Quarterly report pursuant to sections 13 or 15(d)

Consolidated Statements of Cash Flows

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Consolidated Statements of Cash Flows (USD $)
9 Months Ended 51 Months Ended
Apr. 30, 2012
Apr. 30, 2011
Apr. 30, 2012
Operating activities      
Net income (loss) $ (771,391) $ (506,205) $ (4,607,267)
Adjustments to reconcile net income (loss) to net cash used in operating activities:      
Depreciation and amortization 532,828 62,642 783,650
Write-down of supplies inventory   38,000 38,000
Write-down of web development costs     9,000
Fair value of derivative liabilities in excess of proceeds     808,590
Loss on extinguishment of debt 761,492   761,492
(Gain) loss on adjustment to fair value of derivative liabilities (4,192,781)   (3,150,985)
Non-cash interest expense 236,864   236,864
Share-based compensation 121,292   121,292
Amortization of common stock issued for services 249,000   332,000
Changes in operating assets and liabilities:      
(Increase) decrease in prepaid expenses 50,229 (83,816) (128,732)
(Increase) decrease in other current assets (2,849) (9,444) (18,792)
(Decrease) increase in accounts payable and accrued liabilities 848 144,836 370,024
(Decrease) increase in accrued compensation 190,642 85,149 258,416
(Decrease) increase in accrued income taxes 1,600 1,600 3,200
Net cash (used in) provided by operating activities (2,822,226) (267,238) (4,183,248)
Investing activities      
Purchases of property and equipment (23,341) (17,736) (93,626)
Investment in intangible assets   (250,000) (250,000)
Net cash (used) provided by in investing activities (23,341) (267,736) (343,626)
Financing activities      
Proceeds from issuance of common stock and warrants 7,750,000 1,092,000 11,889,000
Payment of financing and offering costs (542,500)   (542,500)
Payment of amounts due under acquisition obligation (250,000)   (250,000)
Proceeds from amounts due to stockholder   139,500 153,867
Repayment of amounts due to stockholder   (153,867) (153,867)
Net cash (used in) provided by financing activities 6,957,500 1,077,633 11,096,500
Net increase (decrease) in cash and cash equivalents 4,111,933 542,659 6,569,626
Cash and cash equivalents, at beginning of period 2,457,693 237  
Cash and cash equivalents, at end of period 6,569,626 542,896 6,569,626
Cash paid during the period for:      
Interest   1,400 1,357
Income taxes 800   800
Noncash investing and financing transaction:      
Fair value of placement agent warrants issued in conjunction with financing 276,980   276,980
Acquisition obligation of asset purchase agreement   2,750,000 2,750,000
Acquisition obligation discounts - imputed interest and fair value of warrants $ 483,139   $ 483,139