilities where there exists limited or no observable market data and, therefore, are based primarily upon management’s own estimates, are often calculated based on current pricing policy, the economic and competitive environment, the characteristics of the asset or liability and other such factors. Therefore, the results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability. Additionally, there may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows that could significantly affect the results of current or future value. | |||||||||||||||||
Derivative Liability | |||||||||||||||||
The table below presents the amounts of liabilities measured at fair value on a recurring basis as of February 28, 2014 and November 30, 2013. | |||||||||||||||||
The fair value of the derivatives that are traded in less active over-the counter markets are generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value of hierarchy. | |||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
28-Feb-14 | |||||||||||||||||
Derivative liability | $ | 1,316,784 | — | $ | 1,316,784 | — | |||||||||||
30-Nov-13 | |||||||||||||||||
Derivative liability | $ | 1,672,344 | — | $ | 1,672,344 | — | |||||||||||
Restatement
Restatement | 3 Months Ended | ||||||||||||
Feb. 28, 2014 | |||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||||||
Restatement | ' | ||||||||||||
Note 15 – Restatement | |||||||||||||
During 2014, the Company determined that it should have recorded and valued tainted derivatives that had not previously been identified as derivatives. As a result, the Company has restated its previously issued financial statements for the three-month period ended February 28, 2013 and has recorded additional debt discounts of $646,310 and derivative liabilities of $5,252,428 in such three-month period. As a result, for the three-month period ended February 28, 2013, interest expense increased by $952,859, from $163,570, to $1,116,429 and a loss for a mark-to-market adjustment of derivative liabilities increased by $3,382,032, from $54,087 to $3,436,119. The restatement resulted in a loss of $1,874,714 for the three months ended February 28, 2013, as compared to a gain of $2,312,699 that had previously been reported. | |||||||||||||
The Company restated the consolidated financial statements as of and for the three-months ended February 28, 2013 as follows: | |||||||||||||
Three Months Ended February 28, 2013 | |||||||||||||
As Originally | |||||||||||||
Reported | Adjustments | As Restated | |||||||||||
Long-term debt – less current portion | 2,027,142 | (646,310 | ) | -1 | 1,380,832 | ||||||||
Interest expense | (163,570 | ) | (952,859 | ) | -1 | (1,116,429 | ) | ||||||
Derivative liabilities | 601,953 | 5,175,368 | -2 | 5,777,321 | |||||||||
Capital in excess of par value | 39,496,765 | (169,224 | ) | -2 | 39,327,541 | ||||||||
Accumulated deficit | (49,314,059 | ) | (4,539,834 | ) | -2 | (53,673,893 | ) | ||||||
Gain (loss) on settlement of liabilities | 68,750 | 147,478 | -3 | 216,228 | |||||||||
Gain (loss) on value of derivative liabilities | (54,087 | ) | (3,382,032 | ) | -2 | (3,436,119 | ) | ||||||
Adjustments to consolidated financial statements: | |||||||||||||
-1 | To record debt discount on convertible debentures. | ||||||||||||
-2 | To record derivative liabilities for tainted options and warrants. | ||||||||||||
-3 | To adjust gain on conversion of derivative liabilities to common stock. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Feb. 28, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
16. Subsequent Events | |
The Company borrowed $36,500 from its Chief Executive Office in the second quarter of fiscal 2014. The debt is payable on demand and bears an annual interest rate of 24%. | |
