Trident Brands (TDNT) 10-Q 20 Jul 20 2020 Q2 Quarterly report Financial data

Cover

Cover - shares	6 Months Ended
	May 31, 2020	Jul. 20, 2020
Cover [Abstract]
Entity Registrant Name	Trident Brands Inc
Entity Central Index Key	0001421907
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--11-30
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	true
Entity Current Reporting Status	Yes
Document Period End Date	May 31, 2020
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2020
Entity Ex Transition Period	false
Entity Common Stock Shares Outstanding		32,311,887
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	May 31, 2020	Nov. 30, 2019
Current Assets
Cash and Cash Equivalents	$ 277,334	$ 1,013,674
Accounts Receivable, net of allowance of $70,680 and $55,979 respectively	210,651	280,347
Inventory	1,758,608	2,082,826
Prepaid expenses and other current assets	262,809	168,327
Total Current Assets	2,509,402	3,545,174
Fixed Assets-Furniture & Fixtures, net	222	4,413
Intangible Assets, net	400,000	400,000
TOTAL ASSETS	2,909,624	3,949,587
Current Liabilities
Accounts Payable	409,553	443,247
Accrued Liabilities	5,131,580	3,605,175
Derivative Liability	19,408,042	5,825,480
Convertible Debt, net of discount $0 and $334,988, respectively	12,300,000	11,965,012
Total Current Liabilities	37,249,175	21,838,914
PPP Loan Payable	135,165	0
Convertible Debt, net of discount $1,638,442 and $3,352,894, respectively	8,361,558	6,647,106
Total Liabilities	45,745,898	28,486,020
Stockholders' Deficit
Common stock, $0.001 par value, 300,000,000 shares authorized; 32,311,887 shares issued and outstanding as of May 31, 2020 and November 30, 2019	32,312	32,312
Additional paid-in capital	5,964,268	9,945,488
Non-Controlling Interest in Subsidiary	(345,046)	(288,603)
Accumulated Deficit	(48,487,808)	(34,225,630)
Total Stockholders' Deficit	(42,836,274)	(24,536,433)
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT	$ 2,909,624	$ 3,949,587

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($)	May 31, 2020	Nov. 30, 2019
Current Assets
Allowances for account receivable	$ 70,680	$ 55,979
Current Liabilities
Debt discount, convertible debt current	0	334,988
Non-current liabilities
Debt discount, convertible debt non-current	$ 1,638,442	$ 3,352,894
Stockholders' Deficit
Common stock, shares par value	$ 0.001	$ 0.001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	32,311,887	32,311,887
Common stock, shares outstanding	32,311,887	32,311,887

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	May 31, 2020	May 31, 2019	May 31, 2020	May 31, 2019
Consolidated Statements of Operations (Unaudited)
Revenues, net	$ 244,102	$ 450,148	$ 405,987	$ 1,395,155
Cost of Sales	167,240	286,461	252,169	896,826
Gross Profit	76,862	163,687	153,818	498,329
General & Administrative Expenses	(1,119,556)	(2,127,642)	(2,433,290)	(4,011,885)
Loss from Operations	(1,042,694)	(1,963,955)	(2,279,472)	(3,513,556)
Other Income (Expenses)
Interest Expense, net	(1,001,119)	(1,127,110)	(2,447,807)	(1,981,361)
Gain on Debt Forgiveness	10,000	0	10,000	0
Derivative loss	(8,028,629)	(663,020)	(9,601,342)	(1,491,118)
Total Other Income (Expenses)	(9,019,748)	(1,790,130)	(12,039,149)	(3,472,479)
Net Loss	(10,062,442)	(3,754,085)	(14,318,621)	(6,986,035)
Net loss attributable to Trident	(10,035,750)	(3,718,587)	(14,262,178)	(6,933,161)
Net loss attributable to Non-Controlling Interests	$ (26,692)	$ (35,498)	$ (56,443)	$ (52,874)
Loss per share - Basic and diluted	$ (0.31)	$ (0.12)	$ (0.44)	$ (0.21)
Weighted average number of common shares outstanding - Basic and diluted	32,311,887	32,311,887	32,311,887	32,311,887

