Cover
Cover - shares | 3 Months Ended | |
Aug. 31, 2021 | Oct. 18, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Aug. 31, 2021 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --05-31 | |
Entity File Number | 000-50612 | |
Entity Registrant Name | UNIQUE LOGISTICS INTERNATIONAL, INC. | |
Entity Central Index Key | 0001281845 | |
Entity Tax Identification Number | 01-0721929 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 154-09 146th Ave | |
Entity Address, City or Town | Jamaica | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11434 | |
City Area Code | 678 | |
Local Phone Number | 365-6004 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 632,781,078 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Aug. 31, 2021 | May 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 296,407 | $ 252,615 |
Accounts receivable – trade, net | 70,183,018 | 20,369,747 |
Contract assets | 48,464,151 | 23,423,314 |
Factoring reserve | 7,593,665 | |
Other prepaid expenses and current assets | 632,210 | 761,458 |
Total current assets | 119,575,786 | 52,400,799 |
Property and equipment – net | 199,280 | 192,092 |
Other long-term assets: | ||
Goodwill | 4,463,129 | 4,463,129 |
Intangible assets – net | 7,868,065 | 8,044,853 |
Operating lease right-of-use assets – net | 3,435,326 | 3,797,527 |
Deposits and other assets | 475,362 | 555,362 |
Other long-term assets | 16,241,882 | 16,860,871 |
Total assets | 136,016,948 | 69,453,762 |
Current Liabilities: | ||
Accounts payable – trade | 45,030,631 | 38,992,846 |
Accrued expenses and other current liabilities | 6,738,937 | 2,383,915 |
Accrued freight | 25,136,944 | 10,403,430 |
Revolving credit facility | 39,543,083 | |
Current portion of notes payable – net of discount | 2,963,874 | 2,285,367 |
Current portion of long-term debt due to related parties | 392,975 | 397,975 |
Current portion of operating lease liability | 1,481,602 | 1,466,409 |
Total current liabilities | 121,288,046 | 55,929,942 |
Other long-term liabilities | 494,670 | 565,338 |
Long-term-debt due to related parties, net of current portion | 688,168 | 715,948 |
Notes payable, net of current portion – net of discount | 2,689,885 | 3,193,306 |
Operating lease liability, net of current portion | 2,064,121 | 2,431,144 |
Total long-term liabilities | 5,936,844 | 6,905,736 |
Total liabilities | 127,224,890 | 62,835,678 |
Commitments and contingencies (Note 9) | ||
Stockholders’ Equity: | ||
Common stock, $0.001 par value; 800,000,000 shares authorized; 603,246,759 and 393,742,663 shares issued and outstanding as of August 31, 2021 and May 31, 2021, respectively | 603,247 | 393,743 |
Additional paid-in capital | 4,847,457 | 4,906,384 |
Retained earnings | 3,340,403 | 1,316,987 |
Total Stockholders’ Equity | 8,792,058 | 6,618,084 |
Total Liabilities and Stockholders’ Equity | 136,016,948 | 69,453,762 |
Series A Convertible Preferred Stock [Member] | ||
Stockholders’ Equity: | ||
Preferred Stock, Value | 130 | 130 |
Series B Convertible Preferred Stock [Member] | ||
Stockholders’ Equity: | ||
Preferred Stock, Value | $ 821 | $ 840 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Aug. 31, 2021 | May 31, 2021 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 800,000,000 | 800,000,000 |
Common stock, shares issued | 603,246,759 | 393,742,663 |
Common stock, shares outstanding | 603,246,759 | 393,742,663 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 130,000 | 130,000 |
Preferred stock, shares outstanding | 130,000 | 130,000 |
Series B Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 820,800 | 840,000 |
Preferred stock, shares outstanding | 820,800 | 840,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Revenues: | ||
Total revenues | $ 189,771,860 | $ 57,415,267 |
Costs and operating expenses: | ||
Airfreight services | 51,625,775 | 16,736,941 |
Ocean freight and ocean services | 116,587,742 | 27,866,233 |
Contract logistics | 390,400 | 264,068 |
Customs brokerage and other services | 12,925,092 | 8,144,882 |
Salaries and related costs | 2,751,380 | 2,100,889 |
Professional fees | 293,867 | 418,616 |
Rent and occupancy | 480,209 | 485,544 |
Selling and promotion | 1,033,128 | 1,062,553 |
Depreciation and amortization | 193,799 | 190,819 |
Fees on factoring agreements | 27,000 | 474,060 |
Other | 268,120 | 222,700 |
Total costs and operating expenses | 186,576,512 | 57,967,305 |
Income (loss) from operations | 3,195,348 | (552,038) |
Other income (expenses) | ||
Interest expense, net | (1,290,279) | (32,439) |
Amortization of debt discount | (385,480) | |
Gain on extinguishment of convertible notes payable | 780,050 | |
Gain on forgiveness of promissory note | 358,236 | |
Total other expenses | (537,473) | (32,439) |
Net income (loss) before income taxes | 2,657,875 | (584,477) |
Income tax expense | 634,459 | 16,694 |
Net income (loss) | $ 2,023,416 | $ (601,171) |
Net income (loss) per common share | ||
– basic | $ 0 | $ (0.06) |
– diluted | $ 0 | $ (0.06) |
Weighted average common shares outstanding | ||
– basic | 1,611,146,398 | 10,000,000 |
– diluted | 10,106,876,513 | 10,000,000 |
Airfreight Services [Member] | ||
Revenues: | ||
Total revenues | $ 52,162,641 | $ 17,498,884 |
Ocean Freight and Ocean Services [Member] | ||
Revenues: | ||
Total revenues | 123,300,758 | 30,652,866 |
Contract Logistics [Member] | ||
Revenues: | ||
Total revenues | 722,664 | 688,710 |
Customs Brokerage And Other Services [Member] | ||
Revenues: | ||
Total revenues | $ 13,585,797 | $ 8,574,807 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Equity (unaudited) - USD ($) | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at May. 31, 2020 | $ 130 | $ 870 | $ 1,523,811 | $ (408,510) | $ 1,116,301 | |
Beginning balance, shares at May. 31, 2020 | 130,000 | 870,000 | ||||
Net income (loss) | (601,171) | (601,171) | ||||
Ending balance, value at Aug. 31, 2020 | $ 130 | $ 870 | 1,523,811 | (1,009,681) | 515,130 | |
Ending balance, shares at Aug. 31, 2020 | 130,000 | 870,000 | ||||
Beginning balance, value at May. 31, 2021 | $ 130 | $ 840 | $ 393,743 | 4,906,384 | 1,316,987 | 6,618,084 |
Beginning balance, shares at May. 31, 2021 | 130,000 | 840,000 | 393,742,663 | |||
Conversion of Preferred B to Common Stock | $ (19) | $ 125,692 | (125,673) | |||
Conversion of Preferred B to Common Stock, shares | (19,200) | 125,692,224 | ||||
Issuance of Common Stock for the conversion of notes and accrued interest | $ 83,812 | 66,746 | 150,558 | |||
Issuance of Common Stock for the conversion of notes and accrued interest, shares | 83,811,872 | |||||
Net income (loss) | 2,023,416 | 2,023,416 | ||||
Ending balance, value at Aug. 31, 2021 | $ 130 | $ 821 | $ 603,247 | $ 4,847,457 | $ 3,340,403 | $ 8,792,058 |
Ending balance, shares at Aug. 31, 2021 | 130,000 | 820,800 | 603,246,759 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | May 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ 2,023,416 | $ (601,171) | |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
Depreciation and amortization | 193,799 | 186,707 | |
Amortization of debt discount | 385,480 | ||
Amortization of right of use assets | 362,201 | 346,702 | |
Gain on forgiveness of note payable | (358,236) | ||
Gain on extinguishment of convertible notes payable | (780,050) | ||
Change in deferred tax asset | (80,000) | ||
Accretion of consulting agreement | (70,668) | (70,668) | |
Changes in operating assets and liabilities: | |||
Accounts receivable - trade | (49,813,271) | (5,444,080) | |
Contract assets | (25,040,837) | (6,676,380) | |
Factoring reserve | 7,593,665 | (2,159,517) | |
Other prepaid expenses and current assets | 129,248 | (2,519) | |
Deposits and other assets | 160,000 | 1,042 | |
Accounts payable - trade | 6,037,785 | 7,448,777 | |
Accrued expenses and other current liabilities | 4,475,138 | (2,468,748) | |
Accrued freight | 14,733,514 | 8,813,685 | |
Operating lease liability | (351,830) | (319,669) | |
Net Cash Used in Operating Activities | (40,400,646) | (945,839) | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of property and equipment | (24,199) | ||
Net Cash Used in Investing Activities | (24,199) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from notes payable | 1,000,000 | 87,500 | |
Repayments of notes payable | (41,666) | ||
Repayments of long-term debt due to related parties | (32,780) | (7,500) | |
Borrowings on revolving credit facility, net | 39,543,083 | ||
Net Cash Provided by Financing Activities | 40,468,637 | 80,000 | |
Net change in cash and cash equivalents | 43,792 | (865,839) | |
Cash and cash equivalents - Beginning of Period | 252,615 | 1,349,363 | $ 1,349,363 |
Cash and cash equivalents - End of Period | 296,407 | 483,524 | $ 252,615 |
Cash Paid During the Period for: | |||
Income taxes | |||
Interest | 601,377 | ||
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||
Conversion of Series B Preferred to Common Stock | 125,692 | ||
Issuance of common stock for the conversion of principal and accrued interest | $ 150,558 |
NATURE OF BUSINESS AND SUMMARY
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Aug. 31, 2021 | |
Accounting Policies [Abstract] | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business Unique Logistics International, Inc. (the “Company” or “Unique”) is a global logistics and freight forwarding company. The Company currently operates via its wholly owned subsidiaries, Unique Logistics International (NYC), LLC, a Delaware limited liability company (“UL NYC”), and Unique Logistics International (BOS) Inc, a Massachusetts corporation (“UL BOS”) and (collectively the “UL US Entities”). The Company provides a range of international logistics services that enable its customers to outsource sections of their supply chain process. This range of services can be categorized as follows: ● Air Freight services ● Ocean Freight services ● Customs Brokerage and Compliance services ● Warehousing and Distribution services ● Order Management Liquidity The accompanying condensed consolidated financial statements have been prepared on a going concern basis. Substantial doubt about an entity’s ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. From the inception the Company experienced negative working capital and adverse cash flows from operations, primarily due to significant business growth during the first twelve months in operations, entering new markets and products and repayment of an acquisition related debt. As of August 31, 2021, the Company had negative working capital of approximately $ 1.7 million compared with $ 3.5 million negative working capital as of May 31, 2021. These factors raise the risk of there being substantial doubt about the Company’s ability to continue as a going concern. In response to such factors, the Company’s plans to alleviate the risk of substantial doubt are ● Repaid significant portion of its acquisition related debt during the year ended May 31, 2021 ● Entered into a Second Amendment to the TBK Agreement to increase the credit facility from $ 40.0 million to $ 47.5 million for the period through January 31, 2022 ● Entered into a Purchase Money Financing Agreement on September 8, 2021, with Corefund Capital, LLC to enable the Company to finance additional cargo charter flights for the peak shipping season. ● Entered into an Exchange Agreement on August 4, 2021 to exchange all of its Convertible debt into shares of common stocks upon Financing Event (Note 5). In January 2020, the World Health Organization has declared the outbreak of a novel coronavirus (COVID-19) as a “Public Health Emergency of International Concern,” which continues to have an impact throughout the world and has adversely impacted global commercial activity and contributed to significant declines and volatility in financial markets. The coronavirus outbreak and government responses are creating disruption in global supply chains and adversely impacting many industries. The outbreak could have a continued material adverse impact on economic and market conditions and trigger a period of global economic slowdown. The extent of the impact of COVID-19 on our operational and financial performance will depend on the effect on our shippers and carriers, all of which are uncertain and cannot be predicted. The rapid development and fluidity of this situation precludes any prediction as to the ultimate material adverse impact of the coronavirus outbreak. Nevertheless, the outbreak presents uncertainty and risk with respect to the Company, its performance, and its financial results. The Company has experienced increased air and ocean freight rates due to overall cargo restraints imposed by shippers and carriers and is in a position to pass these cost increases directly to the customers without significantly effecting its margins. Due to impacts from the COVID-19 pandemic and the uncertain pace of recovery, seasonal variations in the availability of air and ocean carriers, the volatility of fuel prices and other supply and demand related factors, operating results for the three and six months ended August 31, 2021, are not necessarily indicative of operating results for the entire year. While we continue to execute our strategic plan, the Company is also in a process of evaluating several other liquidity-oriented options such as raising additional capital, increasing credit limits of the revolving credit facilities, reducing cost of debt, controlling expenditures, and improving its cash collection processes. While many of the aspects of the Company’s plan involve management’s judgments and estimates that include factors that could be beyond our control and actual results could differ from our estimates. These and other factors could cause the strategic plan to be unsuccessful which could have a material adverse effect on our operating results, financial condition, and liquidity. As of August 31, 2021, we expect to alleviate our going concern needs for at least the next twelve months from the time these financial statements are made available with existing cash and cash equivalents and cash flows from operations. We expect to meet our long-term liquidity needs with cash flows from operations and financing arrangements. Basis of Presentation The condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The unaudited interim financial information furnished herein reflects all adjustments, consisting solely of normal recurring items, which in the opinion of management are necessary to fairly state the financial position of the Company and the results of its operations for the periods presented. This report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended May 31, 2021. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The condensed consolidated balance sheet at May 31, 2021 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Significant estimates inherent in the preparation of the consolidated financial statements include determinations of the useful lives and expected future cash flows of long-lived assets, including intangibles, valuation of assets and liabilities acquired in business combinations, estimates of valuation assumptions for long-lived assets impairment, estimates and assumptions in valuation of debt and equity instruments and the calculation of share-based compensation. In addition, the Company makes significant judgments to recognize revenue – see policy note “ Revenue Recognition Fair Value Measurement The Company follows the authoritative guidance that establishes a formal framework for measuring fair values of assets and liabilities in the consolidated financial statements that are already required by generally accepted accounting principles to be measured at fair value. The guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The transaction is based on a hypothetical transaction in the principal or most advantageous market considered from the perspective of the market participant that holds the asset or owes the liability. The Company utilizes market data or assumptions that market participants who are independent, knowledgeable and willing and able to transact would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborate or generally unobservable. The Company attempts to utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The Company is able to classify fair value balances based on the observability of those inputs. The guidance establishes a formal fair value hierarchy based on the inputs used to measure fair value. The hierarchy gives the highest priority to level 1 measurements and the lowest priority to level 3 measurements, and accordingly, level 1 measurement should be used whenever possible. The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities or published net asset value for alternative investments with characteristics similar to a mutual fund. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 – Unobservable inputs for the asset or liability. The methods used may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while management believes its valuation methods are appropriate, the fair value of certain financial instruments could result in a difference fair value measurement at the reporting date. There were no changes in the Company’s valuation methodologies from the prior year. For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amounts for financial assets and liabilities such as cash and cash equivalents, accounts receivable - trade, contract assets, factoring reserve, other prepaid expenses and current assets, accounts payable – trade and other current liabilities, including contract liabilities, current portion of long-term debt due to related party payables, convertible notes, net and current portion of promissory loans approximate fair value due to their short-term nature as of August 31, 2021 and May 31, 2021. The carrying amount of the debt approximates fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to the Company. Lease liabilities approximate fair value based on the incremental borrowing rate used to discount future cash flows. The Company had no Level 3 assets or liabilities as of August 31, 2021, and May 31, 2021. There were no transfers between levels during the reporting period. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits. No loss had been experienced, and management believes it is not exposed to any significant risk on credit. Accounts Receivable – Trade Accounts receivable - trade from revenue transactions are based on invoiced prices which the Company expects to collect. In the normal course of business, the Company extends credit to customers that satisfy pre-defined credit criteria. The Company generally does not require collateral to support customer receivables. Accounts receivable - trade, as shown on the consolidated balance sheets, is net of allowances when applicable. An allowance for doubtful accounts is determined through analysis of the aging of accounts receivable at the date of the consolidated financial statements, assessments of collectability based on an evaluation of historic and anticipated trends, the financial condition of the Company’s customers, and an evaluation of the impact of economic conditions. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, net of allowance for doubtful accounts. As of August 31, 2021 and May 31, 2021, the Company recorded an allowance for doubtful accounts of approximately $ 160,000 240,000 Concentrations Three major customers represented approximately 42% SCHEDULE OF CONCENTRATION OF RISK Customer For the Three Months Ended For the Three Months Ended A 15 % 23 % B 9 % 21 % C 8 % - Total: 32 % 44 % Off Balance Sheet Arrangements On August 30, 2021, the Company terminated its agreement with an unrelated third party (the “Factor”) for factoring of specific accounts receivable. The factoring under this agreement was treated as a sale in accordance with FASB ASC 860, Transfers and Servicing none 31,747,702 31,596,215 1,415,445 During the factoring agreement in place, the Company acted as the agent on behalf of the Factor for the arrangements and had no significant retained interests or servicing liabilities related to the accounts receivable sold. The agreement provided the Factor with security interests in purchased accounts until the accounts have been repurchased by the Company or paid by the customer. In order to mitigate credit risk related to the Company’s factoring of accounts receivable, the Company may purchase credit insurance, from time to time, for certain factored accounts receivable, resulting in risk of loss being limited to the factored accounts receivable not covered by credit insurance, which the Company does not believe to be significant. During the three months ended August 31, 2021 and 2020, the Company factored accounts receivable invoices totaling approximately $ 4.3 37.9 27,000 474,000 Income Taxes The Company files a consolidated income tax return for federal and most state purposes. Management has determined that there are no uncertain tax positions that would require recognition in the consolidated financial statements. If the Company were to incur an income tax liability in the future, interest and penalties on any income tax liability would be reported as interest expense. Management’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based on ongoing analysis of tax laws, regulations, and interpretations thereof as well as other factors. Generally, federal, state, and local authorities may examine the Company’s tax returns for three to four years from the filing date and the current and prior three to four years remain subject to examination as of December 31, 2020 for the UL US Entities, January 31, 2020 for the Company and May 31, 2020 for UL HI. The Company uses the assets and liability method of accounting for deferred taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the balance sheet carrying amounts of existing assets and liabilities and their respective tax basis. As of August 31, 2021 and May 31, 2021, the Company recognized a deferred tax asset of $ 184,000 264,000 Revenue Recognition The Company adopted ASC 606, Revenue from Contracts with Customers To determine revenue recognition, the Company applies the following five steps: 1. Identify the contract(s) with a customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to the performance obligations in the contract; and 5. Recognize revenue as or when the performance obligation is satisfied. Revenue is recognized as follows: i. Freight income - export sales Freight income from the provision of air, ocean, and land freight forwarding services are recognized over time based on a relative transit time basis thru the sail or departure from origin port. The Company is the principal in these transactions and recognizes revenue on a gross basis. ii. Freight income - import sales Freight income from the provision of air, ocean, and land freight forwarding services are recognized over time based on a relative transit time basis thru the delivery to the customer’s designated location. The Company is the principal in these transactions and recognizes revenue on a gross basis. iii. Customs brokerage and other service income Customs brokerage and other service income from the provision of other services are recognized at the point in time the performance obligation is met. The Company’s business practices require, for accurate and meaningful disclosure, that it recognizes revenue over time. The “over time” policy is the period from point of origin to arrival of the shipment at US Port of entry (or in the case when the customer requires delivery to a designated point, the arrival at that delivery point). This over time policy requires the Company to make significant judgements to recognize revenue over the estimated duration of time from port of origin to arrival at port of entry. The point in the process when the Company meets its obligation in the port of entry and the subsequent transfer of the goods to the customer is when the customer has the obligation to pay, has taken physical possession, has legal title, risk and awards (ownership) and has accepted the goods. The Company has elected to not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied as of the end of the period as the Company’s contracts with its customers have an expected duration of one year or less. The Company uses independent contractors and third-party carriers in the performance of its transportation services. The Company evaluates who controls the transportation services to determine whether its performance obligation is to transfer services to the customer or to arrange for services to be provided by another party. The Company determined it acts as the principal for its transportation services performance obligation since it is in control of establishing the prices for the specified services, managing all aspects of the shipments process and assuming the risk of loss for delivery and collection. Revenue billed prior to realization is recorded as contract liabilities on the condensed consolidated balance sheets and contract costs incurred prior to revenue recognition are recorded as contract assets on the condensed consolidated balance sheets. Contract Assets Contract assets represent amounts for which the Company has the right to consideration for the services provided while a shipment is still in-transit but for which it has not yet completed the performance obligation and has not yet invoiced the customer. Upon completion of the performance obligations, which can vary in duration based upon the method of transport and billing the customer, these amounts become classified within accounts receivable - trade. Contract Liabilities Contract liabilities represent the amount of obligation to transfer goods or services to a customer for which consideration has been received. There were no contract liabilities outstanding as of August 31, 2021 and May 31, 2021. Disaggregation of Revenue from Contracts with Customers The following table disaggregates gross revenue by significant geographic area for the three months ended August 31, 2021 and 2020 based on origin of shipment (imports) or destination of shipment (exports): SCHEDULE OF DISAGGREGATION OF REVENUE For the Three Months Ended For the Three Months Ended China, Hong Kong & Taiwan $ 78,105,308 $ 35,239,785 Southeast Asia 75,376,620 9,230,824 United States 7,191,202 3,698,705 India Sub-continent 20,648,314 3,233,275 Other 8,450,415 6,012,678 Total revenue $ 189,771,860 $ 57,415,267 Segment Reporting Based on the guidance provided by ASC Topic 280, Segment Reporting Earnings per Share The Company adopted ASC 260, Earnings per share, The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share. SCHEDULE OF EARNING PER SHARE For the Three Months Ended Numerator: Net income $ 2,023,416 Effect of dilutive securities 385,480 Diluted net income $ 2,408,896 Denominator: Weighted average common shares outstanding – basic 1,611,146,398 Dilutive securities (a): Series A Preferred 1,316,157,000 Series B Preferred 5,373,342,576 Convertible notes 1,806,230,539 Weighted average common shares outstanding and assumed conversion – diluted 10,106,876,513 Basic net income per common share $ 0.00 Diluted net income per common share $ 0.00 (a) - Anti-dilutive securities excluded: - The Company did not have anti-dilutive securities for the three months ended August 31, 2020. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Aug. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 2. PROPERTY AND EQUIPMENT Major classifications of property and equipment are summarized below: SCHEDULE OF PROPERTY AND EQUIPMENT August 31, 2021 May 31, 2021 Furniture and fixtures $ 94,732 $ 84,085 Computer equipment 119,202 108,479 Software 30,609 27,780 Leasehold improvements 27,146 27,146 271,689 247,490 Less: accumulated depreciation (72,409 ) (55,398 ) $ 199,280 $ 192,092 Depreciation expense charged to income for the three months ended August 31, 2021 and 2020 amounted to $ 17,011 9,920 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Aug. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | 3. INTANGIBLE ASSETS Intangible assets consist of the following: SCHEDULE OF INTANGIBLE ASSETS August 31, 2021 May 31, 2021 Trade names / trademarks $ 806,000 $ 806,000 Customer relationships 7,633,000 7,633,000 Non-compete agreements 313,000 313,000 8,752,000 8,752,000 Less: Accumulated amortization (883,935 ) (707,147 ) $ 7,868,065 $ 8,044,853 Amortizable intangible assets, including tradenames and non-compete agreements, are amortized on a straight-line basis over 3 to 10 years. Customer relationships are amortized on a straight-line basis over 12 to 15 years. For the three months ended August 31, 2021 and 2020, amortization expense related to the intangible assets was $ 176,788 and $ 176,787 , respectively. As of August 31, 2021, the weighted average remaining useful lives of these assets were 8.08 years. Estimated amortization expense for the next five years and thereafter is as follows: SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE Twelve Months Ending August 31, 2022 $ 608,814 2023 608,814 2024 608,814 2025 547,953 2026 547,953 Thereafter 4,945,717 Intangible assets, net $ 7,868,065 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 3 Months Ended |
Aug. 31, 2021 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 4. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following: SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES August 31, 2021 May 31, 2021 Accrued salaries and related expenses $ 309,267 $ 672,455 Accrued sales and marketing expense 863,310 539,810 Accrued professional fees 75,000 75,000 Accrued income tax 815,286 256,286 Accrued overdraft liabilities 870,163 790,364 Accrued interest expense 303,111 - Other accrued expenses and current liabilities 3,502,800 50,000 Accrued expenses and other current liabilities $ 6,738,937 $ 2,383,915 Other accrued expenses represent an advance customer deposit for charter flight program. Revenue would be recognized once the flight is completed. |
FINANCING ARRANGEMENTS
FINANCING ARRANGEMENTS | 3 Months Ended |
Aug. 31, 2021 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | 5. FINANCING ARRANGEMENTS Financing arrangements on the consolidated balance sheets consists of: SCHEDULE OF FINANCING ARRANGEMENT August 31, 2021 May 31, 2021 Revolving Credit Facility $ 39,543,083 $ - Promissory note (PPP) - 358,236 Promissory notes (EIDL) 150,000 150,000 Notes payable 3,565,634 2,528,886 Convertible notes – net of discount of $ 2,001,853 1,607,283 1,938,125 2,441,551 45,196,842 5,478,673 Less: current portion (1) (42,506,957 ) (2,285,367 ) $ 2,689,885 $ 3,193,306 (1) As of August 31, 2021, a current portion of outstanding debt is represented by a revolving line of credit in the amount of $ 39,543,083 2,963,874 Revolving Credit Facility On June 1, 2021, the Company entered into a Revolving Purchase, Loan and Security Agreement (the “TBK Agreement”) with TBK BANK, SSB, a Texas State Savings Bank (“Purchaser”), for a facility under which Purchaser will, from time to time, buy approved receivables from the Seller. The TBK Agreement provides for Seller to have access to the lesser of (i) $ 30 25 The Core Facility provided Core with security interests in purchased accounts until the accounts have been repurchased by the Company or paid by the customer. As of June 1, 2021, the Core Facility has been terminated along with all security interests granted to Core and replaced with the TBK Agreement. This facility temporarily renewed on June 17, 2021, under the same terms and conditions as the original agreement and the credit line was set at $ 2.0 On August 4, 2021, the parties to the TBK Agreement entered into a First Amendment Agreement to increase the credit facility from $ 30.0 40.0 On September 17, 2021, (Note 13, Subsequent Events), the parties to the TBK Agreement entered into a Second Amendment to the TBK Agreement primarily to increase the credit facility from $ 40.0 47.5 Promissory Note (PPP) On March 9, 2021, the Company was granted a loan in the aggregate amount of $ 358,236 March 5, 2026 1% Notes Payable On May 29, 2020, the Company entered into a $ 1,825,000 May 29, 2023 The agreement calls for six semi-annual payments of $ 304,166.67 1,216,667 1,825,000 On May 29, 2020, the Company entered into a non-compete, non-solicitation and non-disclosure agreement with a former owner of ATL. The amount payable under the agreement is $ 500,000 The agreement calls for twenty-four monthly non-interest-bearing payments of $ 20,833.33 208,338 500,000 On March 19, 2021 the Company issued to an accredited investor a 10% 1,000,000 1,000,000 the Company entered into an Amended and Restated Promissory Note (the “Amended and Restated Note”) superseding and replacing the Original Note. The Amended and Restated Note is in the principal aggregate amount of $ 1,000,000 7.5% June 15, 2021 December 31, 2021 1,140,624 1,062,215 On August 31, 2021, the Company received $ 1,000,000 cash advance for operating capital from an accredited investor in connection with the issuing new Notes Payable (“New Bridge Notes”) (Note 13, Subsequent Events). The terms of this Notes were not finalized until October 1, 2021, and cash received was recorded as current liability on the condensed consolidated Balance Sheet of the Company as of August 31, 2021. As of August 31, 2021, and May 31, 2021, the outstanding balance of these notes was $ 1,000,000 and $ 0 , respectively. Convertible Notes Trillium SPA On October 8, 2020, the Company entered into a Securities Purchase Agreement (the “Trillium SPA”) with Trillium Partners (“Trillium”) pursuant to which the Company sold to Trillium (i) a 10% 1,111,000 1,000,000 570,478,452 0.001946 October 6, 2021 The Company initially determined the fair value of the warrant and the beneficial conversion feature of the note using the Black-Scholes model and recorded an adjustment to the carrying value of the note liability with an equal and offsetting adjustment to Stockholders’ Equity. The note was amended on October 14, 2020, to adjust the conversion price to $ 0.00179638 On June 1, 2021, this Note maturity was extended to October 6, 2022 On August 19, 2021, Trillium entered into a Securities Exchange Agreement as discussed below. During the three months ended August 31, 2021, a noteholder converted $ 78,703 43,811,372 0.00179638 1,067,500 1,104,500 3a SPA On October 14, 2020, the Company entered into a Securities Purchase Agreement (the “3a SPA”) with 3a Capital Establishment (“3a”) pursuant to which the Company sold to 3a (i) a 10% 1,111,000 1,000,000 570,478,452 0.001946 October 6, 2021 The Company determined the fair value of the warrant using the Black-Scholes model and recorded an adjustment to the carrying value of the note liability with an equal and offsetting adjustment to Stockholders Equity. The warrant had a grant date fair value of $ 563,156 436,844 On June 1, 2021, this Note maturity was extended to October 6, 2022 383,819 On August 19, 2021, 3a entered into a Securities Exchange Agreement as discussed below. As of August 31, 2021 and May 31, 2021 the total unamortized debt discount related to the 3a SPA was $ 632,126 and $ 391,757 , respectively. During the three months ended August 31, 2021, the Company recorded amortization of debt discount totaling $ 143,450 . During the three months ended August 31, 2021, a noteholder converted $ 71,855 40,000,000 0.00179638 1,039,145 1,111,000 Trillium and 3a January Convertible Notes On January 28, 2021, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Trillium Partners LP (“Trillium”) and 3a Capital Establishment (“3a” together with Trillium, the “Investors”) pursuant to which the Company sold to each of the Investors (i) a 10% 916,666 1,666,666 The Notes mature on January 28, 2022 0.0032 1,666,666 On June 1, 2021, maturity of these Notes was extended to January 28, 2023 247,586 On August 19, 2021, investors entered into a Securities Exchange Agreement as discussed below. As of August 31, 2021 and May 31, 2021 the total unamortized debt discount related these Notes was $ 1,369,728 1,215,526 462,100 1,833,334 Covenants As of August 31, 2021 and May 31, 2020, the Company was in compliance with all covenants and debt agreements except for Trillium and 3a where the Company was deemed to be in default. On January 29, 2021, the Company and the investors (Trillium and 3a) entered into a waiver agreement which waived any and all defaults underlying the 3a, Trillium and 3a SPA’s and the Trillium and 3a Notes for a period of six months. Subsequently, the Company signed the Securities Exchange Agreement extending this waiver until a Termination Date event as described below. Securities Exchange Agreement On August 4, 2021, the Company entered into a securities exchange agreement (the “Exchange Agreement”) with the investors (Trillium and 3a) holding the above listed notes and warrants of the Company (each, including its successors and assigns, a “Holder” and collectively the “Holders”). Pursuant to the Exchange Agreement, the Company agreed to issue, and the Holders agreed to acquire the New Securities (as defined herein) in exchange for the Surrendered Securities (the “Old Notes” defined as October and January Notes and Warrants in the Exchange Agreement). “New Securities” means a number of Exchange Shares (as defined in the Exchange Agreement) determined by applying the Exchange Ratio (as defined in the Exchange Agreement) upon consummation of a registered public offering of shares of the Company’s Common Stock (and warrants if included in such financing), at a valuation of not less than $200,000,000.00 pre-money, pursuant to which the Company receives gross proceeds of not less than $20,000,000 and the Company’s Trading Market is a National Securities Exchange (the “Qualified Financing”) To extent that any events that have occurred prior to the date hereof that could have resulted in an event of default under the Old Notes the Holders hereby waive the occurrence of any such event of default. From the date hereof through the earlier of date of (i) the Closing of the Exchange, or (ii) the Termination Date, the Holders agree to forebear from declaring any such event of default and further agree that will not take any steps to collect on the Old Notes and collect any liquidated damages owed under the Old Registration Rights Agreement (“RRA”). In the event the Exchange closes on or before the Termination Date, the defaults under the Old Notes will be permanently waived and any liquidated damages accrued under the Old RRAs will be forgiven. If the Exchange does not close on or before the Termination Date, the Company will be required to pay all the liquidated damages accrued under the Old RRAs as if this Agreement was never executed and the Holders will be entitled to all of the rights and remedies under the Old Transaction Documents. Future maturities related to the above promissory notes, notes payable and convertible notes are as follows: SCHEDULE OF FUTURE MATURITIES OF PROMISSORY NOTES Twelve Months Ending August 31, 2022 $ 2,963,874 2023 4,557,084 2024 8,772 2025 8,772 2026 8,772 Thereafter 108,338 Long-term Debt, Gross 7,655,612 Less: current portion (2,963,874 ) Less: unamortized discount (2,001,853 ) Long term, notes payable $ 2,689,885 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Aug. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 6. RELATED PARTY TRANSACTIONS Related party debt consisted of the following: SCHEDULE OF RELATED PARTY TRANSACTIONS August 31, 2021 May 31, 2021 Due to Frangipani Trade Services (1) $ 903,927 $ 903,927 Due to employee (2) 55,000 60,000 Due to employee (3) 122,216 149,996 Due to related parties, gross 1,081,143 1,113,923 Less: current portion (392,975 ) (397,975 ) Long term, due to related parties $ 688,168 $ 715,948 (1) Due to Frangipani Trade Services (“FTS”), an entity owned by the Company’s CEO, is due on demand and is non-interest bearing. The principal amount of this Promissory Note bears no interest; provided that any amount due under this Note which is not paid when due shall bear interest at an interest rate equal to six percent ( 6 150,655 (4) On May 29, 2020, the Company entered into a $ 90,000 2,500 (5) On May 29, 2020, the Company entered into a $ 200,000 5,556 Consulting Agreements Unique entered into a Consulting Services Agreement on May 29, 2020 for a term of three years with Great Eagle Freight Limited (“Great Eagle” or “GEFD”), a Hong Kong Company (the “Consulting Services Agreement”).where the Company pays $ 500,000 250,000 494,670 565,338 The Company utilizes financial reporting services from the firm owned and controlled by David Briones, a member of the Board of Directors. The service fees are $ 5,000 15,000 Accounts Receivable - trade and Accounts Payable - trade Transactions with related parties account for $ 923,597 20,720,115 1,274,250 10,839,224 Revenue and Expenses Revenue from related party transactions is for export services from related parties or for delivery at place imports nominated by such related parties. For the three months ended August 31, 2021, these transactions represented $ 0.3 Direct costs are services billed to the Company by related parties for shipping activities. For the three months ended August 31, 2021, these transactions represented $ 29.3 |