During the second and third quarters of fiscal 2014, the Company borrowed $20,000 and $40,000 from different working capital lenders. The due dates are from four to six months and the interest rate over the term of the borrowing ranges from 34% to 45%. | |
During the second quarter of fiscal 2014, the Company increased its authorized shares of common stock from 1,500,000,000 to 9,978,999,990 and preferred stock from 1,000,000 to 21,000,010 and changed the par value of its preferred and common shares from $.001 per shares to $.00001 per share. |
Description_of_Business_and_Su
Description of Business and Summary of Accounting Principles (Policies) | 3 Months Ended |
Feb. 28, 2014 | |
Accounting Changes and Error Corrections [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission for quarterly reports on Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended February 28, 2014, are not necessarily indicative of the results that may be expected for the year ended November 30, 2014. For further information, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended November 30, 2013. | |
During the three months ended February 28, 2014, the Company sold a non-operating subsidiary for $100. In connection with the sale, the Company recorded a gain of $640,180, which represented the difference of the proceeds received and the net liabilities of the subsidiary that was sold. |
Net_Income_Loss_Per_Common_Sha1
Net Income (Loss) Per Common Share (Tables) | 3 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Net Income (Loss) Per Common Share | ' | ||||||||
Three Months Ended | Three Months Ended | ||||||||
Feb. 28, 2014 | Feb. 28, 2013 | ||||||||
Net income (loss) – numerator basic | $ | 419,695 | $ | (1,874,714 | ) | ||||
Interest expense attributable to convertible notes, net | 373,225 | ||||||||
Net income plus interest expense attributable to convertible notes, net – numerator diluted | $ | 792,920 | $ | (1,874,714 | ) | ||||
Weighted average common shares outstanding – denominator basic | 884,733,330 | 355,594,056 | |||||||
Effect of dilutive securities | 1,212,289,456 | — | |||||||
Weighted average dilutive common shares outstanding – denominator diluted | 2,097,022,786 | 355,594,056 | |||||||
Net income per common share – basic | $ | 0 | $ | (0.01 | ) | ||||
Net income per common share – diluted | $ | 0 | $ | (0.01 | ) | ||||
s |
Principal_Financing_Arrangemen1
Principal Financing Arrangements (Tables) | 3 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Debt | ' | ||||||||
28-Feb-14 | 30-Nov-13 | ||||||||
Debt due to Laurus | $ | 2,146,023 | $ | 2,108,498 | |||||
Convertible debt due to Factor Fund | 1,945,190 | 2,182,690 | |||||||
Convertible debt due to various lenders | 395,750 | 243,250 | |||||||
Other short-term debt due to various lenders | 178,719 | 248,592 | |||||||
Total debt | 4,665,682 | 4,783,030 | |||||||
Less: current portion of long-term debt | (3,802,982 | ) | (3,766,468 | ) | |||||
Less: discount on debt | (860,491 | ) | (1,002,902 | ) | |||||
Total long-term debt, net of discounts | $ | 2,209 | $ | 13,660 |
Derivative_Liabilities_Tables
Derivative Liabilities (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||||||||||
Derivative Instruments | ' | ||||||||||||||||||||||||
Initial valuation | |||||||||||||||||||||||||
of derivative | |||||||||||||||||||||||||
liabilities upon | Change in | Exercise | |||||||||||||||||||||||
Balance at | issuance of new | fair value of | of stock | Conversion | Balance at | ||||||||||||||||||||
November 30, | securities during | derivative | options/ | of debt | February 28, | ||||||||||||||||||||
2013 | the period | liabilities | warrants | to equity | 2014 | ||||||||||||||||||||
