The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2018 and 2017
NOTE 1 – ORGANIZATION AND DESCRIPTION BUSINESS
Hammer Fiber Optics Holdings Corp. (“the Company”) is an alternative telecommunications carrier formed to provide high capacity broadband through a wireless access network. Hammer Fiber Optics Holdings Corp. is the parent company and sole shareholder of Hammer Wireless Corporation. The financial statements for Hammer Fiber Optics Holdings Corp. and its wholly-owned subsidiary are reported on a consolidated basis. All significant intercompany accounts and transactions have been eliminated.
NOTE 2 – CORPORATE HISTORY AND BACKGROUND ON MERGER
The Company was originally incorporated in the State of Nevada on September 23, 2010, under the name Recursos Montana S.A. The Company’s principal activity was an exploration stage company engaged in the acquisition of mineral properties then owned by the Company.
On February 2, 2015, the Company entered into a Share Exchange Agreement with Tanaris Power Holdings, Inc., whereby the Company acquired 100% of Tanaris Power Holdings, Inc. issued and outstanding common stock in exchange for shares of the Company’s common stock equal to 51% of the issued and outstanding common stock of the Company. Tanaris Power Holdings, Inc. was the owner of certain rights in connection with the marketing and sale of smart lithium-ion batteries and battery technologies for various industrial vehicles markets and related applications. On March 6, 2015, the Company amended its Articles of Incorporation to change its name to Tanaris Power Holdings, Inc.
On April 25, 2016, Tanaris Power Holdings, Inc., a Nevada corporation entered into s Share Exchange Agreement (the “Share Exchange Agreement”) with Hammer Fiber Optics Investments, Ltd., a Delaware corporation (“HFOI”), and the controlling stockholders of HFOI (the “HFOI Shareholders”). Pursuant to the Share Exchange Agreement, the Company acquired 20,000,000 shares of common stock of HFOI from the HFOI shareholders (the “HFOI Shares”) and in exchange, the Company issued to the HFOI Shareholders 50,000,000 (post-Merger) restricted shares of its common stock (the “HMMR Shares”). As a result of the Share Exchange Agreement, HFOI became a wholly owned subsidiary of the Company.
On April 13, 2016, the Board of Directors (BOD) approved a Plan of Merger (the “Plan of Merger”) under Nevada Revised Statuses (NRS) Section 92A.180 to merge (the “Merger”) with our wholly-owned subsidiary HFO Holdings, a Nevada corporation, to effect a name change from Tanaris Power Holdings Inc. to Hammer Fiber Optics Holdings Corp. The Plan of Merger also provided for a 1 for 1,000 exchange ratio for shareholders of both the Company and the HRO Holdings, which had the effect of a 1 for 1,000 reverse split of the common stock. Articles of Merger were filed with the Secretary of State of Nevada on April 13, 2016 and, on April 14, 2016, this corporate action was submitted to Financial Industry Regulatory Authority (the “FINRA”) for its review and approval.
On May 3, 2016, the FINRA approved the merger with the wholly-owned subsidiary, HMMR Fiber Optics Holdings Corp. (“HFO Holdings”). Accordingly, thereafter, the Company’s name was changed and the shares of common stock began trading under new ticker symbol “HMMR” as of May 27, 2016. The merger was effected on July 19, 2016.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and cash equivalents
Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.
F-6
Property and equipment
Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets. For network service equipment, and furniture and fixtures, the useful life is ten and five years, respectively. Leasehold Improvements are depreciated over six years. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred.
Impairment of long-lived assets
The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future undiscounted cash flows to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. The Company has not recognized impairment losses for any long-lived assets.
Notes Receivable
These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, they are recorded at amortized cost less any provision for impairment. Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty is more likely than not to default.
Indefinite lived intangible assets
The Company reviews property, plant and equipment, inventory component prepayments and certain identifiable intangibles, excluding goodwill, for impairment. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate. If property, plant and equipment, inventory component prepayments and certain identifiable intangibles are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair value. The Company has not recorded any related impairment losses.
The Company does not amortize goodwill and intangible assets with indefinite useful lives, rather such assets are required to be tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that the assets may be impaired. The Company has not recorded any related impairment losses.
Revenue recognition
The Company recognizes revenues and the related costs when a sales or service arrangement exists, delivery and acceptance has occurred or service has been rendered, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured. Amounts invoiced or collected in advance of product delivery or providing services are recorded as unearned revenue or customer deposits. The company accrues for sales returns, bad debts, and other allowances based on its historical experience.
