|
|
|
|
|
|
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Ameri Metro, Inc. (Ameri Metro and the Company) was formed to engage primarily in high-speed rail for passenger and freight transportation and related transportation projects. The Company initially intends to develop a Midwest high-speed rail system for passengers and freight. Currently the Company is engaged in raising capital and entering into relationships in furtherance of its planned activities.
The Companys activities are subject to significant risks and uncertainties including failure to secure additional funding to properly execute the companys business plan.
Basis of Presentation
The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (SEC), and should be read in conjunction with the audited financial statements and notes thereto contained in the Companys financial statements filed with the SEC on Form 10K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for the consolidated financial statements to be not misleading have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year 2016 as reported in Form 10K, have been omitted.
Principles of Consolidation
The consolidated financial statements present the financial position, results of operations and cash flows for Ameri Metro, Inc. (AMI) and its wholly-owned subsidiary, Global Transportation & Infrastructure, Inc. (GTI). Intercompany transactions and balances have been eliminated in consolidation.
The financial position, results of operations and cash flows as of, and for the period reported include only the results of operations for AMI as GTI was not formed until December 1, 2010, and was inactive for the period from December 1, 2010 to April 30, 2017.
|
NOTE 2 GOING CONCERN
These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated any revenues since inception and is unlikely to generate earnings in the immediate or foreseeable future. As at April 30, 2017, the Company has a working capital deficiency of $22,281,604 and has accumulated losses of $28,366,481 since inception. The ability of Ameri Metro to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining future profitable operations.
Managements plans include selling its equity securities and obtaining debt financing to fund its capital requirement and on-going operations; however, there can be no assurance the Company will be successful in these efforts. These factors create substantial doubt about the Companys ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.
|
NOTE 3 DUE TO RELATED PARTIES
At April 30, 2017, the Company is indebted to three directors of the Company for $1,050 (July 31, 2016 - $1,050) for expenditures incurred on behalf of the Company. The amount is unsecured, non-interest bearing and due on demand.
|
NOTE 4 LOANS PAYABLE RELATED PARTIES
As of April 30, 2017, $1,059,181 (July 31, 2016 - $960,967) is due to the majority shareholder, of which $509,486 is unsecured, non-interest bearing and due on demand, and $7,600 is past due with an interest rate of 2% per annum. On March 17, 2017, the majority shareholder consolidated six loans and the consolidated loan of $542,095 is due on October 31, 2018 and bears interest at 3.50% per annum. At April 30, 2017, accrued interest on these loans is $28,896 (July 31, 2016 - $14,068).
|
NOTE 5 LOAN PAYABLE
On January 30, 2014, the Company entered into a short-term loan of $6,000 with an interest rate of 3% per annum and a maturity date of April 30, 2015. The Company has repaid $2,597 as of April 30, 2017. At April 30, 2017, accrued interest on these loans is $353 (July 31, 2016 - $277). At April 30, 2017, this loan is past due.
|
NOTE 6 CAPITAL STOCK
Preferred Shares: 200,000,000 par value $0.000001 per share. There are 1,800,000 shares of preferred stock outstanding at April 30, 2017.
On November 3, 2014, the Company effected a 4:1 forward stock split of its issued and outstanding shares of common stock. As of April 30, 2017, 99.71% of the shareholders participated and therefore the statements are retroactively adjusted to reflect a 3.99:1 forward split. Due to the 3.99:1 forward split, the shares increased to 938,192,724, and the shares issuable to effect a 4:1 split is 2,736,000 shares. As a result, all share amounts have been retroactively adjusted for all periods presented for a 3.99:1 forward split. Subsequent to April 30, 2017, the Company issued the remaining 2,736,000 shares of common stock.
On August 4, 2016, the Company issued 104,104 Class B common shares to correct the amount of shares issued to a shareholder as a result of the forward stock split.
On April 30, 2017, the Company issued 43,200,000 shares of Class C common stock at a fair value of $10,800 to the Companys Founder pursuant to the Employment agreement as described in Note 8.
|
NOTE 8 COMMITMENTS AND CONTINGENCIES
Employee Agreements
The Company has entered into an employment agreement with the Chief Executive Officer (CEO) Debra Mathias with an effective date of April 21, 2014. The term of the employment agreements is 3 years, with an annual base salary of $1,200,000. On April 21, 2017, the agreement was extended to April 21, 2021.
The Company has signed an employment agreement for the Head of Mergers and Acquisitions and Business Development, and as non-board member President, Mr. Shah Mathias (Company Founder), with an effective date of October 2, 2014. The term of the employment agreement is 20 years, with an annual base salary of $1,200,000 and ten percent (10%) of any revenue producing contract entered into by the Company while the Company Founder is in office, while holding any position under any title, and five percent (5%) of any such revenue producing contract afterward, for the benefit of the Company Founder or his estate, for a period of twenty (20) years. The Company Founder is also eligible to earn an annual bonus award of up to 100% of the annual base salary. In addition, the Company Founder is entitled to receive shares of the Companys common stock as follows: when the Company issue shares for the Initial Public Offering, the Company Founder is to be issued 10% of the said shares; and if shares are issued at such time to any other party the Company Founder is to be issued an equal amount of shares.
