|
|
|
|
|
|
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 10-K. 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 2015 as reported in Form 10-K, have been omitted.
|
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 January 31, 2016, the Company has a working capital deficiency of $12,972,156 and has accumulated losses of $18,505,819 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 January 31, 2016, the Company is indebted to three directors of the Company for $1,050 (July 31, 2015 - $250) 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 January 31, 2016, $645,297 (July 31, 2015 - $528,552) is due to the majority shareholder, of which $508,531 is unsecured, non-interest bearing and due on demand, $11,829 is past due with an interest rate of 3%, $30,337 is due December 31, 2016 with interest at 3%, and $94,600 is due on October 26, 2016 with an interest rate of 2%. At January 31, 2016, accrued interest on these loans is $1,292 (July 31, 2015 - $506).
|
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 January 31, 2015. The Company has repaid $2,597 as of January 31, 2016. At January 31, 2016, accrued interest on these loans is $229 (July 31, 2015 - $206). At January 31, 2016, this loan is past due.
|
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 60,000,000 post-split shares of Class B common stock that had previously been issued by the former CFO to himself without appropriate Board of Directors approval.
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 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 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 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 also issue himself, without approval of the Company's Board of Directors 60,000,000 post-split shares of Class B common stock as a signing bonus. On December 30, 2014, the former CFO caused the Company to issue him 60,000,000 post-split shares of Class B common stock. 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. The former CFO has notified the Company that he disputes the rescission.
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.
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.
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.
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.
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.
Operating Lease
On January 31, 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 January 31, 2016, no stock has been issued in payment of rent.
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. 1
|
NOTE 8 SUBSEQUENT EVENTS
On March 8, 2016, options for 2,000,000 common shares were granted to four management team members (8,000,000 in total). The exercise price of each option shall be determined by the Board of Directors of the Company. For each individual 800,000 options vested on the date granted and 200,000 options vest annually for six years.
|
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 10-K. 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 2015 as reported in Form 10-K, have been omitted.
|
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 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 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 also issue himself, without approval of the Company's Board of Directors 60,000,000 post-split shares of Class B common stock as a signing bonus. On December 30, 2014, the former CFO caused the Company to issue him 60,000,000 post-split shares of Class B common stock. 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. The former CFO has notified the Company that he disputes the rescission.
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.
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.
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.
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.
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.
|
Operating Lease
On January 31, 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 January 31, 2016, no stock has been issued in payment of rent.
|
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.
|