Cover
Cover - shares | 3 Months Ended | |
Aug. 31, 2021 | Oct. 15, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | PREAXIA HEALTH CARE PAYMENT SYSTEMS INC. | |
Entity Central Index Key | 0001350156 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --05-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Aug. 31, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 | |
Entity Common Stock Shares Outstanding | 19,767,698 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-52365 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 20-4395271 | |
Entity Address Address Line 1 | PO Box 34075 Westbrook PO | |
Entity Address Address Line 2 | 1610-37th Street S.W. | |
Entity Address City Or Town | Calgary | |
Entity Address State Or Province | AB | |
Entity Address Postal Zip Code | T3C 3W2 | |
City Area Code | 403 | |
Local Phone Number | 850-4120 | |
Security 12g Title | Common Stock, $0.001 par value | |
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Aug. 31, 2021 | May 31, 2021 |
Current assets | ||
Cash | $ 0 | $ 40 |
Total current assets | 0 | 40 |
Total assets | 0 | 40 |
Current liabilities | ||
Bank indebtedness | 244 | 0 |
Accounts payable and accrued liabilities | 165,450 | 163,027 |
Accounts payable and accrued liabilities - related party | 459,121 | 429,121 |
Advances - related party | 46,521 | 37,696 |
Loans payable - shareholders | 136,465 | 136,465 |
Liability for unissued shares | 134,792 | 134,792 |
Convertible note payable - related party | 1,058,760 | 1,058,760 |
Total current liabilities | 2,001,353 | 1,959,861 |
Total liabilities | 2,001,353 | 1,959,861 |
Commitments and Contingencies | 0 | 0 |
STOCKHOLDERS' DEFICIT | ||
Common Stock, $0.001 par value, 75,000,000 shares authorized 19,767,698 shares issued and outstanding | 19,768 | 19,768 |
Additional paid-in capital | 2,655,236 | 2,655,236 |
Accumulated other comprehensive income | 57,197 | 57,197 |
Accumulated deficit | (4,733,554) | (4,692,022) |
Total stockholders' deficit | (2,001,353) | (1,959,821) |
Total liabilities and stockholders' deficit | $ 0 | $ 40 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Aug. 31, 2021 | May 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 19,767,698 | 19,767,698 |
Common stock, shares outstanding | 19,767,698 | 19,767,698 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) | ||
Revenue | $ 41 | $ 0 |
Operating expenses | ||
Consulting | 30,000 | 30,000 |
Professional | 7,876 | 0 |
Office and administration | 1,616 | 3,504 |
Research and development | 2,081 | 1,351 |
Total expenses | 41,573 | 34,855 |
Loss from operations | (41,532) | (34,855) |
Net loss and comprehensive loss | $ (41,532) | $ (34,855) |
Net loss per share - basic and diluted | $ 0 | $ 0 |
Weighted average number of common shares outstanding - basic and diluted | 19,797,698 | 19,797,698 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated other comprehensive loss | Retained Earnings (Accumulated Deficit) |
Balance, shares at May. 31, 2020 | 19,767,698 | ||||
Balance, amount at May. 31, 2020 | $ (1,796,628) | $ 19,768 | $ 2,655,236 | $ 57,197 | $ (4,528,829) |
Net loss and comprehensive loss | (34,855) | $ 0 | 0 | 0 | (34,855) |
Balance, shares at Aug. 31, 2020 | 19,767,698 | ||||
Balance, amount at Aug. 31, 2020 | (1,831,483) | $ 19,768 | 2,655,236 | 57,197 | (4,563,684) |
Balance, shares at May. 31, 2021 | 19,767,698 | ||||
Balance, amount at May. 31, 2021 | (1,959,821) | $ 19,768 | 2,655,236 | 57,197 | (4,692,022) |
Net loss and comprehensive loss | (41,532) | $ 0 | 0 | 0 | (41,532) |
Balance, shares at Aug. 31, 2021 | 19,767,698 | ||||
Balance, amount at Aug. 31, 2021 | $ (2,001,353) | $ 19,768 | $ 2,655,236 | $ 57,197 | $ (4,733,554) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Cash flows from operating activities | ||
Net loss | $ (41,532) | $ (34,855) |
Change in operating assets and liabilities | ||
Increase in accounts payable and accrued liabilities - related party | 30,000 | 30,000 |
Increase (decrease) in accounts payable and accrued liabilities | 2,423 | (6,327) |
Cash flows used in operating activities | (9,109) | (11,182) |
Cash flows from investing activities | 0 | 0 |
Cash flows from financing activities | ||
Increase in bank indebtedness | 244 | 0 |
Advances - related party | 9,035 | 12,535 |
Repayment of advances - related party | (210) | (598) |
Net cash provided by financing activities | 9,069 | 11,937 |
Net change in cash | (40) | 755 |
Cash, beginning of the period | 40 | 46 |
Cash, end of the period | 0 | 801 |
Supplemental Disclosure: | ||
Cash paid for income taxes | 0 | 0 |
Cash paid for interest | $ 0 | $ 0 |
Organization And Description Of
Organization And Description Of Business | 3 Months Ended |
Aug. 31, 2021 | |
Organization And Description Of Business | |
