AMERI METRO, INC. (FORMERLY YELLOWWOOD), 10-Q filed on 6/20/2016
Quarterly Report
Document and Entity Information (USD $)
9 Months Ended
Apr. 30, 2016
Jan. 31, 2016
Apr. 15, 2016
Common Class A
Apr. 15, 2016
Common Stock B
Apr. 15, 2016
Common Class C
Apr. 15, 2016
Common Class D
Apr. 15, 2016
Preferred Class A
Entity Registrant Name
Ameri Metro, Inc. (formerly Yellowwood) 
 
 
 
 
 
 
Document Type
10-Q 
 
 
 
 
 
 
Document Period End Date
Apr. 30, 2016 
 
 
 
 
 
 
Amendment Flag
false 
 
 
 
 
 
 
Entity Central Index Key
0001534155 
 
 
 
 
 
 
Current Fiscal Year End Date
--07-31 
 
 
 
 
 
 
Entity Common Stock, Shares Outstanding
 
 
1,600,000 
987,934,483 
4,800,000 
48,000,000 
1,800,000 
Entity Filer Category
Smaller Reporting Company 
 
 
 
 
 
 
Entity Current Reporting Status
Yes 
 
 
 
 
 
 
Entity Voluntary Filers
No 
 
 
 
 
 
 
Entity Well-known Seasoned Issuer
No 
 
 
 
 
 
 
Document Fiscal Year Focus
2016 
 
 
 
 
 
 
Document Fiscal Period Focus
Q3 
 
 
 
 
 
 
Entity Public Float
 
$ 0 
 
 
 
 
 
Trading Symbol
amgi 
 
 
 
 
 
 
STATEMENT OF FINANCIAL POSITION (USD $)
Apr. 30, 2016
Jul. 31, 2015
ASSETS
 
 
Cash and cash equivalents
$ 54,605 
$ 0 
Prepaid expenses
12,317 
Total Current Assets
66,922 
Office equipment, net
1,351 
601 
Deposits
2,940 
1,500 
Total Assets:
71,213 
2,101 
Bank indebtness
528 
Accounts payable
1,046,381 
272,972 
Accrued expenses
13,037,695 
7,704,828 
Due to related party
1,050 
250 
Loans payable - related party
748,847 
528,552 
Loans payable
3,403 
3,403 
Total Liabilities
14,837,376 
8,510,533 
Preferred stock, authorized
200,000,000 
200,000,000 
Preferred stock, par value
0.000001 
0.000001 
Preferred stock, shares issued and outstanding
1,800,000 
1,800,000 
Paid in Capital preferred stock
Common stock class A, authorized
7,000,000 
7,000,000 
Common stock class A, par value
0.000001 
0.000001 
Common stock class A, issued and outstanding
1,600,000 
6,400,000 
Paid in Capital Common stock class A
Common stock class B, authorized
4,000,000,000 
4,000,000,000 
Common stock class B, par value
0.000001 
0.000001 
Common stock class B, issued and outstanding
987,934,483 
1,093,876,626 
Paid in Capital Common stock class B
988 
1,094 
Common stock class C, authorized
4,000,000,000 
4,000,000,000 
Common stock class C, par value
0.000001 
0.000001 
Common stock class C, issued and outstanding
4,800,000 
Paid in Capital Common stock class C
Common stock class D, authorized
4,000,000,000 
4,000,000,000 
Common stock class D, par value
0.000001 
0.000001 
Common stock class D, issued and outstanding
48,000,000 
Paid in Capital Common stock class D
48 
Additional paid in Capital
5,581,884 
5,595,967 
Stock subscriptions receivable
(47,000)
(47,000)
Accumulated Deficit
(20,302,091)
(14,058,501)
Total Stockholders' Deficit
(14,766,163)
(8,508,432)
Total Liabilities and Equity Deficit
$ 71,213 
$ 2,101 
STATEMENTS OF OPERATIONS (USD $)
3 Months Ended 9 Months Ended
Apr. 30, 2016
Apr. 30, 2015
Apr. 30, 2016
Apr. 30, 2015
Income Statements
 
 
 
