7. CAPITAL STOCK TRANSACTIONS

3 Months Ended

Jan. 31, 2016

Equity [Abstract]

CAPITAL STOCK TRANSACTIONS

Preferred Stock

The Company is authorized to issue up to 5,000,000 shares of its $0.001 preferred stock.

In June 2015, the Company designated 20,000 of the authorized preferred stock as convertible preferred stock with the following characteristics:

i. Each share of Preferred Stock would be convertible into 1,000,000 shares of Common Stock at the Preferred Stock holders’ option, subject to restrictions regarding timing, volume and common share availability.

ii. In shareholder votes, each share of Preferred Stock would have voting power equal to 1,000,000 shares of Common Stock.

During the year ended October 31, 2015, 759,817,144 shares of common stock were retired and converted to 767 shares of convertible preferred stock. In addition, the Company issued 1,203 shares of convertible preferred stock to its employee and consultants for services rendered. These shares were value at $645,000 based on closing price of the underlying common stock if converted.

In June 2015, the company entered into various purchase agreements with accredited investors for the sale of 220 shares of its convertible preferred stock at a price of $100 per share. Total cash proceeds from the sale of stock were $22,000 which was recorded as stock to be issued.

During the year ended October 31, 2015, the company entered into various purchase agreements with an accredited investor for the sale of 478,000,000 shares of its common stock at a price ranged from $0.00035 to $0.0012 per share. Total cash proceeds from the sale of stock during the year ended October 31, 2015, was $510,000. As of October 31, 2015, the Company issued 228,000,000 shares of common stock and 250 shares of preferred stock in lieu of 250,000,000 shares of common stock. In connection with these stock purchase agreements, the Company issued 57,019,761 shares of common stock and 725 shares of preferred stock in lieu of finders’ fees, which represents stock offering costs. Finders’ fees are treated as a reduction in paid in capital per current accounting guidance.

During the three months ended January 31, 2016, 692,943,784 shares of common stock were retired and converted to 694 shares of convertible preferred stock. In addition, the Company issued 54 shares of convertible preferred stock to its employee and consultants for services rendered. These shares were value at $172,800 based on closing price of the underlying common stock if converted.

During the three months ended January 31, 2016, 8 shares of preferred stock were retired and cancelled.

At January 31, 2016 and October 31, 2015, there were 3,685 and 2,945 shares issued and outstanding, respectively.

Common Stock

The Company is authorized to issue up to 4,500,000,000 shares of its $0.001 common stock.

At January 31, 2016 and October 31, 2015, there were 2,944,402,694 and 3,829,346,478 shares issued and outstanding, respectively.

Fiscal year 2015:

During the year ended October 31, 2015, the Company issued 387,000,000 shares of common stock for legal and consulting services rendered. The shares were valued at $425,000 based on service invoice and the closing stock prices on the dates of the stock grants.

During the year ended October 31, 2015, the company entered into various purchase agreements with an accredited investor for the sale of 478,000,000 shares of its common stock at a price ranged from $0.00035 to $0.0012 per share. Total cash proceeds from the sale of stock during the year ended October 31, 2015, was $510,000. As of October 31, 2015, the Company issued 228,000,000 shares of common stock and 250 shares of preferred stock in lieu of 250,000,000 shares of common stock. In connection with these stock purchase agreements, the Company issued 57,019,761 shares of common stock and 725 shares of preferred stock in lieu of finders’ fees, which represents stock offering costs. Finders’ fees are treated as a reduction in paid in capital per current accounting guidance.

During the year ended October 31, 2015, the Company also issued 3,737,696,430 shares upon conversion of convertible notes amounted to $382,077.

During the year ended October 31, 2015, 759,817,144 shares of common stock were retired and converted to 767 shares of convertible preferred stock.

Fiscal year 2016:

During the three months ended January 31, 2016, 692,943,784 shares of common stock were retired and converted to 694 shares of convertible preferred stock. In addition, 200,000,000 shares were retired and cancelled.

Options and Warrants

A summary of option activity during the three months ended January 31, 2016 and the year ended October 31, 2015 are presented below:

January 31, 2016

October 31, 2015

Weighted

Weighted

Weighted

Weighted

average

average

average

average

Number of

exercise

life

Number of

exercise

life

shares

price

(years)

shares

price

(years)

Outstanding at beginning of year

140,666,667

$

0.0146

9.27

52,666,667

$

0.08

6.24

Granted

–

–

–

138,000,000

0.0146

10.00

Exercised

–

–

–

–

–

–

Forfeited

–

–

–

50,000,000

0.08

6.24

Cancelled

–

–

–

–

–

–

Expired

–

–

–

–

–

–

Outstanding at end of period

140,666,667

$

0.0146

9.02

140,666,667

$

0.0146

9.27

Options exercisable at end of period

140,666,667

$

0.0146

9.02

140,666,667

$

0.0146

9.27

A summary of warrant activity during the three months ended January 31, 2016 and the year ended October 31, 2015 are presented below:

January 31, 2016

October 31, 2015

Weighted

Weighted

Weighted

Weighted

average

average

average

average

exercise

remaining

exercise

remaining

Number

price

contractual

Number

price

contractual

Outstanding

per share

life (years)

Outstanding

per share

life (years)

Outstanding at beginning of year

4,000,000

$

0.75

5.39

4,000,000

$

0.75

6.39

Granted

–

–

–

Exercised

–

–

–

–

–

–

Forfeited

–

–

–

–

–

–

Cancelled

–

–

–

–

–

–

Expired

–

–

–

–

–

–

Outstanding at end of period

4,000,000

$

0.75

5.14

4,000,000

$

0.75

5.39

Warrants exercisable at end of period

–

$

–

–

–

$

–

–

In November 2014, the Company granted options to all board members to purchase a total of 138,000,000 shares at an exercise price of $0.0146 per share of its common stock for service rendered and to replace the old options. These options vests in 4 equal amounts on the grant date, 2/9/2015, 5/9/2015, and 8/9/2015 and are exercisable within 10 years from the dates of vesting. The total estimated value using the Black-Scholes Model, based on the following variables, was $2,760,000.

Market Price:	$0.020
Exercise Price:	$0.015
Term:	10 years
Volatility:	321%
Dividend Yield:	0
Risk Free Interest Rate:	2.25%

For the year ended October 31, 2015, $2,760,000 was fully amortized as stock based compensation.