Variable convertible debt | $ | 1,467,182 | $ | 230,837 | $ | (117,289 | ) | $ | — | $ | (300,920 | ) | $ | 1,279,810 | |||||||||||
Tainted convertible debt | 139,953 | — | (121,361 | ) | — | — | 18,592 | ||||||||||||||||||
Tainted stock options | 30,343 | — | (20,898 | ) | — | — | 9,445 | ||||||||||||||||||
Tainted warrants | 34,866 | — | (25,929 | — | 8,937 | ||||||||||||||||||||
$ | 1,672,344 | $ | 230,837 | $ | (285,477 | ) | $ | — | $ | (300,920 | ) | $ | 1,316,784 | ||||||||||||
Embedded Derivative Instruments | ' | ||||||||||||||||||||||||
Initial valuation | |||||||||||||||||||||||||
of derivative | |||||||||||||||||||||||||
liabilities upon | Change in | Exercise | |||||||||||||||||||||||
Balance at | issuance of new | fair value of | of stock | Conversion | Balance at | ||||||||||||||||||||
November 30, | securities during | derivative | options/ | of debt | February 28, | ||||||||||||||||||||
2012 | the period | liabilities | warrants | to equity | 2013 | ||||||||||||||||||||
Variable convertible debt | $ | 361,760 | $ | 1,946,880 | $ | 2,269,698 | $ | — | $ | (308,797 | ) | $ | 4,269,541 | ||||||||||||
Tainted convertible debt | 264,189 | 1,071,965 | — | (286 | ) | 1,335,868 | |||||||||||||||||||
Tainted stock options | 49,483 | 12,012 | — | — | 61,500 | ||||||||||||||||||||
Tainted warrants | 27,973 | 82,444 | — | — | 110,417 | ||||||||||||||||||||
$ | 703,405 | $ | 1,946,880 | $ | 3,436,119 | $ | — | $ | (309,083 | ) | $ | 5,777,326 |
Restatement_Tables
Restatement (Tables) | 3 Months Ended | ||||||||||||
Feb. 28, 2014 | |||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||||||
Restatement | ' | ||||||||||||
Three Months Ended February 28, 2013 | |||||||||||||
As Originally | |||||||||||||
Reported | Adjustments | As Restated | |||||||||||
Long-term debt – less current portion | 2,027,142 | (646,310 | ) | -1 | 1,380,832 | ||||||||
Interest expense | (163,570 | ) | (952,859 | ) | -1 | (1,116,429 | ) | ||||||
Derivative liabilities | 601,953 | 5,175,368 | -2 | 5,777,321 | |||||||||
Capital in excess of par value | 39,496,765 | (169,224 | ) | -2 | 39,327,541 | ||||||||
Accumulated deficit | (49,314,059 | ) | (4,539,834 | ) | -2 | (53,673,893 | ) | ||||||
Gain (loss) on settlement of liabilities | 68,750 | 147,478 | -3 | 216,228 | |||||||||
Gain (loss) on value of derivative liabilities | (54,087 | ) | (3,382,032 | ) | -2 | (3,436,119 | ) |
Basis_of_Presentation_Details
Basis of Presentation (Details) (USD $) | 3 Months Ended |
Feb. 28, 2014 | |
Basis Of Presentation Details | ' |
Proceeds from sale of subsidiary | $100 |
Gain on sale of subsidiary | $640,180 |
Going_Concern_Matters_and_Real1
Going Concern Matters and Realization of Assets (Details) (USD $) | Feb. 28, 2014 | Nov. 30, 2013 |
Going Concern Matters and Realization of Assets (Textual) | ' | ' |
Working capital | ($9,902,401) | ' |
Stockholders Equity Deficiency | ($9,798,235) | ($10,512,876) |
Major_Customers_Details
Major Customers (Details) (Customer Concentration Risk [Member]) | 3 Months Ended | 12 Months Ended | ||
Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Nov. 30, 2013 | |
Sales Revenue, Goods, Net [Member] | Sales Revenue, Goods, Net [Member] | Accounts Receivable [Member] | Accounts Receivable [Member] | |
Major Customers (Textual) | ' | ' | ' | ' |
Concentration Risk, Percentage | 38.00% | 37.00% | 0.00% | 45.00% |
Net_Income_Loss_Per_Common_Sha2
Net Income (Loss) Per Common Share (Details) (USD $) | 3 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
Summary of net income loss per common share | ' | ' |
Net income (loss) | $419,695 | ($1,874,714) |
Interest expense attributable to convertible notes, net | 373,225 | ' |