 
REVENUES
$ 0 
$ 0 
$ 0 
$ 0 
Professional fees
29,850 
5,800 
833,118 
31,600 
Directors fees
450,000 
337,500 
1,500,750 
989,868 
Depreciation
96 
80 
256 
240 
General & administrative
146,060 
113,612 
459,219 
337,386 
Officer payroll
1,169,074 
862,500 
3,448,241 
2,527,808 
TOTAL OPERATING EXPENSES
1,795,080 
1,319,492 
6,241,584 
3,886,902 
LOSS FROM OPERATIONS
(1,795,080)
(1,319,492)
(6,241,584)
(3,886,902)
Franchise tax
(180,000)
(180,000)
Interest expense
(1,192)
(119)
(2,001)
(357)
Termination Fee
(5)
TOTAL OTHER INCOME (EXPENSE)
(1,192)
(180,119)
(2,006)
(180,357)
Net Income (Loss)
(1,796,272)
(1,499,611)
(6,243,590)
(4,067,259)
Net loss per Common share (Basic and Diluted)
$ 0.00 
$ 0.00 
$ (0.01)
$ 0.00 
Number of Common Shares - (Basic and Diluted)
1,042,334,483 
1,069,430,122 
1,066,077,332 
997,882,443 
STATEMENTS OF CASH FLOWS (USD $)
9 Months Ended
Apr. 30, 2016
Apr. 30, 2015
Statement of Cash Flows
 
 
Net Income (Loss)
$ (6,243,590)
$ (4,067,259)
Issuance of stock for services
750 
37,658 
Issuance of stock for Termination fee
Cancellation of stock issued for services
(15,220)
Depreciation
256 
240 
Stock-based compensation
324 
Adjustments, Noncash Items, to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities
(13,885)
37,898 
Prepaid expense and deposits - period
(13,757)
Accounts payable - period
773,409 
168,127 
Accrued expenses - period
5,332,867 
3,822,138 
Increase (Decrease) in Operating Liabilities
6,092,519 
3,990,265 
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities
6,078,634 
4,028,163 
Net Cash Provided by (Used in) Operating Activities
(164,956)
(39,096)
Purchase of property and equipment
(1,006)
Net Cash Provided by (Used in) Investing Activities
(1,006)
Bank indebtedness, for the period
(528)
Proceeds from related party loan
252,914 
38,610 
Repayment of related party loan
(32,619)
Due to related party
800 
Net Cash Provided by (Used in) Financing Activities
220,567 
38,610 
Net Decrease in Cash
54,605 
(486)
Cash, Beginning of Period
2,191 
Cash, End of Period
$ 54,605 
$ 1,705 
STATEMENT OF CASH FLOWS, SUPPLEMENTAL DISCLOSURES (USD $)
9 Months Ended
Apr. 30, 2016
Apr. 30, 2015
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
 
 
Interest paid
$ 0 
$ 0 
Income taxes paid
Issuable common stock - Class B
$ 0 
$ 22 
Note 1 - Summary of Significant Accounting Policies
Note 1 - Summary of Significant Accounting Policies

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.  Currently, the Company is engaged in raising capital and entering into relationships in furtherance of its planned activities.

The Company’s activities are subject to significant risks and uncertainties including failure to secure additional funding to properly execute the company’s 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 Company’s financial statements filed with the SEC on Form 10-K.  In the opinion of management, all 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 ended July 31, 2015, as reported in Form 10-K, have been omitted.

Note 2 - Going Concern
Note 2 - Going Concern

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, 2016, the Company has a working capital deficiency of $14,770,454 and has accumulated losses of $20,302,091 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.

 

Management’s 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 Company’s 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 5 - Loan Payable
Note 5 - Loan Payable

NOTE 5 – LOAN PAYABLE

 

On January 30, 2014, the Company entered into a short-term loan with a non-related party.  The Company was loaned $6,000 from an investment company, the repayment terms are 3% interest with a maturity date of April 30, 2015.  The Company has repaid $2,597 as of April 30, 2016. At April 30, 2016, accrued interest on these loans is $251 (July 31, 2015 - $206). At April 30, 2016, this loan is past due

Note 6 - Capital Stock
Note 6 - Capital Stock

NOTE 6 – CAPITAL STOCK

On November 3, 2014, the Company effected a 4:1 forward stock split of its issued and outstanding shares of common stock. As a condition of the split, all shareholders who wanted to participate were required to send $100 to the Transfer Agent to pay for the expense related to reissuance of shares due to split. The cutoff date for the return of the notification and payment to the transfer agent was December 31, 2014. If the shareholder did not return the confirmation and payment, they would not be eligible to receive the additional shares.

