Going Concern Matters and Realization of Assets

6 Months Ended

May 31, 2013

Going Concern Matters and Realization of Assets [Abstract]

Going Concern Matters and Realization of Assets

Note 2 – Going Concern Matters and Realization of Assets

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the ordinary course of business. However, the Company has sustained substantial losses from its continuing operations in recent years and as of May 31, 2013, the Company has negative working capital of $7,240,358 and a stockholders’ equity deficiency of $8,934,942. In addition, the Company is unable to meet its obligations as they become due and sustain its operations. The Company believes that its existing cash resources are not sufficient to fund its continuing operating losses, capital expenditures, lease and debt payments and working capital requirements.

The Company may not be able to raise sufficient additional debt, equity or other cash on acceptable terms, if at all. Failure to generate sufficient revenues, achieve certain other business plan objectives or raise additional funds could have a material adverse effect on the Company’s results of operations, cash flows and financial position, including its ability to continue as a going concern, and may require it to significantly reduce, reorganize, discontinue or shut down its operations.

In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company which, in turn, is dependent upon the Company’s ability to meet its financing requirements on a continuing basis, and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in its existence.

Management’s plans include:

Seek to spend $25,000 each month on marketing initiatives, with the goal of generating sufficient revenues to be operating at positive cash flow within six months. The Company has instituted a plan of salary deferrals and has signed an agreement with a lender to provide the Company with cash to cover its monthly operating cash-flow shortfall and marketing money for the next six months. The Company has only expended approximately $1,000 a month on direct marketing efforts in fiscal 2013. Management believes that the additional advertising expenditures to promote the Company’s mobile VoIP app will bring additional subscribers and will result in a significant increase in revenues to the Company.

Obtain approval from Apple Inc. (“Apple”) to sell an iPhone and iPad app on Apple’s app store. The Company has developed and submitted to Apple an iPhone app that allows mobile voice and video calls to be made over an Internet connection from an iPhone or iPad. Management believes the Company’s mobile VoIP app provides desirable features to consumers, such as the ability to make a video call on an iPhone to a user who has an Android mobile device. The video calling application is a free download. It is designed to attract more subscribers so the Company can offer the new subscribers various revenue-generating applications.

3.	Continue to develop new uses and distribution channels for its mobile VoIP service. The Company’s mobile VoIP application allows for low-cost calling to any landline or cell phone in the world.

Leverage the technology of the Company’s mobile apps to provide inexpensive high-quality telephony services to low-tech products, such as prepaid calling cards. The Company is now selling prepaid calling cards, which can call any phone number in the world without the connection fees or other miscellaneous charges that other calling cards impose on a consumer.

There can be no assurance that the Company will be able to achieve its business plan objectives or be able to achieve or maintain cash-flow-positive operating results. If the Company is unable to generate adequate funds from operations or raise sufficient additional funds, the Company may not be able to repay its existing debt, continue to operate its network, respond to competitive pressures or fund its operations. As a result, the Company may be required to significantly reduce, reorganize, discontinue or shut down its operations. The financial statements do not include any adjustments that might result from this uncertainty.