RETIREMENT PLANS
RETIREMENT PLANS | 3 Months Ended |
Aug. 31, 2021 | |
Retirement Benefits [Abstract] | |
RETIREMENT PLANS | 7. RETIREMENT PLANS We have two savings plans that qualify under Section 401(k) of the Internal Revenue Code. Eligible employees may contribute a portion of their salary into the savings plans, subject to certain limitations. In one of which the Company has the discretionary option of matching employee contributions and in the other the Company matches 20% on the first 100% contribution. In either Plan, employees can contribute 1% to 98% of gross salary up to a maximum permitted by law. 56,321 0 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 3 Months Ended |
Aug. 31, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | 8. STOCKHOLDERS’ EQUITY Common Stock On June 28, 2021, a noteholder converted $ 71,855.20 40,000,000 0.00179638 On July 8, 2021, a noteholder converted $ 15,620.83 8,695,727 0.00179638 On August 3, 2021, a noteholder converted $ 24,418.89 13,593,388 0.00179638 On August 9, 2021, a noteholder converted $ 12,820.83 7,137,037 0.00179638 Preferred Shares Series B Convertible Preferred On August 13, 2021, Unique Logistics International, Inc. (the “Company”) issued 125,692,224 19,200 100 Warrants The following is a summary of the Company’s warrant activity: SCHEDULE OF WARRANTS ACTIVITY Weighted Average Warrants Exercise Price Outstanding – May 31, 2021 1,140,956,904 $ 0.002 Exercisable – May 31, 2021 1,140,956,904 $ 0.002 Granted - $ - Outstanding – August 31, 2021 1,140,956,904 $ 0.002 Exercisable – August 31, 2021 1,140,956,904 $ 0.002 SCHEDULE OF WARRANTS OUTSTANDING AND EXERCISABLE Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.002 1,140,956,904 4.11 $ 0.002 1,140,956,904 $ 0.002 At August 31, 2021, the total intrinsic value of warrants outstanding and exercisable was $ 54,827,543 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Aug. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 9. COMMITMENTS AND CONTINGENCIES Pending acquisitions On August 23, 2021, the Company and Unique Logistics Limited, Hong Kong (“ULHK”) entered into a Non-Binding Term Sheet for the Company’s purchase from ULHK of (i) 65% of the capital stock of Unique Logistics International India (Private) Ltd.; (ii) 50% of the capital stock of ULI (North & East China) Company Limited; (iii) 50% of the capital stock of Unique Logistics International (Shanghai) Co. Ltd; (iv) 50% of the capital stock of ULI International Co. Ltd.; (v) 49.99% of TGF Unique Limited; (vi) 100% of the capital stock of Unique Logistics International (H.K.) Limited; (vii) 65% of the capital stock of Unique Logistics International (Vietnam) Co. Ltd.; (viii) 70% of the capital stock of ULI (South China) Limited; (ix) 100% of the capital stock of Unique Logistics International (South China) Ltd.; and (x) 100 of the capital stock of Shenzhen Unique Logistics Limited (collectively the “ULHK Entities”). The initial purchase price, subject to adjustment, to be paid for the ULHK Entities is $ 22,000,000 210,000,000 1,000,000 2,500,000 March 31, 2023 The purchase of ULHK Entities is subject to, among other things, due diligence, receipt and review of definitive agreements, receipt of certain regulatory approvals, audited financial statements, material third part consents and consent of minority shareholders of ULHK Entities Litigation From time to time, the Company may become involved in litigation relating to claims arising in the ordinary course of the business. There are no claims or actions pending or threatened against the Company that, if adversely determined, would in the Company’s management’s judgment have a material adverse effect on the Company. Leases The Company leases office space, warehouse facilities and equipment under non-cancellable lease agreements expiring on various dates through October 2028. Office leases contain provisions for future rent increases. The Company adopted ASC 842 from inception, requiring the Company to recognize an asset and liability on the consolidated balance sheets for lease arrangements with terms longer than 12 months. The Company has elected the practical expedient to not apply the recognition requirement to leases with a term of less than one year (short term leases). The Company uses its incremental borrowing rate to discount lease payments to present value. The incremental borrowing rate is based on the estimated interest rate the Company could obtain for borrowing over a similar term of the lease at commencement date. Rental escalations, renewal options and termination options, when applicable, have been factored into the Company’s determination of lease payments when appropriate. The Company does not separate lease and non-lease components of contracts. Variable payments related to pass-through costs for maintenance, taxes and insurance or adjustments based on an index such as Consumer Price Index are not included in the measurement of the lease liability or asset and are expensed as incurred. The components of lease expense were as follows: SCHEDULE OF COMPONENTS OF LEASE EXPENSE August 31, 2021 August 31, 2020 For the Three Months Ended For the Three Months Ended August 31, 2021 August 31, 2020 Operating lease $ 362,201 $ 346,702 Interest on lease liabilities 52,384 50,741 Total net lease cost $ 414,585 $ 397,443 Supplemental balance sheet information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION August 31, 2021 May 31, 2021 Operating leases: Operating lease ROU assets – net $ 3,435,326 $ 3,797,527 Current operating lease liabilities, included in current liabilities $ 1,481,602 $ 1,466,409 Noncurrent operating lease liabilities, included in long-term liabilities 2,064,121 2,431,144 Total operating lease liabilities $ 3,545,723 $ 3,897,553 Supplemental cash flow and other information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION For the For the ROU assets obtained in exchange for lease liabilities: Operating leases $ - $ 223,242 Weighted average remaining lease term (in years): Operating leases 3.95 4.45 Weighted average discount rate: Operating leases 4.25 % 4.25 % As of August 31, 2021, future minimum lease payments under noncancelable operating leases are as follows: SCHEDULE OF MINIMUM LEASE PAYMENTS Twelve Months Ending August 31, 2022 $ 1,569,738 2023 696,262 2024 507,321 2025 423,985 2026 229,215 Thereafter 420,309 Total lease payments 3,846,830 Less: imputed interest (311,107 ) Total lease obligations $ 3,535,723 |
INCOME TAX PROVISION
INCOME TAX PROVISION | 3 Months Ended |
Aug. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX PROVISION | 10. INCOME TAX PROVISION The income tax expense consists of the following: SCHEDULE OF INCOME TAX EXPENSE August 31, 2021 August 31, 2020 Federal Current $ 457,000 $ - Deferred 65,448 - State and Local - Current 102,000 - Deferred 14,552 - Income tax expense $ 639,000 $ - The expected tax expense based on the statutory rate is reconciled with actual tax expense benefit as follows: SCHEDULE OF EXPECTED TAX EXPENSE (BENEFIT) For the Three Months Ended August 31, 2020 US Federal statutory rate (%) 21 % 21 % State income tax, net of federal benefit 7 % 4 % Change in valuation allowance (2 )% (25 )% Other permanent differences, net 5 % - Income tax provision (%) 31 % - |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Aug. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | As of August 31, 2020, the Company recorded a full valuation allowance against the deferred tax assets due to insufficient evidence to support the utilization of these benefits. 11. SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date the condensed consolidated financial statements were available to be issued. Based on this evaluation, the Company has identified the following reportable subsequent events other than those disclosed elsewhere in these condensed consolidated financial statements. Purchase Money Financing On September 8, 2021 (the “Effective Date”), the Company entered into a Purchase Money Financing Agreement (the “Financing Agreement”) with Corefund Capital, LLC (“Corefund”) in order to enable the Company to finance additional cargo charter flights for the peak shipping season. Pursuant to the Financing Agreement, the Company may, from time to time, request financing from Corefund to enable the Company to engage Company’s suppliers to provide chartered cargo flights for the Company’s clients. The Company may also request that Corefund tender payments directly to a supplier. Corefund requires payments from a buyer to be made to a Deposit Account Control Agreement account at an agreed upon bank where Corefund is the sole director and accessor to the account for the term of the relationship. As collateral securing its obligations under the Financing Agreement, the Company granted Corefund a continuing security interest in all of the Company’s now owned and hereafter acquired Accounts Receivable (“Collateral”) subject to the security interest granted pursuant to that certain Revolving Purchase, Loan and Security Agreement, dated as of June 2, 2021. Immediately upon an Event of Default (as defined in the Financing Agreement), all outstanding obligations shall accrue interest at the rate of 0.1 10 Revolving credit facility On September 17, 2021, the parties to the TBK Agreement entered into a Second Amendment to the TBK Agreement primarily to increase the credit facility from $ 40.0 47.5 Amendment of a Note Payable On September 23, 2021 1,000,000 October 31, 2021 New bridge notes On October 1, 2021, the Company entered into a Securities Purchase Agreement with Trillium Partners LP and Carpathia LLC (each a “Buyer”) pursuant to which the Company issued to each Buyer a Note in the aggregate principal amount of $ 1,000,000 2,000,000 March 31, 2022 Interest on this Notes shall initially accrue on the outstanding Principal Amount (as defined therein) at a rate equal to twelve (12) % per annum during the first 120 calendar days following the issuance date of this Note (“Issue Date”). Commencing 121 days following the Issue Date and continuing thereafter, absent an Event of Default, interest shall accrue on the outstanding Principal Amount at a rate equal to eighteen (18) % per annum. The Principal Amount and all accrued Interest shall become due and payable on the Maturity Date. Upon the occurrence of any Event of Default, including at any time following the Maturity Date, a default interest rate equal to twenty four percent (24%) per annum shall be in effect as to all unpaid principal then outstanding. The Company shall pay a minimum interest payment equal to twelve percent (12%) on the Principal Amount, or $ 120,000 Note Conversion On September 28, 2021, a noteholder converted $ 53,054.86 29,534,319 0.00179638 |
NATURE OF BUSINESS AND SUMMAR_2
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Aug. 31, 2021 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business Unique Logistics International, Inc. (the “Company” or “Unique”) is a global logistics and freight forwarding company. The Company currently operates via its wholly owned subsidiaries, Unique Logistics International (NYC), LLC, a Delaware limited liability company (“UL NYC”), and Unique Logistics International (BOS) Inc, a Massachusetts corporation (“UL BOS”) and (collectively the “UL US Entities”). The Company provides a range of international logistics services that enable its customers to outsource sections of their supply chain process. This range of services can be categorized as follows: ● Air Freight services ● Ocean Freight services ● Customs Brokerage and Compliance services ● Warehousing and Distribution services ● Order Management |
