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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Jul. 31, 2014

Description of Business [Policy Text Block]

a) Description of Business - The Company is a leading designer and developer of wireless technologies which emphasize wireless medical and other wireless products. We develop the integration of the automated optimization software applications into the OEM project for Personal Computers and Servers.

Segment Reporting, Policy [Policy Text Block]

b) Segment Information - The Company follows ASC Topic 280, “Disclosures about Segments of an Enterprise and Related Information.” Topic 280 requires that a company report financial and descriptive information about its reportable operating segments. Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker currently evaluates the Company’s operations from a number of different operational perspectives including but not limited to a client by client basis. The Company derives all significant revenues from a single reportable operating segment of business. Accordingly, the Company does not report more than one segment; nevertheless, management evaluates, at least annually, whether the Company continues to have one single reportable segment.

Use of Estimates, Policy [Policy Text Block]

c) Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates, and the differences may be material to the financial statements. Estimates are used primarily in determining the depreciable lives of fixed assets, and inventory valuation. In addition, estimates form the basis for the reserves for sales allowances, accounts receivable and inventory. Various assumptions go into the determination of these estimates. The process of determining significant estimates requires consideration of factors such as historical experience and current and expected economic conditions.

Cash and Cash Equivalents, Policy [Policy Text Block]

d) Cash and Cash Equivalents - The Company considers all highly liquid investments and time deposits with original maturities of three months or less when purchased to be cash equivalents. All cash and cash equivalents are maintained with nationally recognized financial institutions.

Allowance for Doubtful Accounts [Policy Text Block]

e) Allowance for Doubtful Accounts - An allowance for doubtful accounts is computed based on the Company’s historical experience and management’s analysis of possible bad debts. Accounts receivable are shown net of an allowance for doubtful accounts of $26 and $26 as of July 31, 2014 and 2013, respectively.

Inventory, Policy [Policy Text Block]

f) Inventories - Inventories are stated at the lower of cost or market on an average basis. Inventory reserves are recorded for damaged, obsolete, excess and slow-moving inventory. Market value of inventory is estimated based on the impact of market trends, an evaluation of economic conditions and the value of current orders relating to the future sales of this type of inventory. As of July 31, 2014 and July 31, 2013, the value of the inventory reserve was $7,352 and $10,360 respectively.

Income Tax, Policy [Policy Text Block]

g) Income Taxes - The Company accounts for income taxes pursuant to the FASB ASC Topic 740, "Accounting for Uncertainty in Income Taxes", (“Topic 740”). Topic 740 clarifies the accounting for uncertainty in income taxes recognized in the Company’s financial statements in accordance with generally accepted accounting principles. The calculation of the Company's tax provision involves the application of complex tax rules and regulations within multiple jurisdictions. The Company's tax liabilities include estimates for all income-related taxes that the Company believes are probable and that can be reasonably estimated. To the extent that the Company’s estimates are understated, additional charges to the provision for income taxes would be recorded in the period in which the Company determines such understatement. If the Company's income tax estimates are overstated, income tax benefits will be recognized when realized. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Topic 740 prescribes a recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

Intangible Assets, Finite-Lived, Policy [Policy Text Block]

h) Identified Intangible Asset – Licensed technology and patents are generally amortized on a straight-line basis over the periods of benefit. We amortize all acquisition-related intangible assets that are subject to amortization over their estimated useful life based on economics benefit.

The carrying amounts of the intangible assets as of July 31, 2014 are as follows (in thousands, except years):

	Intangible Assets, Gross						Accumulated Amortization						Intangible Assets, Net				Weighted
																	Average
																	Useful
	July 31,				July 31,		July 31,				July 31,		July 31,				Life
	2013		Additions		2014		2013		Expense		2014		2013		July 31, 2014		(Years)
Developed technology	$	-	$	4,423	$	4,423	$	-	$	(134)	$	(134)	$	-	$	4,289		7
Trade names and Other Intangible Asset		-		817		817		-		(24)		(24)		-		793		7
Total intangible assets, net	$	-	$	5,240	$	5,240	$	-	$	(158)	$	(158)	$	-	$	5,082

Total amortization expense related to intangible assets was $157,800 for the year ended July 31, 2014, all of which was recorded in operating expenses. As of July 31, 2014, the amortization expense related to identifiable intangible assets in future periods is expected to be as follows (in thousands):

			Other		Total
	Developed		Intangible		Intangible
	Technology		Assets		Assets
2015	$	631	$	117	$	748
2016		631		117		748
2017		631		117		748
2018		631		117		748
2019		631		117		748
Thereafter		1,134		208		1,342
Total intangible assets subject to amortization	$	4,289	$	793	$	5,082

The increase in intangibles in fiscal 2014 is due to the intangibles assets acquired from former shareholders of Veloxum in May 2014. We perform an annual impairment assessment in the fourth quarter of each year for indefinite-lived intangible assets to determine whether is more likely than not that the carrying value of the assets may not be recoverable.

For further discussion of identified intangible assets, see “Note 4. Acquisitions” for a further discussion.

Revenue Recognition, Policy [Policy Text Block]

i) Revenue Recognition - The majority of the Company's product revenues are recognized upon shipment or delivery and acceptance of products by customers, when pervasive evidence of a sales arrangement exists, the price is fixed or determinable, the title has transferred and collection of resulting receivables is reasonably assured. For merchandise products, the Company recognizes revenue upon shipment of products, when title is passed and the amount collectible can reasonably be determined. All amounts billed to a customer related to shipping and handling are classified as revenue, while all costs incurred by the Company for shipping and handling are classified as selling expenses. For non-recurring engineering (“NRE”) projects, revenue is recognized for the deliverable portions that meet the revenue recognition criteria that persuasive evidence that an agreement exists, delivery has occurred or services have been rendered, the price is fixed and determinable, and collectability is reasonably assured.

