Quarterly report pursuant to sections 13 or 15(d)

Consolidated Statements of Cash Flows

v2.4.0.6
Consolidated Statements of Cash Flows (USD $)
3 Months Ended 45 Months Ended
Oct. 31, 2011
Oct. 31, 2010
Oct. 31, 2011
Operating activities      
Net income (loss) $ 2,712,046 $ (2,450) $ (1,123,830)
Adjustments to reconcile net income (loss) to net cash used in operating activities:      
Depreciation and amortization 167,596   418,417
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
Gain on adjustment to fair value of derivative liabilities (3,977,418)   (2,935,623)
Non-cash interest expense 69,134   69,134
Share-based compensation 5,139   5,139
Amortization of common stock issued for services 83,000   166,000
Changes in operating assets and liabilities:      
(Increase) decrease in prepaid expenses 67,721   (111,240)
(Increase) decrease in other current assets 7,416   (8,523)
(Decrease) increase in accounts payable and accrued liabilities (28,878) (2,050) 340,297
(Decrease) increase in accrued compensation (38,594)   29,180
Increase in accrued income taxes 1,600   3,200
Net cash used in operating activities (931,238) (4,500) (2,292,259)
Investing activities      
Purchases of property and equipment (17,339)   (87,625)
Investment in intangible assets     (250,000)
Net cash used in investing activities (17,339)   (337,625)
Financing activities      
Proceeds from issuance of common stock and warrants     4,139,000
Payment of amounts due under acquisition obligation (100,000)   (100,000)
Proceeds from amounts due to stockholder   4,500 153,867
Repayment of amounts due to stockholder     (153,867)
Net cash provided from financing activities (100,000) 4,500 4,039,000
Net increase (decrease) in cash (1,048,577)   1,409,116
Cash, at beginning of period 2,457,693 237  
Cash, at end of period 1,409,116 237 1,409,116
Cash paid during the period for:      
Interest     1,357
Income taxes 400   400
Noncash investing and financing transaction:      
Acquisition obligation of asset purchase agreement     2,750,000
Acquisition obligation discounts - imputed interest and fair value of warrants $ 402,355   $ 402,355