Note 1 - Organization and Description of Business | Note 1 – Organization and Description of Business 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. The business objective of the Company is the development, distribution, marketing and sale of health care payment processing services and products. The Company has not yet realized any revenues from its planned operations. The operations of the Company are expected to be primarily undertaken by its wholly-owned subsidiary, PreAxia Health Care Payment Ltd. (“PreAxia Payment”), incorporated pursuant to the laws of the Province of Alberta on November 26, 2015. PreAxia Payment is in the process of developing an online access system creating a health spending account that will facilitate card payment and processing services to third-party administrators, insurance companies and others. COVID-19 The recent outbreak of the COVID-19 has spread across the globe and is impacting worldwide economic activity. Conditions surrounding the coronavirus continue to rapidly evolve and government authorities have implemented emergency measures to mitigate the spread of the virus. The outbreak and the related mitigation measures have had and will continue to have a material adverse impact on global economic conditions as well as on the Company's business activities. The extent to which COVID-19 may impact the Company's business activities will depend on future developments, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions, business disruptions, and the effectiveness of actions taken in the Canada, United States and other countries to contain and treat the disease. These events are highly uncertain and, as such, the Company cannot determine their financial impact at this time. No adjustments have been made to the amounts reported in these condensed consolidated financial statements as a result of this matter. |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 3 Months Ended |
Aug. 31, 2021 | |
Summary Of Significant Accounting Policies | |
Note 2 - Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Basis of presentation The unaudited condensed consolidated financial statements of the Company for the three months ended August 31, 2021 and 2020 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of May 31, 2021 was derived from the audited financial statements included in the Company's financial statements as of and for the fiscal year ended May 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on September 9, 2021. These financial statements should be read in conjunction with that report. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (i) PreAxia Health Care Payment Systems Inc., incorporated pursuant to the laws of the Province of Alberta on January 28, 2008 (ii) PreAxia Canada Inc., incorporated pursuant to the laws of the Province of Alberta on January 28, 2008 and (iii) PreAxia Health Care Payment Ltd., incorporated pursuant to the laws of the Province of Alberta on November 26, 2015 (collectively, the “Subsidiaries”). All inter-company accounts and transactions have been eliminated in consolidation. Going Concern The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the three months ended August 31, 2021, the Company incurred a net loss of $41,532 and used cash in operating activities of $9,109, and on August 31, 2021, had a stockholders’ deficit of $2,001,353. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the consolidated financial statements are issued. The Company’s unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty should we be unable to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital and to ultimately achieve profitable operations. Currently, the Company does not have significant cash or other material assets, nor does it have operations or a source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. The Company’s officers or principal shareholders have committed to making advances or loans to pay for certain legal, accounting, and administrative costs. The Company hopes to be able to attract suitable investors for our business plan, which will not require us to use our cash. There can be no assurance that the Company will be successful in this situation. The Company is unable to predict the effect, if any, that the COVID-19 global pandemic may have on its access to the financing markets. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in the case of equity financing. 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. Use of Estimates The preparation of the unaudited condensed 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. Foreign Currency Translation The functional currency of the Company is the United States dollar. The functional currency of the Subsidiaries 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 transaction 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 of 1.00 US Dollar=1.2625 Canadian Dollars (August 31, 2021), 1.00 USD Dollar=0.7273 GBP, and 1.00 US Dollar = 1.2067 Canadian Dollars (May 31, 2021), 1.00 USD Dollar=0.7039 GBP; ii) income and expenses are translated at average exchange rates for three months ended August 31, 2021 of 1.00 US Dollar = 1.2452 Canadian Dollars and 1.00 US Dollar = 1.3219 Canadian Dollars (August 31, 2020); iii) all resulting exchange differences are recognized as other comprehensive income, a separate component of equity. The exchange differences during the three months ended August 31, 2021 and 2020 were insignificant and no amounts have been recorded. Fair Value of Financial Instruments 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 August 31, 2021 and May 31, 2021. 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. Net Income (Loss) Per Share Net income (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 shares of potential common stock equivalents for convertible note payable – related party outstanding during the periods ended August 31, 2021 and May 31, 2021, which have been excluded from the loss per share computation as their effect would have been anti-dilutive due to net losses. Research and Development Costs The Company expenses research and development costs as incurred in accordance with FASB ASC 730 “Research and Development.” During the three months ended August 31, 2021 and 2020, we incurred $2,081 and $1,351, respectively, in research and development expenses. 