The Company’s revenues have consisted primarily of subscription agreements for its broadband internet and voice-over-IP phone services. Residential broadband service delivered to customers over the Company’s hybrid fiber and wireless network in Atlantic County, New Jersey has been the primary revenue source. Revenues are supplemented by phone and add-on services. Broadband services delivered via fiber optics to enterprise businesses account for the remaining sources of revenue. Services have been billed monthly to subscribers on either a one- year or two-year contract for residential customers and three-year contracts for enterprise business customers. Revenue begins accruing as service is delivered at commencement of the customer’s service contract.
Revenue is recorded net of discounts provided to customers. Discounts applied during the years July 31, 2018 and 2017 were $22,314 and $14,364, respectively.
F-7
Income taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
Fair value measurements
The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.
The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:
Level 1 — quoted prices in active markets for identical assets or liabilities
Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The Company has no assets or liabilities valued at fair value on a recurring basis.
Consolidation of financial statements
Hammer Fiber Optics Holdings Corp. is the parent company and sole shareholder of Hammer Wireless Corporation and Hammer Fiber Optic Investments Ltd. The financial statements for Hammer Fiber Optics Holdings Corp. and its wholly-owned subsidiaries are reported on a consolidated basis. All significant intercompany accounts and transactions have been eliminated.
Basic and Diluted Earnings (Loss) per Common Share
The basic earnings (loss) per share are calculated by dividing the Company’s net income available to common shareholders by the weighted average number of common shares during the year. The diluted earnings (loss) per share is calculated by dividing the Company’s net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Diluted earnings (loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items in the Company. As of July 31, 2018 and 2017, there were no common stock equivalents outstanding.
Recent accounting pronouncements
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09,
Revenue from Contracts with Customers.
ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In addition, during 2016 the FASB has issued ASU 2016-08, ASU 2016-10 and ASU 2016-12, all of which clarify certain implementation guidance within ASU 2014-09, and ASU 2016-11, which rescinds certain SEC guidance effective upon an entity’s adoption of ASU 2014-09. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein. The standard can be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption. The Company is currently assessing the impact this standard will have on its consolidated financial statements.
F-8
The Company does not expect the adoption of any other recent accounting pronouncements to have a material impact on its financial statements
.
Reclassifications
Certain prior period amounts have been reclassified to conform with current period presentation.
In July 2016, certain shareholders of the Company contributed 9,291,670 restricted shares of their common stock to the Company’s wholly-owned subsidiary, Hammer Wireless Corporation, for the purpose of effecting acquisitions, joint ventures or other business combinations with third parties. Then, Hammer Wireless sold a portion of these restricted shares to third parties and contributed the proceeds to the Company. Since such contribution was an inter-company transaction, any impact on the financial statements is eliminated in the consolidation of these financial statements. During fiscal year ended July 31, 2018 shares held by Hammer Wireless Corporation have been reclassified as Treasury Shares for the purposes of determining the number of outstanding shares of the company.
In the fiscal year ended July 31, 2017, the Company reported loss of asset impairment of $750,000 related to a note receivable. In the fiscal year ended July 31, 2018, the Company recovered $289,000 related to this note receivable. Accordingly, the loss of asset impairment in fiscal 2017 has been reclassified to general and administrative expense in the statement of operations, and in fiscal 2018, we have reported the full recovery of bad debt of $289,000 in general and administrative expense
.
Accounts Receivable
Accounts receivable are recorded at invoiced amount and generally do not bear interest. An allowance for doubtful accounts is established, as necessary, based on past experience and other factors which, in management's judgment, deserve current recognition in estimating bad debts. Such factors include growth and composition of accounts receivable, the relationship of the allowance for doubtful accounts to accounts receivable and current economic conditions. The determination of the collectability of amounts due from customer accounts requires the Company to make judgments regarding future events and trends. Allowances for doubtful accounts are determined based on assessing the Company’s portfolio on an individual customer and on an overall basis. This process consists of a review of historical collection experience, current aging status of the customer accounts, and the financial condition of the Company’s customers. As of July 31, 2018, the Company recorded an allowance for doubtful accounts of $23,002 based on historical collection activity for accounts older than 90 days.
NOTE 4 – GOING CONCERN
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has consistently sustained losses since its inception. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern. The Company’s continuation as a going concern is dependent upon, among other things, its ability to increase revenues, adequately control operating expenses and receive debt and/or equity capital from third parties. No assurance can be given that the Company will be successful in these efforts.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
The Company intends to continue to address this condition by seeking to raise additional capital through the issuance of debt and/or the sale of equity until such time that ongoing revenues can sustain the business, at which time capitalization may be considered through other means.