Consolidated Statements of Chan

Consolidated Statements of Changes in Stockholders' Deficit (Unaudited) - USD ($)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Non-Controlling Interest [Member]
Balance, shares at Nov. 30, 2018		32,311,887
Balance, amount at Nov. 30, 2018	$ (12,699,391)	$ 32,312	$ 9,564,737	$ (22,125,441)	$ (170,999)
Stock Options Expense	283,899	0	283,899	0	0
Net loss	(3,231,950)	$ 0	0	(3,214,574)	(17,376)
Balance, shares at Feb. 28, 2019		32,311,887
Balance, amount at Feb. 28, 2019	(15,647,442)	$ 32,312	9,848,636	(25,340,015)	(188,375)
Balance, shares at Nov. 30, 2018		32,311,887
Balance, amount at Nov. 30, 2018	(12,699,391)	$ 32,312	9,564,737	(22,125,441)	(170,999)
Stock Options Expense	380,751
Net loss	(6,986,035)
Balance, shares at May. 31, 2019		32,311,887
Balance, amount at May. 31, 2019	(19,304,675)	$ 32,312	9,945,488	(29,058,602)	(223,873)
Balance, shares at Feb. 28, 2019		32,311,887
Balance, amount at Feb. 28, 2019	(15,647,442)	$ 32,312	9,848,636	(25,340,015)	(188,375)
Stock Options Expense	96,852	0	96,852	0	0
Net loss	(3,754,085)	$ 0	0	(3,718,587)	(35,498)
Balance, shares at May. 31, 2019		32,311,887
Balance, amount at May. 31, 2019	(19,304,675)	$ 32,312	9,945,488	(29,058,602)	(223,873)
Balance, shares at Nov. 30, 2019		32,311,887
Balance, amount at Nov. 30, 2019	(24,536,433)	$ 32,312	9,945,488	(34,225,630)	(288,603)
Net loss	(4,256,179)	0	0	(4,226,428)	(29,751)
APIC reclassified to derivative liability	(3,981,220)	$ 0	(3,981,220)	0	0
Balance, shares at Feb. 29, 2020		32,311,887
Balance, amount at Feb. 29, 2020	(32,773,832)	$ 32,312	5,964,268	(38,452,058)	(318,354)
Balance, shares at Nov. 30, 2019		32,311,887
Balance, amount at Nov. 30, 2019	(24,536,433)	$ 32,312	9,945,488	(34,225,630)	(288,603)
Stock Options Expense	0
Net loss	(14,318,621)
Balance, shares at May. 31, 2020		32,311,887
Balance, amount at May. 31, 2020	(42,836,274)	$ 32,312	5,964,268	(48,487,808)	(345,046)
Balance, shares at Feb. 29, 2020		32,311,887
Balance, amount at Feb. 29, 2020	(32,773,832)	$ 32,312	5,964,268	(38,452,058)	(318,354)
Net loss	(10,062,442)	$ 0	0	(10,035,750)	(26,692)
Balance, shares at May. 31, 2020		32,311,887
Balance, amount at May. 31, 2020	$ (42,836,274)	$ 32,312	$ 5,964,268	$ (48,487,808)	$ (345,046)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	May 31, 2020	May 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (14,318,621)	$ (6,986,035)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount	1,339,440	1,236,628
Depreciation expense	4,191	4,191
Inventory write-off	76,366	0
Derivative Loss	9,601,342	1,491,118
Stock options expense	0	380,751
Changes in operating assets and liabilities:
Accounts Receivable	69,696	(162,141)
Prepaid expenses and other current assets	(94,482)	(84,961)
Inventory	247,852	(547,759)
Accounts payable and accrued liabilities	1,266,543	372,218
Cash used in operating activities	(1,807,673)	(4,295,990)
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of fixed assets	0	18,868
Additions of intangible assets	0	(6,420)
Cash provided by investing activities	0	12,448
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from PPP loan	135,165	0
Proceeds from convertible debt	936,168	2,804,187
Cash provided by financing activities	1,071,333	2,804,187
NET CHANGE IN CASH AND CASH EQUIVALENTS	(736,340)	(1,479,355)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	1,013,674	3,133,303
CASH AND CASH EQUIVALENTS AT END OF PERIOD	277,334	1,653,948
Cash paid for:
Income taxes	0	0
Interest	0	254,184
NON-CASH TRANSACTIONS
Debt discount related to derivative liability	$ 0	$ 1,911,256