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 will capitalize 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 are capitalized under the same criteria as our marketed software. 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. Commitments and Contingencies The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Revenue Recognition In accordance with ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the 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 when, or as, we satisfy the performance obligation. Gross Versus Net Revenue ASC 606 provides guidance on proper recognition of principal versus agent considerations which is used to determine gross versus net revenue recognition. Under ASC 606, the core objective of the guidance on gross versus net revenue recognition is to help determine whether an entity is a principal or an agent in a transaction. In general, the primary difference between these two is the performance obligation being satisfied. The principal has a performance obligation to provide the desired goods or services to the end customer, whereas the agent arranges for the principal to provide the desired goods or services. Additionally, a fundamental characteristic of a principal in a transaction is control. A principal substantively controls the goods and services before they are transferred to the customer as well as controls the price of the good or service being provided. An agent normally receives a commission or fee for these activities. In addition to control, the level at which an entity controls the price of the good or service being transferred determines principal versus agent status. The more discretion over setting price a company has in providing the good or service, the more likely they are considered a principal rather than an agent. Under the guidance when another party is involved in providing a good or service to a customer, an entity is a principal if the entity obtains control of the asset or right to a service performed by the other party. The Company provides administrative services for Health Spending Accounts sponsored by employers (the “customer”). The Company does not take possession of goods or control the services provided as the employees of customer are free to determine their health care provider. As such, the Company records revenue net of reimbursements to employees. The Company’s services to the customer consist of reviewing medical costs for eligibility and reimbursing employees for eligible costs. During the three months ended August 31, 2021 and 2020, the Company had revenue of $41 and $0, respectively. The Company earns a 10% commission on amounts reimbursed for eligible expenses. Income Taxes The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income and Comprehensive Income in the period that includes the enactment date. The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertain income tax positions. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Aug. 31, 2021 | |
Recent Accounting Pronouncements | |
Note 3 - Recent Accounting Pronouncements | Note 3 – Recent Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt— Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Aug. 31, 2021 | |
Related Party Transactions | |
Note 4 - Related Party Transactions | Note 4 Related Party Transactions Accounts Payable and Accrued Liabilities - Related Parties As of August 31, 2021 and May 31, 2021, accounts payable and accrued liabilities – related party due to Tom Zapatinas totaled $459,121 and $429,121, respectively. During the three months ended August 31, 2021 and 2020, Tom Zapatinas, the Chief Executive Officer and Director of the Company, earned $30,000 and $30,000, respectively, for consulting services provided to the Company. Advances – Related Party As of August 31, 2021 and May 31, 2021, advances payable due to Tom Zapatinas totaled $46,521 and $37,696, respectively. During the three months ended August 31, 2021 and 2020, Tom Zapatinas, the Chief Executive Officer and a Director of the Company, advanced the Company $9,035 and $12,535, respectively, in cash and was repaid $210 and $598, respectively, in cash. Loans Payable – Shareholders As of August 31, 2021 and May 31, 2021, loans payable - shareholders are $136,465. Loans payable – shareholders are unsecured, non-interest bearing and due on demand or due within one year after the issuance date. During the three months ended August 31, 2021 and 2020, the Company was advanced $0 in cash and was repaid $0 in cash. Convertible Note Payable – Related Party As of August 31, 2021 and May 31, 2021, convertible note payable - related party of $1,058,760 is due to Tom Zapatinas, the Chief Executive Officer and a Director of the Company. The Note is non-interest bearing, unsecured, payable on demand and convertible in whole or in part into shares of common stock of the Company at a conversion price of $0.10 per share, which equates to 10,587,600 shares. |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Aug. 31, 2021 | |
Stockholders' Deficit | |
Note 5 - Stockholders' Deficit | Note 5 – Stockholders’ Deficit Common Stock Common Stock, par value of $0.001 per share; 75,000,000 shares authorized: 19,767,698 shares issued and outstanding on August 31, 2021 and May 31, 2021. Holders of Common Stock have one vote per share of Common Stock held. |
