Note 4 - Liquidity and Management’s Plan

As of January 31, 2016, the Company had cash and cash equivalents of $430 and an accumulated deficit of $21,585,065. The Company also incurred a net loss of $6,004,943 and had net cash used in operating activities of $415,288 for the six months ended January 31, 2016. Given the Company’s negative cash flow from operations management anticipated its cash constraints and, therefore, took measures to meet its obligations.

On April 24, 2015, the Company entered into a Series of transactions with Kodiak Capital Group, LLC. (“Kodiak”). On that date the Company entered into an Equity Purchase Agreement pursuant to which the Company may “put” to Kodiak up to $1,000,000 of shares of our Common Stock in amounts up to $25,000 per put upon the effectiveness of a registration statement that may be filed for such purpose. The Company issued 500,000 shares of Common Stock as a commitment fee and executed a Registration Rights Agreement to register the Shares to be sold under the line. Also on that date, the Company entered into a Securities Purchase Agreement with Kodiak for the purchase and sale of original issue discount debentures for a borrowing amount of up to $500,000. The first note, a 15% Senior Secured Convertible Debenture, in the principal amount of $115,000 with proceeds of $100,000 was executed on April 24, 2015 and is due on the first anniversary thereof. Principal and interest under the note is convertible at any time at the option of Kodiak into shares of the Company’s Common Stock at a conversion price equal to the lesser of $0.10 or 65% of the lowest closing bid price for the 30 trading days immediately prior to conversion. Thereafter, the Company shall sell and Kodiak shall purchase an additional debenture in the principal amount of $460,000 at the purchase price of $400,000, within 30 days following the effectiveness of a registration statement to be filed for the registration of the Shares underlying both debentures. On April 24, 2015, the Company issued Kodiak a 1% Convertible Redeemable Note in the amount of $50,000 whereby a pre-existing obligation to an unrelated third-party in the amount of $50,000 was assigned to Kodiak and exchanged for such note. Principal and interest under the note are convertible at any time at the option of Kodiak, into shares of Common Stock at the conversion price equal to 70% of the lowest closing bid price for the 30 trading days immediately prior to conversion.

On May 21, 2015, the Company effectuated a Convertible Note Agreement with an investor for the purchase and sale of $43,000 of the Company’s original issue discount convertible note. The note, in the principal amount of $43,000, was issued on May 21, 2015

On August 13, 2015, the Company effectuated two convertible note agreements with two different investors with a principal amount of $25,000 for each note. The notes bear interest at a rate of 12% per annum and are convertible into shares of common stock at a conversion price equal to 60% of the lowest trade price in the 20 trading days prior to the conversion. The principal and accrued interest balances are due on August 13, 2016.

On September 4, 2015, the Company effectuated a convertible note agreement with an investor for a total principal of $69,000. The note bears interest at a rate of 10% per annum and is convertible into shares of common stock at a conversion price equal to 55% of the lowest trade price in the 20 trading days prior to the conversion. The principal and accrued interest balances are due on March 4, 2016.

On September 21, 2015, the Company effectuated a convertible note agreement with an investor for a total principal of $92,000. The note bears interest at a rate of 10% per annum and is convertible into shares of common stock at a conversion price equal to 50% of the lowest 3 trade price in the 20 trading days prior to the conversion. The principal and accrued interest balances are due on June 21, 2016.

On October 5, 2015, the Company entered promissory note with an investor for a total principal of $100,000. The principal and accrued interest balances are due in 48 payments of $2,625 each to be paid within 12 months.

On October 9, 2015, the Company entered a business loan with a creditor for a total principal of $150,000. The principal and accrued interest balances are due in 220 payments of $900 each to be paid within 10 months.

On November 17, 2015, the Company entered into a promissory note with an investor for a total principal of $10,000 that bears interest at 5% interest per year. The entire principal balance together with accrued interest was originally due on February 15, 2016 and is now in default.

Management expects its new business for automated optimization of software applications will generate more revenue in the quarter ending April 30, 2016 and continue to grow. There can be no assurances that management will be able to successfully implement a long-term solution, and accordingly, the Company continues to explore debt and equity financing options. These conditions raise substantial doubt about the Company's ability to continue as a going concern for the next 12 months.

The Company believes in the viability of its strategy to increase revenue, cash flows, and profitability and in its ability to raise additional funds, and believes that the actions presently being taken by the Company will provide the Company with sufficient liquidity to continue to finance its operations.