Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
May. 31, 2015 | Aug. 17, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | PERVASIP CORP | |
Entity Central Index Key | 90,721 | |
Document Type | 10-Q | |
Document Period End Date | May 31, 2015 | |
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 | 3,943,106,209 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,015 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | May. 31, 2015 | Nov. 30, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 6,309 | $ 1,832 |
Restricted securities | $ 116,000 | 1,040,000 |
Prepaid expenses and other current assets | 3,337 | |
Total current assets | $ 122,309 | 1,045,169 |
Other assets | 54,151 | 7,119 |
Excess of purchase price over net assets acquired-Canalytix acquisition | 410,839 | |
Total assets | 587,299 | 1,052,288 |
Current liabilities: | ||
Current portion of long-term debt, net of discounts of $149,897 and $189,270 at May 31, 2015 and November 30, 2014, respectively | 3,767,499 | 4,631,122 |
Accounts payable and other current liabilities | 1,984,308 | 1,966,224 |
Accounts payable and other current liabilities - related party | 351,292 | 410,333 |
Due to Pension Benefit Guaranty Corporation | 2,052,418 | 2,001,984 |
Related party debt | 891,576 | 804,078 |
Derivative liabilities | 1,475,587 | 639,339 |
Total current liabilities | 10,522,680 | $ 10,453,080 |
Long-term debt less current portion | 414,401 | |
Total liabilities | 10,937,081 | $ 10,453,080 |
Stockholders' equity deficiency: | ||
Common stock, $0.00001 par value; 8,978,999,990 shares authorized, 3,702,630,209 and 1,194,549,997 shares issued and outstanding in 2015 and 2014, respectively | 37,026 | 11,945 |
Capital in excess of par value | 42,225,001 | 41,750,912 |
Accumulated Deficit | (52,293,158) | (51,764,832) |
Accumulated other comprehensive income (loss) | (322,817) | 601,183 |
Total Pervasip Corp. stockholder's deficit | (10,353,747) | $ (9,400,792) |
Noncontrolling interest in subsidiary | 3,965 | |
Total stockholders deficit | (10,349,782) | $ (9,400,792) |
Total liabilities and stockholders' deficit | $ 587,299 | $ 1,052,288 |
Preferred Stock [Member] | ||
Stockholders' equity deficiency: | ||
Preferred stock | ||
Convertible Preferred Stock [Member] | ||
Stockholders' equity deficiency: | ||
Preferred stock | ||
Series D Preferred Stock [Member] | ||
Stockholders' equity deficiency: | ||
Preferred stock | ||
Series E Preferred Stock [Member] | ||
Stockholders' equity deficiency: | ||
Preferred stock | ||
Series F Preferred Stock [Member] | ||
Stockholders' equity deficiency: | ||
Preferred stock | $ 100 | |
Series G Preferred Stock [Member] | ||
Stockholders' equity deficiency: | ||
Preferred stock | 100 | |
Series H Preferred Stock [Member] | ||
Stockholders' equity deficiency: | ||
Preferred stock | $ 1 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | May. 31, 2015 | Nov. 30, 2014 |
Discounts on long-term debt | $ 149,897 | $ 189,270 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 8,978,999,990 | 8,978,999,990 |
Common stock, shares issued | 3,702,630,209 | 1,194,549,997 |
Common stock, shares outstanding | 3,702,630,209 | 1,194,549,997 |
Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 1,000,000 | 21,000,010 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Series D Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares issued | 51 | 51 |
Preferred stock, shares outstanding | 51 | 51 |
Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.00001 | |
Preferred stock, shares authorized | 20,000,010 | |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Series E Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares issued | 10 | 0 |
Preferred stock, shares outstanding | 10 | 0 |
Series F Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares issued | 10,000,000 | 0 |
Preferred stock, shares outstanding | 10,000,000 | 0 |
Series G Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares issued | 10,000,000 | 0 |
Preferred stock, shares outstanding | 10,000,000 | 0 |
Series H Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.00001 | |
Preferred stock, shares issued | 100,000 | |
Preferred stock, shares outstanding | 100,000 |
Consoldiated Statements of Oper
Consoldiated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2015 | May. 31, 2014 | |
Income Statement [Abstract] | ||||
Revenues (includes related party revenue of $65,000 for the six and three-month periods ended May 31, 2015) | $ 65,927 | $ 237,353 | $ 66,821 | $ 451,015 |
Costs and expenses: | ||||
Cost of services | 11,599 | 113,455 | 12,225 | 237,489 |
Selling, general and administrative | 100,648 | 319,782 | 167,966 | 679,338 |
Total costs and expenses | 112,247 | 433,237 | 180,191 | 916,827 |
Loss from operations | (46,320) | (195,884) | (113,370) | (465,812) |
Other income (expense): | ||||
Interest expense | $ (234,550) | (299,701) | (589,317) | (818,552) |
Amortization of deferred finance costs | $ (24,866) | (5,305) | (42,725) | |
Gain on troubled debt restructuring | $ 1,538,145 | 2,065,614 | ||
Gain on sale of subsidiary | 640,180 | |||
Gain on settlement of derivative liabilities | $ 1,107,495 | 1,223,448 | 300,686 | |
Gain (loss) on change in derivative liabilities | (847,720) | $ (239,755) | (3,017,461) | 14,072 |
Total other income (expense) | 1,563,370 | (564,322) | (323,021) | 93,661 |
Net income (loss) | 1,517,050 | $ (760,206) | (436,391) | $ (372,151) |
Income from noncontrolling interest | 3,965 | 3,965 | ||
Net income (loss) attributable to Pervasip Corp. | 1,513,085 | $ (760,206) | (440,356) | $ (372,151) |
Accretion of preferred stock dividends - beneficial conversion feature | 51,429 | 87,970 | ||
Net income (loss) attributable to common stockholders | $ 1,461,656 | $ (760,206) | $ (528,326) | $ (372,151) |
Basic earnings (loss) per share | $ 0 | $ 0 | $ 0 | $ 0 |
Diluted earnings (loss) per share | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average number of common shares outstanding: Basic | 3,231,962,508 | 1,007,499,997 | 2,448,541,449 | 946,116,664 |
Weighted average number of common shares outstanding: Diluted | 25,626,238,785 | 1,007,499,997 | 2,448,541,449 | 946,116,664 |
Consoldiated Statements of Ope5
Consoldiated Statements of Operations (Parenthetical) - May. 31, 2015 - USD ($) | Total | Total |
Income Statement [Abstract] | ||
Related party revenue | $ 65,000 | $ 65,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) | 3 Months Ended | 6 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2015 | May. 31, 2014 | |
Comprehensive Income (Loss) | ||||
Net income (loss) | $ 1,517,050 | $ (760,206) | $ (436,391) | $ (372,151) |
Other Comprehensive income (loss): | ||||
Foreign currency translation adjustment | (100,000) | (924,000) | ||
Comprehensive income (loss) | $ 1,417,050 | $ (760,206) | $ (1,360,391) | $ (372,151) |
Consoldiated Statements of Cash
Consoldiated Statements of Cash Flows - USD ($) | 6 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
Operating activities: | ||
Net loss | $ (436,391) | $ (372,151) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Stock-based compensation | $ 4,000 | 13,297 |
Provision for bad debt | (731) | |
Amortization of debt discount | $ 305,153 | $ 529,375 |
Amortization of financing costs | 5,305 | |
Gain on troubled debt restructuring | $ (2,065,614) | |
Gain on sale of subsidiary | $ (640,180) | |
Gain on settlement of derivative liabilities | $ (1,223,448) | (300,686) |
Change in fair value of derivative liabilities | $ 3,017,461 | (14,072) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (5,544) | |
Prepaid expenses and other current assets | $ 3,337 | 5,228 |
Other assets | (31,337) | 44,733 |
Accounts payable and accrued liabilities | 140,417 | 475,689 |
Accounts payable and accrued liabilities- related party | 148,457 | 49,653 |
Due to Pension Benefit Guaranty Corporation | 50,434 | 48,094 |
Net cash used in operating activities | (82,226) | $ (167,301) |
Cash flows from investing activities: | ||
Cash acquired in Canalytix acquisition | 303 | |
Net cash provided by investing activities | 303 | |
Cash flows from financing activities: | ||
Proceeds from borrowings | 130,500 | $ 276,500 |
Principal payments of debt | (44,100) | (101,216) |
Net cash provided by financing activities | 86,400 | 175,284 |
Increase in cash and cash equivalents | 4,477 | 7,983 |
Cash and cash equivalents at beginning of period | 1,832 | 17,242 |
Cash and cash equivalents at the end of period | $ 6,309 | $ 25,225 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for: Income taxes | ||
Cash paid during the period for: Interest | $ 52,899 | |
Non-cash financing transactions: | ||
Fair value of derivative liabilities to discount on debt | $ 193,780 | $ 230,837 |
Settlement of accrued interest with issuance of preferred stock | 100,000 | |
Settlement of payables with issuance of warrants | 20,000 | |
Conversion of accrued liabilities to notes payable | $ 150,731 | $ 73,934 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
May. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 1 Basis of Presentation The accompanying unaudited condensed 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. The condensed balance sheet at November 30, 2014 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. Operating results for the six and three-month periods ended May 31, 2015, are not necessarily indicative of the results that may be expected for the year ended November 30, 2015. 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, 2014. For a summary of significant accounting policies (which have not changed from November 30, 2014), see the Companys Annual Report on Form 10-K for the year ended November 30, 2014. Marketable securities The Company classifies investments in equity securities bought and held primarily to be sold in the short term that have readily determinable fair values, as trading securities. Unrealized holding gains and losses for trading securities are included in earnings. Any unrealized holding gains and losses from available-for-sale securities are excluded from earnings and are recorded in comprehensive income until a gain or loss has been realized. |