Contingencies And Commitments
Contingencies And Commitments | 3 Months Ended |
Aug. 31, 2021 | |
Contingencies And Commitments | |
Note 6 - Contingencies and Commitments | Note 6 – Contingencies and Commitments 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 long-term commitments for equipment purchases or leases. The Company does not lease office space as the CEO operates the business from his personal residence. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Aug. 31, 2021 | |
Subsequent Events | |
Note 7 - Subsequent Events | Note 7 – Subsequent Events The Company has evaluated all subsequent events through the date these financial statements were issued and no subsequent events occurred that required disclosure. |
Summary Of Significant Accoun_2
Summary Of Significant Accounting Policies (Policies) | 3 Months Ended |
Aug. 31, 2021 | |
Summary Of Significant Accounting Policies | |
Basis of presentation | The unaudited condensed consolidated financial statements of the Company for the three months ended August 31, 2021 and 2020 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of May 31, 2021 was derived from the audited financial statements included in the Company's financial statements as of and for the fiscal year ended May 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on September 9, 2021. These financial statements should be read in conjunction with that report. |
Principles of Consolidation | The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (i) PreAxia Health Care Payment Systems Inc., incorporated pursuant to the laws of the Province of Alberta on January 28, 2008 (ii) PreAxia Canada Inc., incorporated pursuant to the laws of the Province of Alberta on January 28, 2008 and (iii) PreAxia Health Care Payment Ltd., incorporated pursuant to the laws of the Province of Alberta on November 26, 2015 (collectively, the “Subsidiaries”). All inter-company accounts and transactions have been eliminated in consolidation. |
Going Concern | The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the three months ended August 31, 2021, the Company incurred a net loss of $41,532 and used cash in operating activities of $9,109, and on August 31, 2021, had a stockholders’ deficit of $2,001,353. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the consolidated financial statements are issued. The Company’s unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty should we be unable to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital and to ultimately achieve profitable operations. Currently, the Company does not have significant cash or other material assets, nor does it have operations or a source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. The Company’s officers or principal shareholders have committed to making advances or loans to pay for certain legal, accounting, and administrative costs. The Company hopes to be able to attract suitable investors for our business plan, which will not require us to use our cash. There can be no assurance that the Company will be successful in this situation. The Company is unable to predict the effect, if any, that the COVID-19 global pandemic may have on its access to the financing markets. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in the case of equity financing. |
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. |
Use of Estimates | The preparation of the unaudited condensed 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. |
Foreign Currency Translation | The functional currency of the Company is the United States dollar. The functional currency of the Subsidiaries 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 transaction 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 of 1.00 US Dollar=1.2625 Canadian Dollars (August 31, 2021), 1.00 USD Dollar=0.7273 GBP, and 1.00 US Dollar = 1.2067 Canadian Dollars (May 31, 2021), 1.00 USD Dollar=0.7039 GBP; ii) income and expenses are translated at average exchange rates for three months ended August 31, 2021 of 1.00 US Dollar = 1.2452 Canadian Dollars and 1.00 US Dollar = 1.3219 Canadian Dollars (August 31, 2020); iii) all resulting exchange differences are recognized as other comprehensive income, a separate component of equity. The exchange differences during the three months ended August 31, 2021 and 2020 were insignificant and no amounts have been recorded. |
Fair Value of Financial Instruments | 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 August 31, 2021 and May 31, 2021. 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. |
Net income (Loss) Per Share | Net income (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 shares of potential common stock equivalents for convertible note payable – related party outstanding during the periods ended August 31, 2021 and May 31, 2021, which have been excluded from the loss per share computation as their effect would have been anti-dilutive due to net losses. |
Research and Development Costs | The Company expenses research and development costs as incurred in accordance with FASB ASC 730 “Research and Development.” During the three months ended August 31, 2021 and 2020, we incurred $2,081 and $1,351, respectively, in research and development expenses. |
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 will capitalize 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 are capitalized under the same criteria as our marketed software. |
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. |
Commitments and Contingencies | The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. |
Revenue Recognition | In accordance with ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the 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 when, or as, we satisfy the performance obligation. |
Gross Versus Net Revenue | ASC 606 provides guidance on proper recognition of principal versus agent considerations which is used to determine gross versus net revenue recognition. Under ASC 606, the core objective of the guidance on gross versus net revenue recognition is to help determine whether an entity is a principal or an agent in a transaction. In general, the primary difference between these two is the performance obligation being satisfied. The principal has a performance obligation to provide the desired goods or services to the end customer, whereas the agent arranges for the principal to provide the desired goods or services. Additionally, a fundamental characteristic of a principal in a transaction is control. A principal substantively controls the goods and services before they are transferred to the customer as well as controls the price of the good or service being provided. An agent normally receives a commission or fee for these activities. In addition to control, the level at which an entity controls the price of the good or service being transferred determines principal versus agent status. The more discretion over setting price a company has in providing the good or service, the more likely they are considered a principal rather than an agent. Under the guidance when another party is involved in providing a good or service to a customer, an entity is a principal if the entity obtains control of the asset or right to a service performed by the other party. The Company provides administrative services for Health Spending Accounts sponsored by employers (the “customer”). The Company does not take possession of goods or control the services provided as the employees of customer are free to determine their health care provider. As such, the Company records revenue net of reimbursements to employees. The Company’s services to the customer consist of reviewing medical costs for eligibility and reimbursing employees for eligible costs. During the three months ended August 31, 2021 and 2020, the Company had revenue of $41 and $0, respectively. The Company earns a 10% commission on amounts reimbursed for eligible expenses. |
Income Taxes | The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income and Comprehensive Income in the period that includes the enactment date. The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertain income tax positions. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25. |
Organization And Description _2
Organization And Description Of Business (Details Narrative) - Acqusition Of Tiempo de Mexico Ltd ("Tiempo") [Member] - Common Stock [Member] | May 31, 2005$ / sharesshares |
Shares issued for acquisition of all outstanding stock, shares | shares | 5,000,000 |
Share price, par value per share | $ / shares | $ 0.001 |
Summary Of Significant Accoun_3
Summary Of Significant Accounting Policies (Details Narrative) | 3 Months Ended | |||
Aug. 31, 2021USD ($)shares | Aug. 31, 2020USD ($) | May 31, 2021USD ($) | May 31, 2020USD ($) | |
Research and development expenses | $ 2,081 | $ 1,351 | ||
Revenue | $ 41 | $ 0 | ||
Commissions earns, percentage | 10.00% | 10.00% | ||
Net loss | $ (41,532) | $ (34,855) | ||
Stockholders' deficit | (2,001,353) | (1,831,483) | $ (1,959,821) | $ (1,796,628) |
Cash used in operating activities | $ (9,109) | $ (11,182) | ||
Canada, Dollars [Member] | ||||
Foreign currency exchange rate translation | 1.2625 | 1.2067 | ||
Canada, Dollars [Member] | Income And Expenses [Member] | ||||
Foreign currency exchange rate translation | 1.2452 | 1.3219 | ||
GBP [Member] | ||||
Foreign currency exchange rate translation | 0.7273 | 0.7039 | ||
USD [Member] | ||||
Foreign currency exchange rate translation | 1 | 1 | ||
US [Member] | ||||
Foreign currency exchange rate translation | 1 | 1 | ||
Convertible Notes Payable - Related Party [Member] | ||||
Antidilutive securities excluded from computation of earnings per share amount | shares | 10,587,600 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | ||
Aug. 31, 2021 | Aug. 31, 2020 | May 31, 2021 | |
Loans payable - shareholders | $ 136,465 | $ 136,465 | |
Repayment of loans payable - shareholder | 0 | $ 0 | |
Proceeds from loans payable - shareholder | 0 | 0 | |
Advances - related party | 46,521 | 37,696 | |
Accounts payable and accrued liabilities - related party | 459,121 | $ 429,121 | |
Consulting services | 30,000 | 30,000 | |
Advances - related party | 9,035 | 12,535 | |
Repayment of advances to related party | 210 | 598 | |
Tom Zapatinas, Chief Executive Officer And Director [Member] | |||
Consulting services | 30,000 | 30,000 | |
Advances - related party | 9,035 | 12,535 | |
Repayment of advances to related party | $ 210 | $ 598 | |
Common stock shares issuable upon conversion of debt | 1,058,760 | 10,587,600 | |
Convertible note conversion price | $ 0.10 | $ 0.10 |
Stockholders Deficit (Details N
Stockholders Deficit (Details Narrative) - $ / shares | Aug. 31, 2021 | May 31, 2021 |
Stockholders' Deficit | ||
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 19,767,698 | 19,767,698 |
Common stock, shares outstanding | 19,767,698 | 19,767,698 |