Liquidity | Liquidity The accompanying condensed consolidated financial statements have been prepared on a going concern basis. Substantial doubt about an entity’s ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. From the inception the Company experienced negative working capital and adverse cash flows from operations, primarily due to significant business growth during the first twelve months in operations, entering new markets and products and repayment of an acquisition related debt. As of August 31, 2021, the Company had negative working capital of approximately $ 1.7 million compared with $ 3.5 million negative working capital as of May 31, 2021. These factors raise the risk of there being substantial doubt about the Company’s ability to continue as a going concern. In response to such factors, the Company’s plans to alleviate the risk of substantial doubt are ● Repaid significant portion of its acquisition related debt during the year ended May 31, 2021 ● Entered into a Second Amendment to the TBK Agreement to increase the credit facility from $ 40.0 million to $ 47.5 million for the period through January 31, 2022 ● Entered into a Purchase Money Financing Agreement on September 8, 2021, with Corefund Capital, LLC to enable the Company to finance additional cargo charter flights for the peak shipping season. ● Entered into an Exchange Agreement on August 4, 2021 to exchange all of its Convertible debt into shares of common stocks upon Financing Event (Note 5). In January 2020, the World Health Organization has declared the outbreak of a novel coronavirus (COVID-19) as a “Public Health Emergency of International Concern,” which continues to have an impact throughout the world and has adversely impacted global commercial activity and contributed to significant declines and volatility in financial markets. The coronavirus outbreak and government responses are creating disruption in global supply chains and adversely impacting many industries. The outbreak could have a continued material adverse impact on economic and market conditions and trigger a period of global economic slowdown. The extent of the impact of COVID-19 on our operational and financial performance will depend on the effect on our shippers and carriers, all of which are uncertain and cannot be predicted. The rapid development and fluidity of this situation precludes any prediction as to the ultimate material adverse impact of the coronavirus outbreak. Nevertheless, the outbreak presents uncertainty and risk with respect to the Company, its performance, and its financial results. The Company has experienced increased air and ocean freight rates due to overall cargo restraints imposed by shippers and carriers and is in a position to pass these cost increases directly to the customers without significantly effecting its margins. Due to impacts from the COVID-19 pandemic and the uncertain pace of recovery, seasonal variations in the availability of air and ocean carriers, the volatility of fuel prices and other supply and demand related factors, operating results for the three and six months ended August 31, 2021, are not necessarily indicative of operating results for the entire year. While we continue to execute our strategic plan, the Company is also in a process of evaluating several other liquidity-oriented options such as raising additional capital, increasing credit limits of the revolving credit facilities, reducing cost of debt, controlling expenditures, and improving its cash collection processes. While many of the aspects of the Company’s plan involve management’s judgments and estimates that include factors that could be beyond our control and actual results could differ from our estimates. These and other factors could cause the strategic plan to be unsuccessful which could have a material adverse effect on our operating results, financial condition, and liquidity. As of August 31, 2021, we expect to alleviate our going concern needs for at least the next twelve months from the time these financial statements are made available with existing cash and cash equivalents and cash flows from operations. We expect to meet our long-term liquidity needs with cash flows from operations and financing arrangements. |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The unaudited interim financial information furnished herein reflects all adjustments, consisting solely of normal recurring items, which in the opinion of management are necessary to fairly state the financial position of the Company and the results of its operations for the periods presented. This report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended May 31, 2021. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The condensed consolidated balance sheet at May 31, 2021 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Significant estimates inherent in the preparation of the consolidated financial statements include determinations of the useful lives and expected future cash flows of long-lived assets, including intangibles, valuation of assets and liabilities acquired in business combinations, estimates of valuation assumptions for long-lived assets impairment, estimates and assumptions in valuation of debt and equity instruments and the calculation of share-based compensation. In addition, the Company makes significant judgments to recognize revenue – see policy note “ Revenue Recognition |
Fair Value Measurement | Fair Value Measurement The Company follows the authoritative guidance that establishes a formal framework for measuring fair values of assets and liabilities in the consolidated financial statements that are already required by generally accepted accounting principles to be measured at fair value. The guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The transaction is based on a hypothetical transaction in the principal or most advantageous market considered from the perspective of the market participant that holds the asset or owes the liability. The Company utilizes market data or assumptions that market participants who are independent, knowledgeable and willing and able to transact would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborate or generally unobservable. The Company attempts to utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The Company is able to classify fair value balances based on the observability of those inputs. The guidance establishes a formal fair value hierarchy based on the inputs used to measure fair value. The hierarchy gives the highest priority to level 1 measurements and the lowest priority to level 3 measurements, and accordingly, level 1 measurement should be used whenever possible. The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities or published net asset value for alternative investments with characteristics similar to a mutual fund. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 – Unobservable inputs for the asset or liability. The methods used may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while management believes its valuation methods are appropriate, the fair value of certain financial instruments could result in a difference fair value measurement at the reporting date. There were no changes in the Company’s valuation methodologies from the prior year. For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amounts for financial assets and liabilities such as cash and cash equivalents, accounts receivable - trade, contract assets, factoring reserve, other prepaid expenses and current assets, accounts payable – trade and other current liabilities, including contract liabilities, current portion of long-term debt due to related party payables, convertible notes, net and current portion of promissory loans approximate fair value due to their short-term nature as of August 31, 2021 and May 31, 2021. The carrying amount of the debt approximates fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to the Company. Lease liabilities approximate fair value based on the incremental borrowing rate used to discount future cash flows. The Company had no Level 3 assets or liabilities as of August 31, 2021, and May 31, 2021. There were no transfers between levels during the reporting period. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits. No loss had been experienced, and management believes it is not exposed to any significant risk on credit. |
Accounts Receivable – Trade | Accounts Receivable – Trade Accounts receivable - trade from revenue transactions are based on invoiced prices which the Company expects to collect. In the normal course of business, the Company extends credit to customers that satisfy pre-defined credit criteria. The Company generally does not require collateral to support customer receivables. Accounts receivable - trade, as shown on the consolidated balance sheets, is net of allowances when applicable. An allowance for doubtful accounts is determined through analysis of the aging of accounts receivable at the date of the consolidated financial statements, assessments of collectability based on an evaluation of historic and anticipated trends, the financial condition of the Company’s customers, and an evaluation of the impact of economic conditions. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, net of allowance for doubtful accounts. As of August 31, 2021 and May 31, 2021, the Company recorded an allowance for doubtful accounts of approximately $ 160,000 240,000 Concentrations Three major customers represented approximately 42% SCHEDULE OF CONCENTRATION OF RISK Customer For the Three Months Ended For the Three Months Ended A 15 % 23 % B 9 % 21 % C 8 % - Total: 32 % 44 % Off Balance Sheet Arrangements On August 30, 2021, the Company terminated its agreement with an unrelated third party (the “Factor”) for factoring of specific accounts receivable. The factoring under this agreement was treated as a sale in accordance with FASB ASC 860, Transfers and Servicing none 31,747,702 31,596,215 1,415,445 During the factoring agreement in place, the Company acted as the agent on behalf of the Factor for the arrangements and had no significant retained interests or servicing liabilities related to the accounts receivable sold. The agreement provided the Factor with security interests in purchased accounts until the accounts have been repurchased by the Company or paid by the customer. In order to mitigate credit risk related to the Company’s factoring of accounts receivable, the Company may purchase credit insurance, from time to time, for certain factored accounts receivable, resulting in risk of loss being limited to the factored accounts receivable not covered by credit insurance, which the Company does not believe to be significant. During the three months ended August 31, 2021 and 2020, the Company factored accounts receivable invoices totaling approximately $ 4.3 37.9 27,000 474,000 |
Income Taxes | Income Taxes The Company files a consolidated income tax return for federal and most state purposes. Management has determined that there are no uncertain tax positions that would require recognition in the consolidated financial statements. If the Company were to incur an income tax liability in the future, interest and penalties on any income tax liability would be reported as interest expense. Management’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based on ongoing analysis of tax laws, regulations, and interpretations thereof as well as other factors. Generally, federal, state, and local authorities may examine the Company’s tax returns for three to four years from the filing date and the current and prior three to four years remain subject to examination as of December 31, 2020 for the UL US Entities, January 31, 2020 for the Company and May 31, 2020 for UL HI. The Company uses the assets and liability method of accounting for deferred taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the balance sheet carrying amounts of existing assets and liabilities and their respective tax basis. As of August 31, 2021 and May 31, 2021, the Company recognized a deferred tax asset of $ 184,000 264,000 |
Revenue Recognition | Revenue Recognition The Company adopted ASC 606, Revenue from Contracts with Customers To determine revenue recognition, the Company applies the following five steps: 1. Identify the contract(s) with a customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to the performance obligations in the contract; and 5. Recognize revenue as or when the performance obligation is satisfied. Revenue is recognized as follows: i. Freight income - export sales Freight income from the provision of air, ocean, and land freight forwarding services are recognized over time based on a relative transit time basis thru the sail or departure from origin port. The Company is the principal in these transactions and recognizes revenue on a gross basis. ii. Freight income - import sales Freight income from the provision of air, ocean, and land freight forwarding services are recognized over time based on a relative transit time basis thru the delivery to the customer’s designated location. The Company is the principal in these transactions and recognizes revenue on a gross basis. iii. Customs brokerage and other service income Customs brokerage and other service income from the provision of other services are recognized at the point in time the performance obligation is met. The Company’s business practices require, for accurate and meaningful disclosure, that it recognizes revenue over time. The “over time” policy is the period from point of origin to arrival of the shipment at US Port of entry (or in the case when the customer requires delivery to a designated point, the arrival at that delivery point). This over time policy requires the Company to make significant judgements to recognize revenue over the estimated duration of time from port of origin to arrival at port of entry. The point in the process when the Company meets its obligation in the port of entry and the subsequent transfer of the goods to the customer is when the customer has the obligation to pay, has taken physical possession, has legal title, risk and awards (ownership) and has accepted the goods. The Company has elected to not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied as of the end of the period as the Company’s contracts with its customers have an expected duration of one year or less. The Company uses independent contractors and third-party carriers in the performance of its transportation services. The Company evaluates who controls the transportation services to determine whether its performance obligation is to transfer services to the customer or to arrange for services to be provided by another party. The Company determined it acts as the principal for its transportation services performance obligation since it is in control of establishing the prices for the specified services, managing all aspects of the shipments process and assuming the risk of loss for delivery and collection. Revenue billed prior to realization is recorded as contract liabilities on the condensed consolidated balance sheets and contract costs incurred prior to revenue recognition are recorded as contract assets on the condensed consolidated balance sheets. Contract Assets Contract assets represent amounts for which the Company has the right to consideration for the services provided while a shipment is still in-transit but for which it has not yet completed the performance obligation and has not yet invoiced the customer. Upon completion of the performance obligations, which can vary in duration based upon the method of transport and billing the customer, these amounts become classified within accounts receivable - trade. Contract Liabilities Contract liabilities represent the amount of obligation to transfer goods or services to a customer for which consideration has been received. There were no contract liabilities outstanding as of August 31, 2021 and May 31, 2021. Disaggregation of Revenue from Contracts with Customers The following table disaggregates gross revenue by significant geographic area for the three months ended August 31, 2021 and 2020 based on origin of shipment (imports) or destination of shipment (exports): SCHEDULE OF DISAGGREGATION OF REVENUE For the Three Months Ended For the Three Months Ended China, Hong Kong & Taiwan $ 78,105,308 $ 35,239,785 Southeast Asia 75,376,620 9,230,824 United States 7,191,202 3,698,705 India Sub-continent 20,648,314 3,233,275 Other 8,450,415 6,012,678 Total revenue $ 189,771,860 $ 57,415,267 |