Net income plus interest expense attributable to convertible notes, net - numerator diluted | $792,920 | ($1,874,714) |
Weighted average common shares outstanding - denominator basic | 884,733,330 | 355,594,056 |
Effect of dilutive securities, stock options and preferred stock | 1,212,289,456 | ' |
Weighted average dilutive common shares outstanding - denominator diluted | 2,097,022,786 | 355,594,056 |
Earnings (loss) per common share - basic | $0 | ($0.01) |
Earnings (loss) per common share - diluted | $0 | ($0.01) |
Net_Income_Per_Common_Share_De
Net Income Per Common Share (Details Textual) | 3 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
Net Income Per Common Share (Textual) | ' | ' |
Shares issuable upon exercise of options, warrants or convertible debt excluded from computation of earning per share | 86,918,833 | 22,103,000 |
StockBased_Compensation_Plans_
Stock-Based Compensation Plans (Details) (USD $) | 3 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
Stock Based Compensation Plans (Textual) | ' | ' |
Stock based compensation expense | $7,946 | $6,720 |
Unrecognized employee stock-compensation expense | $19,221 | ' |
Accounts_Payable_and_Accrued_E1
Accounts Payable and Accrued Expenses (Details) (USD $) | Feb. 28, 2014 | Nov. 30, 2013 |
Summary of accounts payable and accrued expenses | ' | ' |
Payable from sale of subsidiaries | $796,499 | $796,499 |
Defined_Benefit_Plan_Details_N
Defined Benefit Plan (Details Narrative) (USD $) | 3 Months Ended | |
Feb. 28, 2014 | Nov. 30, 2013 | |
Defined Benefit Plan (Textual) | ' | ' |
Total outstanding amount due to PBGC including accrued interest | $1,938,027 | $1,914,392 |
Number of former employees covered under defined benefit plan | 40 | ' |
Principal_Financing_Arrangemen2
Principal Financing Arrangements (Details) (USD $) | Feb. 28, 2014 | Nov. 30, 2013 | Feb. 28, 2013 |
Debt Instrument [Line Items] | ' | ' | ' |
Debt | $4,665,682 | $4,783,030 | ' |
Current portion of long-term debt | -3,802,982 | -3,766,468 | -1,380,832 |
Discount on debt | -860,491 | -1,002,902 | ' |
Long-term debt | 2,209 | 13,660 | ' |
Debt due to Laurus [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt | 2,146,023 | 2,108,498 | ' |
Convertible Debt due to Factor Fund [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt | 1,945,190 | 2,182,690 | ' |
Convertible Debt due to Various Lenders [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt | 395,750 | 243,250 | ' |
Other Short term debt due to various lenders [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt | $178,719 | $248,592 | ' |
Principal_Financing_Arrangemen3
Principal Financing Arrangements (Details 1) (USD $) | 3 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
Gain on troubled debt restructuring | ' | $2,714,461 |
Debt due to Laurus [Member] | ' | ' |
Interest rate, minimum | 5.25% | ' |
Interest rate, maximum | 20.00% | ' |
Gain on troubled debt restructuring | 0 | ' |
Convertible Debt due to Factor Fund [Member] | ' | ' |
Debt converted to common stock, value | 277,500 | 78,960 |
Debt converted to common stock, share | 203,000,000 | 39,345,576 |
Convertible Debt due to Various Lenders [Member] | ' | ' |
Interest rate, minimum | 0.00% | ' |
Debt converted to common stock, value | $31,000 | ' |
Debt converted to common stock, share | 11,000,000 | ' |
Other Short term debt due to various lenders [Member] | ' | ' |
Interest rate, minimum | 35.00% | ' |
Interest rate, maximum | 45.00% | ' |
Principal_Financing_Arrangemen4
Principal Financing Arrangements (Details 2) (USD $) | 3 Months Ended | ||
Feb. 28, 2014 | Feb. 28, 2013 | ||
Gain on settlement of liabilities | $300,686 | $216,228 | |