Going Concern Matters and Reali
Going Concern Matters and Realization of Assets | 6 Months Ended |
May. 31, 2015 | |
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 operations in recent years and as of May 31, 2015, the Company has negative working capital of $10,400,371 and a stockholders deficit of $10,349,782. 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, 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 Companys 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 Companys 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. Managements plans include efforts to preserve current revenue sources, develop new revenue sources and negotiate further debt reductions with creditors. 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 Pronouncement
Recent Accounting Pronouncements and Accounting Principles | 6 Months Ended |
May. 31, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements and Accounting Principles | Note 3 Recent Accounting Pronouncements and Accounting Principles In May 2014, FASB issued ASU 2014-09, "Revenue from Contracts with Customers". This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The revised effective date for this ASU is for annual and interim periods beginning on or after December 15, 2017, and early adoption will be permitted, but not earlier than the original effective date of annual and interim periods beginning on or after December 15, 2016, for public entities. We will adopt this ASU when effective. Companies may use either a full retrospective or modified retrospective approach to adopt this ASU and our management is currently evaluating which transition approach to use. We are currently evaluating the impact of adopting ASU 2014-09 on our consolidated financial statements and related disclosures. In April 2015, FASB issued ASU 2015-03, "Interest-Imputation of Interest". This ASU requires that debt issuance costs be reported in the balance sheet as a direct deduction from the face amount of the related liability, consistent with the presentation of debt discounts. Prior to the amendments, debt issuance costs were presented as a deferred charge (i.e., an asset) on the balance sheet. This ASU is effective for annual reporting periods beginning after December 15, 2015 and interim periods within fiscal years beginning after December 15, 2016. The amendments must be applied retrospectively. All entities have the option of adopting the new requirements as of an earlier date for financial statements that have not been previously issued. Applicable disclosures for a change in an accounting principle are required in the year of adoption, including interim periods. We will adopt this ASU when effective. The adoption of ASU 2015-03 will not have a material impact on our consolidated financial statements and related disclosures. Principles of Consolidation The condensed consolidated financial statements include the accounts of Pervasip Corp., its wholly-owned subsidiaries, and its 90% owned subsidiary, Canalytix, LLC. The activities of the Companys newly acquired subsidiary Canalytix, LLC are included in the financial statements since March 25, 2015 (date of acquisition). Any significant inter-company balances and transactions have been eliminated. |
Major Customers
Major Customers | 6 Months Ended |
May. 31, 2015 | |
Risks and Uncertainties [Abstract] | |
Major Customers | Note 4 Major Customers For the six-month period ended May 31, 2015, all customers are on a prepaid basis and the Company has no accounts receivable. As of May 31, 2014, one customer constituted 32% of the Companys accounts receivable balance. During the six-month and three-month periods ended May 31, 2015, one customer that is a related party accounted for approximately 97% and approximately 99%, respectively, of the Companys revenues. During the six-month and three-month periods ended May 31, 2014, two customers accounted for approximately 32% and 27%, respectively, and approximately 27% and 34%, respectively, of the Companys revenues. |
Net Income (Loss) Per Common Sh
Net Income (Loss) Per Common Share | 6 Months Ended |
May. 31, 2015 | |
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. Six Months Ended May 31, 2015 Six Months Ended May 31, 2014 Three Months Ended May 31, 2015 Three Months Ended May 31, 2014 Net income (loss) attributable to common stockholders - basic $ (528,326 ) $ (372,151 ) $ 1,461,656 $ (760,206 ) Income attributable to convertible notes (1,413,320 ) Interest expense convertible notes 270,490 Net income (loss) attributable to common stockholders - diluted $ (528,326 ) $ (372,151 ) $ 318,826 $ (760,206 ) Weighted average common shares outstanding - basic 2,448,541,449 946,116,664 3,231,962,508 1,007,499,997 Effect of dilutive securities 22,394,276,277 Weighted average common shares outstanding diluted 2,448,541,449 946,116,664 25,626,238,785 1,007,499,997 Earnings (loss) per common share - basic $ (0.00 ) $ (0.00 ) $ 0.00 $ (0.00 ) Earnings (loss) per common share - diluted $ (0.00 ) $ (0.00 ) $ 0.00 $ (0.00 ) Approximately 1,224,948,000 and 1,204,948,000 shares of common stock issuable upon the exercise of outstanding stock options, warrants or convertible debt were excluded from the calculation of net income (loss) per share for the six and three-month periods ended May 31, 2015,respectively, because the effect would be anti-dilutive. Also excluded are shares of common stock issuable upon the conversion of our Series E, F, G, and H preferred for the six-month period ended May 31, 2015. At May 31, 2015, Series E and Series H preferred shares could convert into approximately 18,890,521,000 and and 2,361,315,130 shares of common stock, respectively. Series F and G preferred shares are not convertible at May 31, 2015. Approximately 1,475,706,000 and 1,485,708,000 shares of common stock issuable upon the exercise of outstanding stock options, warrants or convertible debt were excluded from the calculation of net income (loss) per share for the six and three-month periods ended May 31, 2014, respectively, because the effect would be anti-dilutive. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 6 Months Ended |
May. 31, 2015 | |
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. For the six-month periods ended May 31, 2015 and 2014, the Company recorded $4,000 and $13,291, respectively, in stock-based compensation expense. At May 31, 2015, there is no remaining unrecognized employee stock-compensation expense for previously granted unvested options. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 6 Months Ended |
May. 31, 2015 | |
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 May 31, 2015 and November 30, 2014, 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 Companys liability has been reduced, such reduction will be reflected on the books of the Company. |
Defined Benefit Plan
Defined Benefit Plan | 6 Months Ended |
May. 31, 2015 | |
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 Companys 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 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 May 31, 2015 and November 30, 2014 was $2,052,418 and $2,001,984, respectively, including accrued interest, which is recorded as a current liability. The Company made no payments to the Plan in the six-month periods ended May 15, 2015 and 2014. 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. As a result of the curtailment, it has been the Companys policy to recognize the unfunded status of the Plan as of the end of the fiscal year with a corresponding charge or credit to earnings for the change in the unfunded liability. There was no pension expense recorded in the six-month periods ended May 31, 2015 and 2014. Effective January 14, 2015, the Company executed a settlement and release agreement with the PBGC pursuant to which PBGC agreed to accept $100,000 in full satisfaction of all amounts that had been due from the Company, which amounted to $2,052,418 at May 31, 2015. The Company agreed to pay the sum of $100,000 to PBGC in equal installments of $25,000 on January 31, 2015, April 30, 2015, July 31, 2015 and October 31, 2015. Upon receipt of the settlement amount, the PBGC shall be deemed to have released the Company from any and all employer liability and fiduciary responsibility. No installment payments have been made and the Company has not received a default notice from PBGC. |
Debt
Debt | 6 Months Ended |
May. 31, 2015 | |
Debt Disclosure [Abstract] | |
