HOMES INVENTORY FOR SALES

12 Months Ended

Jul. 31, 2024

HOMES INVENTORY FOR SALES

HOMES INVENTORY FOR SALES

NOTE 13 – HOMES INVENTORY FOR SALES

On May 19, 2023, RAC filed a complaint for breach of two promissory notes entered into with Fix Pads Holdings, LLC and for injunctive relief in the 11^th Judicial Circuit Court in Miami-Dade County Florida, as well as an emergency motion for temporary injunction enjoining Fix Pads Holdings, LLC from selling, transferring, conveying or otherwise disposing of any real property assets pledged as collateral in relation to the two promissory notes entered into between RAC and Fix Pads. In addition to the injunctive relief sought above, RAC is also seeking damages for breach of the promissory notes. After RAC filed and served the lawsuit, Fix Pads removed the lawsuit to the United States District Court for the Southern District of Florida on May 24, 2023. As such, the case will now be proceeding in the Southern District of Florida. RAC has obtained temporary injunctive relief against Fix Pads.

On July 7, 2023, RAC filed a complaint for appointment of receiver, breach of Limited Liability Company Agreement, and breach of fiduciary duty in the 11^th Judicial Circuit Court of Miami-Dade County, Florida against Fix Pads Holdings LLC, FixPads Management, LLC and RAC FixPads II, LLC. RAC seeks for a receiver to be appointed to wind up the real property assets of RAC FixPads II, LLC and for damages for breach of the joint venture agreement.

In June 2024, the parties entered into two settlement agreements, which FixPads Holdings LLC and the others transfer the title of forty-four (44) properties to the Company for selling and distribute the net proceed from the sales between the parties. According to the terms and condition of the settlement agreements, the Company shall pay the title search cost, taxes, lien expenses, $50,000 legal fees and $185,238 payable to one of the parties. 

During the year ended July 31, 2024, the Company repaid $185,238 obligation and paid $82,888 for title search cost, property taxes, liens, and fines to obtain quitclaim deed certificate of twenty-nine (29) properties and accrued $50,000 legal fees.

Pursuant to title search and settlement of taxes and due related to properties, the Company proceeded for obtaining the Quitclaim Deed Certificate of twenty-nine (29) properties. The Company intends to sell these properties. As of date of this report, twenty - six (26) Quitclaim Deed Certificates were issued, and the rest is under process.

The Company obtained the official fair value reports of properties from an independent firm based on sales comparison and secondary sales and recognized the value of twenty-nine (29) properties based on the valuation reports and physical condition of the homes. Some of the homes must be remodeled, therefore its valuation was based on land price or secondary sales and or value per Square Foot. Those valuations were not more than sales comparison price.

Here is the summary of the fair value of twenty-nine (29) properties as of July 31, 2024, and recognition of nonmonetary gain:

Total fair value of 29 properties	$	1,638,893
Title cost paid in July 2024		82,888
Title cost paid in August 2024		25,888
Total title cost paid by the Company		108,776
Nonmonetary Gain recognized		1,530,117
Less loan and accrued interest receivable in connection with settlement agreement		231,421
Nonmonetary Gain recognized, net	$	1,298,696
Balance of properties as of July 31, 2024, excluding cost paid in August 2024	$	1,613,005