My City Builders Inc

Previous wording

On October 4, 2022, the Company, through RAC, entered into a Limited Liability Agreement with Fixed Pads Holdings, (“FPH”). As a result of the agreement, RAC and FPH formed a limited liability company called RAC FIXPADS II, LLC (the “LLC”), incorporated in the state of Delaware. The purpose of which is to purchase, finance, collateralize, improve, rehabilitate, market, sell or lease property, as well as carry on any lawful business, purpose or activity. The LLC has two members RAC and FPH, both providing an initial contribution to the LLC of $1,000 in exchange for a 50% membership interest represented by an issuance of 1,000 Units of the LLC to each party. Each member is entitled to 1 vote per member. The LLC is managed by a manager, Fix Pads Management LLC.

Current wording

On October 4, 2022, the Company, through RAC, entered into a Limited Liability Company Agreement with Fix Pads Holdings, LLC ("Fix Pads"). As a result of the agreement, RAC and Fix Pads formed a limited liability company called RAC FIXPADS II, LLC (“LLC”), incorporated in the state of Delaware. The LLC has two members, RAC and Fix Pads, both providing an initial contribution to the LLC of $1,000 in exchange for a 50% membership interest represented by an issuance of 1,000 Units of the LLC to each party. Each member is entitled to one vote per member. The LLC is managed by a manager, Fix Pads. The agreement provides that additional capital contributions of the members will be made to the LLC as follows: (i) Fix Pads will transfer and assign all rights to and incidents of ownership for up to 60 residential properties it has title, or will have title, to the LLC, as set forth in the agreement; and (ii) RAC will make additional cash contributions to the capital of the LLC, up to a maximum of $5,214,000, on such dates and in such amounts as requested by the LLC, in the manner set forth in the agreement. From the sale of each property by the LLC, the Company shall receive $13,000 and the average additional cash capital contribution per property. During the years ended July 31, 2024, and 2023, the Company invested $0 and $2,679,500 and recognized impairment loss of $ 947,500and $1,732,000, respectively.

Previous wording

On July 22, 2022, the Company received a promissory note, in the principal amount of $672,960 from, and entered into a Loan Agreement dated July 18, 2022, with Fix Pads Holdings, LLC a South Carolina limited liability company. The note has a 12% interest rate per annum payable as follows: (1) a pre-payment on July 22, 2022 of pro-rated interest for the period from July 22, 2022 through July 30, 2022 in the amount of $2,212.47; (2) a pre-payment of interest on August 1, 2022 for the period from August 1, 2022 through September 30, 2022 in the amount of $13,496.07; and then (3) monthly payments of interest only beginning on October 1, 2022 and continuing on the 1 st day of each month thereafter until all principal and accrued interest are paid in full by July 1, 2023. The note is secured by mortgages or deeds of trust on 7 properties. Consideration for the note was paid in part by the Company in the amount of $328,625.72 and in part by an investor, Mr. Campanaro, in the amount of $328,625.73 (together both amounts equal $657,251.45 which represent the total note amount of $672,960 minus the two prepayments described above). On July 26, 2022, The Company entered into a partial assignment of the promissory note dated July 25, 2022, with Mr. Campanaro whereby the Company assigned to Mr. Campanaro the right to payment of principal in the amount of $336,480 and the right to half of the amount of any interest payments made on the principal amount of the note.

Current wording

On July 22, 2022, the Company received a promissory note, in the principal amount of $672,960 from, and entered into a Loan Agreement dated July 18, 2022, with, Fix Pads Holdings, LLC. The note had a 12% interest rate per annum payable of $672,960. Consideration for the note was paid in part by the Company in the amount of $328,626, net of prepayment interest and in part by a third-party investor in the amount of $328,626. On August 18, 2022, the Company issued a promissory note of $358,620. The note had a 12% interest rate per annum payable of $358,620 and was due on August 1, 2023. Consideration for the note was paid in part by the Company in the amount of $175,007, net of prepayment interest and in part by a third-party investor in the amount of $175,007.

Previous wording

On April 25th, 2024, RAC finalized the purchase of two lots in Gadsden, Alabama. This decision stemmed from the ongoing construction of three homes by RAC on the same street, slated for completion and rental availability by July 31st, 2024. With the aim of bolstering rental demand, RAC intends to commence construction on these newly acquired lots in July 2024, ultimately expanding its property portfolio to five homes on the same street upon their completion.