Convertible Debt due to Factor Fund [Member] | ' | ' | |
Payment on note | 250,000 | ' | |
Proceeds from note | 150,000 | ' | |
Cancellation of convertible debenture | 35,000 | ' | |
Convertible Debt due to Factor Fund [Member] | Amendment #1[Member] | ' | ' | |
Principal amount | 1,000,000 | ' | |
Payment on note | 350,000 | ' | |
Interest rate, minimum | 6.00% | ' | |
Note, fair value | 1,874,169 | ' | |
Unamortized Debt discount | 1,000,000 | ' | |
Change in fair value of derivative liability | 874,169 | ' | |
Convertible Debt due to Factor Fund [Member] | Amendment #2[Member] | ' | ' | |
Principal amount | 1,000,000 | ' | |
Interest rate, minimum | 2.00% | ' | |
Bridge Notes [Member] | ' | ' | |
Principal amount | 50,000 | ' | |
New Notes [Member] | ' | ' | |
Principal amount | 665,000 | ' | |
Proceeds from note | 300,000 | ' | |
Interest rate, minimum | 6.00% | ' | |
Note, fair value | 67,123 | ' | |
Finders fee | 68,640 | ' | |
Debt interest expense | 150,000 | ' | |
Original issue discount | 100,000 | ' | |
Unamortized Debt discount | 40,000 | ' | |
Change in fair value of derivative liability | 27,123 | ' | |
Conversion rate, minimum | 60.00% | ' | |
Debt | 99,360 | ' | |
Convertible debt with a fixed conversion rate [Member] | ' | ' | |
Principal amount | 395,750 | [1] | ' |
Convertible debt with a fixed conversion rate [Member] | Past Due Notes [Member] | ' | ' | |
Principal amount | 138,000 | ' | |
Interest rate, minimum | 18.00% | ' | |
Conversion rate, minimum | 1.50% | ' | |
Conversion rate, maximum | 2.00% | ' | |
Convertible debt with a fixed conversion rate [Member] | CEO Notes [Member] | ' | ' | |
Principal amount | 31,000 | ' | |
Interest rate, minimum | 0.00% | ' | |
Interest rate, maximum | 24.00% | ' | |
Converted principal, amount | 31,000 | ' | |
Converted principal shares of common stock | 11,000,000 | ' | |
Conversion rate, minimum | 0.10% | ' | |
Conversion rate, maximum | 0.50% | ' | |
Convertible debt with a varialble conversion rate for cash[Member] | ' | ' | |
Principal amount | 152,500 | ' | |
Proceeds from note | 60,000 | ' | |
Interest rate, minimum | 8.00% | ' | |
Note, fair value | 163,714 | ' | |
Original issue discount | 152,500 | ' | |
Change in fair value of derivative liability | 11,214 | ' | |
Convertible Debt due to Various Lenders [Member] | ' | ' | |
Principal amount | 67,750 | ' | |
Interest rate, minimum | 0.00% | ' | |
Other Short term debt due to various lenders [Member] | ' | ' | |
Principal amount | 178,719 | ' | |
Payment on note | 60,368 | 5,827 | |
Proceeds from note | 30,000 | ' | |
Interest rate, minimum | 35.00% | ' | |
Interest rate, maximum | 45.00% | ' | |
Debt | $32,642 | ' | |
[1] | convertible debt due to various lenders consists of notes for $120,000, $98,000, $67,750, $40,000, $37,500 and $32,500, for a total of $395,750. Four of these six notes were outstanding at November 30, 2013. The $120,000 and the $32,500 note were issued in the first quarter of fiscal 2014. |
Derivative_Liabilities_Derivat
Derivative Liabilities - Derivative Instruments (Details) (USD $) | 3 Months Ended |
Feb. 28, 2014 | |
Variable Convertible Debt [Member] | ' |
Derivative Liability, beginning balance | $1,467,182 |
Initial valuation of derivative liabilities upon issuance of new securities | 230,837 |
Change in fair value of derivative liabilite | -117,289 |
Conversion of debt to equity | -300,920 |
Derivative Liability, ending balance | 1,279,810 |
Tainted Convertible Debt [Member] | ' |
Derivative Liability, beginning balance | 139,953 |
Change in fair value of derivative liabilite | -121,361 |
Derivative Liability, ending balance | 18,592 |
Tainted Stock options [Member] | ' |
Derivative Liability, beginning balance | 30,343 |