ORGANIZATION AND DESCRIPTION OF

ORGANIZATION AND DESCRIPTION OF BUSINESS	6 Months Ended
	May 31, 2020
ORGANIZATION AND DESCRIPTION OF BUSINESS
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS	Trident Brands Incorporated (“we”, “our”, “the Company”) was incorporated under the laws of the State of Nevada on November 5, 2007. The Company was formed to engage in the acquisition, exploration and development of natural resource properties. The Company is now focused on the development of high growth branded and private label consumer products and ingredients within the nutritional supplement, life sciences and food and beverage categories. The Company is in its early growth stage and has transitioned out of its shell status with its Form 10 style 8-K filing at the end of August, 2014. Activities to date have focused on capital formation, organizational development and execution of its branded and private label consumer products and ingredients business plan.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	May 31, 2020
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Basis of Presentation The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Form 10-K filed with SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2019 as reported in the Form 10-K have been omitted. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information, information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates. The ultimate impact from COVID-19 on the Company’s operations and financial results during 2020 will depend on, among other things, the ultimate severity and scope of the pandemic, the pace at which governmental and private travel restrictions and public concerns about public gatherings will ease, the rate at which historically large increases in unemployment rates will decrease, if at all, and whether, and the speed with which the economy recovers. We are not able to fully quantify the impact that these factors will have on our financial results during 2020 and beyond, but expect developments related to COVID-19 to materially affect the Company’s financial performance in 2020. Customer Concentration The Company had four major customers that accounted for approximately 64.9% of sales for the six month period ended May 31, 2020 and 52.9% of the accounts receivable compared to four major customers that accounted for 79.2% of sales and 54.0% of the accounts receivable for the 12 month period ended November 30, 2019. Fair Value of Financial Instruments The Company measures its financial assets and liabilities in accordance with the requirements of FASB ASC 820, “Fair Value Measurements and Disclosures”. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 - Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date and includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, accounts payable and note payable. The fair value of the Company’s long-term debt is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value. As of May 31, 2020 the Company did not have any financial assets or liabilities measured and recorded at fair value on the Company’s consolidated balance sheets on a recurring basis, except for a derivative liability, related to the embedded conversion option on the “2016” and “2018” convertible notes, with a fair value as of May 31, 2020 of $19,408,042. The derivative liability was fair valued using Level 3 inputs. The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs: Balance at November 30, 2019 $ 5,825,480 APIC reclassified to derivative liability 3,981,220 Unrealized derivative loss included in other expense 9,601,342 Balance at May 31, 2020 $ 19,408,042 During the six months ended May 31, 2020, the embedded conversion option on the 2016 convertible notes qualified for derivative accounting. The beneficial conversion feature that was recorded to additional paid in capital (APIC) when the convertible notes were first issued amounting to $3,981,220 were reclassified to derivative liability when the conversion price on the notes were amended to a variable conversion rate (see Note 5). The fair value of the derivative liabilities are calculated at the time of issuance and the Company records a derivative liability for the calculated value. Changes in the fair value of the derivative liabilities are recorded in other income (expense) in the consolidated statements of operations. The following are the assumptions used for derivative instruments valued using the Black Scholes option pricing model as of May 31, 2020: Market value of stock on measurement date $0.22 Risk-fee interest rate 0.16 to 0.18% Dividend yield 0% Volatility factor 204.21% to 166.85% Term 0.59 yr. and 1.50 yr. Recent Accounting Pronouncements The Company has evaluated recent accounting pronouncements through the date the financial statements were issued and filed with the Securities and Exchange Commission and believe that there are none that will have a material impact on the Company’s financial statements.

GOING CONCERN

GOING CONCERN	6 Months Ended
	May 31, 2020
GOING CONCERN
NOTE 3. GOING CONCERN	The accompanying interim consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are issued. In accordance with Financial Accounting Standards Board, or the FASB, Accounting Standards Update No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40), our management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued. As of May 31, 2020, the Company had $277,334 in cash and a working capital deficit of $34,739,773. The Company also has generated losses and has an accumulated deficit as of May 31, 2020. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The Company completed additional long-term financing with the non-US institutional investor, receiving proceeds of $3,400,780 on November 30, 2018, $2,804,187 on April 13, 2019 and $3,795,033 (less $936,168 withheld for interest payments up to and including June 30, 2020) on November 6, 2019 through the issuance of secured convertible promissory notes. On March 5, 2020, the 2018 Convertible Note was amended to increase the amount of the 3rd tranche by $936,168 representing the amount previously withheld as interest payment. The payment was received on March 12, 2020. However, unless management is able to obtain additional financing, the Company may not be able to meet its funding requirements during the next 12 months. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

WARRANTS AND OPTIONS

WARRANTS AND OPTIONS	6 Months Ended
	May 31, 2020
WARRANTS AND OPTIONS
NOTE 4. WARRANTS AND OPTIONS	The following table represents stock option activity for the period ended May 31, 2020: Number of Options Weighted Average Exercise Price Contractual Life in Years Intrinsic Value Outstanding - November 30, 2019 3,215,000 $ 0.40 2.42 Exercisable - November 30, 2019 3,215,000 $ 0.40 2.42 $ -0- Granted -0- Exercised or Vested -0- Forfeited or Expired 750,000 Outstanding - May 31, 2020 2,465,000 $ 0.40 2.52 Exercisable - May 31, 2020 2,465,000 $ 0.40 2.52 $ -0- As of May 31, 2020, the Company has no outstanding warrants. All the outstanding warrants have expired.