NOTE 5 – NOTES RECEIVABLE
During the fiscal year ended July 31, 2016, the Company entered into a loan agreement with MEK Investments Inc. for an aggregate amount of $235,000. The loan matured June 30, 2018 at which time the principal was due in its entirety, in addition to simple interest accrued at 3% per year. As of July 31, 2018, the Company recorded bad debt expense for the full receivable balance, including accrued interest of $14,696.
The Company had entered into a loan agreement during the year ended July 31, 2016 with Zena Capital, LLC for an aggregate amount of $1,000,000. Payments totaling $250,000 had been made against the loan; however, the loan was in default as of July 31, 2017. The Company recorded an impairment loss for the full $750,000 in July 2017 after determining that the collectability of the note, as well, as the services to be rendered by Zena Capital, LLC, were no longer assured. In 2018, the Company received payments totaling $289,000 as partial recovery of the outstanding loan balance. The partial recovery is reported in general and administrative expense on the Consolidated Statement of Operations. See also the “reclassifications” footnote related to the 2017 amounts.
F-9
NOTE 6 – PROPERTY AND EQUIPMENT
As of July 31, 2018, property and equipment consisted of the following:
|
|
Amount
|
Life
|
|
|
|
|
Computer and Telecom equipment
|
$
|
4,636,066
|
5 years
|
Building & Structures
|
|
119,416
|
10 years
|
Office equipment, furniture, fixtures
|
|
94,287
|
5-6 years
|
Computer software
|
|
79,952
|
3 years
|
Capitalized labor costs
|
|
1,880,554
|
5 years
|
Sub-total
|
|
6,810,275
|
|
Less: Accumulated depreciation and amortization
|
|
(2,216,640)
|
|
Total
|
$
|
4,593,635
|
|
As of July 31, 2017, property and equipment consisted of the following:
|
|
Amount
|
Life
|
|
|
|
|
Computer and Telecom equipment
|
$
|
4,014,389
|
5 years
|
Building & Structures
|
|
110,516
|
10 years
|
Office equipment, furniture, fixtures
|
|
94,287
|
5-6 years
|
Computer software
|
|
79,952
|
3 years
|
Capitalized labor costs
|
|
1,880,554
|
5 years
|
Sub-total
|
|
6,179,698
|
|
Less: Accumulated depreciation and amortization
|
|
(1,174,682)
|
|
Total
|
$
|
5,005,016
|
|
Depreciation expense was $1,041,958 and $872,103 for the years ended July 31, 2018 and 2017, respectively.
NOTE 7 – INDEFINITE LIVED INTANGIBLE ASSETS
The Company has $18,934 of recognized indefinite lived intangible assets, which consist of the ownership of Internet Protocol version 4 (IPv4) address blocks. These assets are not amortized and are evaluated routinely for potential impairment. If a determination is made that the intangible asset is impaired after performing the initial qualitative assessment, the asset’s fair value will be calculated and compared with the carrying value to determine whether an impairment loss should be recognized.
NOTE 8 – RELATED PARTY TRANSACTIONS
On October 9, 2016, the Company entered into a short-term loan agreement with a family member of a member of the Company’s Board of Directors (BOD). Under the agreement, the lender advanced $100,000 to the Company for the purpose of providing working capital. The loan carries an annual interest rate of 3%. The Company is currently in default on this loan. On September 15, 2016, the Company received $210,000 from a family member of a member of the BOD, also for the purpose of working capital, and has recorded such amount as a deposit in anticipation of executing a loan agreement.
On April, 9 2018, the Company received an additional $20,000 deposit from a family member of a member of the BOD. The amount was intended as additional working capital. The Company anticipates execution of a loan agreement relative to this advance.
During the fiscal year ended July 31, 2016, the Company entered into two promissory notes with a Director for an aggregate amount of $2,400,000 and $1,000,000, respectively. The $2,400,000 note matures on January 4, 2019. The terms consist of ten principal and interest payments due quarterly in the amount of $300,000 for total payments of $3,000,000. The Company is currently in default on this loan. To date, the Company has made payments on this note amounting to $725,831. The payments were applied to interest accrued as of the time of payment as well as to principal. The principal balance was $2,294,067 at July 31, 2018 and 2017. The interest accrued was $219,434 at July 31, 2018 and $69,594 at July 31, 2017, respectively.