Change in fair value of derivative liabilite | -20,898 |
Derivative Liability, ending balance | 9,445 |
Tainted Warrants [Member] | ' |
Derivative Liability, beginning balance | 34,866 |
Change in fair value of derivative liabilite | -25,929 |
Derivative Liability, ending balance | 8,937 |
Derivative Instrument [Member] | ' |
Derivative Liability, beginning balance | 1,672,344 |
Initial valuation of derivative liabilities upon issuance of new securities | 230,837 |
Change in fair value of derivative liabilite | -285,477 |
Conversion of debt to equity | -300,920 |
Derivative Liability, ending balance | $1,316,784 |
Derivative_Liabilities_Embedde
Derivative Liabilities - Embedded Derivative Instruments (Details) (USD $) | 3 Months Ended |
Feb. 28, 2014 | |
Variable convertible debt [Member] | ' |
Derivative Liability, beginning balance | $361,760 |
Initial valuation of derivative liabilities upon issuance of new securities | 1,946,880 |
Change in fair value of derivative liabilite | 2,269,698 |
Conversion of debt to equity | -308,797 |
Derivative Liability, ending balance | 4,269,541 |
Tainted convertible debt [Member] | ' |
Derivative Liability, beginning balance | 264,189 |
Change in fair value of derivative liabilite | 1,071,965 |
Conversion of debt to equity | -286 |
Derivative Liability, ending balance | 1,335,868 |
Tainted stock options [Member] | ' |
Derivative Liability, beginning balance | 49,483 |
Change in fair value of derivative liabilite | 12,012 |
Derivative Liability, ending balance | 61,500 |
Tainted warrants [Member] | ' |
Derivative Liability, beginning balance | 27,973 |
Change in fair value of derivative liabilite | 82,444 |
Derivative Liability, ending balance | 110,417 |
Embedded derivative liablities [Member] | ' |
Derivative Liability, beginning balance | 703,405 |
Initial valuation of derivative liabilities upon issuance of new securities | 1,946,880 |
Change in fair value of derivative liabilite | 3,436,119 |
Conversion of debt to equity | -309,083 |
Derivative Liability, ending balance | $5,777,326 |
Derivative_Liabilities_Details
Derivative Liabilities (Details Narrative) (USD $) | 3 Months Ended | 12 Months Ended |
Feb. 28, 2014 | Nov. 30, 2013 | |
Convertible debt with a variable conversion feature [Member] | Minimum [Member] | ' | ' |
Expected term | '0 years | '0 years 7 months |
Volatility rate | 201.00% | 229.00% |
Discount rate | 1.00% | 0.13% |
Dividends | $0 | $0 |
Convertible debt with a variable conversion feature [Member] | Maximum [Member] | ' | ' |
Expected term | '1 year 2 months 5 days | ' |
Volatility rate | ' | 283.00% |
Discount rate | ' | 0.25% |
Tainted conventional convertible debt [Member] | Minimum [Member] | ' | ' |
Expected term | '0 years | '0 years |
Volatility rate | 201.00% | 201.00% |
Discount rate | 1.00% | 1.00% |
Dividends | $0 | $0 |
Tainted conventional convertible debt [Member] | Maximum [Member] | ' | ' |
Expected term | '1 year 7 months 5 days | '1 year 0 months |
Volatility rate | ' | 243.00% |
Tainted stock options and warrants [Member] | Minimum [Member] | ' | ' |
Expected term | '0 years 2 months | '1 year 0 months |
Volatility rate | 243.00% | 232.00% |
Discount rate | 1.00% | 1.00% |
Dividends | $0 | $0 |
Tainted stock options and warrants [Member] | Maximum [Member] | ' | ' |
Expected term | '8 years 2 months 5 days | '7 years 5 months |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 12 Months Ended |
Nov. 30, 2013 | |
Income Taxes (Textual) | ' |
Net operating loss carryforwards for federal income tax purposes | $3,000,000 |
Operating loss carryforwards, expiration dates | 'Expire in the years 2014 through 2032. |
Equity_Details