CONVERTIBLE DEBT

CONVERTIBLE DEBT	6 Months Ended
	May 31, 2020
CONVERTIBLE DEBT
NOTE 5. CONVERTIBLE DEBT	On January 29, 2015, the Company entered into a securities purchase agreement with a non-US institutional investor whereby it agreed to sell an aggregate principal amount of $2,300,000 of senior secured convertible debentures, convertible into shares of the company’s common stock. The Company received $1,800,000 of the funds from the transaction on February 5, 2015. The balance of $500,000 was received on May 14, 2015. These convertible notes were subsequently acquired by Fengate (defined below) on April 28, 2017. The convertible debentures are convertible into shares of the Company’s common stock at an initial conversion price of $0.71 per share, for an aggregate of up to 3,239,437 shares. The debentures originally accrued interest at 6% per annum. On September 26, 2016 the Company entered into an amendment agreement related to these convertible debentures whereby the applicable interest rate was increased from 6% to 8% and provisions added to allow the investor to transfer, sell or hypothecate the convertible notes subject to applicable securities laws. The maturity date of the notes was also extended through September 30, 2019. We considered ASC Topic 470-50, Debt Modifications and Extinguishments, and determined that the modification was not deemed substantial. On September 26, 2016, the Company entered into a securities purchase agreement with a non-US institutional investor, pursuant to which, in consideration for proceeds of $4,100,000, the Company issued a secured convertible promissory note in the amount of $4,100,000. Pursuant to the securities purchase agreement, the investor had agreed, from time to time after January 1, 2017, to make additional investments at the Company’s request of up to $5,900,000 ($10,000,000 in the aggregate) in one or more tranches of not less than one tranche during any 60 day period. On May 9, 2017, the Company received the second tranche of funding with proceeds of $4,400,000 and on May 16, 2018 the third tranche of $1,500,000 for a total investment by the investor of $10,000,000. The Company used the proceeds of the secured convertible note for general working capital purposes including settlement of accounts payable and repayment of mature loans. In consideration of each advance made by the investor pursuant to the securities purchase agreement, the Company issued to the investor a convertible promissory note of equal value, maturing on September 30, 2019, and bearing interest at the rate of 8% per annum. Each note is secured in first priority against the present and after acquired assets of the Company and is convertible in whole or in part at the option of the holder into common shares of the Company at a conversion price of $0.60 per share, for an aggregate of up to 16,666,667 shares. These convertible notes were subsequently acquired by Fengate on April 28, 2017. Due to the notes being convertible to common shares of the Company, a beneficial conversion feature analysis was performed. The intrinsic value of the conversion feature of the notes amounted to $3,333,334 and was recognized as a debt discount. As of May 31, 2020, $3,333,334 of the debt discount was amortized to interest of which $334,988 was amortized during the current six month period compared to $713,018 for the six month period in the prior year. The unamortized discount as of May 31, 2020 is $0. On November 30, 2018 the Company and Fengate Trident LP (“Fengate”) entered into a Securities Purchase Amendment Agreement pursuant to which the Company has agreed to issue to Fengate an additional convertible promissory note (the “2018 Convertible Note”) of up to $10,000,000, subject to certain terms and conditions. Each portion of the principal amount advanced pursuant to the 2018 Convertible Note will bear interest at the rate of twelve percent (12%) per annum and will be payable monthly in arrears to Fengate. Outstanding principal and interest will continue to be secured by the general security agreement dated September 26, 2016, which forms a part of the Agreement. The holder of the note may also elect from time to time to convert all or a portion of the outstanding principal and interest into common shares of the Company at a 25% discount to the average closing price of the common shares during the 10 trading days immediately prior to the applicable conversion date. On November 30, 2018 the Company received the first tranche of funding with proceeds of $3,400,780. The 2nd tranche of $2,804,187 was received on April 13, 2019. The 3rd tranche of $3,795,033 less $936,168 withheld for interest payments up to and including June 30, 2020 was received on November 6, 2019. On January 9, 2020 the 2018 Convertible Notes were extended and will mature on December 1, 2021. On March 5, 2020, the 2018 Convertible Note was amended to increase the amount of the 3rd tranche by $936,168 representing the amount previously withheld as interest payment. The withheld interest was subsequently received on March 12, 2020. The Company analyzed the embedded conversion option on the convertible notes for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the conversion option on the 2018 Convertible Note qualified for derivative accounting. The Company used the Black-Scholes model to value the embedded conversion option at $892,000 on the issuance date of November 30, 2018, $1,911,256 on the issuance date of April 13, 2019 and $1,696,933 on the issuance date of November 6, 2019. The assumptions used were a discount rate of 2.80%, 1.96% and 1.96%; volatility rate of 79.57%, 104.70% and 107.3%; and a term of 1.50, 1.13 and 0.57 years respectively. The Company used the Black-Scholes model to re-value the embedded conversion options at $9,500,060 as of May 31, 2020. The change of $2,494,225 was recorded as derivative loss expense. The assumptions used were a discount rate of 0.16%, volatility of 166.85% and a term of 1.50 year. The fair value of the embedded conversion options was recorded as debt discount and will be amortized over the term of the 2018 Convertible Notes. The amortization recognized in the current six month period was 1,004,452 compared to $523,610 for the six month period in the prior year. The unamortized discount as of May 31, 2020 was $1,638,442. On January 9, 2020 the Company and Fengate entered into an Amendment to Convertible Promissory Notes Agreement to amend the terms of certain convertible promissory notes issued pursuant to a Securities Purchase Agreement by and between the Company and the Purchaser dated September 26, 2016 and previously amended on November 30, 2018 and March 11, 2019. The Amendment affects the convertible notes issued February 5, 2015 (US$1,800,000), May 14, 2015 (US$500,000), September 26, 2016 (US$4,100,000), May 9, 2017 (US$4,400,000) and May 16, 2018 (US$1,500,000), respectively (collectively the “2016 Notes”). Pursuant to the Amendment, Fengate has agreed to convert all of the 2016 Notes on or before the earlier to occur of (i) the maturity date of the 2016 Convertible Notes and (ii) the Company raising new equity investment of not less than US$2,000,000, on terms mutually acceptable to Fengate and the Company (subject to Fengate’s regulatory considerations). Conversion of the 2016 Notes will occur in a single conversion transaction at a price that is equal to a 25% discount to the average closing price of the Company’s common stock for the 10 trading days immediately prior to the conversion date, with the exact structure of the conversion to be determined by the parties. The Amendment of January 9, 2020 also amends the outstanding 2018 Convertible Note issued to Fengate on November 30, 2018 (US$3,400,780), April 13, 2019 (US$2,804,187) and November 6, 2019 (US$3,795,033). Maturity of the 2018 Convertible Note has been deferred to December 1, 2021. On June 3, 2020, effective May 31, 2020, the maturity date of the 2016 Notes was extended from May 31 to December 31, 2020. The Company analyzed the embedded conversion option on the amended “2016 Notes” for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the conversion option qualified for derivative accounting. On January 9, 2020 the Company used the Black-Scholes model to value the embedded conversion options at $7,965,083. The assumptions used were a discount rate of 1.96%, volatility rate of 148.8%; and a term of 0.39 years respectively. The modification resulted in $3,981,220 of APIC previously recorded for beneficial conversion feature of these convertible notes being reclassified as derivative liability, and $3,983,863 was recorded as derivative loss expense. The Company used the Black-Scholes model to re-value the embedded conversion options at $9,907,982 as of May 31, 2020. The change of $1,942,899 was recorded as derivative loss expense. The assumptions used were a discount rate of 0.18%, volatility of 204.21% and a term of 0.59 year.

