Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
May 31, 2018 | Aug. 15, 2018 | Nov. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | PREAXIA HEALTH CARE PAYMENT SYSTEMS INC. | ||
Entity Central Index Key | 1,350,156 | ||
Document Type | 10-K | ||
Document Period End Date | May 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --05-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 13,767,388 | ||
Entity Common Stock, Shares Outstanding | 19,667,698 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,018 |
Balance Sheets
Balance Sheets - USD ($) | May 31, 2018 | May 31, 2017 |
Current Assets | ||
Cash | $ 7,608 | $ 8,779 |
Total Current Assets | 7,608 | 8,779 |
Total Assets | 7,608 | 8,779 |
Current Liabilities | ||
Accounts Payable and Accrued Liabilities | 142,859 | 131,219 |
Accounts Payable and Accrued Liabilities – Related Party | 119,121 | |
Loans Payable | 87,064 | 17,280 |
Notes Payable - Related Party | 1,058,760 | 1,058,760 |
Total Current Liabilities | 1,407,804 | 1,207,259 |
STOCKHOLDERS’ DEFICIT | ||
Common stock | 19,668 | 19,668 |
Additional Paid-in Capital | 2,682,303 | 2,682,303 |
Accumulated other Comprehensive Income/(Loss) | 57,197 | 57,197 |
Retained Deficit | (4,159,364) | (3,957,648) |
Total Stockholders’ Deficit | (1,400,196) | (1,198,480) |
Total Liabilities and Stockholders’ Deficit | $ 7,608 | $ 8,779 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | May 31, 2018 | May 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 19,667,698 | 19,667,698 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Operating Expenses | ||
Consulting fees | $ 128,000 | $ 126,741 |
Professional fees | 9,082 | 8,990 |
Office and administration | 26,567 | 24,901 |
Research and development | 38,067 | 54,743 |
Amortization expense | 34,050 | |
Total Operating Expenses | 201,716 | 249,425 |
Operating loss | (201,716) | (249,425) |
Other Income (Expenses) | ||
Commission income | ||
Interest expense | (12,597) | |
Total Other Income (Expenses) | (12,597) | |
Net loss | (201,716) | (262,022) |
Other comprehensive income: | ||
Foreign currency translation | 4,450 | |
Comprehensive loss for the period | $ (201,716) | $ (257,572) |
Basic and diluted loss per share | $ (0.01) | $ (0.01) |
Weighted average number of shares outstanding | 19,667,698 | 18,905,485 |
Shareholders Equity
Shareholders Equity - USD ($) | Common Stock | Additional Paid-In Capital | Other Comprehensive Income / Loss | Retained Earnings / Accumulated Deficit | Total |
Balance, shares at May. 31, 2016 | 18,228,882 | ||||
Balance, amount at May. 31, 2016 | $ 18,229 | $ 1,993,451 | $ 52,747 | $ (3,695,626) | $ (1,631,199) |
Foreign currency translation | 4,450 | 4,450 | |||
Forgiveness of Interest | 19,524 | 19,524 | |||
Common shares issued, shares | 562,908 | ||||
Common shares issued, value | $ 563 | 104,539 | 105,016 | ||
Common shares issued for debt, shares | 875,908 | ||||
Common shares issued for debt, value | $ 876 | 514,045 | 514,921 | ||
Net loss | (262,022) | (262,022) | |||
Balance, shares at May. 31, 2017 | 19,667,698 | ||||
Balance, amount at May. 31, 2017 | $ 19,668 | 2,682,303 | 57,197 | (3,957,648) | (1,198,480) |
Forgiveness of Interest | |||||
Net loss | (201,716) | (201,716) | |||
Balance, shares at May. 31, 2018 | 19,667,698 | ||||
Balance, amount at May. 31, 2018 | $ 19,668 | $ 2,682,303 | $ 57,197 | $ (4,159,364) | $ (1,400,196) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Cash Flows from Operating Activities | ||
Net loss | $ (201,716) | $ (262,022) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization | 34,050 | |
Changes in operating assets and liabilities: | ||
Increase (decrease) in accounts payable and accrued liabilities - related party | 119,121 | 98,383 |
Increase (decrease) in accounts payable and accrued liabilities | 11,640 | (853) |
Increase (decrease) in accrued interest | 12,056 | |
Cash Flows used in operating activities | (70,955) | (118,385) |
Cash Flows from Investing Activities | ||
Cash flows used in investing activities | ||
Cash Flows from Financing Activities | ||
Cash from Loans Payable | 69,784 | |
Cash received for common shares | 121,941 | |
Cash flows provided by financing activities | 69,784 | 121,941 |
Effect of exchange rate changes on cash | (1,928) | |
Increase (decrease) in cash during the period | (1,171) | 1,628 |
Cash, beginning of year | 8,779 | 7,151 |
Cash, end of year | 7,608 | 8,779 |
Supplemental Disclosure: | ||
Cash paid for income taxes | ||
Cash paid for interest | ||
Non-cash investing and financing activities: | ||
Accounts payable related party converted to loan payable | 1,058,760 | |
Shares issued for stock subscriptions | 35,062 | |
Common stock Issued for Debt including interest | 513,764 | |