Debt | Note 9 Debt May 31, 2015 November 30, 2014 Debt due to Laurus $ 1,832,141 $ 2,266,186 Convertible debt due to Secured Lender 1,594,010 1,935,190 Secured term loan 414,401 Convertible debt due to various lenders 320,750 448,520 Other short-term debt due to various lenders 170,495 170,496 Total debt 4,331,797 4,820,392 Less: current portion of long-term debt (3,767,499 ) (4,631,122 ) Less: discount on debt (149,897 ) (189,270 ) Total long-term debt $ 414,401 $ Debt due to Laurus As of May 31, 2015 and November 30, 2014, the Company owed a third party lender, LV Administrative Services, Ltd., as agent for Laurus Master Fund, Ltd. and various affiliates (Laurus), $1,832,141 and $2,266,186, respectively. All of such debt became due by its terms on September 28, 2010. 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, which amounted to a charge to interest expense of $63,234 for the six-months ended May 31, 2015. 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 had signed an agreement, on two separate occasions, to sell all of its debt at a discount to a third party, however the third parties did not fulfill all of the terms of the agreements and $1,832,141 and $2,266,186 of debt remains due to Laurus at May 31, 2015 and November 30, 2014, respectively. On December 31, 2014, Laurus and the Company again entered into an agreement (the Settlement Agreement) to assign the remaining debt to a third party for $100,000. In the first quarter of fiscal 2015, $30,000 of the $100,000 was paid, and the Company recognized a $497,279 gain from troubled debt restructuring on the pro-rata reduction of the debt due to Laurus. The Settlement Agreement was then assigned to EXO Opportunity Fund, which has agreed to pay the remaining $70,000 to Laurus. Such payment would eliminate the balances due from the Company to Laurus and release the security interest and liens filed by Laurus. Convertible debt due to Secured Lender 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. The Fund did not abide by the contractual terms of the assignment agreement; therefore, at May 31, 2015 and November 30, 2014, 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 Funds 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. The Amended Notes originally matured on December 31, 2014. Amended Note 1 was modified in January 2015 to mature on December 31, 2015 and the Fund agreed that upon payment in full of the remaining balance of Amended Note 1, that Amended Note 2 would be considered paid in full. 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 volume weighted average price of the common stock for the 30 trading days immediately prior to the conversion date. During the six months ended May 31, 2014, the Fund converted $273,400 of principal into 203,000,000 shares of common stock of the Company. The Fund did not submit a conversion notice during the six months ended May 31, 2015. 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. The Company determined that the fair value of the notes was $1,703,423 at the issuance dates. The value of the debt of $1,000,000 was recorded as a debt discount and is amortized to interest expense over the term of the Notes. The variance to the fair value of $703,423 was recognized as an initial loss and recorded to interest expense. 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 also 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 for $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 in June 2013; 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, 2015. The New Note can be converted at any time into shares of common stock of the Company at 60% of the volume weighted average price of the common stock for the 20 trading days immediately prior to the conversion date, as defined. The Company received an aggregate of $300,000 in cash under the New Note 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 conversion feature 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 $1,103,940 at the issuance date. Debt discount was recorded up to the $665,000 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 in the aggregate amount of $478,940 was expensed 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 included in interest expense and added to the principal balance of Amended Note 1. The Fund agreed to limit its sales of the Companys common stock, to not engage in any short transactions involving the Companys 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 desired to convert existing debt into shares of common stock. Effective January 20, 2015, the Company signed a debt modification agreement with the Fund. The modification reduced the outstanding balance on Amended Note 1 from $280,190 to $250,000, and provided that upon the completion of the payments required to retire Amended Note 1, the outstanding balance of Amended Note 2 would be reduced from $1,000,000 to $0. The Fund subsequently assigned the remaining balance of Amended Note 1 and the related security agreements to EXO Opportunity Fund LLC (EXO). The Company also received $25,000 in cash in February 2015, in conjunction with a variable rate convertible debenture payable to EXO (the EXO Note), which matures on December 31, 2015, bears interest at an annual rate of 6%, and is subject to the same security agreements as Amended Note 1. The conversion price of the EXO 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 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 note was $74,990 at the issuance date. Debt discount was recorded up to the $25,000 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 in the aggregate amount of $49,990 was expensed immediately as additional interest expense. On January 21, 2015, the Company signed a second debt modification agreement with the Fund. This modification provided for the reduction of the principal balance of the New Note from $634,600 to $250,000, subject to certain conditions precedent. The Fund assigned a $250,000 portion of the New Note and the related security agreements to two new debt holders in equal amounts of $125,000 each. On March 5, 2015, the Company met the conditions precedent in the debt modification agreement, and recognized a gain of $1,538,145 in the three-month period ended May 31, 2015. For the six months ended May 31, 2015, as a result of the debt modifications with the Fund and Laurus, the Company recognized a gain on troubled debt restructuring of $2,126,800. On April 21, 2015, EXO purchased a $63,000 convertible note, with a minimum conversion price of $0.00005 per share, that the Company originally issued to Diamond Remark LLC (Diamond) on September 4, 2014. On May 11, 2015, the Company signed a $140,000 convertible note agreement with Flux Carbon Starter Fund (the Flux Note), which matures on December 31, 2015, bears interest at an annual rate of 6%. The Flux Note can be converted into the Companys common stock at a price of $0.002 per share. In conjunction with the Flux Note, the Company received $68,000 in cash and recorded an original issuance discount of $72,000 as a debt discount, which is being amortized over the life of the note to interest expense on the effective interest method. Interest expense of $6,154 was recognized for the three months ended May 31, 2015. The Amended Notes, New Note, the Flux Note and EXO Note (the Secured Lenders) are secured by a blanket lien on substantially all of the Companys assets pursuant to the terms of security agreements executed by the Company and its subsidiaries in favor of the Fund. In addition, the Companys chief executive officer pledged his voting control of the Company pursuant to a stock pledge agreement in favor of the Secured Lenders, to further secure the Companys obligations. If an event of default occurs under the security agreement, the stock pledge agreement, the Amended Notes, the New Note or the EXO 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. At May 31, 2015 and November 30, 2014, the Company owed the Secured Lenders $1,594,010 and $1,935,190, respectively. Convertible Debt due to various lenders Convertible debt with a fixed conversion rate At May 31, 2015 and November 30, 2014, the Company owed a lender $138,000, in connection with 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. At November 30, 2014, the Company owed Diamond $63,000 in convertible debt with a minimum conversion price of $0.00005 per share. At May 31, 2015 and November 30, 2014, a total of $138,000 and $201,000, respectively, of convertible debt with a fixed conversion rate was outstanding. Convertible debt with a variable conversion rate issued for cash During the six months ended May 31, 2014, the Company received a total of $152,500 in cash from two lenders for convertible debt. The convertible debt bears interest at an annual rate of 6% to 8% is due between June and October 2015. The lender can elect at any time to convert any portion of the debt into shares of common stock of the Company, subject to a limit of 4.99% of the outstanding shares, at a price discount ranging from 30% to 42% of the price of the common stock as defined in the agreements. The conversion price of the $152,500 of variable conversion 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. The Company determined that the fair value of the conversion feature was $163,714 at the issuance dates. The debt was recorded as a debt discount of $152,102 and is amortized to interest expense over the term of the note. At May 31, 2015 and November 30, 2014, a total of $115,000 and $179,770 of variable-rate convertible debt that had been issued for cash was outstanding, respectively. Convertible debt with a variable conversion rate assigned to lenders During the six months ended May 31, 2015 and 2014, no other debt with a variable conversion rate was assigned to a lender. At May 31, 2015 and November 30, 2014, the Company owes one lender $67,750 as a result of an assignment in 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 Companys common stock as defined in the agreements. At May 31, 2015 and November 30, 2014, a total of $320,750 and $448,520 of other convertible debt was outstanding, respectively. Other short-term debt due to various lenders During the six months ended May 31, 2015 and 2014, the Company received $0 and $50,000, respectively from lenders in exchange for notes payable that had no conversion features. At May 31, 2015 and November 30, 2014 , the Company owed various lenders approximately $170,500 for non-convertible notes. Cash payments were made on these notes of $0 and $60,368 d and 2014, respectively. and 2014 Long-term debt The Company acquired 90% of Canalytix LLC on March 25, 2015. Canalytix owes Flux Carbon Starter Fund $414,401, as of May 31, 2015, under a secured senior term loan agreement, which is included in long-term debt in the Companys consolidated financial statements. The debt bears an annual interest rate of 12% and matures on December 31, 2019. Principal payments are made periodically from cash flow. No principal payments are due until maturity. |
Derivative Liabilities
Derivative Liabilities | 6 Months Ended |
May. 31, 2015 | |
Notes to Financial Statements | |