Equity (Details) (USD $) | 3 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
Stockholder's Equity (Textual) | ' | ' |
Gain on troubled debt restructuring | ' | $2,714,461 |
Convertible notes to third parties [Member] | ' | ' |
Stockholder's Equity (Textual) | ' | ' |
Outstanding principal debt converted into common shares | 366,174 | ' |
Outstanding principal debt converted into common shares, shares | 203,000,000 | ' |
Debt converted to common stock, value | 278,800 | ' |
Gain on troubled debt restructuring | 87,374 | ' |
CEO [Member] | ' | ' |
Stockholder's Equity (Textual) | ' | ' |
Outstanding principal debt converted into common shares | 10,565 | ' |
Outstanding principal debt converted into common shares, shares | 5,000,000 | ' |
Debt converted to common stock, value | 9,500 | ' |
Gain on troubled debt restructuring | $1,065 | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Feb. 28, 2014 | Nov. 30, 2013 | |
Related Party Transactions (Textual) | ' | ' |
Consultant fees | $48,000 | $47,500 |
Amount owed by the company | $986,591 | $938,210 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (Fair Value, Measurements, Recurring [Member], USD $) | Feb. 28, 2014 | Nov. 30, 2013 |
Summary of derivative liabilities at fair value | ' | ' |
Derivative liability | $1,316,784 | $1,672,344 |
Fair Value, Inputs, Level 2 [Member] | ' | ' |
Summary of derivative liabilities at fair value | ' | ' |
Derivative liability | $1,316,784 | $1,672,344 |
Restatement_Restatement_Detail
Restatement - Restatement (Details) (USD $) | 3 Months Ended | ||
Feb. 28, 2014 | Feb. 28, 2013 | Nov. 30, 2013 | |
Long-term debt-less current portion | $3,802,982 | $1,380,832 | $3,766,468 |
Interest Expense | -518,851 | -1,116,429 | ' |
Derivative liabilities | ' | 5,777,321 | ' |
Capital in excess of par value | 40,511,168 | 39,327,541 | 40,424,222 |
Accumulated deficit | -51,318,136 | -53,673,893 | -51,737,831 |
Gain (loss) on settlement of liabilities | 300,686 | 216,228 | ' |
Gain on value of derivative liabilities | 285,477 | -3,436,119 | ' |
Original Reported | ' | ' | ' |
Long-term debt-less current portion | ' | 2,027,142 | ' |
Interest Expense | ' | -163,570 | ' |
Derivative liabilities | ' | 601,953 | ' |
Capital in excess of par value | ' | 39,496,765 | ' |
Accumulated deficit | ' | -49,314,059 | ' |
Gain (loss) on settlement of liabilities | ' | 68,750 | ' |
Gain on value of derivative liabilities | ' | -54,087 | ' |
Adjustments | ' | ' | ' |
Long-term debt-less current portion | ' | -646,310 | ' |
Interest Expense | ' | -952,859 | ' |
Derivative liabilities | ' | 5,175,368 | ' |
Capital in excess of par value | ' | -169,224 | ' |
Accumulated deficit | ' | -4,539,834 | ' |
Gain (loss) on settlement of liabilities | ' | 147,478 | ' |
Gain on value of derivative liabilities | ' | ($3,382,032) | ' |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 31-May-14 | Apr. 13, 2014 | Feb. 28, 2014 | Nov. 30, 2013 | Feb. 28, 2014 | Feb. 28, 2014 | Feb. 28, 2014 |
Subsequent event | Subsequent event- Additional #1 | Subsequent Event - Additional #2 | |||||
Subsequent Events (Textual) | ' | ' | ' | ' | ' | ' | ' |
Proceeds from capital lenders | ' | ' | ' | ' | ' | $20,000 | $40,000 |
Interest rate, minimum | ' | ' | ' | ' | ' | 34.00% | ' |
Interest rate, maximum | ' | ' | ' | ' | ' | 45.00% | ' |
Proceeds for related party debt | ' | ' | ' | ' | $36,500 | ' | ' |
Related party debt interest rate | ' | ' | ' | ' | 24.00% | ' | ' |
Common stock, par value | $0.00 | ' | $0.00 | $0.00 | ' | ' | ' |
Common stock, shares authorized | 9,978,999,990 | 1,500,000 | 8,978,999,990 | 800,000,000 | ' | ' | ' |
Preferred stock, shares authorized | 21,000,010 | 1,000,000 | 21,000,010 | 1,000,000 | ' | ' | ' |