The Company has entered into an employment agreement with the Chief Engineer with an effective date of December 3, 2014. The term of the employment agreement is 3 years, with an annual base salary of $175,000. The Chief Engineer is also entitled to 1,000,000 post-split shares of Class B common stock as a signing bonus. On December 30, 2014, the Company issued 1,000,000 post-split shares of Class B common stock to the Chief Engineer.
The Company has entered into a directorship agreement with a Director of the Company with an effective date of June 30, 2015. The initial term of the directorship agreement is one year, with an annual base salary of $150,000. The director is also entitled to 1,000,000 post-split shares of Class B common stock. On July 24, 2015, the Company issued 1,000,000 post-split shares of Class B common stock to the director. On March 17, 2016, the term of the agreement was extended to July 31, 2021.
The Company entered into an employment agreement with the Chief Financial Officer (the CFO) with an effective date of August 4, 2015. The term of the employment agreement is 3 years, with an annual base salary of $350,000. On March 17, 2016, the term of the agreement was extended to July 31, 2021. Effective November 1, 2016, the annual base salary was increased to $500,000.
The Company entered into an employment agreement with the Chief Operating Officer (the COO) with an effective date of August 4, 2015. The term of the employment agreement is 3 years, with an annual base salary of $375,000. On March 17, 2016, the term of the agreement was extended to July 31, 2021. Effective November 1, 2016, the annual base salary was increased to $500,000.
The Company entered into an employment agreement with the Chief General Counsel with an effective date of August 4, 2015. The term of the employment agreement is 3 years, with an annual base salary of $500,000. On March 17, 2016, the term of the agreement was extended to July 31, 2021.
The Company entered into eleven directorship agreements with eleven Directors of the Company. The initial term of the directorship agreements is one year, with an annual base salary of $150,000. Each of the eleven directors is also entitled to 1,000,000 shares of Class B common stock. On March 17, 2016, the term of the agreements was extended to July 31, 2021.
On October 19, 2016, the Company appointed three individuals as Directors of the Company and the Audit Committee. Effective November 1, 2016, the annual compensation for each of the individuals is $120,000.
The Company has entered into an employment agreement with the President of the Company with an effective date of November 1, 2016. The term of the employment agreement is 3 years, with an annual base salary of $650,000.
The Company has entered into an employment agreement with the Chief Risk Officer of the Company with an effective date of November 1, 2016. The term of the employment agreement is 3 years, with an annual base salary of $500,000.
The Company has entered into an employment agreement with the Vice CEO of the Company with an effective date of November 1, 2016. The term of the employment agreement is 3 years, with an annual base salary of $750,000.
The Company has entered into an employment agreement with the Treasurer of the Company with an effective date of November 1, 2016. The term of the employment agreement is 3 years, with an annual base salary of $600,000.
The Company has entered into an employment agreement with the Non-Executive General Manager of the Company with an effective date of November 1, 2016. The term of the employment agreement is 3 years, with an annual base salary of $160,000.
Operating Lease
On April 30, 2014, the Company terminated its existing office space lease, and entered into a new month to month rent agreement for office space. The new agreement which commenced on November 1, 2015, calls for monthly rent payments of $1,440. The terminated lease agreement has not been resolved as to payment of existing amounts due in cash or stock, or as to any early termination fees. As of April 30, 2017, no stock has been issued in payment of rent.
Master Consulting Agreement
On March 20, 2016, the Company entered into a Master Consulting Agreement with Global Infrastructure Finance & Development Authority, Inc. (GIF&DA), a division of Hi Speed Rail Facilities, Inc. Hi Speed Rail Facilities, Inc. is a non-profit entity organized and established by the Founder of the Company. GIF&DA has or is about to secure all necessary approvals by certain Joint Resolutions enacted by the federal and state(s) governmental agencies Legislature for the construction of a project consisting of financing, construction and operation of Hi Speed Rail Passenger, Freight, Air, Sea, Ground, Other Transportation Projects and other Parallel and Ancillary Infrastructure Projects.
Pursuant to the Agreement, the Company was appointed as the agent and representative of GIF&DA to facilitate GIF&DA in securing the first and future phases of financing the project and the construction of the project. The Company shall receive 1.5% the face amount of each master trust indenture (bond indenture) in consideration for arranging financing and developing the sponsorship mechanism of the project. The term of the Agreement shall continue until the completion of the project. At April 30, 2017, the Company has not secured any financing for GIF&DA.
Agreement for Construction and Agreement of Sale and or Assignment of Assets in Phase One
On August 8, 2016, Company entered into a Construction Agreement with Port De Claudius, Inc. (PDC). Pursuant to the Construction Agreement, the Company shall perform all tasks and actions required to develop and construct the Port Trajan Pa. commercial properties (the Project) and to secure the first and future phases of the financing applicable to the design, planning, engineering, and related soft and hard costs of the construction of the Project.