As of the date of this filing 99.71% of the shareholders participated and therefore the statements are retroactively adjusted to reflect a 3.99:1 forward split. Due to 3.99:1 forward split the shares increased to 938,192,724, the shares issuable to effect a 4:1 split is 2,736,000.  As a result, all share amounts have been retroactively adjusted for all periods presented for a 3.99:1 forward split.

On August 3, 2015, the Company reclassified 4,800,000 shares of Class A common stock to Class C common stock and reclassified 48,000,000 shares of Class B common stock to Class D common stock.

On August 3, 2015, the Company issued 20,000 post-split shares of Class B common stock as termination fee for an agreement in which the Company did not fully perform.  The fair value of these shares is $5 and is recorded as termination fee.

On August 3, 2015, the Company reinstated 20,000 shares of Class B common stock that were rescinded in error in the fiscal year ended July 31, 2015.

On August 31, 2015, the Company issued 1,000,000 post-split shares of Class B common stock to a director of the Company pursuant to directorship agreement entered on August 4, 2015.  The fair value of these shares is $250 and is recorded as directors’ fees.

On September 10, 2015, the Company issued 2,000,000 post-split shares of Class B common stock to two directors of the Company pursuant to two directorship agreements entered on August 4, 2015.  The fair value of these shares is $500 and is recorded as directors’ fees.

On November 11, 2015, the Company rescinded 63,476,191 post-split shares of Class B common stock that had previously been issued to the former CFO for services as the former CFO did not fully perform on the original contract.

On November 11, 2015, the Company rescinded 880,952 post-split shares of Class B common stock that had previously been issued for services as the consultant did not fully perform on the original contract.

Note 7 - Stock Options
Note 7 - Stock Options

NOTE 7 – STOCK OPTIONS

On March 8, 2016, the Company adopted a stock option plan named 2016 Equity Incentive Plan, the purpose of which is to help the Company secure and retain the services of employees, directors and consultants, provide incentives to exert maximum efforts for the success of the Company and any affiliate and provide a means by which the eligible recipients may benefit from increases in value of the common stock. 

On March 8, 2016, the Company granted 8,000,000 stock options to 4 officers and directors of the Company, exercisable at $42 per share and expire on March 8, 2026.  The 8,000,000 options vest according to the following schedule: 3,200,000 options vest immediately and 800,000 vest annually for the next 6 years.  The weighted average grant date fair value of stock options granted during the nine month period ended April 30, 2016 was $0.00009.  During the nine months ended April 30, 2016, the Company recorded stock-based compensation of $324 (2015 - $nil), as officer payroll on the consolidated statement of operations.

 

A summary of the Company’s stock option activity is as follow:

 

 

 Number of Options

Weighted Average Exercise Price

$

 

Weighted Average Remaining

Contractual Term

Aggregate Intrinsic Value

$

Outstanding, July 31, 2015

0

0

0

0

 

 

 

 

 

Granted

8,000,000

42.00

0

0

 

 

 

 

 

Outstanding, April 30, 2016

8,000,000

42.00

9.86

0

 

 

The fair value of each option granted was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

 

 

Nine months

ended

April 30,

2016

»Nine months

ended

April 30,

2015

 

 

 

Expected dividend yield

0%

0

Expected volatility

150%

0

Expected life (in years)

10

0

Risk-free interest rate

1.83%

0

 

 

A summary of the status of the Company’s non-vested stock options as of April 30, 2016, and changes during the nine month period ended April 30, 2016, is presented below:

 

Non-vested options

Number of options

 

Weighted Average

Grant Date

Fair Value

$

 

 

 

Non-vested at July 31, 2015

0

0

 

 

 

Granted

8,000,000

0.00009

 Vested

(3,200,000)

0.00009

 

 

 

Non-vested at April 30, 2016

4,800,000

0.00009

 

At April 30, 2016, there was $419 of unrecognized compensation costs related to non-vested stock-based compensation arrangements granted under the Plan.  There was $nil intrinsic value associated with the outstanding stock options at April 30, 2016.

Note 8 - Commitments and Contingencies
Note 8 - Commitments and Contingencies

NOTE 8 – COMMITMENTS AND CONTINGENCIES

Employee Agreements

The Company has entered into an employment agreement with the Chief Executive Officer 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.

