Note 3a - Summary of Significant Accounting Policies

6 Months Ended

Jan. 31, 2014

Notes

Note 3a - Summary of Significant Accounting Policies

Note 3a - Summary of Significant Accounting Policies

Earnings (Loss) Per Share

Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the periods presented. Diluted loss per share is computed by dividing net loss by the weighted average common shares and potentially dilutive common share equivalents. The effects of potential common stock equivalents are not included in computations when their effect is anti-dilutive.

In the periods in which net losses were presented, the basic and diluted weighted average shares outstanding are the same since including the additional shares would have an anti-dilutive effect on the loss per share calculations. Common stock warrants to purchase 16,509,500 and 16,509,500 shares of common stock for the six and three months ended January 31, 2014 (Q1/Q2 ’14 and Q2 ’14), respectively, and 16,509,500 shares of common stock for the period January 25, 2005 (Inception) through January 31, 2014 (end of Q2 ’14), were not included in the computation of diluted weighted average common shares outstanding.

In the periods in which net incomes were presented, the basic and diluted weighted average shares outstanding are the same since including the additional shares would not have a dilutive effect on the earnings per share calculations. Common stock warrants to purchase 13,931,500 shares of common stock for the six months ended and 13,931,500 for the three months ended January 31, 2013 (Q1/Q2 ’13 and Q2 ’13), respectively, were not included in the computation of diluted weighted average common shares outstanding as the exercise price exceeded the market price of the common stock.