PAYCHECK PROTECTION PROGRAM (PP

PAYCHECK PROTECTION PROGRAM (PPP) LOAN	6 Months Ended
	May 31, 2020
PAYCHECK PROTECTION PROGRAM (PPP) LOAN
NOTE 6. PAYCHECK PROTECTION PROGRAM (PPP) LOAN	On May 28, 2020, the company obtained a Paycheck Protection Program (PPP) loan in the amount of $135,165. These business loans were established by the 2020 US Federal government Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to help certain businesses, self-employed workers, sole proprietors, certain nonprofit organizations, and tribal businesses continue paying their workers. The CARES Act was established in order to enable small businesses to pay employees during the economic slowdown caused by COVID-19 by providing forgivable loans to qualifying businesses for up to 2.5 times their average monthly payroll costs. The amount borrowed under the CARES Act and used for payroll costs, rent, mortgage interest, and utility costs during the 24 week period after the date of loan disbursement is eligible to be forgiven provided that (a) we use the PPP Funds during the eight week period after receipt thereof, and (b) the PPP Funds are only used to cover payroll costs (including benefits), rent, mortgage interest, and utility costs. While the full loan amount may be forgiven, the amount of loan forgiveness will be reduced if, among other reasons, we do not maintain staffing or payroll levels or less than 60% of the loan proceeds are used for payroll costs. Principal and interest payments on any unforgiven portion of the PPP Funds will be deferred to the date the SBA remits the borrower’s loan forgiveness amount to the lender or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness period for six months and will accrue interest at a fixed annual rate of 1.0% and carry a two year maturity date. There is no prepayment penalty on the CARES Act Loan.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	May 31, 2020
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation	The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Form 10-K filed with SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2019 as reported in the Form 10-K have been omitted.
Use of Estimates	The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information, information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates. The ultimate impact from COVID-19 on the Company’s operations and financial results during 2020 will depend on, among other things, the ultimate severity and scope of the pandemic, the pace at which governmental and private travel restrictions and public concerns about public gatherings will ease, the rate at which historically large increases in unemployment rates will decrease, if at all, and whether, and the speed with which the economy recovers. We are not able to fully quantify the impact that these factors will have on our financial results during 2020 and beyond, but expect developments related to COVID-19 to materially affect the Company’s financial performance in 2020.
Customer Concentration	The Company had four major customers that accounted for approximately 64.9% of sales for the six month period ended May 31, 2020 and 52.9% of the accounts receivable compared to four major customers that accounted for 79.2% of sales and 54.0% of the accounts receivable for the 12 month period ended November 30, 2019.
Fair Value of Financial Instruments	The Company measures its financial assets and liabilities in accordance with the requirements of FASB ASC 820, “Fair Value Measurements and Disclosures”. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 - Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date and includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, accounts payable and note payable. The fair value of the Company’s long-term debt is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value. As of May 31, 2020 the Company did not have any financial assets or liabilities measured and recorded at fair value on the Company’s consolidated balance sheets on a recurring basis, except for a derivative liability, related to the embedded conversion option on the “2016” and “2018” convertible notes, with a fair value as of May 31, 2020 of $19,408,042. The derivative liability was fair valued using Level 3 inputs. The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs: Balance at November 30, 2019 $ 5,825,480 APIC reclassified to derivative liability 3,981,220 Unrealized derivative loss included in other expense 9,601,342 Balance at May 31, 2020 $ 19,408,042 During the six months ended May 31, 2020, the embedded conversion option on the 2016 convertible notes qualified for derivative accounting. The beneficial conversion feature that was recorded to additional paid in capital (APIC) when the convertible notes were first issued amounting to $3,981,220 were reclassified to derivative liability when the conversion price on the notes were amended to a variable conversion rate (see Note 5). The fair value of the derivative liabilities are calculated at the time of issuance and the Company records a derivative liability for the calculated value. Changes in the fair value of the derivative liabilities are recorded in other income (expense) in the consolidated statements of operations. The following are the assumptions used for derivative instruments valued using the Black Scholes option pricing model as of May 31, 2020: Market value of stock on measurement date $0.22 Risk-fee interest rate 0.16 to 0.18% Dividend yield 0% Volatility factor 204.21% to 166.85% Term 0.59 yr. and 1.50 yr.
Recent Accounting Pronouncements	The Company has evaluated recent accounting pronouncements through the date the financial statements were issued and filed with the Securities and Exchange Commission and believe that there are none that will have a material impact on the Company’s financial statements.