Derivative Liabilities | Note 10 - Derivative Liabilities The Company evaluated its convertible note agreements pursuant to ASC 815 and for those notes in which there was 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 its convertible notes. The Company valued the embedded derivatives using the Black-Scholes valuation model. Convertible debt with a variable conversion feature In 2015, the Company estimated the fair value of the derivatives using the Black-Scholes valuation method with assumptions including: (1) term of 0 to 0.59 years; (2) a computed volatility rate of 787%; (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 2014, the Company estimated the fair value of the derivatives using the Black-Scholes valuation method with assumptions including: (1) term of 0 to 0.59 years; (2) a computed volatility rate of 172%; (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. Tainted conventional convertible debt In 2015, the Company estimated the fair value of the derivative using the Black-Scholes valuation method with assumptions including: (1) term of .0 to .59 years; (2) a computed volatility rate of 787%; (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 2014, the Company estimated the fair value of the derivative using the Black-Scholes valuation method with assumptions including: (1) term of 0 to 0.59 years; (2) a computed volatility rate of 172%; (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 warrants The Company also evaluated all outstanding warrants 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 Companys stock as the number of shares issuable cannot be estimated and could exceed the amount of authorized shares available to be issued by the Company. The Company valued the embedded derivatives within the warrants using the Black-Scholes valuation model. In 2015, the Company estimated the fair value of the derivative using the Black-Scholes valuation method with assumptions including: (1) term of .71 to 8.08 years; (2) a computed volatility rate of 787%; (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 2014, the Company estimated the fair value of the derivative using the Black-Scholes valuation method with assumptions including: (1) term of .50 to 9.08 years; (2) a computed volatility rate of 172%; (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 six months ended May 31, 2015 was as follows: Initial valuation of derivative liabilities upon Change in Balance at issuance of new fair value of Conversion Balance at November 30, securities during derivative of debt Debt May 31, 2014 the period liabilities to equity Forgiveness 2015 Variable convertible debt $ 527,781 $ 74,990 $ 2,698,844 $ (1,162,262 ) $ (1,153,545 ) $ 985,808 Tainted convertible debt 106,246 118,790 169,683 394,719 Tainted warrants 5,312 2,000 87,748 95,060 $ 639,339 $ 195,780 $ 3,017,461 $ (1,162,262 ) $ (1,214,731 ) $ 1,475,587 Activity for embedded derivative instruments during the six months ended May 31, 2014 was as follows: Initial valuation of derivative liabilities upon Change in Balance at issuance of new fair value of Conversion Balance at November 30, securities during derivative of debt to May 31, 2013 the period liabilities equity 2014 Variable convertible debt $ 1,467,182 $ 230,837 $ 145,427 $ (300,920 ) $ 1,542,526 Tainted convertible debt 139,953 (136,600 ) 3,353 Tainted warrants 65,209 (22,899 ) 42,310 $ 1,672,344 $ 230,837 $ (14,072 ) $ (300,920 ) $ 1,588,189 |
Stockholders Equity
Stockholders Equity | 6 Months Ended |
May. 31, 2015 | |
Equity [Abstract] | |
Stockholders Equity | Note 11 Stockholders Equity As discussed in Note 9, the Company entered into various transactions where it issued convertible notes to third parties. Such convertible notes allowed the debt holders to convert outstanding debt principal into shares of the Companys common stock, par value $0.00001, (the 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, i On January 13, 2015, 10 shares of Series E Preferred, 10,000,000 shares of Series F Preferred and 10,000,000 shares of Series G preferred were issued to our chief executive officer in exchange for $100,000 in debt. The Series E Preferred has voting rights equal to 400% of the sum of the common stock, Series D Preferred, Series F Preferred and Series G Preferred, but no dividend rights and no liquidation rights. The Series E Preferred is convertible into the number of common shares equal to its voting rights. The Series F Preferred has voting rights equal to 100 million common shares and a liquidation preference of $10,000,000 over junior securities. Each share of Series F Preferred Stock shall be convertible at any time after their six-month anniversary date, if the Company is current with the filing of public reports pursuant to Section 12 or 15 of the Securities Exchange Act of 1934, or after twelve months if such reports are not filed, into the number of shares of the Corporation's Common Stock, equal to the price of the Series F Preferred Stock of $2.50 per share, divided by the par value of the Series F Preferred, subject to adjustment as may be determined by the Board of Directors. Shares of Series F Preferred Stock are anti-dilutive to reverse splits, so that in the event of a reverse split, the shares are convertible into the same number of common shares after the reverse split as would have been issued before the reverse split. The conversion rate of Series F Preferred Stock, however, increases proportionately in the case of forward splits, and may not be diluted by a reverse split following a forward split. The Series G Preferred has voting rights equal to 10 million common shares and a liquidation preference of $10,000,000 over junior securities. Each share of Series G Preferred Stock shall be convertible, at any time after their six-month anniversary date, if the Company is current with the filing of public reports pursuant to Section 12 or 15 of the Securities Exchange Act of 1934, or after twelve months if such reports are not filed, into 500 shares of the Corporation's Common Stock. Shares of Series G Preferred Stock are anti-dilutive to reverse splits, so that in the event of a reverse split, the shares are convertible into the same number of common shares after the reverse split as would have been issued before the reverse split. The conversion rate of Series G Preferred Stock, however, increases proportionately in the case of forward splits, and may not be diluted by a reverse split following a forward split. ASC 480, Distinguishing Liabilities from Equity Each share of Series F and Series G convertible preferred stock is convertible into 250,000 and 500 shares of Common Stock, respectively, which gives the holder of the Series F and Series G a beneficial conversion price. At the issuance date of January 13, 2015, the effective conversion price was less than the fair value of the Common Stock into which the preferred shares are convertible. Consequently, the Company recognized a beneficial conversion feature (BCF). The intrinsic value of the BCF is limited to the basis that is initially allocated to the convertible security. The Company recorded a discount on the preferred stock of $100,000 from the value of the Series F and Series G shares issued in exchange for outstanding payables to the chief executive officer (see Note 12 Related Party Transactions). The discount is being accreted to preferred stock dividends over a six-month period, as the preferred stock is convertible after six months (date of earliest conversion). Accretion amounted to $87,970 and $51,429 for the six and three-month period ended May 31, 2015. On March 19, 2015 the Company filed a certificate of amendment of its certificate of incorporation in which the Board of Directors designated the Series H Preferred Stock from the Companys previously authorized preferred stock with a stated value per share of $0.001. The number of shares of Series H Preferred Stock was set at 800,000 shares. Shares of Series H Preferred Stock have conversion rights into shares of Common Stock. The number of shares of Common Stock to which a holder of Series H Preferred Stock shall be entitled upon a Conversion shall equal the product obtained by (a) multiplying the number of fully-diluted Common Shares by four (4), then (b) multiplying the result by a fraction, the numerator of which will be the number of shares of Series H Preferred Stock being converted and the denominator of which will be the number of authorized shares of Series H Preferred Stock. If the Company delays the issuance of shares of Common Stock beyond three trading days after the Company receives a notice of conversion from a Series H Preferred Stock shareholder, the Company is required to pay for the losses incurred by the Series H Preferred Stock shareholder as a result of the delay. Each share of Series H Preferred Stock shall entitle the holder thereof, on all matters submitted to a vote of the stockholders of the Corporation, to that number of votes as shall be equal to the aggregate number of shares of Common Stock into which such holder's shares of Series H Preferred Stock are convertible on the record date for the stockholder action. In the event that the Corporations Board of Directors declares a dividend payable to holders of any class of stock, the holder of each share of Series H Preferred Stock shall be entitled to receive a dividend equal in amount and kind to that payable to the holder of the number of shares of the Companys Common Stock into which that holders Series H Preferred Stock could be converted on the record date for the dividend. Upon the liquidation, dissolution and winding up of the Corporation, the holders of the Series H Preferred Stock shall be entitled to receive in cash out of the net assets of the Corporation, whether from capital or from earnings available for distribution to its stockholders, before any amount shall be paid to the holders of Common Stock or to the holders of any other class or series of equity stock, an amount equal to eighty percent (80%) of said net assets multiplied by a fraction, the numerator of which shall be the number of outstanding shares of Series H Preferred Stock on the record date for the distribution and the denominator of which shall be the number of authorized shares of Series H Preferred Stock. On March 25, 2015, the Company executed a securities purchase agreement (the Agreement) with