The Project consists of two phases, phase one closing to take place on or before October 14, 2016 (Phase One) and phase two to take place on or before August 31, 2017. Due to delays in obtaining funding, the August 31, 2017 Phase Two closing date has been pushed back to a yet-to-be-determined future date. Phase One consists of land purchase and onsite /off site improvement and its estimated cost, for both phases, is $2,000,000,000. PDC agreed to pay the Company 40% of the cost (i.e $800,000,000), plus 2% over the adjustment for the increase in inflation regardless of the cost to the Company to perform the required services. A mobilization fee of $2,729,514 shall be due and payable by PDC to the Company upon the closing of Bond funding for Phase One. The bond proceeds from the first tranche are expected to be $950,000,000.
On September 11, 2016, in relation to the August 8, 2016 Construction agreement, the Company, Jewels Real-Estate 10-86 Master LLLP (Jewel), Global Infrastructure Finance & Development Authority, Inc. (GIF&DA), Port De Claudius, Inc., and HSRF Statutory Trust (HSRF) entered into an Agreement of Sale and or Assignment of Assets in Phase One pursuant to which the Company agreed to assign and Jewel agreed to sell all rights, title and interest in and to any contractual agreements entered among Ameri Metro, Jewel and other related parties to PDC on completion of Phase One as governed by the Construction Agreement. The cost of Phase One is $950,000,000. The net Phase One revenue to the Company is expected to be $66,719,514 which includes $33,740,000 from the assignment of the Land Purchase Agreement the Company entered into with Jewel on November 26, 2013, $14,250,000 in consulting fee in relation to the Master Consulting Agreement, $2,729,514 of mobilization fee and $16,000,000 of onsite / offsite improvement fee. The $66,719,514 revenue will be paid from the proceeds from $950,000,000 bond issuance. At April 30, 2017, the $950,000,000 bond has not been issued and the land has not been transferred from Jewel to PDC.
|
NOTE 9 INCOME TAXES
For the period ended April 30, 2017, the Company has net losses in addition to prior years net taxable losses, the result is a net taxable loss carry-forward, and therefore the Company has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. For the periods ended April 30, 2017 and July 31, 2016, the cumulative net operating loss carry-forward from operations is approximately $7,593,000 and $7,265,000; respectively, and will expire beginning in the year 2030
The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:
April 30, 2017 | July 31, 2016 | |
Net loss before income taxes per financial statements | $ (6,516,258) | $ (4,447,318) |
| ||
Income tax recovery | 2,215,500 | 2,649,200 |
Timing difference and other | (2,104,100) | (2,317,600) |
Change in valuation allowance | (111,400) | (331,600) |
Provision for income taxes | $ 0 | $ 0 |
April 30, 2017 | July 31, 2016 | |
Deferred tax asset attributable to: | ||
Net operating loss carryover | $ 2,581,500 | $ 2,470,200 |
Valuation allowance | (2,581,500) | (2,470,200) |
Net deferred tax asset | $ 0 | $ 0 |
Due to the change in ownership provisions of the Tax Reform Act of 1986, the net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations.
|
NOTE 10 SUBSEQUENT EVENT
Subsequent to April 30, 2017, the Company issued an additional 2,736,000 of Class B common stock in connection with the November 3, 2014 stock split.
|
Nature of Business
Ameri Metro, Inc. (Ameri Metro and the Company) was formed to engage primarily in high-speed rail for passenger and freight transportation and related transportation projects. The Company initially intends to develop a Midwest high-speed rail system for passengers and freight. Currently the Company is engaged in raising capital and entering into relationships in furtherance of its planned activities.
The Companys activities are subject to significant risks and uncertainties including failure to secure additional funding to properly execute the companys business plan.
|
Basis of Presentation
The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (SEC), and should be read in conjunction with the audited financial statements and notes thereto contained in the Companys financial statements filed with the SEC on Form 10K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for the consolidated financial statements to be not misleading have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year 2016 as reported in Form 10K, have been omitted.
|
Principles of Consolidation
The consolidated financial statements present the financial position, results of operations and cash flows for Ameri Metro, Inc. (AMI) and its wholly-owned subsidiary, Global Transportation & Infrastructure, Inc. (GTI). Intercompany transactions and balances have been eliminated in consolidation.
The financial position, results of operations and cash flows as of, and for the period reported include only the results of operations for AMI as GTI was not formed until December 1, 2010, and was inactive for the period from December 1, 2010 to April 30, 2017.
|
The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:
April 30, 2017 | July 31, 2016 | |
Net loss before income taxes per financial statements | $ (6,516,258) | $ (4,447,318) |
| ||
Income tax recovery | 2,215,500 | 2,649,200 |
Timing difference and other | (2,104,100) | (2,317,600) |
Change in valuation allowance | (111,400) | (331,600) |
Provision for income taxes | $ 0 | $ 0 |
|
April 30, 2017 | July 31, 2016 | |
Deferred tax asset attributable to: | ||
Net operating loss carryover | $ 2,581,500 | $ 2,470,200 |
Valuation allowance | (2,581,500) | (2,470,200) |
Net deferred tax asset | $ 0 | $ 0 |
|