Capital Leases

12 Months Ended

Jul. 31, 2018

Debt Disclosure [Abstract]

CAPITAL LEASES

NOTE 12 - CAPITAL LEASES

The Company entered into two leases for equipment all of which are classified as capital leases. The Company financed the equipment with a leasing entity. Under the terms of these transactions, assets with a cost of approximately $37,255 and $60,408, leases were financed under two separate lease agreements as of the May 2018 and June 2018, respectively. The leases are net leases as all of the costs associated with the assets such as maintenance, insurance and property taxes are for the account of the Company. Under each of these transactions, the Company can elect to purchase the assets from the lessor at the end of a fixed term. These terms are for 36 months, with the first lease payments starting June 20, 2018 and July 20, 2018, respectively and monthly lease principal and interest payments of $1,176 and $1,856, respectively. The Company will own the equipment at the end of the term. The interest rate under the leases range from 6.65% to 8.50% per annum. The Company has accounted for its repayment obligations under these transactions as capital lease obligations. The assets are included in Leased Equipment and Net investment in finance leases and the capital lease obligation is included in Long-term capital lease obligations and current maturities of capital leases on the accompanying Balance Sheet as of July 31, 2018.

During the year ended July 31, 2018, the Company made total principal payments of $3,032. The future capital lease payments under the financing agreements are as follows:

Year	Amount
2019	$	36,381
2020		36,381
2021		32,152
Total future payments:	$	104,914
Less: amounts representing interest	$	10,622
Present value of net minimum lease payments	$	94,292
Less current maturities	$	30,465
Long-term capital lease obligation	$	63,827