Forgiveness of Interest | $ 19,524 |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Note 1 – Summary of significant accounting policies This summary of significant accounting policies of PreAxia Health Care Payment Systems Inc. (the “Company”) is presented to assist in understanding the Company’s consolidated financial statements. The consolidated financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the consolidated financial statements, which are stated in U.S. Dollars. Organization PreAxia Health Care Payment Systems Inc. (the “Company” or “PreAxia”) was incorporated on April 3, 2000 in the State of Nevada. On May 31, 2005 the Company acquired all of the outstanding stock of Tiempo de Mexico Ltd. (“Tiempo”) in exchange for 5,000,000 shares of the common stock of the Company with a par value of $0.001. The Company had no operations prior to the date of the aforementioned acquisition. As a result, the consolidated results of operations presented at May 31, 2018 and 2017 are those of the Company and PreAxia Canada Inc. PreAxia Canada Inc. was incorporated pursuant to the laws of the Province of Alberta on January 28, 2008. Since inception of PreAxia Canada Inc., its business objective has been the development, distribution, marketing and sale of health care payment processing services and products. Nature and Continuance of Operations The Company has not yet realized any revenues from its planned operations. The primary operations of the Company will eventually be undertaken by PreAxia Canada. PreAxia Canada is in the process of developing an online access system creating a health savings account that allows card payments and processing services to third-party administrators, insurance companies and others. Use of Estimates in the preparation of the consolidated financial statements The preparation of the Company's consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions that our company may undertake in the future, actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents. Foreign Currency Translation The functional currency of the Company is the United States dollar. The functional currency of PreAxia Canada is the Canadian dollar. Assets and liabilities in the accompanying consolidated financial statements are translated into United States dollars at the exchange rate in effect at the balance sheet date and capital accounts are translated at historical rates. Income statement accounts are translated at the average rates of exchange prevailing during the period. Translation adjustments arising from the use of differing exchange rates from period to period are included in the accumulated other comprehensive income (loss) account in stockholders’ deficit. Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date. Any exchange gains and losses are included in the Statement of Operations and Comprehensive Loss. The Company's reporting currency is the U.S. dollar. All transactions initiated in Canadian Dollars are translated into U.S. dollars in accordance with Accounting Standards Codification ("ASC") 830-30, "Translation of Financial Statements," as follows: i) assets and liabilities are translated at the closing rate at the date of the balance sheet or 1US Dollar=1.2958 Canadian Dollars (May 31, 2018), and; 1US Dollar=1.3495 Canadian Dollars (May 31, 2017); ii) income and expenses are translated at average exchange rates for twelve months ended May 31, or 1US Dollar=1.2851 Canadian Dollars (May 31, 2018), and; 1US Dollar=1.2973 Canadian Dollars (May 31, 2017); iii) all resulting exchange differences are recognized as other comprehensive income, a separate component of equity. Gain (Loss) Per Share Gain (loss) per share of common stock is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The Company has 10,587,600 and 10,587,600 shares of potential common stock equivalents as of May 31, 2018 and 2017, respectively. A separate computation of diluted earnings (loss) per share is not presented since the Company has net losses as the effects would be anti-dilutive. Research and Development Costs For the years ended May 31, 2018, and 2017, we expended $38,067 and $54,743 on research and development. Software Development Costs The Company accounts for software development costs in accordance with several accounting pronouncements, including FASB ASC 730, Research and Development, FASB ASC 350-40, Internal-Use Software, FASB 985-20, Costs of Computer Software to be Sold, Leased, or Marketed and FASB ASC 350-50, Website Development Costs . Costs incurred during the period of planning and design, prior to the period determining technological feasibility, for all software developed for use internal and external, has been charged to operations in the period incurred as research and development costs. Additionally, costs incurred after determination of readiness for market have been expensed as research and development. The Company has capitalized certain costs in the development of our proprietary software (computer software to be sold, leased or licensed) for the period after technological feasibility was determined and prior to our marketing and initial sales. Website development costs have been capitalized, under the same criteria as our marketed software. Intangible software costs were