Current wording

On April 25, 2024, RAC finalized the purchase of two additional lots in Gadsden, Alabama bringing the total properties owned in East Gadsden to twenty-two. This decision stemmed from the ongoing construction of three homes by RAC on the same street, slated for completion. With the aim of bolstering rental demand, RAC has started construction on these newly acquired lots. The homes are 3-bedroom 2-bathroom single family homes with under roof of 1270 square feet. The plan for Gadsden Alabama is to build new low-income single-family homes for rent.

Previous wording

On January 17,2024, the Company’s Board of Directors approved the settlement of $2,850,000 due to one related party in exchange for an issuance of 11,400,000 shares of common stock. The Company valued the issuance of 11,400,000 shares of common stock at market price of $0.20 per share on settlement date and recognized gain of $570,000. The gain on settlement of debts to related party was added in additional paid in capital.

Current wording

On January 17, 2024, the Company’s Board of Directors approved the settlement of $2,850,000 due to one related party in exchange for an issuance of 11,400,000 shares of common stock. The Company valued the issuance of 11,400,000 shares of common stock at market price of $0.20 per share on settlement date and recognized gain of $570,000. The gain on settlement of debts to related party was added in additional paid in capital.

Previous wording

The following summary of our results of operations should be read in conjunction with our unaudited consolidated financial statements for the nine months ended April 30, 2024, and 2023, which are included herein.

Current wording

The following summary of our results of operations should be read in conjunction with our unaudited consolidated financial statements for the three months ended October 31, 2024, and 2023, which are included herein.

Previous wording

Our operating results for the nine months ended April 30, 2024, and 2023, and the changes between those periods for the respective items are summarized as follows:

Current wording

Our operating results for the three months ended October 31, 2024, and 2023, and the changes between those periods for the respective items are summarized as follows:

Previous wording

Three Months Ended April 30, 2024, compared to the Three Months ended April 30,2023

Current wording

Three Months Ended October 31, 2024, compared to the Three Months ended October 31,2023

Previous wording

For the three months ended April 30, 2024, and 2023, we generated revenue from interest income of $0 and $12,249 and revenue from rent income of $15,877 and $0, respectively.

Current wording

For the three months ended October 31, 2024, and 2023, we generated revenue from rent income of $25,528 and $6,169, respectively.

Previous wording

We had a net loss of $81,368 for the three months ended April 30, 2024, and $57,866 for the three months ended April 30, 2023. The increase in net loss of $23,502 was due to an increase in professional fees of $28,778, general and administration expenses of $17,407, depreciation expenses of $8,620, cost of rental homes of $1,495, offset by a decrease in interest expenses of $29,170 and an increase in revenue of $3,628.

Current wording

We had a net loss of $74,485 for the three months ended October 31, 2024, and $78,577 for the three months ended October 31, 2023. The decrease in net loss of $4,092 was due to an increase in operating expenses of $4,604 and other expenses of $10,663 offset by an increase in revenue of $19,359.

Previous wording

Operating expenses for the three months ended April 30, 2024, and 2023 were $80,735 and $24,435, respectively. For the three months ended April 30, 2024, and 2023, the operating expenses were primarily attributed to professional fees of $47,996 and $19,218, general and administrative expenses of $22,624 and $5,217, depreciation expenses of $8,620 and $0 and cost of rental homes of $1,495 and $0 respectively. The cost of rental homes was for rented homes such as lawncare, maintenance and repairs, management fees, utilities, insurance and property taxes.

Current wording

Operating expenses for the three months ended October 31, 2024, and 2023 were $80,092 and $75,488, respectively. For the three months ended October 31, 2024, and 2023, the operating expenses were primarily attributed to professional fees of $51,247 and $57,536, general and administrative expenses of $7,301 and $9,805, depreciation expenses of $14,951 and $5,928 and cost of rental homes of $6,593 and $2,219 respectively. The cost of rental homes was for rented homes such as lawncare, maintenance and repairs, management fees, utilities, insurance and property taxes.

Previous wording

Other expenses for the three months ended April 30, 2024, and 2023, represent interest expenses -related party of $10,989 and $45,680 for granted loans and interest expenses of $5,521 and $0 for loans payable to third party, respectively.

Current wording

Other expenses for the three months ended October 31, 2024, and 2023, represent interest expenses -related party of $0 and $9,258 for granted loans and interest expenses of $19,921 and $0 for banks borrowings and loan payable to third party, respectively.

