HOMES INVENTORY FOR SALES

9 Months Ended

Apr. 30, 2025

HOMES INVENTORY FOR SALES

HOMES INVENTORY FOR SALES

NOTE 4 – HOMES INVENTORY FOR SALES

On October 4, 2022, the Company, through RAC Real Estate Acquisition Corp.(“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 $ 947,500 and $1,732,000, respectively.

In June 2024, the Company entered into two settlement agreements, which LLC and the other parties to 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, and $185,238 payable to one of the parties. 

During the year ended July 31, 2024, the Company repaid $185,238 obligation and 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.

During the year ended July 31, 2024, the Company obtained Quitclaim Deed Certificate and 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.

On October 18,2024, the Company acquired one home located at 1320 ½ 5^th Avenue , Laurel MS 39440 for amount of $8,021and paid restoration and repairs expenses of $10,943 for selling.

On November 26, 2024, The Company entered into an interest purchase agreement with Frank Campanaro in connection with settlement agreement dated June 2024 for 50% ownership of a property located at 1320 N 5^th Avenue, Laurel, MS in amount of $41,565 in cash. Pursuant to acquisition agreement, the Company’s ownership of property was increased to 100%. No allowance for obsolescence or impairment from lower of cost and net realizable value has been made as of and for the period ended April 30, 2025. On April 1, 2025, the Company reallocated the home from inventory for sale to fixed assets and the home was leased for monthly $2,150 starting April 1, 2025.

As of April 30, 2025, and July 31, 2024, homes inventory for sales consist of as follows:

Nonmonetary gain recognized of 29 properties	$	1,530,117
Title cost paid in July 2024		82,888
Balance of 29 properties as of July 31,2024		1,613,005
Cost of restoration and repairs		363,014
Purchased 50% interest and right of one property		41,565
Purchased one home for sales		18,976
Allocation one home to property for lease		(102,765	)
Balance of 29 properties as of April 30,2025	$	1,933,795