Segment Reporting | Segment Reporting Based on the guidance provided by ASC Topic 280, Segment Reporting |
Earnings per Share | Earnings per Share The Company adopted ASC 260, Earnings per share, The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share. SCHEDULE OF EARNING PER SHARE For the Three Months Ended Numerator: Net income $ 2,023,416 Effect of dilutive securities 385,480 Diluted net income $ 2,408,896 Denominator: Weighted average common shares outstanding – basic 1,611,146,398 Dilutive securities (a): Series A Preferred 1,316,157,000 Series B Preferred 5,373,342,576 Convertible notes 1,806,230,539 Weighted average common shares outstanding and assumed conversion – diluted 10,106,876,513 Basic net income per common share $ 0.00 Diluted net income per common share $ 0.00 (a) - Anti-dilutive securities excluded: - The Company did not have anti-dilutive securities for the three months ended August 31, 2020. |
NATURE OF BUSINESS AND SUMMAR_3
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Accounting Policies [Abstract] | |
SCHEDULE OF CONCENTRATION OF RISK | SCHEDULE OF CONCENTRATION OF RISK Customer For the Three Months Ended For the Three Months Ended A 15 % 23 % B 9 % 21 % C 8 % - Total: 32 % 44 % |
SCHEDULE OF DISAGGREGATION OF REVENUE | SCHEDULE OF DISAGGREGATION OF REVENUE For the Three Months Ended For the Three Months Ended China, Hong Kong & Taiwan $ 78,105,308 $ 35,239,785 Southeast Asia 75,376,620 9,230,824 United States 7,191,202 3,698,705 India Sub-continent 20,648,314 3,233,275 Other 8,450,415 6,012,678 Total revenue $ 189,771,860 $ 57,415,267 |
SCHEDULE OF EARNING PER SHARE | The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share. SCHEDULE OF EARNING PER SHARE For the Three Months Ended Numerator: Net income $ 2,023,416 Effect of dilutive securities 385,480 Diluted net income $ 2,408,896 Denominator: Weighted average common shares outstanding – basic 1,611,146,398 Dilutive securities (a): Series A Preferred 1,316,157,000 Series B Preferred 5,373,342,576 Convertible notes 1,806,230,539 Weighted average common shares outstanding and assumed conversion – diluted 10,106,876,513 Basic net income per common share $ 0.00 Diluted net income per common share $ 0.00 (a) - Anti-dilutive securities excluded: - |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Major classifications of property and equipment are summarized below: SCHEDULE OF PROPERTY AND EQUIPMENT August 31, 2021 May 31, 2021 Furniture and fixtures $ 94,732 $ 84,085 Computer equipment 119,202 108,479 Software 30,609 27,780 Leasehold improvements 27,146 27,146 271,689 247,490 Less: accumulated depreciation (72,409 ) (55,398 ) $ 199,280 $ 192,092 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | Intangible assets consist of the following: SCHEDULE OF INTANGIBLE ASSETS August 31, 2021 May 31, 2021 Trade names / trademarks $ 806,000 $ 806,000 Customer relationships 7,633,000 7,633,000 Non-compete agreements 313,000 313,000 8,752,000 8,752,000 Less: Accumulated amortization (883,935 ) (707,147 ) $ 7,868,065 $ 8,044,853 |
SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE | Estimated amortization expense for the next five years and thereafter is as follows: SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE Twelve Months Ending August 31, 2022 $ 608,814 2023 608,814 2024 608,814 2025 547,953 2026 547,953 Thereafter 4,945,717 Intangible assets, net $ 7,868,065 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | Accrued expenses and other current liabilities consisted of the following: SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES August 31, 2021 May 31, 2021 Accrued salaries and related expenses $ 309,267 $ 672,455 Accrued sales and marketing expense 863,310 539,810 Accrued professional fees 75,000 75,000 Accrued income tax 815,286 256,286 Accrued overdraft liabilities 870,163 790,364 Accrued interest expense 303,111 - Other accrued expenses and current liabilities 3,502,800 50,000 Accrued expenses and other current liabilities $ 6,738,937 $ 2,383,915 |
FINANCING ARRANGEMENTS (Tables)
FINANCING ARRANGEMENTS (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF FINANCING ARRANGEMENT | Financing arrangements on the consolidated balance sheets consists of: SCHEDULE OF FINANCING ARRANGEMENT August 31, 2021 May 31, 2021 Revolving Credit Facility $ 39,543,083 $ - Promissory note (PPP) - 358,236 Promissory notes (EIDL) 150,000 150,000 Notes payable 3,565,634 2,528,886 Convertible notes – net of discount of $ 2,001,853 1,607,283 1,938,125 2,441,551 45,196,842 5,478,673 Less: current portion (1) (42,506,957 ) (2,285,367 ) $ 2,689,885 $ 3,193,306 (1) As of August 31, 2021, a current portion of outstanding debt is represented by a revolving line of credit in the amount of $ 39,543,083 2,963,874 |
SCHEDULE OF FUTURE MATURITIES OF PROMISSORY NOTES | Future maturities related to the above promissory notes, notes payable and convertible notes are as follows: SCHEDULE OF FUTURE MATURITIES OF PROMISSORY NOTES Twelve Months Ending August 31, 2022 $ 2,963,874 2023 4,557,084 2024 8,772 2025 8,772 2026 8,772 Thereafter 108,338 Long-term Debt, Gross 7,655,612 Less: current portion (2,963,874 ) Less: unamortized discount (2,001,853 ) Long term, notes payable $ 2,689,885 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Related Party Transactions [Abstract] | |
SCHEDULE OF RELATED PARTY TRANSACTIONS | Related party debt consisted of the following: SCHEDULE OF RELATED PARTY TRANSACTIONS August 31, 2021 May 31, 2021 Due to Frangipani Trade Services (1) $ 903,927 $ 903,927 Due to employee (2) 55,000 60,000 Due to employee (3) 122,216 149,996 Due to related parties, gross 1,081,143 1,113,923 Less: current portion (392,975 ) (397,975 ) Long term, due to related parties $ 688,168 $ 715,948 (1) Due to Frangipani Trade Services (“FTS”), an entity owned by the Company’s CEO, is due on demand and is non-interest bearing. The principal amount of this Promissory Note bears no interest; provided that any amount due under this Note which is not paid when due shall bear interest at an interest rate equal to six percent ( 6 150,655 (4) On May 29, 2020, the Company entered into a $ 90,000 2,500 (5) On May 29, 2020, the Company entered into a $ 200,000 5,556 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Equity [Abstract] | |
SCHEDULE OF WARRANTS ACTIVITY | The following is a summary of the Company’s warrant activity: SCHEDULE OF WARRANTS ACTIVITY Weighted Average Warrants Exercise Price Outstanding – May 31, 2021 1,140,956,904 $ 0.002 Exercisable – May 31, 2021 1,140,956,904 $ 0.002 Granted - $ - Outstanding – August 31, 2021 1,140,956,904 $ 0.002 Exercisable – August 31, 2021 1,140,956,904 $ 0.002 |
SCHEDULE OF WARRANTS OUTSTANDING AND EXERCISABLE | SCHEDULE OF WARRANTS OUTSTANDING AND EXERCISABLE Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.002 1,140,956,904 4.11 $ 0.002 1,140,956,904 $ 0.002 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
SCHEDULE OF COMPONENTS OF LEASE EXPENSE | The components of lease expense were as follows: SCHEDULE OF COMPONENTS OF LEASE EXPENSE August 31, 2021 August 31, 2020 For the Three Months Ended For the Three Months Ended August 31, 2021 August 31, 2020 Operating lease $ 362,201 $ 346,702 Interest on lease liabilities 52,384 50,741 Total net lease cost $ 414,585 $ 397,443 |
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION | Supplemental balance sheet information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION August 31, 2021 May 31, 2021 Operating leases: Operating lease ROU assets – net $ 3,435,326 $ 3,797,527 Current operating lease liabilities, included in current liabilities $ 1,481,602 $ 1,466,409 Noncurrent operating lease liabilities, included in long-term liabilities 2,064,121 2,431,144 Total operating lease liabilities $ 3,545,723 $ 3,897,553 |
SCHEDULE OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION | Supplemental cash flow and other information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION For the For the ROU assets obtained in exchange for lease liabilities: Operating leases $ - $ 223,242 Weighted average remaining lease term (in years): Operating leases 3.95 4.45 Weighted average discount rate: Operating leases 4.25 % 4.25 % |
SCHEDULE OF MINIMUM LEASE PAYMENTS | As of August 31, 2021, future minimum lease payments under noncancelable operating leases are as follows: SCHEDULE OF MINIMUM LEASE PAYMENTS Twelve Months Ending August 31, 2022 $ 1,569,738 2023 696,262 2024 507,321 2025 423,985 2026 229,215 Thereafter 420,309 Total lease payments 3,846,830 Less: imputed interest (311,107 ) Total lease obligations $ 3,535,723 |
INCOME TAX PROVISION (Tables)
INCOME TAX PROVISION (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF INCOME TAX EXPENSE | The income tax expense consists of the following: SCHEDULE OF INCOME TAX EXPENSE August 31, 2021 August 31, 2020 Federal Current $ 457,000 $ - Deferred 65,448 - State and Local - Current 102,000 - Deferred 14,552 - Income tax expense $ 639,000 $ - |
SCHEDULE OF EXPECTED TAX EXPENSE (BENEFIT) | The expected tax expense based on the statutory rate is reconciled with actual tax expense benefit as follows: SCHEDULE OF EXPECTED TAX EXPENSE (BENEFIT) For the Three Months Ended August 31, 2020 US Federal statutory rate (%) 21 % 21 % State income tax, net of federal benefit 7 % 4 % Change in valuation allowance (2 )% (25 )% Other permanent differences, net 5 % - Income tax provision (%) 31 % - |
SCHEDULE OF CONCENTRATION OF RI
SCHEDULE OF CONCENTRATION OF RISK (Details) - Revenue Benchmark [Member] - Customer Concentration Risk [Member] | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Customer A [Member] | ||
Product Information [Line Items] | ||
Concentration risk percentage | 15.00% | 23.00% |
Customer B [Member] | ||
Product Information [Line Items] | ||
Concentration risk percentage | 9.00% | 21.00% |
Customer C [Member] | ||
Product Information [Line Items] | ||
Concentration risk percentage | 8.00% | (0.00%) |
Customers [Member] | ||
Product Information [Line Items] | ||
Concentration risk percentage | 32.00% | 44.00% |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUE (Details) - USD ($) | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Total revenue | $ 189,771,860 | $ 57,415,267 |
China, Hong Kong & Taiwan [Member] | ||
Total revenue | 78,105,308 | 35,239,785 |
Asia [Member] | ||
Total revenue | 75,376,620 | 9,230,824 |
UNITED STATES | ||
Total revenue | 7,191,202 | 3,698,705 |
INDIA | ||
Total revenue | 20,648,314 | 3,233,275 |
Other [Member] | ||
Total revenue | $ 8,450,415 | $ 6,012,678 |
SCHEDULE OF EARNING PER SHARE (
SCHEDULE OF EARNING PER SHARE (Details) - USD ($) | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Accounting Policies [Abstract] | ||
Net income | $ 2,023,416 | $ (601,171) |
Effect of dilutive securities | 385,480 | |
Diluted net income | $ 2,408,896 | |
Weighted average common shares outstanding – basic | 1,611,146,398 | 10,000,000 |
Series A Preferred | $ 1,316,157,000 | |
Series B Preferred | 5,373,342,576 | |
Convertible notes | $ 1,806,230,539 | |
Weighted average common shares outstanding and assumed conversion – diluted | 10,106,876,513 | 10,000,000 |
Basic net income per common share | $ 0 | $ (0.06) |
Diluted net income per common share | $ 0 | $ (0.06) |
(a) - Anti-dilutive securities excluded: |
NATURE OF BUSINESS AND SUMMAR_4
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | |||||
Aug. 31, 2021 | Aug. 31, 2020 | Jan. 31, 2022 | Aug. 30, 2021 | Jun. 02, 2021 | May 31, 2021 | |
Product Information [Line Items] | ||||||
[custom:WorkingCapitalDeficit-0] | $ 1,700,000 | $ 3,500,000 | ||||