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	May 31, 2020
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Schedule of change in fair value of financial instruments	Balance at November 30, 2019 $ 5,825,480 APIC reclassified to derivative liability 3,981,220 Unrealized derivative loss included in other expense 9,601,342 Balance at May 31, 2020 $ 19,408,042
Schedule of derivative instruments valued using the Black Scholes option pricing model	Market value of stock on measurement date $0.22 Risk-fee interest rate 0.16 to 0.18% Dividend yield 0% Volatility factor 204.21% to 166.85% Term 0.59 yr. and 1.50 yr.

WARRANTS AND OPTIONS (Tables)

WARRANTS AND OPTIONS (Tables)	6 Months Ended
	May 31, 2020
WARRANTS AND OPTIONS
Schedule of stock option activity	Number of Options Weighted Average Exercise Price Contractual Life in Years Intrinsic Value Outstanding - November 30, 2019 3,215,000 $ 0.40 2.42 Exercisable - November 30, 2019 3,215,000 $ 0.40 2.42 $ -0- Granted -0- Exercised or Vested -0- Forfeited or Expired 750,000 Outstanding - May 31, 2020 2,465,000 $ 0.40 2.52 Exercisable - May 31, 2020 2,465,000 $ 0.40 2.52 $ -0-

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	6 Months Ended
	May 31, 2020USD ($)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Beginning balance	$ 5,825,480
APIC reclassified to derivative liability	3,981,220
Unrealized derivative loss included in other expense	9,601,342
Ending balance	$ 19,408,042

SUMMARY OF SIGNIFICANT ACCOUN_5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1)	6 Months Ended
	May 31, 2020$ / shares
Market value of stock on measurement date	$ 0.22
Divident yield	0.00%
Minimum [Member]
Risk-fee interest rate	0.16%
Volatility factor	166.85%
Term	7 months 2 days
Maximum [Member]
Risk-fee interest rate	0.18%
Volatility factor	204.21%
Term	1 year 5 months 30 days

SUMMARY OF SIGNIFICANT ACCOUN_6

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative)	6 Months Ended	12 Months Ended
	May 31, 2020USD ($)integer	Nov. 30, 2019USD ($)
APIC reclassified to derivative liability | $	$ 3,981,220
Derivative Liability | $	$ 19,408,042	$ 5,825,480
Accounts Receivable [Member]
Number of customers	4
Concentration risk percentage	52.90%	54.00%
Sales [Member]
Number of customers	4
Concentration risk percentage	79.20%
Sales [Member] | Major Customers [Member]
Number of customers	4
Concentration risk percentage	64.90%

GOING CONCERN (Details Narrativ

GOING CONCERN (Details Narrative) - USD ($)	6 Months Ended
	May 31, 2020	May 31, 2019	Mar. 05, 2020	Nov. 30, 2019	Nov. 30, 2018
Working capital deficit	$ (34,739,773)
Cash and Cash Equivalents	277,334	$ 1,653,948		$ 1,013,674	$ 3,133,303
Increased tranche amount			$ 936,168
Proceeds from convertible debt	936,168	$ 2,804,187
Second Tranche [Member] | April 13, 2019 [Member,
Proceeds from promissory note	2,804,187
First Tranche [Member] | November 30, 2018 [Member]
Proceeds from promissory note	3,400,780
Third Tranche [Member] | November 6, 2019 [Member]
Interest payment	936,168
Proceeds from convertible debt	$ 3,795,033

