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 48 Months Ended
Jan. 31, 2012
Jan. 31, 2011
Jan. 31, 2012
Operating activities      
Net income (loss) $ 40,182 $ (6,796) $ (3,795,694)
Adjustments to reconcile net income (loss) to net cash used in operating activities:      
Depreciation and amortization 350,151   600,973
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 (2,579,451)   (1,537,656)
Non-cash interest expense 162,302   162,302
Share-based compensation 56,693   56,693
Amortization of common stock issued for services 166,000   249,000
Changes in operating assets and liabilities:      
(Increase) decrease in prepaid expenses 20,628 (1,650) (158,334)
(Increase) decrease in other current assets (2,794)   (18,733)
(Decrease) increase in accounts payable and accrued liabilities (67,871) (7,599) 301,304
(Decrease) increase in accrued compensation (28,692)   39,082
Increase in accrued income taxes 1,600   3,200
Net cash used in operating activities (1,881,252) (16,045) (3,242,273)
Investing activities      
Purchases of property and equipment (20,199)   (90,485)
Investment in intangible assets     (250,000)
Net cash used in investing activities (20,199)   (340,485)
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   19,500 153,867
Repayment of amounts due to stockholder     (153,867)
Net cash (used in) provided by financing activities (100,000) 19,500 4,039,000
Net increase (decrease) in cash (2,001,451) 3,455 456,242
Cash, at beginning of period 2,457,693 237  
Cash, at end of period 456,242 3,692 456,242
Cash paid during the period for:      
Interest     1,357
Income taxes 800   800
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