The $1,000,000 note matured on June 9, 2018 at which time the principal became due in its entirety, in addition to simple interest accrued at 3%. The company is currently in default on this loan.
F-10
On June 19, 2018, a convertible promissory note that was entered into on February 12, 2018 by the Company for the sum of $103,000 was settled in full on the company’s behalf by a Director. The settlement included a prepayment penalty for a full settlement amount of $132,433. The difference between the carrying value of the loan and the full settlement amount ($29,433) was recorded as interest expense.
As of July 31, 2018, all of the related party payables are reported as current liabilities in the Consolidated Balance Sheet.
NOTE 9 – CONVERTIBLE DEBT
On February 12, 2018, the Company entered into an agreement for a convertible promissory note for the sum of $103,000. The note accrues interest at a rate of 12 percent per annum due at maturity. The note matures nine months from the issuance date. Prepayment of the note is subject to a premium charge based on the amount of days prepaid before the maturity date. The note allows conversion into the Company’s common stock at a discount of 37 percent of the stock’s market price. The holder shall have the right after 180 days to convert all or part of the note at their discretion. On June 19, 2018 the note was settled in full on the company’s behalf by a Director (see Note 8).
NOTE 10 – INCOME TAXES
The Company’s income tax expense, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect management’s best estimate of current and future taxes to be paid. The Company is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgments and estimate are required in the determination of the consolidated income tax expense.
The reconciliation of income tax benefit at the U.S. statutory rate of 35% for the fiscal year ended July 31, 2017, to the Company’s effective tax rate is as follows:
Income tax benefit provision at statutory rate
|
$
|
(2,655,485)
|
Change in valuation allowance
|
|
2,655,485
|
Income tax benefit provision
|
$
|
-
|
The tax effects of temporary differences that give rise to the Company’s net deferred tax assets as of July 31, 2017 are as follows:
Net operating loss
|
$
|
1,823,482
|
Valuation allowance
|
|
(1,823,482)
|
Net deferred tax asset
|
$
|
-
|
The reconciliation of income tax benefit at the federal and state statutory blended rates for the fiscal year ended July 31, 2018, to the Company’s effective tax rate is as follows:
Income tax benefit provision at statutory rate
|
$
|
(1,158,167)
|
Change in valuation allowance
|
|
1,158,167
|
Income tax benefit provision
|
$
|
-
|
The tax effects of temporary differences that give rise to the Company’s net deferred tax assets as of July 31, 2018 are as follows:
Net operating loss
|
$
|
2,981,649
|
Valuation allowance
|
|
(2,981,649)
|
Net deferred tax asset
|
$
|
-
|
The Tax Cuts and Jobs Act of 2017 (the Act) reduced the statutory corporate federal income tax rate from 35% to 21% beginning in 2018. The blended tax rate for 2018 considered the tax laws enacted in 2017. The tax effect of temporary differences from net operating losses (“NOL”) has been reduced to reflect the newly enacted rate.
The Company has approximately $14,200,000 of NOL carried forward to offset taxable income in future years. The tax laws enacted in 2017 also changed the treatment of NOL. Prior to the change, NOL could be carried back up to two years and carried forward up to 20 years to offset taxable income. In the new tax law, the NOL that can be carried forward is limited to 80% of the taxable income, can no longer be carried back, but are allowed to be carried forward indefinitely. The new law will apply to NOL arising in tax years beginning December 31, 2017, hence, $3,000,000 of the NOL will be subject to the 80% limitation and will be carried forward indefinitely while $11,200,000 of the NOL will be carried forward for 20 years and will begin to expire in 2036.
F-11
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax assets relating to NOLs for every period because it is more likely than not that all of the deferred tax asset will not be realized.
As of July 31, 2018 and 2017, the Company has no unrecognized income tax benefits. The Company’s policy for classifying interest and penalties associated with unrecognized income tax benefits is to include such items as a tax expense. No interest or penalties have been recorded during the years ended July 31, 2018 and 2017. As of July 31, 2018 and 2017, the Company did not have any amounts recorded pertaining to uncertain tax positions.
The tax years from 2015 and forward remain open to examination by federal and state authorities due to net operating loss and credit carryforwards. The Company is currently not under examination by the Internal Revenue Service or any other taxing authorities.
NOTE 11 – STOCKHOLDERS’ EQUITY
Treasury Stock
During the year ended July 31, 2018, the Company received cash of $2,600,651 from the sale of 800,914 treasury shares to various investors and a Directors.