Allowance for doubtful accounts | 160,000 | 240,000 | ||||
Accounts receivable outstanding | 4,300,000 | 37,900,000 | ||||
Factoring expenses | 27,000 | $ 474,000 | ||||
Deferred tax asset | $ 184,000 | 264,000 | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Three Customers [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 42.00% | |||||
TBK Agreement [Member] | ||||||
Product Information [Line Items] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 40,000,000 | |||||
TBK Agreement [Member] | Forecast [Member] | ||||||
Product Information [Line Items] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 47,500,000 | |||||
Factoring Agreement [Member] | ||||||
Product Information [Line Items] | ||||||
Accounts receivable outstanding | $ 0 | $ 31,747,702 | ||||
Repurchase of trade accounts receivable | $ 1,415,445 | $ 31,596,215 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Aug. 31, 2021 | May 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 271,689 | $ 247,490 |
Less: accumulated depreciation | (72,409) | (55,398) |
Property and equipment, net | 199,280 | 192,092 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 94,732 | 84,085 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 119,202 | 108,479 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 30,609 | 27,780 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 27,146 | $ 27,146 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 17,011 | $ 9,920 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | Aug. 31, 2021 | May 31, 2021 |
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 8,752,000 | $ 8,752,000 |
Less: Accumulated amortization | (883,935) | (707,147) |
Intangible assets, net | 7,868,065 | 8,044,853 |
Trademarks and Trade Names [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 806,000 | 806,000 |
Customer Relationships [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 7,633,000 | 7,633,000 |
Noncompete Agreements [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 313,000 | $ 313,000 |
SCHEDULE OF ESTIMATED AMORTIZAT
SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE (Details) - USD ($) | Aug. 31, 2021 | May 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 608,814 | |
2023 | 608,814 | |
2024 | 608,814 | |
2025 | 547,953 | |
2026 | 547,953 | |
Thereafter | 4,945,717 | |
Intangible assets, net | $ 7,868,065 | $ 8,044,853 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Indefinite-lived Intangible Assets [Line Items] | ||
Amortization of Intangible Assets | $ 176,788 | $ 176,787 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 8 years 29 days | |
Tradenames and Non-Compete Agreements [Member] | Minimum [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 3 years | |
Trade Names and Non-Compete Agreements [Member] | Maximum [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | |
Customer Relationships [Member] | Minimum [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 12 years | |
Customer Relationships [Member] | Maximum [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 15 years |
SCHEDULE OF ACCRUED EXPENSES AN
SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Aug. 31, 2021 | May 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued salaries and related expenses | $ 309,267 | $ 672,455 |
Accrued sales and marketing expense | 863,310 | 539,810 |
Accrued professional fees | 75,000 | 75,000 |
Accrued income tax | 815,286 | 256,286 |
Accrued overdraft liabilities | 870,163 | 790,364 |
Accrued interest expense | 303,111 | |
Other accrued expenses and current liabilities | 3,502,800 | 50,000 |
Accrued expenses and other current liabilities | $ 6,738,937 | $ 2,383,915 |
SCHEDULE OF FINANCING ARRANGEME
SCHEDULE OF FINANCING ARRANGEMENT (Details) - USD ($) | Aug. 31, 2021 | May 31, 2021 | |
Short-term Debt [Line Items] | |||
Notes payable, gross | $ 45,196,842 | $ 5,478,673 | |
Less: current portion | [1] | (42,506,957) | (2,285,367) |
Long term, notes payable | 2,689,885 | 3,193,306 | |
Revolving Credit Facility [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable, gross | 39,543,083 | ||
Promissory Notes (PPP) [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable, gross | 358,236 | ||
Promissory Notes (EIDL) [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable, gross | 150,000 | 150,000 | |
Notes Payable [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable, gross | 3,565,634 | 2,528,886 | |
Convertible Notes - Net of Discount [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable, gross | $ 1,938,125 | $ 2,441,551 | |
[1] | As of August 31, 2021, a current portion of outstanding debt is represented by a revolving line of credit in the amount of $ 39,543,083 2,963,874 |
FINANCING ARRANGEMENTS - SCHEDU
FINANCING ARRANGEMENTS - SCHEDULE OF FINANCING ARRANGEMENT (Details) (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | May 31, 2021 | |
Short-term Debt [Line Items] | |||
Debt, original issue discount | $ 385,480 | ||
Revolving credit facility | 39,543,083 | ||
Current portion of notes payable | 2,963,874 | 2,285,367 | |
Convertible Notes - Net of Discount [Member] | |||
Short-term Debt [Line Items] | |||
Debt, original issue discount | $ 2,001,853 | $ 1,607,283 |
SCHEDULE OF FUTURE MATURITIES O
SCHEDULE OF FUTURE MATURITIES OF PROMISSORY NOTES (Details) - USD ($) | Aug. 31, 2021 | May 31, 2021 |
Debt Disclosure [Abstract] | ||
2022 | $ 2,963,874 | |
2023 | 4,557,084 | |
2024 | 8,772 | |
2025 | 8,772 | |
2026 | 8,772 | |
Thereafter | 108,338 | |
Long-term Debt, Gross | 7,655,612 | |
Less: current portion | (2,963,874) | $ (2,285,367) |
Less: unamortized discount | (2,001,853) | |
Long term, notes payable | $ 2,689,885 | $ 3,193,306 |
FINANCING ARRANGEMENTS (Details
FINANCING ARRANGEMENTS (Details Narrative) - USD ($) | Oct. 01, 2021 | Sep. 28, 2021 | Aug. 31, 2021 | Aug. 09, 2021 | Aug. 03, 2021 | Jul. 08, 2021 | Jun. 28, 2021 | Jun. 02, 2021 | Apr. 07, 2021 | Mar. 19, 2021 | Mar. 09, 2021 | Jan. 28, 2021 | Oct. 14, 2020 | Oct. 08, 2020 | May 29, 2020 | Aug. 31, 2021 | Aug. 31, 2020 | Sep. 17, 2021 | Sep. 16, 2021 | Aug. 04, 2021 | Jun. 17, 2021 | May 31, 2021 |
Debt Instrument [Line Items] | ||||||||||||||||||||||
Accounts receivables net | $ 70,183,018 | $ 70,183,018 | $ 20,369,747 | |||||||||||||||||||
Proceeds from notes payable | 1,000,000 | $ 87,500 | ||||||||||||||||||||
Gain on extinguishment of debt | 780,050 | |||||||||||||||||||||
Debt, original issue discount | 385,480 | |||||||||||||||||||||
Noteholder [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt, conversion of notes into shares, value | $ 12,820.83 | $ 24,418.89 | $ 15,620.83 | $ 71,855.20 | ||||||||||||||||||
Debt, conversion of notes into shares | 7,137,037 | 13,593,388 | 8,695,727 | 40,000,000 | ||||||||||||||||||
Trillium Note [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Notes payable | 1,140,624 | 1,140,624 | 1,062,215 | |||||||||||||||||||
Trillium Note [Member] | Accredited Investor [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt, interest rate | 10.00% | |||||||||||||||||||||
Notes payable | $ 1,000,000 | |||||||||||||||||||||
Proceeds from notes payable | $ 1,000,000 | |||||||||||||||||||||
Amended and Restated Note [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt, maturity date | Dec. 31, 2021 | |||||||||||||||||||||
Debt, interest rate | 7.50% | |||||||||||||||||||||
Notes payable | $ 1,000,000 | |||||||||||||||||||||
Debt instrument, description | the Company entered into an Amended and Restated Promissory Note (the “Amended and Restated Note”) superseding and replacing the Original Note. The Amended and Restated Note is in the principal aggregate amount of $1,000,000 and bears interest at a rate of a guaranteed 7.5% or 75,000 at maturity. The Amended and Restated Note matures on | |||||||||||||||||||||
New Bridge Notes [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Notes payable | 1,000,000 | 1,000,000 | 0 | |||||||||||||||||||
Proceeds from notes payable | 1,000,000 | |||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt, periodic payments | $ 53,054.86 | |||||||||||||||||||||
Subsequent Event [Member] | New Bridge Notes [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt, maturity date | Mar. 31, 2022 | |||||||||||||||||||||
UL ATL [Member] | Notes Payable [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt, maturity date | May 29, 2023 | |||||||||||||||||||||
Notes payable | 1,216,667 | $ 1,825,000 | 1,216,667 | 1,825,000 | ||||||||||||||||||
Debt, periodic payment description | The agreement calls for six semi-annual payments of $304,166.67, for which the first payment was due on November 29, 2020. | |||||||||||||||||||||
Debt, periodic payments | $ 304,166.67 | |||||||||||||||||||||
TBK Agreement [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Lesser received from amount | $ 30,000,000 | |||||||||||||||||||||
Line of credit | 40,000,000 | 40,000,000 | ||||||||||||||||||||
TBK Agreement [Member] | Subsequent Event [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Line of credit | $ 47,500,000 | $ 40,000,000 | ||||||||||||||||||||
TBK Agreement [Member] | Maximum [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Line of credit | $ 40,000,000 | |||||||||||||||||||||
TBK Agreement [Member] | Maximum [Member] | Subsequent Event [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Line of credit | 47,500,000 | |||||||||||||||||||||
TBK Agreement [Member] | Minimum [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Line of credit | $ 30,000,000 | |||||||||||||||||||||
TBK Agreement [Member] | Minimum [Member] | Subsequent Event [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Line of credit | $ 40,000,000 | |||||||||||||||||||||
TBK Agreement [Member] | Corefund Capital, LLC [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Accounts receivables net | $ 2,000,000 | |||||||||||||||||||||
TBK Agreement [Member] | Corefund Capital, LLC [Member] | Maximum [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Accounts receivables net | 25,000,000 | |||||||||||||||||||||
Paycheck Protection Program Loans [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt, outstanding balance | $ 358,236 | |||||||||||||||||||||
Debt, maturity date | Mar. 5, 2026 | |||||||||||||||||||||
Debt, interest rate | 1.00% | |||||||||||||||||||||
Non-Compete, Non-Solicitation and Non-Disclosure Agreement [Member] | ATL [Member] | Notes Payable [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Notes payable | 208,338 | $ 500,000 | 208,338 | 500,000 | ||||||||||||||||||
Debt, periodic payment description | The agreement calls for twenty-four monthly non-interest-bearing payments of $20,833.33 with the first payment on June 29, 2020 | |||||||||||||||||||||
Debt, periodic payments | $ 20,833.33 | |||||||||||||||||||||
Trillium SPA [Member] | Convertible Notes Payable [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt, maturity date | Oct. 6, 2022 | Oct. 6, 2021 | ||||||||||||||||||||
Debt, interest rate | 10.00% | |||||||||||||||||||||
Notes payable | $ 1,067,500 | $ 1,111,000 | $ 1,067,500 | 1,104,500 | ||||||||||||||||||
Proceeds from notes payable | $ 1,000,000 | |||||||||||||||||||||
Number of warrants to purchase common stock | 570,478,452 | |||||||||||||||||||||
Warrants exercise price, per share | $ 0.001946 | |||||||||||||||||||||
Debt, conversion price per share | $ 0.00179638 | $ 0.00179638 | $ 0.00179638 | |||||||||||||||||||
Debt, conversion of notes into shares, value | $ 78,703 | |||||||||||||||||||||
Debt, conversion of notes into shares | 43,811,372 | |||||||||||||||||||||
3a SPA [Member] | Convertible Notes Payable [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt, maturity date | Oct. 6, 2022 | Oct. 6, 2021 | ||||||||||||||||||||
Debt, interest rate | 10.00% | |||||||||||||||||||||
Notes payable | $ 1,111,000 | |||||||||||||||||||||
Proceeds from notes payable | $ 1,000,000 | |||||||||||||||||||||
Number of warrants to purchase common stock | 570,478,452 | |||||||||||||||||||||
Warrants exercise price, per share | $ 0.001946 | |||||||||||||||||||||
Warrants, value | $ 563,156 | |||||||||||||||||||||
Debt, beneficial conversion feature | $ 436,844 | |||||||||||||||||||||
Gain on extinguishment of debt | $ 383,819 | |||||||||||||||||||||
Debt, unamortized debt discount | $ 632,126 | 632,126 | 391,757 | |||||||||||||||||||
Debt, original issue discount | 143,450 | |||||||||||||||||||||
3a SPA [Member] | Convertible Notes Payable [Member] | Noteholder [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Notes payable | $ 1,039,145 | $ 1,039,145 | 1,111,000 | |||||||||||||||||||
Debt, conversion price per share | $ 0.00179638 | $ 0.00179638 | ||||||||||||||||||||
Debt, conversion of notes into shares, value | $ 71,855 | |||||||||||||||||||||
Debt, conversion of notes into shares | 40,000,000 | |||||||||||||||||||||
Trillium and 3a SPA [Member] | Convertible Notes Payable [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt, maturity date | Jan. 28, 2023 | Jan. 28, 2022 | ||||||||||||||||||||
Debt, interest rate | 10.00% | |||||||||||||||||||||
Notes payable | $ 1,833,334 | $ 916,666 | $ 1,833,334 | 1,833,334 | ||||||||||||||||||
Proceeds from notes payable | $ 1,666,666 | |||||||||||||||||||||
Debt, conversion price per share | $ 0.0032 | |||||||||||||||||||||
Debt, beneficial conversion feature | $ 1,666,666 | |||||||||||||||||||||
Gain on extinguishment of debt | $ 247,586 | |||||||||||||||||||||
Debt, unamortized debt discount | $ 1,369,728 | 1,369,728 | $ 1,215,526 | |||||||||||||||||||
