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 63 Months Ended
Apr. 30, 2013
Apr. 30, 2012
Apr. 30, 2013
Operating activities      
Net income (loss) $ (5,377,572) $ (771,391) $ (11,578,300)
Adjustments to reconcile net income (loss) to net cash used in operating activities:      
Depreciation and amortization 550,890 532,828 1,519,161
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   761,492 761,492
(Gain) loss on adjustment to fair value of derivative liabilities   (4,192,781) (3,150,985)
Non-cash interest expense 71,075 236,864 337,642
Share-based compensation 357,272 121,292 690,050
Common stock issued for services 34,500 249,000 366,500
Changes in operating assets and liabilities:      
(Increase) decrease in prepaid expenses 215,582 50,229 (127,601)
(Increase) decrease in other current assets (7,354) (2,849) (15,720)
(Decrease) increase in accounts payable and accrued liabilities 134,171 848 518,492
(Decrease) increase in accrued compensation (210,278) 190,642 8,571
(Decrease) Increase in accrued income taxes (800) 1,600 2,400
Net cash (used in) provided by operating activities (4,232,514) (2,822,226) (9,812,708)
Investing activities      
Purchases of property and equipment (16,773) (23,341) (141,570)
Investment in intangible assets     (250,000)
Net cash (used in) provided by investing activities (16,773) (23,341) (391,570)
Financing activities      
Proceeds from issuance of common stock and warrants 7,200,000 7,750,000 19,089,000
Payment of financing and offering costs (504,000) (542,500) (1,046,500)
Payment of amounts due under acquisition obligation (500,000) (250,000) (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 6,957,500 17,533,550
Net increase (decrease) in cash 2,187,763 4,111,933 7,329,272
Cash and cash equivalents, at beginning of period 5,141,509 2,457,693  
Cash and cash equivalents, at end of period 7,329,272 6,569,626 7,329,272
Cash paid during the period for:      
Interest     1,357
Income taxes 2,800 800 3,600
Noncash investing and financing transaction:      
Fair value of placement agent warrants issued in the public offering 228,240 276,980 505,220
Acquisition obligation of asset purchase agreement     2,750,000
Acquisition obligation discounts - imputed interest and fair value of warrants   $ 402,355 $ 402,355