Previous wording

As of April 30, 2024, our current assets were $253,070 and our current liabilities were $1,097,258 which resulted in working capital deficiency of $844,188. As of April 30, 2024, current assets were comprised of $21,548 in cash, $101 in accounts receivable, $228,570 in loan receivable and $2,851 in accrued interest income, compared to $151,718 in cash, $34,858 in prepaid expenses, $228,750 in loan receivable and $3,116 in accrued interest income as of July 31,2023.

Current wording

As of October 31, 2024, our current assets were $1,699,636 and our current liabilities were $1,848,679 which resulted in working capital deficiency of $149,043. As of October 31, 2024, current assets were comprised of $15,169 in cash, $188 in accounts receivable, $1,684,279 in homes inventory for sales, compared to $20,245 in cash, $2,607 in accounts receivable, $1,613,005 in homes inventory for sales.

Previous wording

As of April 30, 2024, current liabilities were comprised of $218,175 in accounts payable and accrued liabilities, $680,000 in due to related parties and $199,083 loans payable-current portion, compared to $237,888 in accounts payable and accrued liabilities and $3,726,222 in due to related parties as of July 31, 2023.

Current wording

As of October 31, 2024, current liabilities were comprised of $47,607 in accounts payable and accrued liabilities, $1,345,000 in due to related parties, $25,000 loan payable-current portion and $431,072 in bank borrowings, compared to $79,563 in accounts payable and accrued liabilities, $1,106,000 in due to related parties, $25,000 loan payable-current portion, $28,500 in loans payable -related party and $332,589 in bank borrowings as of July 31, 2024.

Previous wording

We have not generated positive cash flows from operating activities. For the nine months ended April 30, 2024, net cash flows used in operating activities was $172,366, consisting of a net loss of $1,174,411, reduced by impairment loss on investment of $947,500, depreciation expenses of $20,889, amortization of debt discount of $1,458, prepaid expenses of $34,858, accrued interest income of $265, accrued interest -related party of $4,453, due to related party of $16,889,and increased by accounts payable and accrued liabilities of $24,166, accounts receivable of $101. For the nine months ended April 30, 2023, net cash flows used in operating activities was $105,618, consisting of a net loss of $131,069, reduced by due to related parties of $38,710 and increased by accounts payable and accrued liabilities of $2,348, deferred interest income of $6,748, accrued interest income of $4,163.

Current wording

We have not generated positive cash flows from operating activities. For the three months ended October 31, 2024, net cash flows used in operating activities was $159,601, consisting of a net loss of $74,485, reduced by depreciation expenses of $14,951, amortization of debt discount of $744, accounts receivable of $2,419, and increased by accounts payable and accrued liabilities of $31,956 and homes inventory cost for sales of $71,274.

Previous wording

During the nine months ended April 30, 2024, the Company used $657,754 for payments of construction.

Current wording

During the three months ended October 31, 2024, and 2023, the Company used $153,435 and $94,960 for payments of construction expenses.

Previous wording

During the nine months ended April 30, 2023, the Company received advance from related parties of $4,039,300 and repaid $876,800 to related parties.

Current wording

During the three months ended October 31, 2023, the Company received advance from related parties of $90,000, bank borrowings of $215,110, and repaid $103,400 to related parties.

Previous wording

Our consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. During the nine months ended April 30, 2024, we incurred net loss of $1,174,411 and net cash used in operating activities of $172,366. As of April 30, 2024, we had an accumulated deficit of $3,220,171 and working capital deficit of $844,188. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management plans to raise necessary funding through equity and debt financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements. The ability of the Company to continue operations in its new business model is dependent upon, among other things, obtaining financing to continue operations and continue developing the business plan. The Company cannot give any assurance as to the ability to develop or operate profitably. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Current wording

Our consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. During the three months ended October 31, 2024, we incurred net loss of $74,485 and net cash used in operating activities of $159,601. As of October 31, 2024, we had an accumulated deficit of $2,094,394 and working capital deficit of $149,043. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management plans to raise necessary funding through equity and debt financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements. The ability of the Company to continue operations in its new business model is dependent upon, among other things, obtaining financing to continue operations and continue developing the business plan. The Company cannot give any assurance as to the ability to develop or operate profitably. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Previous wording

As pf April 30, 2024 and July 31,2023 and for nine months ended April 30, 2024, and 2023, customer concentrations (more than 10%) were as follows:

Current wording

As of October 31, 2024, and July 31, 2024, and for three months ended October 31, 2024, and 2023, customer concentrations (more than 10%) were as follows: