Stockholders’ Deficiency

12 Months Ended

Jul. 31, 2015

Equity [Abstract]

Stockholders’ (Deficiency)/Equity:

Note 10 - Stockholders’ Deficiency:

Warrants

As of July 31, 2015, the Company has the following warrants to purchase common stock outstanding:

Number of Shares to be Purchased*		Warrant Exercise Price per Share		Warrant Expiration Date
	129,033,516	$	0.015	March 31, 2016
	54,545,440	$	0.015	September 30, 2016
	11,350,454	$	0.015	February 1, 2017
	9,999,998	$	0.015	August 10, 2017
	16,648,288	$	0.015	December 12, 2017
	68,333,338	$	0.015	June 17, 2018
	51,333,336	$	0.015	January 15, 2019
	138,333,334	$	0.015	March 27, 2019
	33,333,333	$	0.015	June 25, 2020
	512,911,037

* All outstanding warrants are subject to price protection provisions as described below.

There are 512,911,037 warrants outstanding as of July 31, 2015. During the fiscal year ended July 31, 2015, 17,542,402 warrants, which had an average exercise price of $0.84 per warrant, expired. There were no warrants exercised for the fiscal year ended July 31, 2015. The outstanding warrants at July 31, 2015 have a weighted average exercise price of $0.015 per share and have a weighted average remaining life of 2.5 years.

As of July 31, 2015, the Company has 512,911,037 warrants with a current exercise price of $0.015 which have price protection provisions that allow for the reduction in the current exercise price upon the occurrence of certain events, including the Company’s issuance of common stock or securities convertible into or exercisable for common stock, such as options and warrants, at a price per share less than the exercise price then in effect. For instance, if the Company issues shares of its common stock or options exercisable for or securities convertible into common stock at an effective price per share of common stock less than the exercise price then in effect, the exercise price will be reduced to the effective price of the new issuance. Simultaneously with any reduction to the exercise price, the number of shares of common stock that may be purchased upon exercise of each of these warrants shall be increased proportionately, so that after such adjustment the aggregate exercise price payable for the adjusted number of warrants shall be the same as the aggregate exercise price in effect immediately prior to such adjustment. There are a limited number of permitted types of stock and equity instrument issuances for each series of warrants which will not invoke the price protection provisions of these warrants. The conversion price for all previously outstanding warrants was adjusted from $0.03 to $0.015 in conjunction with the Series G Convertible Preferred Stock financing on June 24, 2015 and the total number of previously outstanding warrants increased from 239,788,852 to 479,577,704, in addition to the 33,333,333 warrants issued in the financing.

The Company accounts for the warrants with price protection provisions in accordance with FASB ASC Topic 815 as described in Note 9 - Derivative Liabilities above. As of July 31, 2015, there were a total of 512,911,037 warrants with an estimated fair value of $2,363,415, which are identified on the consolidated balance sheets under the caption “Derivative Warrant Liability”.

Preferred Stock

The Company has authorized 1,000,000 shares of preferred stock with a par value of one-tenth of a cent ($.001) per share. The preferred stock may be issued in various series and shall have preference as to dividends and to liquidation of the Company. The Company’s Board of Directors is authorized to establish the specific rights, preferences, voting privileges and restrictions of such preferred stock, or any series thereof. At July 31, 2015, 670 shares of the Company’s non-voting Series F 9% Convertible Preferred Stock and 500 shares of the Company’s non-voting Series G 9% Convertible Preferred Stock were issued and outstanding. At July 31, 2014, 25 shares of the Company’s non-voting Series E 9% Convertible Preferred Stock and 1,225 shares of the Company’s non-voting Series F 9% Convertible Preferred Stock were issued and outstanding. See Note 9 - Series A, B, C, D, E, F and G 9% Convertible Preferred Stock above.

Equity Instruments Issued for Services Rendered

During the years ended July 31, 2015 and 2014, the Company issued stock options, warrants and shares of common stock in exchange for services rendered to the Company. The fair value of each stock option and warrant was valued using the Black Scholes pricing model which takes into account as of the grant date the exercise price and expected life of the stock option or warrant, the current price of the underlying stock and its expected volatility, expected dividends on the stock and the risk free interest rate for the term of the stock option or warrant. Shares of common stock are valued at the quoted market price on the date of grant. The fair value of each grant was charged to the related expense in the consolidated statement of operations for the services received (see Note 11).