WARRANTS AND OPTIONS (Details)

WARRANTS AND OPTIONS (Details) - Stock Options [Member]	6 Months Ended
	May 31, 2020USD ($)$ / sharesshares
Number of Options
Outstanding, Beginning Balance	3,215,000
Exercisable, Beginning Balance	3,215,000
Granted	0
Exercised or Vested	0
Forfeited or Expired	750,000
Outstanding, Ending Balance	2,465,000
Exercisable, Ending Balance	2,465,000
Weighted Average Exercise Price
Outstanding, Beginning Balance | $ / shares	$ 0.40
Exercisable, Beginning Balance | $ / shares	0.40
Outstanding, Ending Balance | $ / shares	0.40
Exercisable, Ending Balance | $ / shares	$ 0.40
Contractual Life in Years
Outstanding Contractual Life in Years, Beginning Balance	2 years 5 months 1 day
Exercisable Contractual Life in Years, Beginning Balance	2 years 5 months 1 day
Outstanding Contractual Life in Years, Ending Balance	2 years 6 months 7 days
Exercisable Contractual Life in Years, Ending Balance	2 years 6 months 7 days
Intrinsic Value
Exercisable Intrinsic Value, Beginning Balance | $	$ 0
Exercisable Intrinsic Value, Ending Balance | $	$ 0

CONVERTIBLE DEBT (Details Narra

CONVERTIBLE DEBT (Details Narrative) - USD ($)

May 09, 2017

May 14, 2015

Feb. 05, 2015

Jun. 03, 2020

Jan. 09, 2020

Sep. 30, 2019

May 16, 2018

Sep. 26, 2016

Jan. 29, 2015

May 31, 2020

May 31, 2019

May 31, 2020

May 31, 2019

Mar. 05, 2020

Nov. 30, 2018

Increased tranche amount

$ 936,168

Proceeds from convertible debt

$ 936,168

$ 2,804,187

APIC reclassified to derivative liability

3,981,220

Derivative loss expense

$ 8,028,629

$ 663,020

9,601,342

1,491,118

Amortization of debt discount

$ 1,339,440

1,236,628

Minimum [Member]

Term

7 months 2 days

Volatility rate

166.85%

Minimum [Member] | Convertible notes [Member]

Term

2 years 6 months

Maximum [Member]

Term

1 year 5 months 30 days

Volatility rate

204.21%

Maximum [Member] | Convertible notes [Member]

Term

3 years

Black-Scholes Model One [Member]

Term

2 months 30 days

Derivative loss expense

$ 1,942,899

Discount rate

0.18%

Volatility rate

204.21%

Black-Scholes Model [Member]

Term

4 months 21 days

Derivative loss expense

3,983,863

Discount rate

1.96%

Volatility rate

148.80%

Embedded conversion feature

$ 7,965,083

9,907,982

Second Tranche [Member] | April 13, 2019 [Member,

Proceeds from promissory note

2,804,187

First Tranche [Member] | November 30, 2018 [Member]

Proceeds from promissory note

3,400,780

Third Tranche [Member] | November 6, 2019 [Member]

Proceeds from convertible debt

3,795,033

Interest payment

$ 936,168

2016 Notes [Member]

Terms of amendment

Fengate has agreed to convert all of the 2016 Notes on or before the earlier to occur of (i) the maturity date of the 2016 Convertible Notes and (ii) the Company raising new equity investment of not less than US$2,000,000, on terms mutually acceptable to Fengate and the Company (subject to Fengate’s regulatory considerations). Conversion of the 2016 Notes will occur in a single conversion transaction at a price that is equal to a 25% discount to the average closing price of the Company’s common stock for the 10 trading days immediately prior to the conversion date, with the exact structure of the conversion to be determined by the parties. On June 3 the maturity date was extended from May 31 to December 31, 2020 effective May 31, 2020.

