Stockholders' Equity

6 Months Ended

Jan. 31, 2014

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.

In November 2013, the Company issued 1,250,000 shares in exchange for services rendered. The shares issued were valued at market and amounted to $66,500.

On December 23, 2013, the Company issued 750,000 shares in exchange for services rendered. The shares issued in this transaction were valued at market and amounted to $40,500.

During the six months ended January 31, 2014, the Company issued 8,987,280 shares as a result of an exchange for common stock and the cashless exercise of a total of 888,452 warrants.

Stock Based Compensation

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 and six months ended January 31, 2014 and 2013 was $5,662,223 and $6,010,376, 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.

On November 1, 2013 the Company granted its executive officers cashless stock options to purchase a total of 22,500,000 shares of its common stock at exercise prices ranging from $0.06 to $0.10 per share. These options vested immediately and expire in ten years on October 31, 2023. The Company has valued these options using the Black Scholes option pricing model which resulted in a fair market value of $985,500 which has been fully recognized as expense for the six months ended January 31, 2014.

On December 31, 2013 the Company granted its executive officers cashless stock options to purchase a total of 66,500,000 shares of its common stock at exercise prices ranging from $0.06 to $0.10 per share. These options vested immediately and expire in ten years on December 30, 2023. The Company has valued these options using the Black Scholes option pricing model which resulted in a fair market value of $3,591,000 which has been fully recognized as expense for the six months ended January 31, 2014.

The assumptions used in the valuation were as follows:

Market value of stock on measurement date	$	0.0285-0.054
Risk-free interest rate		2.24 - 2.99	%
Dividend yield		0	%
Volatility factor		438 - 459	%
Term		10 years

Stock option activity for xix months ended January 31, 2014 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		126,500,000		$	0.10		-	$	-
Forfeited/expired/cancelled		(8,500,000	)	$	0.67		-	$	-
Outstanding at January 31, 2014		194,250,000		$	0.11		8.35	$	-
Exercisable at January 31, 2014		156,125,000		$	0.10		9.04	$	-

Warrants

Warrant activity for six months ended January 31, 2014 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		(888,452	)	$	0.50		-	$	-
Outstanding at January 31, 2014		101,475,239		$	0.23		3.52	$	-
Exercisable at January 31, 2014		28,975,239		$	0.42		2.53	$	-