Debt, original issue discount | $ 462,100 | |||||||||||||||||||||
Exchange Agreement [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Agreement description | the Company agreed to issue, and the Holders agreed to acquire the New Securities (as defined herein) in exchange for the Surrendered Securities (the “Old Notes” defined as October and January Notes and Warrants in the Exchange Agreement). “New Securities” means a number of Exchange Shares (as defined in the Exchange Agreement) determined by applying the Exchange Ratio (as defined in the Exchange Agreement) upon consummation of a registered public offering of shares of the Company’s Common Stock (and warrants if included in such financing), at a valuation of not less than $200,000,000.00 pre-money, pursuant to which the Company receives gross proceeds of not less than $20,000,000 and the Company’s Trading Market is a National Securities Exchange (the “Qualified Financing”) |
SCHEDULE OF RELATED PARTY TRANS
SCHEDULE OF RELATED PARTY TRANSACTIONS (Details) - USD ($) | Aug. 31, 2021 | May 31, 2021 | |
Related Party Transaction [Line Items] | |||
Due to related parties, gross | $ 1,081,143 | $ 1,113,923 | |
Less: current portion | (392,975) | (397,975) | |
Long term, due to related parties | 688,168 | 715,948 | |
Due To Frangipani Trade Services [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties, gross | [1] | 903,927 | 903,927 |
Due To Employee [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties, gross | [2] | 55,000 | 60,000 |
Due To Employee [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties, gross | [3] | $ 122,216 | $ 149,996 |
[1] | Due to Frangipani Trade Services (“FTS”), an entity owned by the Company’s CEO, is due on demand and is non-interest bearing. The principal amount of this Promissory Note bears no interest; provided that any amount due under this Note which is not paid when due shall bear interest at an interest rate equal to six percent ( 6 150,655 | ||
[2] | On May 29, 2020, the Company entered into a $ 90,000 2,500 | ||
[3] | On May 29, 2020, the Company entered into a $ 200,000 5,556 |
SCHEDULE OF RELATED PARTY TRA_2
SCHEDULE OF RELATED PARTY TRANSACTIONS (Details) (Parenthetical) - USD ($) | May 29, 2020 | Aug. 31, 2021 |
Due To Frangipani Trade Services [Member] | ||
Related Party Transaction [Line Items] | ||
Debt, interest rate | 6.00% | |
Debt, periodic payments | $ 150,655 | |
Due To Employee [Member] | ||
Related Party Transaction [Line Items] | ||
Debt, periodic payments | $ 2,500 | |
Notes payable | 90,000 | |
Due To Employee [Member] | ||
Related Party Transaction [Line Items] | ||
Debt, periodic payments | 5,556 | |
Notes payable | $ 200,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | May 29, 2020 | Aug. 31, 2021 | Aug. 31, 2020 | May 31, 2021 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Amortized balances | $ 385,480 | |||
Accounts receivable, trade related parties | 923,597 | $ 1,274,250 | ||
Accounts payable, trade related parties | 20,720,115 | 10,839,224 | ||
Revenue from related party transactions | 300,000 | |||
Total direct costs | 29,300,000 | |||
Consulting Services Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Payment for consulting agreement | $ 500,000 | 250,000 | ||
Amortized balances | 494,670 | $ 565,338 | ||
Service fees | 15,000 | $ 15,000 | ||
Consulting Services Agreement [Member] | David Briones [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Service fees | $ 5,000 |
RETIREMENT PLANS (Details Narra
RETIREMENT PLANS (Details Narrative) - USD ($) | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Retirement Benefits [Abstract] | ||
Retirment plan, description | In one of which the Company has the discretionary option of matching employee contributions and in the other the Company matches 20% on the first 100% contribution. In either Plan, employees can contribute 1% to 98% of gross salary up to a maximum permitted by law. | |
Retirement expense | $ 56,321 | $ 0 |
SCHEDULE OF WARRANTS ACTIVITY (
SCHEDULE OF WARRANTS ACTIVITY (Details) - Warrant [Member] | 3 Months Ended |
Aug. 31, 2021$ / sharesshares | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Number of warrants outstanding, beginning | shares | 1,140,956,904 |
Warrants, weighted average exercise price, beginning | $ / shares | $ 0.002 |
Number of warrants exercisable , beginning | shares | 1,140,956,904 |
Warrants, weighted average exercise price exercisable, beginning | $ / shares | $ 0.002 |
Number of warrants, granted | shares | |
Warrants, weighted average exercise price, granted | $ / shares | |
Number of warrants outstanding, ending | shares | 1,140,956,904 |
Warrants, weighted average exercise price, ending | $ / shares | $ 0.002 |
Number of warrants exercisable, ending | shares | 1,140,956,904 |
Warrants, weighted average exercise price exercisable, ending | $ / shares | $ 0.002 |
SCHEDULE OF WARRANTS OUTSTANDIN
SCHEDULE OF WARRANTS OUTSTANDING AND EXERCISABLE (Details) - Warrant [Member] | 3 Months Ended |
Aug. 31, 2021$ / sharesshares | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Warrants Outstanding, Exercise Price | $ / shares | $ 0.002 |
Warrants Outstanding, Number Outstanding | shares | 1,140,956,904 |
Warrants Outstanding, Weighted Average Remaining Contractual Life (in years) | 4 years 1 month 9 days |
Warrants Exercisable, Weighted Average Exercise Price | $ / shares | $ 0.002 |
Warrants Exercisable, Number Exercisable | shares | 1,140,956,904 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | Aug. 13, 2021 | Aug. 09, 2021 | Aug. 03, 2021 | Jul. 08, 2021 | Jun. 28, 2021 | Aug. 31, 2021 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Number of shares issued | 125,692,224 | |||||
Intrinsic value of warrants outstanding and exercisable | $ 54,827,543 | |||||
Series B Convertible Preferred Stock [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Number of shares issued | 19,200 | |||||
Noteholder [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Debt, conversion of shares, value | $ 12,820.83 | $ 24,418.89 | $ 15,620.83 | $ 71,855.20 | ||
Debt, conversion of shares | 7,137,037 | 13,593,388 | 8,695,727 | 40,000,000 | ||
Common stock per share | $ 0.00179638 | $ 0.00179638 | $ 0.00179638 | $ 0.00179638 | ||
Chief Executive Officer [Member] | Series B Convertible Preferred Stock [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Ownership percentage | 100.00% |
SCHEDULE OF COMPONENTS OF LEASE
SCHEDULE OF COMPONENTS OF LEASE EXPENSE (Details) - USD ($) | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease | $ 362,201 | $ 346,702 |
Interest on lease liabilities | 52,384 | 50,741 |
Total net lease cost | $ 414,585 | $ 397,443 |
SCHEDULE OF SUPPLEMENTAL BALANC
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) - USD ($) | Aug. 31, 2021 | May 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease ROU assets – net | $ 3,435,326 | $ 3,797,527 |
Current operating lease liabilities, included in current liabilities | 1,481,602 | 1,466,409 |
Noncurrent operating lease liabilities, included in long-term liabilities | 2,064,121 | 2,431,144 |
Total operating lease liabilities | $ 3,545,723 | $ 3,897,553 |
SCHEDULE OF SUPPLEMENTAL CASH F
SCHEDULE OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION (Details) - USD ($) | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
ROU assets obtained in exchange for lease liabilities: Operating leases | $ 223,242 | |
Weighted average remaining lease term (in years): Operating leases | 3 years 11 months 12 days | 4 years 5 months 12 days |
Weighted average discount rate | 4.25% | 4.25% |
SCHEDULE OF MINIMUM LEASE PAYME
SCHEDULE OF MINIMUM LEASE PAYMENTS (Details) | Aug. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 1,569,738 |
2023 | 696,262 |
2024 | 507,321 |
2025 | 423,985 |
2026 | 229,215 |
Thereafter | 420,309 |
Total lease payments | 3,846,830 |
Less: imputed interest | (311,107) |
Total lease obligations | $ 3,535,723 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - Securities Purchase Agreement [Member] - ULHK Entities [Member] | 3 Months Ended |
Aug. 31, 2021USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Acquisition description | the Company’s purchase from ULHK of (i) 65% of the capital stock of Unique Logistics International India (Private) Ltd.; (ii) 50% of the capital stock of ULI (North & East China) Company Limited; (iii) 50% of the capital stock of Unique Logistics International (Shanghai) Co. Ltd; (iv) 50% of the capital stock of ULI International Co. Ltd.; (v) 49.99% of TGF Unique Limited; (vi) 100% of the capital stock of Unique Logistics International (H.K.) Limited; (vii) 65% of the capital stock of Unique Logistics International (Vietnam) Co. Ltd.; (viii) 70% of the capital stock of ULI (South China) Limited; (ix) 100% of the capital stock of Unique Logistics International (South China) Ltd.; and (x) 100 of the capital stock of Shenzhen Unique Logistics Limited (collectively the “ULHK Entities”). |
Acquisition purchase price payable term pending | The initial purchase price, subject to adjustment, to be paid for the ULHK Entities is $22,000,000 payable as follows (i) $210,000,000 payable at closing (ii) $1,000,000 in the form of a zero interest 24-month promissory note. Seller shall also be entitled to an additional $2,500,000 payable (the “Earn-Out Payment”) by March 31, 2023, in the event that ULHK Entities EBITDA exceeds $5,000,000 for the calendar year of 2022. Should ULHK Entities EBITDA be less than $5,000,000 but more than $4,500,000 for the 2022 calendar year, the Earn-Out Payment will be adjusted to $2,000,000. No Earn-Out will be paid if the EBITDA of the ULHK Entities is less than $4,500,000 for the 2022 calendar year |
Acquistion initial purchase price | $ 22,000,000 |
Acquistion purchase price payable at closing | 210,000,000 |
Amount payable in zero interest 24 month promissory notes | 1,000,000 |
Earn out payment | $ 2,500,000 |
Earn out payment payable date | Mar. 31, 2023 |
SCHEDULE OF INCOME TAX EXPENSE
SCHEDULE OF INCOME TAX EXPENSE (Details) - USD ($) | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal: Current | $ 457,000 | |
Federal: Deferred | 65,448 | |
State and Local: Current | 102,000 | |
State and Local: Deferred | 14,552 | |
Income tax benefit | $ 639,000 |
SCHEDULE OF EXPECTED TAX EXPENS
SCHEDULE OF EXPECTED TAX EXPENSE (BENEFIT) (Details) | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
US Federal statutory rate | 21.00% | 21.00% |
State income tax, net of federal benefit | 7.00% | 4.00% |
Change in valuation allowance | (2.00%) | (25.00%) |
Other permanent differences, net | 5.00% | |
Income tax provision (benefit) | 31.00% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Oct. 01, 2021 | Sep. 28, 2021 | Sep. 23, 2021 | Sep. 08, 2021 | Sep. 17, 2021 | Sep. 16, 2021 | Aug. 31, 2021 |
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Convertible notes of both principal and interest | $ 53,054.86 | ||||||
Number of convertible notes, shares | 29,534,319 | ||||||
Share issued price per share | $ 0.00179638 | ||||||
Subsequent Event [Member] | Trillium Notes [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt instrument extend maturity date | Sep. 23, 2021 | ||||||
Debt instrument face amount | $ 1,000,000 | ||||||
Debt instrument, maturity date | Oct. 31, 2021 | ||||||
Subsequent Event [Member] | New Bridge Notes [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt instrument face amount | $ 2,000,000 | ||||||
Debt instrument, maturity date | Mar. 31, 2022 | ||||||
Debt instrument interest rate terms | Interest on this Notes shall initially accrue on the outstanding Principal Amount (as defined therein) at a rate equal to twelve (12) % per annum during the first 120 calendar days following the issuance date of this Note (“Issue Date”). Commencing 121 days following the Issue Date and continuing thereafter, absent an Event of Default, interest shall accrue on the outstanding Principal Amount at a rate equal to eighteen (18) % per annum. The Principal Amount and all accrued Interest shall become due and payable on the Maturity Date. Upon the occurrence of any Event of Default, including at any time following the Maturity Date, a default interest rate equal to twenty four percent (24%) per annum shall be in effect as to all unpaid principal then outstanding. The Company shall pay a minimum interest payment equal to twelve percent (12%) on the Principal Amount, or $120,000 (“Minimum Interest Payment”). The Company may prepay the Notes at any time in whole or in part by making a payment equal to (a) the Principal Amount owed under the Notes plus (b) the greater of: (i) all accrued and unpaid interest, or (ii) the Minimum Interest Payment. | ||||||
Minimum interest payment | $ 120,000 | ||||||
Subsequent Event [Member] | New Bridge Notes [Member] | Trillium Partners L.P [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt instrument face amount | 1,000,000 | ||||||
Subsequent Event [Member] | New Bridge Notes [Member] | Carpathia LLC [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt instrument face amount | $ 1,000,000 | ||||||
Purchase Money Financing Agreement [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Accrued interest rate | 0.10% | ||||||
Liquidation success premium percent | 10.00% | ||||||
TBK Agreement [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Line of credit | $ 40,000,000 | ||||||
TBK Agreement [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Line of credit | $ 47,500,000 | $ 40,000,000 |