Flux Carbon Corporation (FCC), pursuant to which the Company acquired from FCC 90% of the issued and outstanding equity of Canalytix in consideration of the issuance by the Company of 1,000,000,000 shares of Common Stock and 100,000 shares of Series H Preferred Stock, par value $0.00001 (the Series H Preferred Stock) of the Company. The sale of 1,000,000,000 shares of Common Stock to FCC was subsequently rescinded and FCC agreed that the issuance of 100,000 shares of Series H Preferred Stock was the sole consideration given by the Company, for the purchase of 90% of Canalytix. The sale of 100,000 shares of the Series H Preferred Stock gives FCC 10% of the voting power and equity in the Company. Canalytix was formed in 2013 to develop and market energy and resource efficiency technologies and products, and is currently focused on doing so for indoor plant growth clients in the Colorado and other qualified markets. Canalytix holds exclusive distribution rights to technology developed by Noveda Technologies, Inc., in hydroponic and other indoor plant growth applications. Noveda is an innovative leader in real-time, web-based energy and water monitoring. Noveda's patented software as a service (SaaS) solutions help reduce energy and water usage, optimize performance of renewable energy systems, and reduce the carbon footprint for customers across commercial/retail, industrial, government, education, and utility sectors. Noveda also offers real-time collaboration tools that leverage social media to educate and empower stakeholder communities and make the smart grid a reality today. On May 11, 2015 the Company signed a securities purchase agreement with Flux Carbon Starter Fund LLC (Flux) for the sale of a convertible promissory note (the Note) in the principal amount of $140,000. The Note, which is due on December 31, 2015, bears interest at the rate of 6% per annum. All principal and accrued interest on the Note is convertible into shares of the Company's Common Stock at the election of Flux, at a conversion price equal to $0.002 per share. If the Company desires to exercise its right to prepay any portion of the Note before it matures or is converted into shares of the Companys Common Stock, the Company may deliver a prepayment notice to Flux, three days before a prepayment is made. The prepayment amount shall equal 130% multiplied by the amount of the outstanding balance paid by the Company. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
May. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 12 Related Party Transactions We paid fees to a third-party intellectual property development firm (the Consultant) for the six and three-month periods ended May 31, 2014 of $96,000 and $48,000, respectively. One of our former 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 May 31, 2015 and November 30, 2014, we owed our chief executive officer $1,234,098 and $1,194,021, respectively, for loans he provided to the Company, unpaid salary and unpaid business expenses. During the first quarter of fiscal 2015, the Company settled $100,000 in outstanding payables to the chief executive officer of by issuing 10,000,000 shares each of the Companys Series F and G preferred stock and 10 shares of the Companys Series E stock. For the six and three-month periods ended May 31, 2015, the Companys Canalytix subsidiary generated revenues from GS Engineering of $65,000. An entity that possesses more than 10% voting control of the Company, as of May 31, 2015, also possessed voting control over GS Engineering. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
May. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 13 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 managements 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. Valuation Hierarchy The table below presents the amounts of assets and liabilities measured at fair value on a recurring basis as of May 31, 2015 and November 30, 2014: The fair value of restricted securities are measured with quoted prices in active markets. The fair value of the derivatives that are traded in less active over-the-counter markets are generally measured using pricing models with non-observable inputs. These measurements are classified as Level 3 within the fair value of hierarchy. Total (Level 1) (Level 2) (Level 3) May 31, 2015 Restricted securities $ 116,000 $ 116,000 Derivative liability $ 1,475,587 $ 1,475,587 November 30, 2014 Restricted securities $ 1,040,000 $ 1,040,000 Derivative liability $ 639,339 $ 639,339 The Company has no instruments with significant off balance sheet risk. In 2015, we estimated the fair value of the derivative using the Black-Scholes valuation method with assumptions including: (1) term of 0 to 8.08 years; (2) a computed volatility rate of 787% (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 2014, we estimated the fair value of the derivative using the Black-Scholes valuation method with assumptions including: (1) term of 0 to 9.08 years; (2) a computed volatility rate of 172% (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. Fluctuations in the conversion discount percentage have the greatest effect on the value of the conversion liabilities valuations during each reporting period. As the conversion discount percentage increases for each of the related conversion liabilities instruments, the change in the value of the conversion liabilities increases, therefore increasing the liabilities on the Company's balance sheet. The higher the conversion discount percentage, the higher the liability. A 10% change in the conversion discount percentage would result in more than a $110,000 change in our Level 3 fair value. |
Acquisition of Company
Acquisition of Company | 6 Months Ended |
May. 31, 2015 | |
Business Combinations [Abstract] | |
Acquisition of Company | Note 14 Acquisition of Company The Company acquired 90% of the equity of Canalytix on March 25, 2015 in exchange for 100,000 shares of Series H Preferred Stock. The Company is currently in the process of valuing the acquired assets and liabilities and completing the purchase price allocation. Due to the timing of this acquisition, the purchase price allocation was not complete as of May 31, 2015. Accordingly, the purchase price in excess of the fair value of the net assets acquired of $410,839 has been recorded in other long-term assets in the accompanying Condensed Consolidated Balance Sheet. Upon the completion of the purchase price allocation, the excess purchase price will be allocated to goodwill, non-controlling interest and other identifiable assets. A presentation of the unaudited proforma income statements of the Company, had the acquisition occurred at the beginning of the fiscal year, for the six and three-month periods ended May 31, 2015 and 2014 is as follows: Six Months Ended Three Months Ended Six Months Ended Three Months Ended 5/31/2015 5/31/2015 5/31/2014 5/31/2014 Revenue $ 113,448 $ 80,600 $ 415,015 $ 237,353 Loss from operations $ (90,523 ) $ (39,324 ) $ (826,498 ) $ (301,572 ) Net income (loss) $ (326,307 ) $ 1,659,544 $ (804,451 ) $ (901,637 ) Income (loss) per share $ 0.00 $ 0.00 $ 0.00 $ 0.00 |
Restatement
Restatement | 6 Months Ended |
May. 31, 2015 | |
Notes to Financial Statements | |
Restatement | Note 15 Restatement During 2015, 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 six-month period ended May 31, 2014. The restatement resulted in a decrease in beginning Retained Deficit at December 1, 2013 of $132,826, and a loss of $372,151 for the six-month period ended May 31, 2014, or a decrease of $29,866, as compared to a loss of $342,285 that had previously been reported. The Company also reclassified deferred financing costs of $42,725 from selling, general and administrative costs, to other expense. The Company restated its consolidated financial statements as of and for the six months ended May 31, 2014 as follows: Six Months Ended May 31, 2014 As Originally Reported Adjustments As Restated Selling, general and administrative costs $ 722,063 $ (42,725 ) (1) $ 679,338 Other expense deferred finance costs 42,725 (1) 17,829 (Gain) loss on value of derivative liabilities (43,938 ) 29,866 (2) (14,072 ) Adjustments to consolidated financial statements: (1) To reclassify deferred finance expense to other expenses. (2) To record gain on the settlement of derivative liabilities. For the six-months ended May 31, 2014, the restatement increased income from continuing operations by $42,725, decreased net income by $29,866, and had no effect on earnings per share, which remained at $0.00. |
Subsequent Events
Subsequent Events | 6 Months Ended |
May. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 16 - Subsequent Events On July 1, 2015, Pervasip Corp. (the Company) executed and closed under a securities purchase agreement with Flux Carbon Corporation (the Buyer), pursuant to which the Company acquired from Buyer 100% of the issued and outstanding equity of Plaid Canary Corporation, a Delaware corporation (PCC), in consideration of the issuance by the Company of 500,000 shares of Series H preferred stock, par value $0.00001 (the Series H Preferred Stock) of the Company. PCC is the majority owner of Grow Big Supply LLC (GBS), a retail supplier of products and services for agricultural facilities. In 2014, GBS recorded, on an unaudited basis, revenues of approximately $5,700,000 and an operating loss of approximately $32,000. Beginning on July 1, 2015, the operating activities and financial statements of GBS will be included in the Companys consolidated financial statements. PCC and the Company are party to a merger agreement, pursuant to which the Company will be merged into PCC on a one (1) to one (1) basis. Among other things, the merger agreement calls for each share of Series H Preferred Stock issued and outstanding immediately prior to the merger to be converted on a one (1) to one (1) basis into one (1) validly issued, fully paid and nonassessable share of PCC Series A Preferred Stock, which will have the same features as the Series H Preferred Stock. The merger also calls for each share of the Companys Common Stock issued and outstanding immediately prior to the merger to be converted on a one (1) to one (1) basis, or into one (1) validly issued, fully paid and nonassessable share of PCC Common Stock. Upon the completion of the merger, each share of Company Common Stock and Preferred Stock shall no longer be outstanding and shall automatically be canceled and cease to exist, and each holder of a certificate representing any share of Company Common Stock and Preferred Stock shall cease to have any rights with respect thereto other than the right to receive, as the case may be, PCC Common Stock or Preferred Stock to be issued in exchange therefor upon the surrender of such certificate, properly endorsed to PCC. On July 9, 2015, a secured lender submitted a conversion notice to convert all of its remaining debt in exchange for 240,476,000 shares of common stock of the Company. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
May. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed 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. The condensed balance sheet at November 30, 2014 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. Operating results for the six and three-month periods ended May 31, 2015, are not necessarily indicative of the results that may be expected for the year ended November 30, 2015. 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, 2014. For a summary of significant accounting policies (which have not changed from November 30, 2014), see the Companys Annual Report on Form 10-K for the year ended November 30, 2014. |
Marketable securities | Marketable securities The Company classifies investments in equity securities bought and held primarily to be sold in the short term that have readily determinable fair values, as trading securities. Unrealized holding gains and losses for trading securities are included in earnings. Any unrealized holding gains and losses from available-for-sale securities are excluded from earnings and are recorded in comprehensive income until a gain or loss has been realized. |
Recent Accounting Pronounceme25
Recent Accounting Pronouncements and Accounting Principles (Policies) | 6 Months Ended |
May. 31, 2015 | |
Recent Accounting Pronouncements And Accounting Principles Policies | |
Recent Accounting Pronouncements | In May 2014, FASB issued ASU 2014-09, "Revenue from Contracts with Customers". This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The revised effective date for this ASU is for annual and interim periods beginning on or after December 15, 2017, and early adoption will be permitted, but not earlier than the original effective date of annual and interim periods beginning on or after December 15, 2016, for public entities. We will adopt this ASU when effective. Companies may use either a full retrospective or modified retrospective approach to adopt this ASU and our management is currently evaluating which transition approach to use. We are currently evaluating the impact of adopting ASU 2014-09 on our consolidated financial statements and related disclosures. In April 2015, FASB issued ASU 2015-03, "Interest-Imputation of Interest". This ASU requires that debt issuance costs be reported in the balance sheet as a direct deduction from the face amount of the related liability, consistent with the presentation of debt discounts. Prior to the amendments, debt issuance costs were presented as a deferred charge (i.e., an asset) on the balance sheet. This ASU is effective for annual reporting periods beginning after December 15, 2015 and interim periods within fiscal years beginning after December 15, 2016. The amendments must be applied retrospectively. All entities have the option of adopting the new requirements as of an earlier date for financial statements that have not been previously issued. Applicable disclosures for a change in an accounting principle are required in the year of adoption, including interim periods. We will adopt this ASU when effective. The adoption of ASU 2015-03 will not have a material impact on our consolidated financial statements and related disclosures. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of Pervasip Corp., its wholly-owned subsidiaries, and its 90% owned subsidiary, Canalytix, LLC. The activities of the Companys newly acquired subsidiary Canalytix, LLC are included in the financial statements since March 25, 2015 (date of acquisition). Any significant inter-company balances and transactions have been eliminated. |
Net Income (Loss) Per Common 26
Net Income (Loss) Per Common Share (Tables) | 6 Months Ended |
May. 31, 2015 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Common Share | Six Months Ended May 31, 2015 Six Months Ended May 31, 2014 Three Months Ended May 31, 2015 Three Months Ended May 31, 2014 Net income (loss) attributable to common stockholders - basic $ (528,326 ) $ (372,151 ) $ 1,461,656 $ (760,206 ) Income attributable to convertible notes (1,413,320 ) Interest expense convertible notes 270,490 Net income (loss) attributable to common stockholders - diluted $ (528,326 ) $ (372,151 ) $ 318,826 $ (760,206 ) Weighted average common shares outstanding - basic 2,448,541,449 946,116,664 3,231,962,508 1,007,499,997 Effect of dilutive securities 22,394,276,277 Weighted average common shares outstanding diluted 2,448,541,449 946,116,664 25,626,238,785 1,007,499,997 Earnings (loss) per common share - basic $ (0.00 ) $ (0.00 ) $ 0.00 $ (0.00 ) Earnings (loss) per common share - diluted $ (0.00 ) $ (0.00 ) $ 0.00 $ (0.00 ) |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
May. 31, 2015 | |
Debt Disclosure [Abstract] | |
Debt | May 31, 2015 November 30, 2014 Debt due to Laurus $ 1,832,141 $ 2,266,186 Convertible debt due to Secured Lender 1,594,010 1,935,190 Secured term loan 414,401 Convertible debt due to various lenders 320,750 448,520 Other short-term debt due to various lenders 170,495 170,496 Total debt 4,331,797 4,820,392 Less: current portion of long-term debt (3,767,499 ) (4,631,122 ) Less: discount on debt (149,897 ) (189,270 ) Total long-term debt $ 414,401 $ |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 6 Months Ended |
May. 31, 2015 | |
Notes to Financial Statements | |
Embedded Derivative Instruments | Activity for embedded derivative instruments during the six months ended May 31, 2015 was as follows: Initial valuation of derivative liabilities upon Change in Balance at issuance of new fair value of Conversion Balance at November 30, securities during derivative of debt Debt May 31, 2014 the period liabilities to equity Forgiveness 2015 Variable convertible debt $ 527,781 $ 74,990 $ 2,698,844 $ (1,162,262 ) $ (1,153,545 ) $ 985,808 Tainted convertible debt 106,246 118,790 169,683 394,719 Tainted warrants 5,312 2,000 87,748 95,060 $ 639,339 $ 195,780 $ 3,017,461 $ (1,162,262 ) $ (1,214,731 ) $ 1,475,587 Activity for embedded derivative instruments during the six months ended May 31, 2014 was as follows: Initial valuation of derivative liabilities upon Change in Balance at issuance of new fair value of Conversion Balance at November 30, securities during derivative of debt to May 31, 2013 the period liabilities equity 2014 Variable convertible debt $ 1,467,182 $ 230,837 $ 145,427 $ (300,920 ) $ 1,542,526 Tainted convertible debt 139,953 (136,600 ) 3,353 Tainted warrants 65,209 (22,899 ) 42,310 $ 1,672,344 $ 230,837 $ (14,072 ) $ (300,920 ) $ 1,588,189 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
May. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Summary of derivative assets at fair value | Total (Level 1) (Level 2) (Level 3) May 31, 2015 Restricted securities $ 116,000 $ 116,000 Derivative liability $ 1,475,587 $ 1,475,587 November 30, 2014 Restricted securities $ 1,040,000 $ 1,040,000 Derivative liability $ 639,339 $ 639,339 |
Acquisition of Company (Tables)
Acquisition of Company (Tables) | 6 Months Ended |
May. 31, 2015 | |
Business Combinations [Abstract] | |
Acquisition of Company | Six Months Ended Three Months Ended Six Months Ended Three Months Ended 5/31/2015 5/31/2015 5/31/2014 5/31/2014 Revenue $ 113,448 $ 80,600 $ 415,015 $ 237,353 Loss from operations $ (90,523 ) $ (39,324 ) $ (826,498 ) $ (301,572 ) Net income (loss) $ (326,307 ) $ 1,659,544 $ (804,451 ) $ (901,637 ) Income (loss) per share $ 0.00 $ 0.00 $ 0.00 $ 0.00 |
Restatement (Tables)
Restatement (Tables) | 6 Months Ended |
May. 31, 2015 | |
Notes to Financial Statements | |
Restatement | Six Months Ended May 31, 2014 As Originally Reported Adjustments As Restated Selling, general and administrative costs $ 722,063 $ (42,725 ) (1) $ 679,338 Other expense deferred finance costs 42,725 (1) 17,829 (Gain) loss on value of derivative liabilities (43,938 ) 29,866 (2) (14,072 ) |
Going Concern Matters and Rea32
Going Concern Matters and Realization of Assets (Details) - USD ($) | May. 31, 2015 | Nov. 30, 2014 |
Going Concern Matters and Realization of Assets (Textual) | ||
Working capital | $ (10,400,371) | |
Stockholders Equity Deficiency | $ (10,349,782) | $ (9,400,792) |
Major Customers (Details)
Major Customers (Details) - May. 31, 2015 | Total | Total |
Accounts Receivable[Member] | Customer Concentration Risk [Member] | ||
Major Customers (Textual) | ||
Concentration Risk, Percentage | 32.00% | |
Sales Revenue, Goods, Net [Member] | Customer Concentration Risk [Member] | ||
Major Customers (Textual) | ||
Concentration Risk, Percentage | 32.00% | 27.00% |
Sales Revenue, Goods, Net [Member] | Related Party Customer Concentration Risk [Member] | ||
Major Customers (Textual) | ||
Concentration Risk, Percentage | 99.00% | 97.00% |
Sales Revenue, Goods, Net [Member] | Customer Concentration Risk 2[Member] | ||
Major Customers (Textual) | ||
Concentration Risk, Percentage | 27.00% | 34.00% |
Net Income (Loss) Per Common 34
Net Income (Loss) Per Common Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2015 | May. 31, 2014 | |
Summary of net income loss per common share (Textual) | ||||