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 Company’s 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 had entered into an employment agreement with the former Chief Financial Officer (the “CFO”) with an effective date of December 3, 2014.  The term of the employment agreement was 3 years, with an annual base salary of $350,000.  The former CFO was also entitled to 60,000,000 post-split shares of Class “B” common stock..  On December 30, 2014, the Company issued 60,000,000 post-split shares of Class “B” common stock to the former CFO.  On November 11, 2015, the former CFO resigned and the Company rescinded the 60,000,000 post-split shares of Class B common stock that had been issued as the former CFO did not fully perform on his employment agreement.

The Company 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 was 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 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.

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.

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 three directorship agreements with three directors of the Company with an effective date of August 1, 2015.  The initial term of the directorship agreements is one year, with an annual base salary of $150,000.  Each of the three directors is also entitled to 1,000,000 post-split shares of Class B common stock. On August 31, 2015 and September 10, 2015, the Company issued 1,000,000 post-split shares and 2,000,000 post-split shares of Class B common stock to the three directors, respectively.  On March 17, 2016, the term of the agreements was extended to July 31, 2021.

 

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 commences 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, 2016, 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, 2016, the Company has not secured any financing for GIF&DA.   .

 

Stock Split

 

In connection with the stock split, some shareholders did not respond or pay the transfer agent fee by the deadline. As a result, these shareholders were not issued the additional shares. At some point, the Company may be required to issue an additional 2,736,000 of Class B common stock in connection with this stock split.

 

Note 9 - Income Taxes
Note 9 - Income Taxes

NOTE 9 - INCOME TAXES

For the period ended April 30, 2016, 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, 2016 and July 31, 2015, the cumulative net operating loss carry-forward from operations is approximately $20,238,000 and $13,995,000; 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:

 

 

Deferred tax asset attributable to:

 

April 30, 2016

 

July 31, 2015

Net operating loss carryover

 

$          6,881,000

 

$       4,758,300

Valuation allowance

 

(6,881,000)

 

(4,758,300)

 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 1 - Summary of Significant Accounting Policies: Nature of Business (Policies)
Nature of Business

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.  Currently, the Company is engaged in raising capital and entering into relationships in furtherance of its planned activities.

The Company’s activities are subject to significant risks and uncertainties including failure to secure additional funding to properly execute the company’s business plan.

Note 1 - Summary of Significant Accounting Policies: Basis of Presentation (Policies)
Basis of Presentation

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 Company’s financial statements filed with the SEC on Form 10-K.  In the opinion of management, all 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 ended July 31, 2015, as reported in Form 10-K, have been omitted.

Note 8 - Commitments and Contingencies: Employee Agreements (Policies)
Employee Agreements

Employee Agreements

The Company has entered into an employment agreement with the Chief Executive Officer 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.

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 Company’s 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 had entered into an employment agreement with the former Chief Financial Officer (the “CFO”) with an effective date of December 3, 2014.  The term of the employment agreement was 3 years, with an annual base salary of $350,000.  The former CFO was also entitled to 60,000,000 post-split shares of Class “B” common stock..  On December 30, 2014, the Company issued 60,000,000 post-split shares of Class “B” common stock to the former CFO.  On November 11, 2015, the former CFO resigned and the Company rescinded the 60,000,000 post-split shares of Class B common stock that had been issued as the former CFO did not fully perform on his employment agreement.

The Company 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 was 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 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.

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.

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 three directorship agreements with three directors of the Company with an effective date of August 1, 2015.  The initial term of the directorship agreements is one year, with an annual base salary of $150,000.  Each of the three directors is also entitled to 1,000,000 post-split shares of Class B common stock. On August 31, 2015 and September 10, 2015, the Company issued 1,000,000 post-split shares and 2,000,000 post-split shares of Class B common stock to the three directors, respectively.  On March 17, 2016, the term of the agreements was extended to July 31, 2021.

Note 8 - Commitments and Contingencies: Operating Lease (Policies)
Operating Lease

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 commences 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, 2016, no stock has been issued in payment of rent.

Note 8 - Commitments and Contingencies: Master Consulting Agreement (Policies)
Master Consulting Agreement

 

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, 2016, the Company has not secured any financing for GIF&DA.   .

Note 8 - Commitments and Contingencies: Stock Split (Policies)
Stock Split

Stock Split

 

In connection with the stock split, some shareholders did not respond or pay the transfer agent fee by the deadline. As a result, these shareholders were not issued the additional shares. At some point, the Company may be required to issue an additional 2,736,000 of Class B common stock in connection with this stock split.

