16. SUBSEQUENT EVENTS

12 Months Ended

Jan. 31, 2014

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

Securities Exchange Agreement

On February 7, 2014, the Company entered into a Securities Exchange Agreement (the Exchange Agreement) with MV Portfolio, LLC, a Florida limited liability company (MVP), MV Patents LLC, a Florida limited liability company and a member of MVP ( MV PAT), and the other members of MVP (MV PAT and such other members, “the Members”). Upon closing of the transaction (the Transactions) contemplated under the Exchange Agreement (the Securities Exchange Agreement), on February 7, 2014, the Members transferred all of the issued and outstanding membership interests of MVP to the Company in exchange for (i) an aggregate of 9,385,000 post-Reverse Split shares of the common stock of the Company (the Securities Exchange), which shares will be delivered to the Members promptly following effectiveness of the Reverse Split. As a result of the Securities Exchange, MVP became a wholly-owned subsidiary of the Company.

Pursuant to the Securities Exchange Agreement:

● At the closing of the Transactions and pursuant to the terms of the Securities Exchange Agreement, all of the membership interests of MVP issued and outstanding immediately prior to the closing were exchanged for the right to receive 9,385,000 post-Reverse Split shares of Common Stock, which shall be delivered to the Members promptly following completion of the Reverse Split.

● Additionally, at the closing the Company paid MV PAT $625,000 in additional cash consideration, and agreed to pay to the Members ten (10%) percent of the Net Proceeds received from any Enforcement Activities or Sale Transactions (as such terms are defined in the Exchange Agreement) related to the patents owned or applications pending as of the closing of the Securities Exchange.

● Upon the closing of the Transactions, William Meadow was appointed Chief Executive Officer and Chairman of the Board of Directors, Shea Ralph was appointed Chief Financial Officer, Secretary and director and David Rector was appointed Chief Operating Officer (and remains a director of the Company).  James Davidson resigned as Chief Executive Officer and a director of the Company and Michael Baybak resigned as Interim Treasurer, Secretary and a director.

● Following the closing of the Transactions, the Company will terminate and split off its mining business, and pursuant to the terms of the Securities Exchange Agreement, the Company have acquired and will continue the business of MVP, that is, patent licensing and assertion of rights under patents against parties believed to be selling goods or services that rely upon MVP’s patented technology.

Private Placement of Convertible Promissory Notes

On February 7, 2014, the Company completed a closing of a private placement offering  of 10% convertible promissory notes (the “Notes”) for gross proceeds of $2,942,495 (before deducting placement agent fees and expenses of the offering). The Notes will automatically convert into shares of the Company’s to be authorized Series C convertible preferred stock, $0.001 par value per share (the “Series C Preferred Stock”), at a pre-Reverse Split conversion price of $0.005 per share and a post-Reverse Split conversion price of $0.50 per share (the “Conversion Price”), upon the Company’s filing of a Certificate of Designation of Series C Convertible Preferred Stock (the “Certificate of Series C Designation”) with the Secretary of State of the State of Nevada following completion of the proxy voting process to increase our authorized preferred stock, and which Series C Preferred Stock shall be convertible into shares of the Company’s Common Stock on a one share for one share basis.  

On March 3, 2014, the Company completed a second closing of a private placement offering to certain investors (the “Investors”) of the Company’s 10% convertible promissory notes (the “Notes”) for gross proceeds of $1,017,500 (before deducting placement agent fees and expenses of the offering). The Notes will automatically convert into shares of the Company’s to be authorized Series C convertible preferred stock, $0.001 par value per share (the “Series C Preferred Stock”), at a pre-Reverse Split conversion price of $0.005 per share and a post-Reverse Split conversion price of $0.50 per share (the “Conversion Price”), upon the Company’s filing of a Certificate of Designation of Series C Convertible Preferred Stock (the "Certificate of Designation") with the Secretary of State of the State of Nevada following completion of a proxy voting process 1 to increase the Company’s authorized preferred stock.  The Series C Preferred Stock will be convertible into shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), on a one share for one share basis.