amortized over a three year period starting June 2014. Amortization for the years ended May 31, 2018 and 2017 was $ nil and $34,050, respectively. Impairment of Long-lived Assets Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiary. All inter-company accounts and transactions have been eliminated in consolidation. FINANCIAL INSTRUMENTS The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. Related party balances are not recorded at fair value because they are by nature not arm’s length transactions subject to normal market rates. Fair Value Estimates The Company defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Management uses a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: · Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities · Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. · Level 3 - Inputs that are both significant to the fair value measurement and unobservable. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of May 31, 2018. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. New Accounting Standards Recent Accounting Pronouncements The Company reviews new accounting standards as issued or updated. No new standards or updates had any material effect on these consolidated financial statements. The accounting pronouncements issued subsequent to the date of these consolidated financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented. Other The Company has selected May 31 as its year-end and the Company paid no dividends in 2018. Going Concern These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At May 31, 2018, the Company had not yet achieved profitable operations, has accumulated losses of $4,159,364 since inception, has negative working capital of $1,400,196 and expects to incur further losses in the development of its business, all of which raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but believes the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
May 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 2 Related Party Transactions Accounts Payable During the year ended May 31, 2018, the Company’s president, Tom Zapatinas, invoiced $120,000 for management services rendered to the Company for the period June 1, 2017 to May 31, 2018. As at May 31, 2018, Accounts payable – related party includes a total of $119,121 due and payable to Mr. Zapatinas. The balance as at May 31, 2017 was $ nil representing an increase of $119,121 over the prior year. The Accounts Payable Related Party was converted to a Note Payable Related Party in the amount of $1,058,760 on May 31, 2017. The Note is noninterest bearing and is payable on demand and can be converted in whole or in part into common shares at $0.10 per share. As of May 31, 2018, the Company owed loan holders $87,064 compared to $17,280 as at May 31, 2017. During the year ended May 31, 2017, the Company issued 775,908 shares of common stock to retire $387,954 of debt. Included in the amount above, the Company had a loan payable to a shareholder of the Company in the amount of $51,849. The loan was unsecured, with 6% interest per annum and was payable 30 days after demand is made by the shareholder. As of May 31, 2018 and 2017, the Company had accrued interest on the related party loan in the amount of $0 and $19,524, respectively. As at May 31, 2017, the above loan in the amount of $51,849 was converted to 103,698 shares of common stock while the interest on the loan in the amount of $19,524 was forgiven by the holder. As at May 31, 2017, the accounts payable to Mr. Ron Lizee in the amount of $90,000 and the accrued interest of $36,967 were converted to 100,000 shares of common stock. Included in accounts payable is a payable in the amount of $14,933 to a creditor, which is disputed by the Company and the Company believes the debt will be settled for an amount significantly less than the amount reported in the accounts. |
Income Taxes
Income Taxes | 12 Months Ended |
May 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 3 – Income Taxes As at May 31, 2018, the Company is in arrears on filing its statutory income tax returns. Tax years 2008 through 2018 are open for examination by taxing authorities. The Company has incurred substantial net operating losses of approximately $3,919,000 since January 28, 2008 (Date of Inception). On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the Tax Act) was enacted into law including a one-time mandatory transition tax on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We are required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, remeasuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. We have remeasured our U.S. deferred tax assets at a statutory income tax rate of 21%. Since the Tax Act was passed late in the fourth quarter of 2017, and ongoing guidance and accounting interpretation are expected over the next 12 months, we consider the accounting of any transition tax, deferred tax re-measurements, and other items to be incomplete due to the forthcoming guidance