Net income (loss) attributable to common stockholders | $ 1,461,656 | $ (760,206) | $ (528,326) | $ (372,151) |
Interest expense - convertible notes | 270,490 | |||
Net income (loss) - attributable to common stockholders diluted | $ 318,826 | $ (760,206) | $ (528,326) | $ (372,151) |
Weighted average common shares outstanding - basic | 3,231,962,508 | 1,007,499,997 | 2,448,541,449 | 946,116,664 |
Effect of dilutive securities | 22,394,276,277 | |||
Weighted average common shares outstanding-diluted | 25,626,238,785 | 1,007,499,997 | 2,448,541,449 | 946,116,664 |
Earnings (loss) per common share - basic | $ 0 | $ 0 | $ 0 | $ 0 |
Earnings (loss) per common share - diluted | $ 0 | $ 0 | $ 0 | $ 0 |
Net Income (Loss) Per Common 35
Net Income (Loss) Per Common Share (Details Narrative) - shares | 3 Months Ended | 6 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2015 | May. 31, 2014 | |
Antidilutive Securities Excluded From Computation Of Earnings per share | 1,660,941,000 | 1,485,708,000 | 1,224,948,000 | 1,475,706,000 |
Series E Preferred Stock [Member] | ||||
Preferred shares available to convert to common shares | 18,890,521,000 | |||
Series H Preferred Stock [Member] | ||||
Preferred shares available to convert to common shares | 2,361,315,130 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Details) - USD ($) | 6 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
Stock Based Compensation Plans (Textual) | ||
Stock based compensation expense | $ 4,000 | $ 13,291 |
Unrecognized employee stock-compensation expense | $ 0 |
Accounts Payable and Accrued 37
Accounts Payable and Accrued Expenses (Details) | May. 31, 2015USD ($) |
Accounts Payable and Accrued Expenses (Textual) | |
Payable from sale of subsidiaries | $ 796,499 |
Defined Benefit Plan (Details N
Defined Benefit Plan (Details Narrative) | 12 Months Ended | ||
Nov. 30, 2014USD ($) | May. 31, 2015USD ($) | ||
Defined Benefit Plan (Textual) | |||
Total outstanding amount due to PBGC including accrued interest | $ 2,001,984 | $ 2,052,418 | |
Number of former employees covered under defined benefit plan | 40 | ||
Payable to Plan | [1] | $ 100,000 | |
[1] | equal installments of $25,000 on January 31, 2015, April 30, 2015, July 31, 2015 and October 31, 2015. |
Debt (Details)
Debt (Details) - USD ($) | May. 31, 2015 | Nov. 30, 2014 |
Debt Instrument [Line Items] | ||
Debt | $ 4,331,797 | $ 4,820,392 |
Current portion of long-term debt | (3,767,499) | (4,631,122) |
Discount on debt | (149,897) | $ (189,270) |
Long-term debt | 414,401 | |
Debt due to Laurus [Member] | ||
Debt Instrument [Line Items] | ||
Debt | 1,832,141 | $ 2,266,186 |
Convertible debt due to Secured Lender [Member] | ||
Debt Instrument [Line Items] | ||
Debt | 1,594,010 | 1,935,190 |
Secured Term Lender [Member] | ||
Debt Instrument [Line Items] | ||
Debt | 414,401 | |
Convertible Debt due to Various Lenders [Member] | ||
Debt Instrument [Line Items] | ||
Debt | 320,750 | 448,520 |
Other Short term debt due to various lenders [Member] | ||
Debt Instrument [Line Items] | ||
Debt | $ 170,494 | $ 170,496 |
Principal Financing Arrangement
Principal Financing Arrangements (Details 1) - USD ($) | 6 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | Nov. 30, 2014 | |
Debt due to Laurus [Member] | |||
Debt Instrument [Line Items] | |||
New Debt Amount | $ 70,000 | ||
Interest rate, minimum | 5.25% | ||
Interest rate, maximum | 20.00% | ||
Debt interest expense | $ 63,234 | ||
Debt assigned to third party | 100,000 | ||
Payments on notes | 30,000 | ||
Convertible debt due to Secured Lender [Member] | |||
Debt Instrument [Line Items] | |||
Original Principal amount | 6,368,078 | ||
Payment on note | 250,000 | ||
Cancellation of convertible debenture | 35,000 | ||
Debt assigned to third party | $ 350,000 | ||
Payments on notes | 150,000 | ||
Convertible debt due to Secured Lender [Member] | Amendment #1[Member] | |||
Debt Instrument [Line Items] | |||
Original Principal amount | $ 1,000,000 | ||
Interest rate, minimum | 6.00% | ||
Note, fair value | $ 1,703,423 | ||
Unamortized Debt discount | 1,000,000 | ||
Change in fair value of derivative liability | 703,423 | ||
Convertible debt due to Secured Lender [Member] | Amendment #2[Member] | |||
Debt Instrument [Line Items] | |||
Original Principal amount | $ 1,000,000 | ||
Interest rate, minimum | 2.00% | ||
Convertible debt due to Secured Lender [Member] | Exo [Member] | |||
Debt Instrument [Line Items] | |||
Original Principal amount | $ 63,000 | ||
New Debt Amount | 97,675 | ||
Discount rate | 49.00% | ||
Accured interest expense | 34,675 | ||
Conversion rate, minimum | 0.005% | ||
Convertible debt due to Secured Lender [Member] | Flux [Member] | |||
Debt Instrument [Line Items] | |||
Original Principal amount | 140,000 | ||
Proceeds from note | $ 68,000 | ||
Interest rate, minimum | 6.00% | ||
Debt interest expense | $ 6,154 | ||
Original issue discount | 72,000 | ||
Conversion rate, minimum | 0.20% | ||
Bridge Notes [Member] | |||
Debt Instrument [Line Items] | |||
Issue date | 2013-11 | ||
Proceeds from note | $ 50,000 | ||
Bridge Notes 1[Member] | |||
Debt Instrument [Line Items] | |||
Issue date | 2013-11 | ||
Proceeds from note | $ 35,000 | ||
Bridge Notes 2[Member] | |||
Debt Instrument [Line Items] | |||
Issue date | 2013-11 | ||
Proceeds from note | $ 12,000 | ||
New Notes [Member] | |||
Debt Instrument [Line Items] | |||
Original Principal amount | 665,000 | ||
New Debt Amount | 99,360 | ||
Proceeds from note | $ 300,000 | ||
Interest rate, minimum | 6.00% | ||
Note, fair value | $ 1,103,940 | ||
Finders fee | 68,640 | ||
Debt interest expense | 478,940 | ||
Original issue discount | 100,000 | ||
Unamortized Debt discount | $ 665,000 | ||
Conversion rate, minimum | 60.00% | ||
New Notes [Member] | Amendment #2[Member] | |||
Debt Instrument [Line Items] | |||
Original Principal amount | $ 634,600 | ||
New Debt Amount | 250,000 | ||
Payments on notes | 125,000 | ||
New Notes [Member] | Amendment #1[Member] | |||
Debt Instrument [Line Items] | |||
Original Principal amount | 280,190 | ||
New Debt Amount | 250,000 | ||
Proceeds from note | $ 25,000 | ||
Interest rate, minimum | 6.00% | ||
Note, fair value | $ 74,990 | ||
Debt interest expense | 25,000 | ||
Change in fair value of derivative liability | 49,990 | ||
Convertible debt with a fixed conversion rate [Member] | |||
Debt Instrument [Line Items] | |||
Original Principal amount | 138,000 | ||
New Debt Amount | $ 201,000 | ||
Interest rate, minimum | 18.00% | ||
Conversion rate, minimum | 1.50% | ||
Conversion rate, maximum | 2.00% | ||
Convertible debt with a fixed conversion rate [Member] | Past Due Notes #1 [Member] | |||
Debt Instrument [Line Items] | |||
Original Principal amount | $ 63,000 | ||
Discount rate | 49.00% | ||
Conversion rate, minimum | 0.05% | ||
Convertible debt with a varialble conversion rate for cash[Member] | |||
Debt Instrument [Line Items] | |||
Original Principal amount | $ 152,500 | ||
New Debt Amount | 115,000 | 179,770 | |
Proceeds from note | $ 60,000 | ||
Interest rate, minimum | 6.00% | ||
Interest rate, maximum | 8.00% | ||
Note, fair value | $ 163,714 | ||
Original issue discount | 152,102 | ||
Change in fair value of derivative liability | 11,612 | ||
Convertible Debt due to Various Lenders [Member] | |||
Debt Instrument [Line Items] | |||
Original Principal amount | $ 67,750 | ||
Discount rate | 55.00% | ||
Interest rate, minimum | 0.00% | ||
Other Short term debt due to various lenders [Member] | |||
Debt Instrument [Line Items] | |||
Original Principal amount | $ 170,500 | $ 170,500 | |
Proceeds from note | $ 0 | 50,000 | |
Interest rate, minimum | 0.00% | ||
Interest rate, maximum | 17.00% | ||
Debt interest expense | $ 0 | 97,818 | |
Payments on notes | 0 | 60,368 | |
Cash advances on notes | $ 67,196 | $ 67,196 | |
Secured Term Lender [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate, minimum | 12.00% |
Principal Financing Arrangeme41
Principal Financing Arrangements (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2015 | May. 31, 2014 | |
Debt Instrument [Line Items] | ||||
Debt converted to common stock, value | $ 150,731 | $ 73,934 | ||
Gain on troubled debt restructuring | $ 1,538,145 | 2,065,614 | ||
Debt due to Laurus [Member] | ||||
Debt Instrument [Line Items] | ||||
Gain on troubled debt restructuring | 497,279 | |||
Convertible debt due to Secured Lender [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt converted to common stock, value | $ 273,400 | |||
Debt converted to common stock, share | 203,000,000 | |||
New Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Gain on troubled debt restructuring | $ 1,538,145 | $ 2,126,800 |
Derivative Liabilities - Embedd
Derivative Liabilities - Embedded Derivative Instruments 2015 (Details) - May. 31, 2015 - USD ($) | Total |
Variable convertible debt [Member] | |
Derivatives, Fair Value [Line Items] | |
Derivative Liability, beginning balance | $ 527,781 |
Initial valuation of derivative liabilities upon issuance of new securities | 74,990 |
Change in fair value of derivative liabilite | 2,698,844 |
Debt forgiveness | (1,153,545) |
Conversion of debt to equity | (1,162,262) |
Derivative Liability, ending balance | 985,808 |
Tainted convertible debt [Member] | |
Derivatives, Fair Value [Line Items] | |
Derivative Liability, beginning balance | 106,246 |
Initial valuation of derivative liabilities upon issuance of new securities | 118,790 |
Change in fair value of derivative liabilite | 169,683 |
Derivative Liability, ending balance | 394,719 |
Tainted warrants [Member] | |
Derivatives, Fair Value [Line Items] | |
Derivative Liability, beginning balance | 5,312 |
Initial valuation of derivative liabilities upon issuance of new securities | 2,000 |
Change in fair value of derivative liabilite | 87,748 |
Derivative Liability, ending balance | 95,060 |
Embedded derivative liablities [Member] | |
Derivatives, Fair Value [Line Items] | |
Derivative Liability, beginning balance | 639,339 |
Initial valuation of derivative liabilities upon issuance of new securities | 195,780 |