Research and Development Expense, Policy [Policy Text Block]

j) Research and Development Costs - Research and development costs are expensed as incurred.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

k) Stock-Based Compensation - The Company adopted ASC Topic 718 “Share-Based Payment”. As permitted, the Company elected to adopt disclosure-only provisions of ASC 718 in accordance with generally accepted accounting principles. Under the provisions of Topic ASC 718, compensation expense is recognized based on the fair value of options on the grant date.

Fair Value of Financial Instruments, Policy [Policy Text Block]

l) Fair Value of Financial Instruments - ASC Topic 820, “Fair Value Measurements”, requires disclosure of the level within the fair value hierarchy in which fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). The Company's financial instruments consist of cash and cash equivalents, short-term trade receivables and payables at July 31, 2014 and 2013.

Fair Value of Financial Instruments

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments at:

	2014				2013
	Carrying				Carrying
	amount		Fair value		amount		Fair value
Financial assets:
Cash and cash equivalents	$	523,540	$	523,540	$	596,871	$	596,871
Accounts receivable	$	490	$	490	$	191,835	$	191,835

Financial liabilities:
Accounts payable and accrued liabilities	$	143,105	$	143,105	$	62,810	$	62,810
Notes payable	$	74,713	$	71,545		-		-

The fair values of the financial instruments shown in the above table represent the amounts that would be received when those assets are sold or that would be paid when those liabilities are transferred in an orderly transaction between market participants at the measurement date. Those fair value measurements maximize the use of observable inputs.

However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company’s own judgments about the assumptions that market participants would use in pricing the asset or liability. Those judgments are developed by the Company based on the best information available in the circumstances, including expected cash flows and appropriately risk-adjusted discount rates, available observable and unobservable inputs.

The Company uses the following methods and assumptions in estimating the fair value disclosures for financial instruments:

Cash equivalents

The carrying amount reported in the balance sheets of cash equivalents approximate fair value because of the relatively short time to maturity.

Accounts receivable

The carrying amount reported in the balance sheets of accounts receivable approximate fair value because of the relatively short time to maturity.

Accounts payable and accrued liabilities

The carrying amount reported in the balance sheets of accrued payable and accrued liabilities approximate fair value because of the relatively short time to maturity.

Notes payable

The fair value of the Company’s notes payable are measured using quoted offer-side prices when quoted market prices are available. If quoted market prices are not available, the fair value is determined by discounting the future cash flows of each instrument at rates that reflect rates currently observed in publicly traded debt markets for debt of similar terms to companies with comparable credit risk. For long-term debt measurements, where there are no rates currently observable in publicly traded debt markets of similar terms with comparable credit, the Company uses market interest rates and adjusts that rate for all necessary risks, including its own credit risk.

Fair Value Hierarchy

The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis at:

			Fair value measurements at reporting date using
	July 31, 2014		Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)	Significant unobservable inputs (Level 3)

Notes payable	$	74,713			$	71,545

			Fair value measurements at reporting date using
	July 31, 2013		Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)	Significant unobservable inputs (Level 3)

Notes payable	$	0			$	0

Concentration [Policy Text Block]

m) Concentration - Financial instruments which potentially subject the Company to concentrations of credit risk are primarily accounts receivable. The Company performs ongoing credit evaluations of its customers’ financial condition. If the collection of the receivable becomes doubtful, the Company establishes a reserve in an amount determined appropriate for the perceived risk. The Company maintains its cash accounts at commercial banks. From time to time, cash balances maintained in such banks may exceed the insured amount by the Federal Deposit Insurance Corporation (FDIC). As of July 31, 2014 and July 31, 2013, management does not believe they are exposed to any significant risk on their cash balances. The Company’s products are primarily sold to global medical device companies. These customers can be significantly affected by changes in economic, competitive or other factors. The Company makes substantial sales to a relatively few, large customers, where company is seeking to capture more business from other targeted medical device companies.

Three customers accounted for $588 (32%), $584 (31%) and $525 (28%) of receivables at July 31, 2014, while one customer accounted for $190,000 (99%) of receivables at July 31, 2013.

Two customers accounted for $1,070,200 (55%) and $206,250 (11%) of the revenues for the year ended July 31, 2014. One customer accounted for $2,169,800 (66%) of the revenues for the year ended July 31, 2013.

Four vendors accounted for $52,000 (45%), $19,650 (17%), $16,512 (14%) and $14,949 (13%) of accounts payable as of July 31, 2014 and three vendors accounted for $20,000 (54%), $5,054 (13%), and $4,400 (12%) of accounts payable as of July 31, 2013.

One vendor accounted for $708,927 (87%) of the purchases for the year ended July 31, 2014. One vendor accounted for $1,315,697 (88%) of the purchases for the year ended July 31, 2013.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

FASB ASC Topic 220, “Comprehensive Income” - New authoritative accounting guidance under ASC Topic 220, “Comprehensive Income,” amends prior guidance to require all non-owner changes in stockholders' equity to be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Under the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income, and the total of comprehensive income. The pronouncement should be applied retrospectively and effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. The adoption of this pronouncement did not a material impact on the Company's financial statements.

FASB ASC Topic 350, “Intangible and Other Assets” - New authoritative accounting guidance under ASC Topic 350, “Intangible and Other Assets,”, which allows for an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. Under new guidance, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. The pronouncement is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of this pronouncement did not have a material impact on the Company's financial statements.

Management does not believe that any other recently issued but not yet effective accounting pronouncements, if adopted, would have an effect on the accompanying consolidated financial statements.