COMMITMENTS

3 Months Ended

Jan. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS

4. NOTE 4 – COMMITMENTS

Lease Agreement

Our current operating lease right-of-use asset and operating lease liability represent our lease for office space used to conduct our business. As of January 31, 2021, the Company is not party to any finance leases. The lease has a remaining lease term of 7 years. The components of lease expense for the three months ended January 31, 2022 and 2021 were as follows:

	January 31,		January 31,
	2022		2021
Operating lease cost (cost resulting from lease payments)	$	29,465	$	18,133
Operating lease expense		26,418		30,821

The Company calculates its incremental borrowing rates for specific lease terms, used to discount future lease payments, as a function of the Small Business Administration (“SBA”) 7(a) loan incremental borrowing rates. The Company’s discount rate and lease term remaining on its lease liability is approximately 5.50% and 7 years, respectively. The Company had net operating cash flows from the operating lease of $741 and $9,039 related to the lease for the three months ended January 31, 2022 and 2021, respectively.

As of January 31, 2022 and 2021, the Company’s right-of-use assets are $506,400 and $592,211, respectively, which are reported in other long-term assets in the Company’s balance sheets. As of January 31, 2022 and 2021, the Company has outstanding lease obligations of $543,297 and $601,250 respectively, which are reported in long-term obligations in the Company’s balance sheets.

The Company has taken advantage of certain practical expedients offered to registrants at adoption of ASC 842. The Company does not apply the recognition requirements of ASC 842 to short-term leases and sub leases. Instead, those lease payments are recognized in profit or loss on a straight-line basis over the lease term. Further, as a practical expedient, all lease contracts are accounted for as one single lease component, as opposed to separating lease and non-lease components to allocate the consideration within a single lease contract.

Maturities of aggregate operating lease liabilities as of January 31, 2022 were as follows:

2022	$	106,000
2023		106,000
2024		106,000
2025		106,000
2026		106,000
Thereafter	$	115,000
Total minimum lease payments	$	645,000
Imputed interest	$	(118,000	)
Total	$	527,000

NEW WORLD TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2022 and 2021

(UNAUDITED)

During January 2021, the Company terminated its current lease for office space and as a result, relinquished the space and derecognized a right of use asset of $126,249, a lease liability of $133,477 and deferred rent of $7,184, resulting in a $14,412 operating lease termination gain.

The Company entered into a 7-year lease agreement with its current landlord for new, larger office space within the same business complex the Company is currently located at in Hauppauge, NY. The new space will be approximately 4,250 square feet and will now serve as the location for the Company’s new Corporate Headquarters, including office space, product demonstration space and meeting rooms used to conduct business and help advance operations. The Company will account for this lease as an operating lease under ASC 842. The original lease commenced June 2020 (subject to adjustment) and expired August 2027 (subject to adjustment). The lease requires an annual payment of approximately $93,500 for the first year, with rent payments originally commencing September 2020 (subject to adjustment) with stated rent increases per year subsequent thereto plus any increases in real estate taxes over the base year, as defined. Subsequently the Company further entered into a Commencement Date Agreement with the landlord January 2021, amending the actual lease commencement date to September 2020 with rent payments commencing December 2020. The Company is not required to pay a security deposit.

$26,418 and $30,821 in rental expense has been charged to operations for the three months ended January 31, 2022 and 2021, respectively. Rental expense is accounted for on the straight-line method.

Any excess of recognized rent expense over scheduled lease payments is included in accounts payable and accrued expenses.

Employment Agreements

In October 2018 the Company entered into an employment agreement with a key management individual. In accordance with the terms of the agreement, the Company issued equity compensation of 2,000,000 shares of common stock to this individual.

In October 2018 the Company entered into various employment agreements with key management individuals. In accordance with the respective terms of these agreements, the Company issued equity compensation 60,000 shares of common stock in the aggregate to those individuals valued at $8,400 and recorded as a liability for stock to be issued.

In October 2018 the Company entered into a Board of Director membership agreement with a key management individual. In accordance with the terms of this agreement, the Company issue equity compensation to this individual. As a result, 30,000 shares of common stock are to be issued, were valued at $4,200 and recorded as a liability for stock to be issued. During December 2018 these common shares were issued in accordance with the agreement.