 

Note 7 - Stock Options: Schedule of Share-based Compensation, Stock Options, Activity (Tables)
Schedule of Share-based Compensation, Stock Options, Activity

A summary of the Company’s stock option activity is as follow:

 

 

 Number of Options

Weighted Average Exercise Price

$

 

Weighted Average Remaining

Contractual Term

Aggregate Intrinsic Value

$

Outstanding, July 31, 2015

0

0

0

0

 

 

 

 

 

Granted

8,000,000

42.00

0

0

 

 

 

 

 

Outstanding, April 30, 2016

8,000,000

42.00

9.86

0

Note 7 - Stock Options: Fair value of each option granted (Tables)
Fair value of each option granted

The fair value of each option granted was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

 

 

Nine months

ended

April 30,

2016

»Nine months

ended

April 30,

2015

 

 

 

Expected dividend yield

0%

0

Expected volatility

150%

0

Expected life (in years)

10

0

Risk-free interest rate

1.83%

0

Note 7 - Stock Options: Non-vested options (Tables)
Non-vested options

A summary of the status of the Company’s non-vested stock options as of April 30, 2016, and changes during the nine month period ended April 30, 2016, is presented below:

 

Non-vested options

Number of options

 

Weighted Average

Grant Date

Fair Value

$

 

 

 

Non-vested at July 31, 2015

0

0

 

 

 

Granted

8,000,000

0.00009

 Vested

(3,200,000)

0.00009

 

 

 

Non-vested at April 30, 2016

4,800,000

0.00009

Note 9 - Income Taxes: Deferred tax asset (Tables)
Deferred tax asset

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:

 

 

Deferred tax asset attributable to:

 

April 30, 2016

 

July 31, 2015

Net operating loss carryover

 

$          6,881,000

 

$       4,758,300

Valuation allowance

 

(6,881,000)

 

(4,758,300)

 Net deferred tax asset

 

$                        0

 

$                   0

Note 2 - Going Concern (Details) (USD $)
Apr. 30, 2016
Details
 
Working capital deficiency
$ 14,770,454 
Accumulated losses
$ 20,302,091 
Note 7 - Stock Options: Schedule of Share-based Compensation, Stock Options, Activity (Details) (USD $)
9 Months Ended
Apr. 30, 2016
Oustanding, July 31, 2015
 
Number of Options
Weighted Average Exercise Price $
$ 0 
Weighted Average Remaining Contractual Term
Aggregate Intrinsic Value $
Granted
 
Number of Options
8,000,000 
Weighted Average Exercise Price $
42.00 
Weighted Average Remaining Contractual Term
Aggregate Intrinsic Value $
Oustanding, April 30, 2016
 
Number of Options
8,000,000 
Weighted Average Exercise Price $
42.00 
Weighted Average Remaining Contractual Term
9.86 
Aggregate Intrinsic Value $
$ 0 
Note 7 - Stock Options: Fair value of each option granted (Details)
9 Months Ended
Apr. 30, 2016
Apr. 30, 2015
Details
 
 
Expected dividend yield
0.00% 
0.00% 
Expected volatility
150.00% 
0.00% 
Expected life (in years)
10 
Risk-free interest rate
1.83% 
0.00% 
Note 7 - Stock Options: Non-vested options (Details) (USD $)
9 Months Ended
Apr. 30, 2016
Non-vested at July 31, 2015
 
Number of options
Weighted Average Grant Date Fair Value $
$ 0 
Granted
 
Number of options
8,000,000 
Weighted Average Grant Date Fair Value $
0.00009 
Vested
 
Number of options
(3,200,000)
Weighted Average Grant Date Fair Value $
0.00009 
Non-vested at April 30, 2016
 
Number of options
4,800,000 
Weighted Average Grant Date Fair Value $
$ 0.00009 
Note 9 - Income Taxes (Details) (USD $)
Apr. 30, 2016
Jul. 31, 2015
Details
 
 
Operating Loss Carryforwards
$ 20,238,000 
$ 13,995,000 
Note 9 - Income Taxes: Deferred tax asset (Details) (USD $)
Apr. 30, 2016
Jul. 31, 2015
Details
 
 
Net operating loss carryover
$ 6,881,000 
$ 4,758,300 
Valuation allowance
(6,881,000)
(4,758,300)
Deferred Tax Assets, Net of Valuation Allowance
$ 0 
$ 0