Quarterly report pursuant to sections 13 or 15(d)

Consolidated Statements of Cash Flows

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Consolidated Statements of Cash Flows (USD $)
6 Months Ended 60 Months Ended
Jan. 31, 2013
Jan. 31, 2012
Jan. 31, 2013
Operating activities      
Net income (loss) $ (3,648,913) $ 40,182 $ (9,849,641)
Adjustments to reconcile net income (loss) to net cash used in operating activities:      
Depreciation and amortization 366,965 350,151 1,335,238
Write-down of supplies inventory     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
(Gain) loss on adjustment to fair value of derivative liabilities   (2,579,451) (3,150,985)
Non-cash interest expense 51,594 162,302 318,161
Share-based compensation 267,072 56,693 599,850
Common stock issued for services 34,500 166,000 366,500
Changes in operating assets and liabilities:      
(Increase) decrease in prepaid expenses 199,781 20,628 (143,401)
(Increase) decrease in other current assets 398 (2,794) (7,971)
(Decrease) increase in accounts payable and accrued liabilities 296,702 (67,871) 681,023
(Decrease) increase in accrued compensation (162,547) (28,692) 56,302
(Decrease) Increase in accrued income taxes 1,200 1,600 4,400
Net cash (used in) provided by operating activities (2,593,248) (1,881,252) (8,173,442)
Investing activities      
Purchases of property and equipment (3,169) (20,199) (127,966)
Investment in intangible assets     (250,000)
Net cash (used in) provided by investing activities (3,169) (20,199) (377,966)
Financing activities      
Proceeds from issuance of common stock and warrants 7,200,000   19,089,000
Payment of financing and offering costs (504,000)   (1,046,500)
Payment of amounts due under acquisition obligation (500,000) (100,000) (750,000)
Proceeds from exercise of warrants and stock options 241,050   241,050
Proceeds from amounts due to stockholder     153,867
Repayment of amounts due to stockholder     (153,867)
Net cash (used in) provided by financing activities 6,437,050 (100,000) 17,533,550
Net increase (decrease) in cash 3,840,633 (2,001,451) 8,982,142
Cash and cash equivalents, at beginning of period 5,141,509 2,457,693  
Cash and cash equivalents, at end of period 8,982,142 456,242 8,982,142
Cash paid during the period for:      
Interest     1,357
Income taxes 800 800 1,600
Noncash investing and financing transaction:      
Fair value of placement agent warrants issued in the public offering 228,240   505,220
Acquisition obligation of asset purchase agreement     2,750,000
Acquisition obligation discounts - imputed interest and fair value of warrants   $ 402,355 $ 402,355