Stockholders' Equity

3 Months Ended

Oct. 31, 2013

Stockholders' Equity [Abstract]

Stockholders' Equity

7. Stockholders' Equity

Common Stock

On August 12, 2013, the Company issued 375,000 shares in exchange for services rendered. The shares issued in this transaction were valued at market and amounted to $15,000.

On August 28, 2013, the Company issued 500,000 shares in exchange for services rendered. The shares issued in this transaction were valued at market and amounted to $35,000.

On September 18, 2013, the Company issued 375,000 shares in exchange for services rendered. The shares issued in this transaction were valued at market and amounted to $22,500.

On October 21, 2013, the Company issued 225,895 shares in exchange for services rendered. The shares issued in this transaction were valued at market and amounted to $9,036.

On October 25, 2013, the Company issued 334,572 shares in exchange for services rendered. The shares issued in this transaction were valued at market and amounted to $13,382.

On October 31, 2013, the Company issued 375,000 shares in exchange for services rendered. The shares issued in this transaction were valued at market and amounted to $15,750.

During the three months ended October 31, 2013, the Company issued 1,523,666 shares as a result of the cashless exercise of 168,000 warrants.

Stock Options

As required by the Stock Compensation Topic, ASC 718, the Company measures and recognizes compensation expense for all share based payment awards made to the officers and directors based on estimated fair values. Stock based compensation expense recognized in the Statement of Operations for the three months ended October 31, 2013 and 2012 was $1,080,201 and $27,174, respectively.

On August 1, 2013 the Company granted its executive officers cashless stock options to purchase a total of 37,500,000 shares of its common stock at exercise prices ranging from $0.10 to $0.20 per share. These options vested immediately and expire in ten years on July 31, 2023. The Company has valued these options using the Black Scholes option pricing model which resulted in a fair market value of $1,068,750 which has been fully recognized as expense for the three months ended, October 31, 2013. The assumptions used in the valuation were as follows:

Market value of stock on measurement date	$	0.0285
Risk-free interest rate		2.74	%
Dividend yield		0	%
Volatility factor		459	%
Term		10 years

Stock option activity for three months ended October 31, 2013 is presented in the table below:

	Number of Shares		Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at July 31, 2013		76,250,000	$	0.18		5.56	$	-
Granted		37,500,000	$	0.16		-	$	-
Forfeited		-	$	-		-	$	-
Outstanding at May 31, 2013		113,750,000	$	0.17		6.78	$	-
Exercisable at May 31, 2013		75,625,000	$	0.20		7.28	$	-

At October 31, 2013, unrecognized stock-based compensation cost amounted to $14,927 which is expected to be recognized over a period of 1.25 years.

Warrants

Warrant activity for three months ended October 31, 2013 is presented in the table below:

	Number of Shares		Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at July 31, 2013		102,363,691	$	0.23		4.02	$	-
Granted		-	$	-		-	$	-
Exercised		168,000	$	0.50		-	$	-
Outstanding at May 31, 2013		102,195,691	$	0.23		3.77	$	-
Exercisable at May 31, 2013		29,695,691	$	0.42		2.81	$	-