Stock Purchase Agreements

During October 2018, the Company entered into a stock purchase agreement with a related party for the sale of shares of the Company’s common stock. As a result, 1,428,571 shares of common stock were issued. (See Note 7).

During January 2021, the Company entered into a stock purchase agreement with a related party for the sale of shares of the Company’s common stock. As a result, 100,000 shares of common stock are to be issued and recorded as a liability for common stock to be issued. (See Note 7).

During March 2021, the Company entered into a stock purchase agreement with a related party for the sale of shares of the Company’s common stock. As a result, 50,000 shares of common stock are to be issued and recorded as a liability for common stock to be issued. (See Note 7).

NEW WORLD TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2022 and 2021

(UNAUDITED)

Marketing Services Agreement

In April 2021, the Company entered into a marketing services agreement with a professional marketing firm to establish a global marketing strategy that includes e-marketing, awareness, branding and digital media. The Company anticipates a global exposure initiative led by this firm to be launched by the end of fiscal 2021 and will help advance the business significantly. According to the terms of the agreement, the Company will compensate the consultant with a first payment period being May 15, 2021 to May 15, 2024 at $50,000 per month with 500,000 restricted common shares. These restricted common shares to be issued were valued at $2,500,000 and recorded as a liability for common stock to be issued. A second payment period shall commence when the Company becomes publicly trading and completes an IPO capital raise, as defined, in which the Company will then compensate the consultant at $100,000 per month for the remainder of the term. The term of the agreement has an initial term of 36 months and shall automatically renew for an additional 12 months unless either party provides thirty days written notice to the other of intent to cancel or non-renew.

In November 2021, the Company entered into an addendum to this marketing services agreement. The Company anticipates a global exposure initiative led by this firm to now be launched by the end of calendar 2022. According to the terms of the addendum, the Company will compensate the consultant with a first payment period estimated to be during the first calendar quarter 2022 at $50,000 per month with 500,000 restricted common shares, which have already been recorded as a liability for common stock to be issued in conjunction with the original agreement. These restricted common shares to be issued were valued at $2,500,000 and shall now be issued on the Company’s first day of trading as a registered public company. Additionally, according to the terms of the Addendum, no fees are due or owing under the original agreement. A second payment period shall commence when the Company becomes publicly trading for three (3) consecutive months and the Company completes an IPO capital raise, as defined, in which the Company will then compensate the consultant at $100,000 per month for the remainder of the term. The term of the agreement has an initial term of 36 months which shall commence following the Company completing an IPO capital raise, as defined, and the Company becoming a registered publicly trading company and shall automatically renew for an additional 12 months unless either party provides thirty days written notice to the other of intent to cancel or non-renew.

Business Advisory Agreement

In May 2021, the Company entered into a business advisory services agreement to assist the Company with establishing a global strategy within current international business, healthcare and finance standards of industry and practice. According to the terms of the agreement, the Company will compensate the consultant $5,000 per month for the first 12 months and 25,000 restricted common shares. These restricted common shares to be issued were valued at $125,000 and recorded as a liability for common stock to be issued. Additionally, the Company can invite the consultant to manage and further participate in additional projects at the following compensation structure; a 2% cash management fee on any financial projects consultant participates in and a 1% common stock management fee on any healthcare projects the consultant participates in. Such projects shall be by invitation only from the Company to the consultant with acceptance by the consultant at its own sole discretion. The term of the agreement is 12 months with termination by either party with 30 days written notice to the other of intent to cancel.

Marketing Services Agreement

In November 2021, the Company entered into a marketing services agreement with a professional marketing firm to establish a marketing strategy for e-marketing, awareness, social media platforms, branding, digital media and on-line presence. The Company anticipates these services to be an integral part of its global exposure initiative expected to be launched by the end of calendar 2022. According to the terms of the agreement, the Company will compensate the consultant $5,000 per month for the first 12 months. Additionally, the Company can invite the consultant to manage and further participate in additional projects. Such projects shall be by invitation only from the Company to the consultant with acceptance by the consultant at its own sole discretion. The term of the agreement is 12 months with termination by either party with 30 days written notice to the other of intent to cancel.

NEW WORLD TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2022 and 2021

(UNAUDITED)