and our ongoing analysis of final year-end data and tax positions. We expect to complete our analysis within the measurement period in accordance with SAB 118, and no later than fiscal year end May 31, 2019. The Company’s deferred tax assets and liabilities consist primarily of the following: 2018 2017 Net operating losses – U.S. parent: Amount carried forward from prior years $ (1,389,099 ) $ (1,340,812 ) Net operating losses (34% tax rate) (68,583 ) (89,087 ) Accrued management compensation 40,800 40,800 Total (1,416,883 ) (1,389,099 ) Change in effective tax rates (from 34% to 21%) 593,817 — Deferred taxes – U.S. Parent (823,066 ) (1,389,099 ) Net operating losses – Canadian subsidiary: Amount carried forward from prior years (31,760 ) (31,760 ) Net operating losses — — Deferred taxes – Canadian subsidiary (31,760 ) (31,760 ) Total deferred tax assets (854,826 ) (1,420,859 ) Less: valuation allowance 854,826 1,420,859 Total net deferred tax assets $ — $ — During the years ended May 31, 2018 and 2017, the change in valuation allowance was a decrease of $566,033 in 2018 and an increase of $257,571 in 2017, respectively. The Company has no tax positions at May 31, 2018 and 2017 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the period presented. The Company had no accruals for interest and penalties at May 31, 2018 and 2017. |
Common Stock
Common Stock | 12 Months Ended |
May 31, 2018 | |
Equity [Abstract] | |
Common Stock | Common Stock The Company is authorized to issue up to 75,000,000 shares of common stock. The shares of common stock are non-assessable, without pre-emption rights, and do not carry cumulative voting rights. Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of our stockholders. Holders of our common stock are entitled to receive dividends if, as and when declared by our Board of Directors. During the year ended May 31, 2017 the Company issued 1,438,816 shares of which 875,908 shares were for the reduction of accounts payable related party and notes payable, in the amount of $514,921 and 562,908 shares for $155,846 in cash received, of which $35,062 was received in the prior year and recorded as subscription payable. |
Contingencies
Contingencies | 12 Months Ended |
May 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies From time to time the Company may be a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations. The Company does not have any long term commitments for equipment or leases. The Company does not have any office space commitments as the CEO operates from his residence. |
Subsequent events
Subsequent events | 12 Months Ended |
May 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events The Company has evaluated all subsequent events through the date these financial statements were issued and no additional subsequent events occurred that required disclosure. |
Summary of significant accoun13
Summary of significant accounting policies (Policies) | 12 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
Organization | Organization PreAxia Health Care Payment Systems Inc. (the “Company” or “PreAxia”) was incorporated on April 3, 2000 in the State of Nevada. On May 31, 2005 the Company acquired all of the outstanding stock of Tiempo de Mexico Ltd. (“Tiempo”) in exchange for 5,000,000 shares of the common stock of the Company with a par value of $0.001. The Company had no operations prior to the date of the aforementioned acquisition. As a result, the consolidated results of operations presented at May 31, 2018 and 2017 are those of the Company and PreAxia Canada Inc. PreAxia Canada Inc. was incorporated pursuant to the laws of the Province of Alberta on January 28, 2008. Since inception of PreAxia Canada Inc., its business objective has been the development, distribution, marketing and sale of health care payment processing services and products. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents. |
Foreign Currency Translation | Foreign Currency Translation The functional currency of the Company is the United States dollar. The functional currency of PreAxia Canada is the Canadian dollar. Assets and liabilities in the accompanying consolidated financial statements are translated into United States dollars at the exchange rate in effect at the balance sheet date and capital accounts are translated at historical rates. Income statement accounts are translated at the average rates of exchange prevailing during the period. Translation adjustments arising from the use of differing exchange rates from period to period are included in the accumulated other comprehensive income (loss) account in stockholders’ deficit. Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date. Any exchange gains and losses are included in the Statement of Operations and Comprehensive Loss. The Company's reporting currency is the U.S. dollar. All transactions initiated in Canadian Dollars are translated into U.S. dollars in accordance with Accounting Standards Codification ("ASC") 830-30, "Translation of Financial Statements," as follows: i) assets and liabilities are translated at the closing rate at the date of the balance sheet or 1US Dollar=1.2958 Canadian Dollars (May 31, 2018), and; 1US Dollar=1.3495 Canadian Dollars (May 31, 2017); ii) income and expenses are translated at average exchange rates for twelve months ended May 31, or 1US Dollar=1.2851 Canadian Dollars (May 31, 2018), and; 1US Dollar=1.2973 Canadian Dollars (May 31, 2017); iii) all resulting exchange differences are recognized as other comprehensive income, a separate component of equity. |