Price Per Share
|
Shares
|
Value
|
$7.00
|
239,230
|
$1,674,610
|
$4.00
|
20,750
|
$83,000
|
$3.00
|
70,200
|
$210,600
|
$2.50
|
111,600
|
$279,000
|
$1.50
|
73,334
|
$110,001
|
$1.10
|
7,000
|
$7,700
|
$1.00
|
63,500
|
$63,500
|
$0.80
|
215,300
|
$172,240
|
Total
|
800,914
|
$2,600,651
|
Additionally, the Company issued 184,300 treasury shares to third parties for services provided during the year. The Company valued these shares using the closing quoted price of the Company’s common stock on the date of issuance. This resulted in an increase in the Company’s general and administrative expenses amounting to $1,259,347.
During the year ended July 31, 2017, the Company received cash of $5,203,003 from the sale of 749,277 Treasury Shares sold to third parties. These transactions represent capital contributions and did not result in an increase in the number of shares outstanding.
Price Per Share
|
Shares
|
Value
|
$7.00
|
728,294
|
$5,098,058
|
$5.00
|
20,989
|
$104,945
|
Total
|
749,277
|
$5,203,003
|
As a result of these transactions, the Company has a balance of 7,557,179 and 8,542,393 in treasury shares as of July 31, 2018 and 2017, respectively.
NOTE 12 – COMMITMENTS AND LEASES
The Company is committed under numerous operating leases for its offices and various installations of operating equipment. The office leases are commitments of 1 to 3 years and have extension of varying lives. Equipment and installation locations have varying leases of between 3 and 5 years and also have varying renewal option of up to 5 years at time for 15 additional years. The Company is also commited to long term technical agreements governed under service orders with several difference major telecommunications operators for access to dark fiber in conjunction with rack space and power at data centers. Commitments on these technical agreements run from 5 to 10 years.
F-12
The future minimum lease payments are provided below.
|
|
Amount
|
For the fiscal year ended July 31, 2019
|
$
|
879,851
|
For the fiscal year ended July 31, 2020
|
|
852,864
|
For the fiscal year ended July 31, 2021
|
|
428,356
|
For the fiscal year ended July 31, 2022
|
|
353,988
|
For the fiscal year ended July 31, 2023 and thereafter
|
|
864,768
|
Rent expense for the Company amounted to $830,145 and $873,000 for the fiscal years ended July 31, 2018 and 2017, respectively.
NOTE 13 – SUBSEQUENT EVENTS
Subsequent to July 31, 017, the Company received cash of $8,600 from the sale of 17,200 Treasury Shares sold to third parties. The Company also issued 110,000 shares of common stock for services to employees of the Company from Treasury Shares.
On September 12, 2018 the Company entered into a stock purchase agreement with Open Data Centers, LLC (the “Seller”). The purchase price for all of the Company Units is two million nine hundred thirty thousand five hundred sixty-six (2,930,566) shares of the Company’s Common Stock from treasury stock. The shares of the Company’s Common Stock to be issued are restricted securities, as defined in Rule 144 of the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended. The Company shall also pay Sellers a sum of $200,000 in Cash, delivered to the Sellers no later than January 10, 2019.
On September 11, 2018 the Company entered into a stock purchase agreement with 1stPoint Communications, LLC (the “Seller”). The purchase price for all of the Company Units is three million six hundred and forty-three thousand six hundred and forty-four (3,643,644) shares of the Company’s Common Stock from treasury stock. Seventy five percent (75%) of the shares of the Company’s Common Stock to be issued are restricted securities, as defined in Rule 144 of the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended.
On September 11, 2018 the Company entered into a stock purchase agreement with Endstream Communications, LLC (the “Seller”). The purchase price for all of the Company Units is one million nine hundred and fifty-seven thousand one hundred and sixteen (1,957,116) shares of the Company’s Common Stock from treasury stock. Seventy five percent (75%) of the shares of Buyer Common Stock to be issued are restricted securities, as defined in Rule 144 of the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended.
On September 11, 2018 the Company entered into a stock purchase agreement with Shelcomm, Inc. (the “Seller”). The purchase price for all of the Company Units is nine hundred thousand (900,000) shares of the Company’s Common Stock from treasury stock. The shares of the Company’s Common Stock to be issued are restricted securities, as defined in Rule 144 of the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended.
The value of the shares issued to the Sellers will be based upon the closing price on the date the transaction is completed. All restricted shares are as defined under Rule 144 of Securities and Exchange Commission and are restricted for a period of twelve (12) months from the date of closing.
F-13