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Capital Structure
 12 Months Ended
Jul. 31, 2013
Capital Structure  
Note 4 - CAPITAL STRUCTURE

Common Stock

 

The Company is authorized to issue 200 million common shares and had issued 24,514,282 as of July 31, 2011 and 25,305,532 as of July 31, 2013 for a two-year increase of 791,250 shares comprised of the following equity transactions:

 

Year ended July 31, 2012

 

On August 12, 2011, we issued 100,000 shares to a law firm for one year of legal services pertaining to our Exchange Act filings. We valued the shares at the closing price of $0.60 per share on the grant date and charged general and administrative expenses with $60,000.

 

On August 18, 2011, we entered into an agreement with a consulting firm to propose investment opportunities in the area of distressed residential and commercial real estate. We issued 46,500 shares of common stock, valuing them at the fair value at the grant date. We charged general and administrative expense with $27,900.

 

During the year ended July 31, 2012, we issued the following shares for cash:

 

Date     Price Per Share     No. of Shares     Proceeds  
10/31/11     $ 0.60       23,500     $ 14,100  
03/06/12       0.40       25,000       10,000  
05/14/12       0.40       16,250       6,500 (1)
                64,750     $ 30,600  

 

1. The $6,500 was received in May, 2012, but the shares were not issued until August, 2012.  At July 31, 2012, the value of the shares was included in Common Stock Payable.

 

Year ended July 31, 2013

 

Beginning the year on August 1, 2012, we had 24,709,282 shares issued and outstanding and issued the following shares during the year ended July 31, 2013:

 

During the year ended July 31, 2013, we issued 180,000 shares to a Director for services. We valued the shares at the closing price on their grant date, charging general and administrative expenses with $70,200.

 

Also during the year ended July 31, 2013, we issued the following shares for cash:

 

Date   Price Per Share     No. of Shares     Proceeds  
                         
02/28/13     0.25       400,000       100,000  
              400,000     $ 100,000  

 

Other Equity Transactions

 

During the years ended July 31, 2013 and 2012, we increased Additional Paid in Capital by $7,754 and $3,729, respectively, by imputing interest on outstanding related-party loans.

 

During the year ended July 31, 2013, we issued 16,250 shares to an accredited investor for $6,500. The receipt of those funds occurred during May, 2012, and was included in Common Stock Payable on the Balance Sheet as of July 31, 2012. This is included above as “shares issued for cash”.  The issuance of these shares extinguished the balance in that category as of October 31, 2012. This accredited investor was enlisted to serve as a Director on September 1, 2012.

 

On January 5, 2013, we granted 240,000 options to an incoming Director. The options have an exercise period of four years with an exercise price of $0.10. In the event that the Director ceases to serve on the Board of Directors for any reason, the Director is entitled to a pro-rata portion of the annual options.  We valued the options using the Black Scholes Option Pricing Model with the following inputs: stock price on measurement date: $0.18; Exercise price: $0.10; Option term: 4 years; Computed volatility: 448%. The resulting Black Scholes value was $43,151.  We expensed the portion of these options vesting as of July 31, 2013 (approximately 57%) and included $24,472 in general and administrative expenses for the year ended July 31, 2013.  The remainder, or $18,679, will be expensed in future periods.

 

During February and May, 2013, a beneficial owner and former officer and director of the Company sold 725,000 shares of our common stock after having purchased such shares from a relative in violation of Section 16b of the Securities Exchange Act of 1934 (the “Exchange Act”).  The profit on these shares was $15,408.  Section 16b of the Exchange Act prohibits such beneficial owners from profiting on the sale of the securities.  Upon notification, the beneficial owner agreed to repay the profits in the form of a reduction in liabilities the Company owes to him.  We therefore reduced $12,000 of related-party advances owed to him to zero and reduced unpaid salaries due to him for the difference, or $3,408.  We increased Additional Paid in Capital for the entire $15,408.

 

Preferred Stock

 

The Company is authorized to issue 100 million shares of preferred stock which has preferential liquidation rights over common stock and is non-voting.  As of July 31, 2013, no shares have been issued.

 

Potentially Dilutive Securities

 

On January 5, 2013, we granted 240,000 options to an incoming Director under a one-year agreement to provide 240,000 options at $0.10.  The 240,000 options expire on January 5, 2017.

 

No options, warrants or other potentially dilutive securities other than those disclosed above have been issued as of July 31, 2013.