Change in fair value of derivative liabilite | 3,017,461 |
Debt forgiveness | (1,214,731) |
Conversion of debt to equity | (1,162,262) |
Derivative Liability, ending balance | $ 1,475,587 |
Derivative Liabilities - Embe43
Derivative Liabilities - Embedded Derivative Instruments 2014 (Details) - May. 31, 2014 - USD ($) | Total |
Variable convertible debt [Member] | |
Derivatives, Fair Value [Line Items] | |
Derivative Liability, beginning balance | $ 1,467,182 |
Initial valuation of derivative liabilities upon issuance of new securities | 230,836 |
Change in fair value of derivative liabilite | 145,427 |
Conversion of debt to equity | (300,920) |
Derivative Liability, ending balance | 1,542,526 |
Tainted convertible debt [Member] | |
Derivatives, Fair Value [Line Items] | |
Derivative Liability, beginning balance | 139,953 |
Change in fair value of derivative liabilite | (136,600) |
Derivative Liability, ending balance | 3,353 |
Tainted warrants [Member] | |
Derivatives, Fair Value [Line Items] | |
Derivative Liability, beginning balance | 65,209 |
Change in fair value of derivative liabilite | (22,899) |
Derivative Liability, ending balance | 42,310 |
Derivative Instrument [Member] | |
Derivatives, Fair Value [Line Items] | |
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 | (14,072) |
Conversion of debt to equity | (300,920) |
Derivative Liability, ending balance | $ 1,558,189 |
Derivative Liabilities (Details
Derivative Liabilities (Details Narrative) - $ / shares | 6 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
Convertible debt with a variable conversion feature [Member] | Minimum [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Expected term | ||
Volatility rate | 787.00% | 172.00% |
Discount rate | 1.00% | 1.00% |
Dividends | $ 0 | $ 0 |
Convertible debt with a variable conversion feature [Member] | Maximum [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Expected term | 5 months 9 days | 5 months 9 days |
Volatility rate | 339.00% | |
Tainted conventional convertible debt [Member] | Minimum [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Expected term | ||
Volatility rate | 787.00% | 172.00% |
Discount rate | 1.00% | 1.00% |
Dividends | $ 0 | $ 0 |
Tainted conventional convertible debt [Member] | Maximum [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Expected term | 5 months 9 days | 5 months 9 days |
Tainted warrants [Member] | Minimum [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Expected term | 7 months 1 day | 5 months |
Volatility rate | 787.00% | 172.00% |
Discount rate | 1.00% | 1.00% |
Dividends | $ 0 | $ 0 |
Tainted warrants [Member] | Maximum [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Expected term | 8 years 8 days | 9 years 8 days |
Equity (Details)
Equity (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
May. 31, 2015 | May. 31, 2014 | May. 31, 2015 | May. 31, 2014 | Mar. 19, 2015 | Nov. 30, 2014 | |
Stockholder's Equity (Textual) | ||||||
Common stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||
Common stock, shares authorized | 8,978,999,990 | 8,978,999,990 | 8,978,999,990 | |||
Accretion of preferred stock beneficial conversion feature | $ 51,429 | $ 87,970 | ||||
Stock issued for acquistion, shares | 100,000 | |||||
Ownership of new entity | 90.00% | |||||
Series F Preferred Stock [Member] | ||||||
Stockholder's Equity (Textual) | ||||||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||
Preferred stock, shares outstanding | 10,000,000 | 10,000,000 | 0 | |||
Preferred voting rights | 100 million common shares | |||||
Liquidation preference | $ 10,000,000 | $ 10,000,000 | ||||
Conversion per share | $ 2.5 | $ 2.5 | ||||
Conversion of shares | 250,000 | |||||
Debt converted to common stock, share | 10,000,000 | |||||
Series H Preferred Stock [Member] | ||||||
Stockholder's Equity (Textual) | ||||||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||
Preferred stock, shares authorized | 800,000 | |||||
Preferred stock, shares outstanding | 100,000 | 100,000 | ||||
Series E Preferred Stock [Member] | ||||||
Stockholder's Equity (Textual) | ||||||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||
Preferred stock, shares outstanding | 10 | 10 | 0 | |||
Preferred voting rights | 400% | |||||
Debt converted to common stock, share | 10,000,000 | |||||
Series D Preferred Stock [Member] | ||||||
Stockholder's Equity (Textual) | ||||||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||
Preferred stock, shares outstanding | 51 | 51 | 51 | |||
Series G Preferred Stock [Member] | ||||||
Stockholder's Equity (Textual) | ||||||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||
Preferred stock, shares outstanding | 10,000,000 | 10,000,000 | 0 | |||
Preferred voting rights | 10 million common shares | |||||
Liquidation preference | $ 10,000,000 | $ 10,000,000 | ||||
Conversion of shares | 500 | |||||
Debt Settlement [Member] | ||||||
Stockholder's Equity (Textual) | ||||||
Outstanding principal debt converted into common shares | $ 278,260 | |||||
Debt converted to common stock, share | 2,468,080,212 | |||||
Stock Issued During Period Value Issued For Services | $ 4,000 | |||||
Stock Issued During Period Shares Issued For Services | 40,000,000 | |||||
CEO [Member] | ||||||
Stockholder's Equity (Textual) | ||||||
Outstanding principal debt converted into common shares | $ 100,000 | |||||
CEO [Member] | Series F Preferred Stock [Member] | ||||||
Stockholder's Equity (Textual) | ||||||
Debt converted to common stock, share | 10,000,000 | |||||
CEO [Member] | Series H Preferred Stock [Member] | ||||||
Stockholder's Equity (Textual) | ||||||
Debt converted to common stock, share | 10,000,000 | |||||
CEO [Member] | Series E Preferred Stock [Member] | ||||||
Stockholder's Equity (Textual) | ||||||
Debt converted to common stock, share | 10 | |||||
Series F Preferred Stock [Member] | ||||||
Stockholder's Equity (Textual) | ||||||
Preferred stock, shares authorized | 10,000,000 | |||||
Series G Preferred Stock [Member] | ||||||
Stockholder's Equity (Textual) | ||||||
Preferred stock, shares authorized | 10,000,000 | |||||
Series H Preferred Stock [Member] | ||||||
Stockholder's Equity (Textual) | ||||||
Preferred stock, shares authorized | 80,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
May. 31, 2015 | May. 31, 2015 | Nov. 30, 2014 | |
Related Party Transactions (Textual) | |||
Consultant fees | $ 48,000 | $ 96,000 | |
Related party revenue | 65,000 | $ 65,000 | |
Common stock issued for acquisition | 100,000 | ||
Chief Financial Officer [Member] | |||
Related Party Transactions (Textual) | |||
Ammount owed to officers | $ 1,234,098 | $ 1,234,098 | $ 1,194,021 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) | May. 31, 2015 | Nov. 30, 2014 |
Summary of derivative liabilities at fair value (Textual) | ||
Restricted securities | $ 116,000 | $ 1,040,000 |
Derivative liability | 1,475,587 | 639,339 |
Fair Value, Inputs, Level 1 [Member] | ||
Summary of derivative liabilities at fair value (Textual) | ||
Restricted securities | 116,000 | 1,040,000 |
Fair Value, Inputs, Level 3 [Member] | ||
Summary of derivative liabilities at fair value (Textual) | ||
Derivative liability | $ 1,475,587 | $ 639,339 |
Fair Value Measurements (Deta48
Fair Value Measurements (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended |
May. 31, 2015 | Nov. 30, 2014 | |
Change in Conversion discount precentage | 10.00% | |
Change in level 3 | $ 110,000 | |
Fair Value of Derivative [Member] | Minimum [Member] | ||
Expected term | ||
Volatility rate | 787.00% | 172.00% |
Discount rate | 1.00% | 1.00% |
Dividends | $ 0 | $ 0 |
Fair Value of Derivative [Member] | Maximum [Member] | ||
Expected term | 8 years 8 days | 9 years 8 days |
Acquisition of Company - Acquis
Acquisition of Company - Acquisition of Company (Details) - Canalytix [Member] - USD ($) | 3 Months Ended | 6 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2015 | May. 31, 2014 | |
Revenue | $ 80,600 | $ 237,353 | $ 113,448 | $ 415,015 |
Loss from operations | (39,324) | (301,572) | (90,523) | (826,498) |
Net income (loss) | $ 1,659,544 | $ (901,637) | $ (326,307) | $ (804,451) |
Income (loss) per share | $ 0 | $ 0 | $ 0 | $ 0 |
Acquisition of Company (Details
Acquisition of Company (Details Narrative) - May. 31, 2015 - USD ($) | Total |
Business Combinations [Abstract] | |
Excess of purchase price over net assets acquired-Canalytix acquisition | $ 410,839 |
Stock issued for acquistion, shares | 100,000 |
Ownership of new entity | 90.00% |
Restatement - Restatement (Deta
Restatement - Restatement (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2015 | May. 31, 2014 | |
Selling, general and administrative | $ 100,648 | $ 319,782 | $ 167,966 | $ 679,338 |
Other expense – deferred finance costs | 17,829 | |||
Gain (loss) on change in derivative liabilities | $ 847,720 | $ 239,755 | $ 3,017,461 | (14,072) |
Originally Reported [Member] | ||||
Selling, general and administrative | $ 722,063 | |||
Other expense – deferred finance costs | ||||
Gain (loss) on change in derivative liabilities | $ (43,938) | |||
Adjustments [Member] | ||||
Selling, general and administrative | (42,725) | |||
Other expense – deferred finance costs | 42,725 | |||
Gain (loss) on change in derivative liabilities | $ 29,866 |
Restatement (Details Narrative)
Restatement (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
May. 31, 2015 | May. 31, 2014 | May. 31, 2015 | May. 31, 2014 | Dec. 31, 2013 | |
Decrease in retained deficit | $ 132,826 | ||||
Net income (loss) | $ 1,517,050 | $ (760,206) | $ (436,391) | $ (372,151) | |
Originally Reported [Member] | |||||
Net income (loss) | (342,285) | ||||
Adjustments [Member] | |||||
Net income (loss) | $ 29,866 |
Subsequent Events (Details)
Subsequent Events (Details) - 6 months ended May. 31, 2015 - Subsequent event [Member] - USD ($) | Total |
Subsequent Events (Textual) | |
Common stock for acquisition | 500,000 |
Converted principal shares of common stock | 240,476,000 |
Revenue | $ 5,700,000 |
Net income (loss) | $ 32,000 |