Gain (Loss) Per Share | Gain (Loss) Per Share Gain (loss) per share of common stock is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The Company has XX and 10,587,600 shares of potential common stock equivalents as of May 31, 2018 and 2017, respectively. A separate computation of diluted earnings (loss) per share is not presented since the Company has net losses as the effects would be anti-dilutive. |
Software Development Costs | Software Development Costs The Company accounts for software development costs in accordance with several accounting pronouncements, including FASB ASC 730, Research and Development, FASB ASC 350-40, Internal-Use Software, FASB 985-20, Costs of Computer Software to be Sold, Leased, or Marketed and FASB ASC 350-50, Website Development Costs . Costs incurred during the period of planning and design, prior to the period determining technological feasibility, for all software developed for use internal and external, has been charged to operations in the period incurred as research and development costs. Additionally, costs incurred after determination of readiness for market have been expensed as research and development. The Company has capitalized certain costs in the development of our proprietary software (computer software to be sold, leased or licensed) for the period after technological feasibility was determined and prior to our marketing and initial sales. Website development costs have been capitalized, under the same criteria as our marketed software. Intangible software costs are amortized over a three year period starting June 2014. Amortization for the years ended May 31, 2018 and 2017 was $ nil and $34,050, respectively. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiary. All inter-company accounts and transactions have been eliminated in consolidation. |
Fair Value Estimates | Fair Value Estimates The Company defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Management uses a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: · Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities · Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. · Level 3 - Inputs that are both significant to the fair value measurement and unobservable. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of May 31, 2018. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. |
Going Concern | Going Concern These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At May 31, 2018, the Company had not yet achieved profitable operations, has accumulated losses of $4,159,364 since inception, has negative working capital of $1,400,196 and expects to incur further losses in the development of its business, all of which raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but believes the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
May 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Deferred tax table | 2018 2017 Net operating losses – U.S. parent: Amount carried forward from prior years $ (1,389,099 ) $ (1,340,812 ) Net operating losses (34% tax rate) (68,583 ) (89,087 ) Accrued management compensation 40,800 40,800 Total (1,416,883 ) (1,389,099 ) Change in effective tax rates (from 34% to 21%) 593,817 — Deferred taxes – U.S. Parent (823,066 ) (1,389,099 ) Net operating losses – Canadian subsidiary: Amount carried forward from prior years (31,760 ) (31,760 ) Net operating losses — — Deferred taxes – Canadian subsidiary (31,760 ) (31,760 ) Total deferred tax assets (854,826 ) (1,420,859 ) Less: valuation allowance 854,826 1,420,859 Total net deferred tax assets $ — $ — |
Note 1 - Summary of significant
Note 1 - Summary of significant accounting policies (Going Concern) (Details) | May 31, 2018USD ($) |
Note 1 - Summary Of Significant Accounting Policies Going Concern | |
Negative working capital | $ 1,400,196 |
Related Party Transactions (Det
Related Party Transactions (Details) | May 31, 2018USD ($) |
Related Party Transactions Details Abstract | |
Accounts payable disputed | $ 14,933 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Total | $ (1,416,883) | $ (1,389,099) |
Valuation allowance | 854,826 | 1,420,859 |
Change in valuation allowance | (566,033) | 257,571 |
Canadian Subsidiary [Member] | ||
Amount carried forward from prior years | (31,760) | (31,760) |
Net operating losses | ||
US Parent [Member] | ||
Amount carried forward from prior years | (1,389,099) | (1,340,812) |
Net operating losses | $ (68,583) | $ (89,087) |