Related Party Transactions

9 Months Ended

Apr. 30, 2023

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 7 – RELATED PARTY TRANSACTIONS

On December 29, 2022, the Company entered into a $100,000 promissory note, with the Company’s president, Derek Gietzen, with a maturity date of January 12, 2023, and annual interest rate of 12%. On January 17, 2023, the Company paid the total principal outstanding of $100,000, plus accrued interest.

On October 4, 2022, the Company entered into a $150,000 promissory note, with the Company’s president, Derek Gietzen, with a maturity date of October 15, 2022, and annual interest rate of 11%. On October 17, 2022, the Company paid the total principal outstanding of $150,000, plus accrued interest.

During the nine months ended April 30, 2023 and 2022, the Company provided VoIP Hosted and fiber services to a Company owned by one of the Board members of Verve Cloud (the Nevada entity) for $118,619 and $144,687, respectively.

On November 17, 2020, as a result of the of the acquisition of the assets of ActiveServe, Inc. (“ActiveServe”), the two sellers became related parties as they continued to be involved as consultants to manage the customer relationship, the Company paid on an annual basis $90,000 to each of the consultants. These agreements expired, and the parties agreed not to extend. As of April 30, 2023, there’s no balance outstanding under the consulting agreements. In addition, part of the Purchase Price is payable in 8 equal quarterly payments to the sellers. During the nine months ended April 30, 2023, the Company paid $217,593 of the principal balance outstanding. It was determined during the quarter ended April 30, 2023, that the required revenue targets were not met. As a result, the Company recognized a gain on settlement of debt of $54,907 which was the remaining accrued amount outstanding. The total principal outstanding on the notes as of April 30, 2023 and July 31, 2022 was $0 and $272,500, respectively.

On December 31, 2021, as a result of the of the acquisition of Skynet’s assets, the two sellers became related parties as they continued to be involved as consultants for 12 months to manage the customer relationship. The Company will pay $100,000 to each of the consultants on an annual basis. As of April 30, 2023, there were no outstanding balances owed to the consultants. Part of the Purchase Price of $600,000 (the “Earn-out Amount”) was retained by the Company and will be paid to sellers in six equal quarterly payments. An additional $100,000 (the “Holdback Amount”) was retained by the Company and will be paid to sellers in accordance with the Skynet asset purchase agreement. During the nine months ended April 30, 2023, the Company paid $100,000 of the principal balance outstanding. The Company amortized $29,764 and $0 of debt discount as interest expense during the nine months ended April 30, 2023 and April 30, 2022, respectively. The total debt discount outstanding as of April 30, 2023 and July 31, 2022, was $9,921 and $39,686, respectively. The total balance outstanding on the Earn-out Amounts as of April 30, 2023 and July 31, 2022, was $500,000 and $600,000, respectively.

Acquisition Payable – Skynet

As part of the acquisition of Skynet’s assets, the Company will pay to the seller a $1,000,000 (the “Share Payment”) by issuance of restricted shares of the Company’s common stock to the owners. On September 1, 2022, the Company and the sellers amended the Asset Purchase Agreement. In accordance with the amended agreement, the Share Payment will be made via the issuance of shares on the earlier of (i) the effective date of that certain Registration Statement on Form S-1 filed by the Company with the Securities and Exchange Commission on August 11, 2021 (in which case the stock will be valued at the price set forth in the prospectus that is a part of such Registration Statement, without underwriter discounts) and (ii) April 30, 2023 (in which case the stock will be valued at the average of the last transaction price on the OTCQB for each of the 10 trading days immediately preceding such issuance date). On December 5, 2022 and March 9, 2023, the Asset Purchase Agreement was amended. The payments due will be extended until the closing of the merger with Minority Equality Opportunities Acquisition (“MEOA”) which is expected to close during the second quarter of calendar year 2023.   The total principal balance outstanding on the acquisitions payable as of April 30, 2023 and July 31, 2022, was $1,000,000.