Extended maturity date

Dec. 31, 2020

2016 Notes [Member] | May 16, 2018 [Member]

Convertible promissory notes

$ 1,500,000

2016 Notes [Member] | May 9, 2017 [Member]

Convertible promissory notes

4,400,000

2016 Notes [Member] | September 26, 2016 [Member]

Convertible promissory notes

4,100,000

2016 Notes [Member] | May 14, 2015 [Member]

Convertible promissory notes

500,000

2016 Notes [Member] | February 5, 2015 [Member]

Convertible promissory notes

$ 1,800,000

Amended SPA Notes [Member]

Extended maturity date

Dec. 1, 2021

Amended SPA Notes [Member] | November 6, 2019 [Member]

Convertible promissory notes

$ 0

3,795,033

$ 3,795,033

Amended SPA Notes [Member] | April 13, 2019 [Member]

Convertible promissory notes

0

2,804,187

2,804,187

Amended SPA Notes [Member] | November 30, 2018 [Member]

Convertible promissory notes

$ 0

$ 3,400,780

3,400,780

Convertible Note [Member] | November 06, 2019 [Member] | Conversion Option [Member]

Black scholes model conversion option

$ 1,696,933

Volatility

104.70%

Discount rate

1.96%

1.96%

Promissory note maturity period

6 months 26 days

Convertible Debt [Member] | Minimum [Member]

Percentage of interest rate

6.00%

Convertible Debt [Member] | Maximum [Member]

Percentage of interest rate

8.00%

Convertible Debt [Member] | Securities Purchase Agreement [Member]

Proceeds from convertible debt

$ 500,000

$ 1,800,000

$ 4,100,000

Extended maturity date

Nov. 30, 2019

Embedded conversion feature

$ 3,333,334

Principal amount of debt

$ 10,000,000

$ 2,300,000

Common stock conversion, shares

16,666,667

3,239,437

Percentage of interest rate

8.00%

6.00%

Amortization of debt discount

$ 3,333,334

Interest amortized

$ 334,988

713,018

Proceeds from promissory note

$ 4,100,000

Additional funding amount

5,900,000

Aggregate amount of promissory note

$ 10,000,000

Conversion price (in dollars per share)

$ 0.60

$ 0.71

Convertible Debt [Member] | Second Tranche [Member] | Securities Purchase Agreement [Member]

Proceeds from convertible debt

$ 4,400,000

Convertible Debt [Member] | Third Tranche [Member] | Securities Purchase Agreement [Member]

Proceeds from convertible debt

$ 1,500,000

Convertible Debt [Member] | Third Tranche [Member] | November 06, 2019 [Member]

Extended maturity date

Dec. 1, 2021

Proceeds from promissory note

$ 3,795,033

Accrued interest

$ 0

$ 0

2018 Convertible Note [Member] | Conversion Option [Member] | Re-value [Member]

Term

1 year 5 months 30 days

Derivative loss expense

$ 3,674,580

Volatility

166.85%

Discount rate

0.16%

0.16%

Unamortized debt discount

$ 1,638,442

$ 1,638,442

Amortization of debt

$ 1,004,452

$ 523,610

2018 Convertible Note [Member] | Conversion Option [Member] | Minimum [Member]

Volatility

79.57%

Discount rate

1.96%

1.96%

Promissory note maturity period

1 year 1 month 17 days

2018 Convertible Note [Member] | Conversion Option [Member] | Maximum [Member]

Volatility

104.70%

Discount rate

2.80%

2.80%

Promissory note maturity period

1 year 6 months

2018 Convertible Note [Member] | Securities Purchase Agreement [Member]

Principal amount of debt

$ 10,000,000

Percentage of interest rate

12.00%

Convertible note description

Company at a 25% discount to the average closing price of the common shares during the 10 trading days immediately prior to the applicable conversion date

2018 Convertible Note [Member] | April 13, 2019 [Member, | Conversion Option [Member]

Black scholes model conversion option

$ 1,911,256

2018 Convertible Note [Member] | November 30, 2018 [Member] | Conversion Option [Member]

Black scholes model conversion option

892,000

2018 Convertible Note [Member] | November 30, 2018 [Member] | Conversion Option [Member] | Re-value [Member]

Black scholes model conversion option

$ 9,500,060

PAYCHECK PROTECTION PROGRAM (_2

PAYCHECK PROTECTION PROGRAM (PPP) LOAN (Details Narrative) - Paycheck Protection Program [Member] - USD ($)	1 Months Ended	6 Months Ended
	May 28, 2020	May 31, 2020
Interest rate		1.00%
Debt instrument maturity term		2 years
Loan Payable	$ 135,165
Description of forgivable loans	Providing forgivable loans to qualifying businesses for up to 2.5 times their average monthly payroll costs. The amount borrowed under the CARES Act and used for payroll costs, rent, mortgage interest, and utility costs during the 24 week period after the date of loan disbursement is eligible to be forgiven provided that (a) we use the PPP Funds during the eight week period after receipt thereof, and (b) the PPP Funds are only used to cover payroll costs (including benefits), rent, mortgage interest, and utility costs. While the full loan amount may be forgiven, the amount of loan forgiveness will be reduced if, among other reasons, we do not maintain staffing or payroll levels or less than 60% of the loan proceeds are used for payroll costs. Principal and interest payments on any unforgiven portion of the PPP Funds will be deferred to the date the SBA remits the borrower’s loan forgiveness amount to the lender or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness period for six months and will accrue interest at a fixed annual rate of 1.0% and carry a two year maturity date. There is no prepayment penalty on the CARES Act Loan.