Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Feb. 28, 2018 | Jun. 12, 2018 | Aug. 31, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | ON THE MOVE SYSTEMS CORP. | ||
Entity Central Index Key | 1,498,148 | ||
Document Type | 10-K | ||
Trading Symbol | OMVS | ||
Document Period End Date | Feb. 28, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --02-28 | ||
Is Entity a Well-known Seasoned Issuer | No | ||
Is Entity a Voluntary Filer | No | ||
Is Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 17,439,944 | ||
Entity Common Stock, Shares Outstanding | 165,340,897 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,018 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Feb. 28, 2018 | Feb. 28, 2017 |
Current assets: | ||
Cash | $ 24,773 | $ 56,907 |
Accounts receivable | 28,000 | 7,778 |
Robot parts inventory | 316,113 | |
Deposits on robots | 150,000 | |
Prepaid expenses | 83,103 | |
Note receivable | 40,000 | |
Total current assets | 491,989 | 214,685 |
Revenue earning robots, net of accumulated depreciation of $0 and $3,544, respectively | 81,506 | |
Fixed assets, net of accumulated depreciation of $36,632 and $2,650, respectively | 158,205 | 45,052 |
Intangible asset, net | 56,248 | |
Security deposit | 30,141 | |
Total assets | 736,583 | 341,243 |
Current liabilities: | ||
Accounts payable and accrued expenses | 487,243 | 12,720 |
Advances payable | 1,594 | |
Balance due on acquisition of WeSecure | 25,000 | |
Customer deposits | 10,000 | 20,000 |
Current portion of convertible notes payable, net of discount of $3,418,636 and $0, respectively | 2,117,946 | |
Loan payable - related party | 316,142 | 62,529 |
Vehicle loan - current portion | 17,830 | 7,900 |
Current portion of accrued interest payable | 694,592 | |
Derivative liability | 31,113,844 | |
Total current liabilities | 34,784,191 | 103,149 |
Convertible notes payable, net of discount of $505,039 and $0, respectively | 95,060 | 365,000 |
Accrued interest payable | 55,917 | |
Vehicle loan | 64,332 | 38,134 |
Total liabilities | 34,999,500 | 506,283 |
Shareholders' deficit: | ||
Preferred Stock, undesignated; 15,645,650 shares authorized; no shares issued and outstanding at August 31, 2017 and February 28, 2017, respectively | ||
Series E Preferred Stock, $0.001 par value; 4,350,000 shares authorized; 4,350,000 and 3,350,000 shares issued and outstanding ,respectively | 4,350 | 3,350 |
Series F Convertible Preferred Stock, $1.00 par value; 4,350 shares authorized; 3,450 and 2,450 shares issued and outstanding, respectively | 3,450 | 2,450 |
Common Stock, $0.001 par value; 480,000,000 shares authorized 124,004,554 and no shares issued and outstanding, respectively | 125,004 | |
Additional paid-in capital | 1,108,308 | 13,857 |
Accumulated deficit | (35,504,029) | (184,697) |
Total shareholders' deficit | (34,262,917) | (165,040) |
Total liabilities and shareholders' deficit | $ 736,583 | $ 341,243 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Feb. 28, 2018 | Feb. 28, 2017 |
Statement of Financial Position [Abstract] | ||
Revenue earning robots, accumulated depreciation | $ 0 | $ 3,544 |
Fixed assets, accumulated depreciation | 36,632 | 2,650 |
Current portion of convertible notes payable net of unamortized discount | 3,418,636 | 0 |
Convertible notes payable net of unamortized discount | $ 505,039 | $ 0 |
Preferred stock, undesignated, par value (in dollars per share) | ||
Preferred stock, undesignated, authorized | 15,645,650 | 15,645,650 |
Preferred stock, undesignated, issued | ||
Preferred stock, undesignated, outstanding | ||
Series E Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Series E Preferred Stock, authorized | 4,350,000 | 4,350,000 |
Series E Preferred Stock, issued | 4,350,000 | 3,350,000 |
Series E Preferred Stock, outstanding | 4,350,000 | 3,350,000 |
Series F Preferred Stock, par value (in dollars per share) | $ 1 | $ 1 |
Series F Preferred Stock, authorized | 4,350 | 4,350 |
Series F Preferred Stock, issued | 3,450 | 2,450 |
Series F Preferred Stock, outstanding | 3,450 | 2,450 |
Common stock, par value (in dollars per shares) | $ 0.001 | $ 0.001 |
Common stock, authorized | 480,000,000 | 480,000,000 |
Common stock, issued | 125,004,554 | |
Common stock, outstanding | 125,004,554 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 2 Months Ended | 5 Months Ended | 12 Months Ended |
Feb. 28, 2017 | Dec. 31, 2016 | Feb. 28, 2018 | |
Income Statement [Abstract] | |||
Revenues | $ 106,476 | ||
Cost of Goods Sold | 45,000 | ||
Gross Profit | 61,476 | ||
Operating expenses: | |||
Research and development | 20,153 | 30,572 | 493,000 |
General and administrative | 54,856 | 49,349 | 2,391,664 |
Depreciation and amortization | 6,194 | 130,081 | |
Loss on impairment of fixed assets | 563,556 | ||
Total operating expenses | 81,203 | 79,921 | 3,578,301 |
Loss from operations | (81,203) | (79,921) | (3,516,825) |
Other income (expense), net: | |||
Change in fair value of derivative liabilities | (9,495,321) | ||
Interest expense | (4,658) | (1,183) | (12,411,883) |
Gain on settlement of debt | 1,175,028 | ||
Other income | 1,926 | ||
Total other income (expense), net | (2,732) | (1,183) | (20,732,176) |
Net loss | $ (83,935) | $ (81,104) | $ (24,249,001) |
Net loss per share - basic (in dollars per share) | $ (0.39) | ||
Net loss per share - diluted (in dollars per share) | $ (0.39) | ||
Weighted average common shares outstanding - basic (in shares) | 61,578,290 | ||
Weighted average common shares outstanding - diluted (in shares) | 60,916,122 | 61,578,290 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT - USD ($) | Series E Preferred Stock [Member] | Series F Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at beginning at Jul. 25, 2016 | $ 3,350 | $ 2,450 | $ 13,857 | $ (19,658) | $ (1) | |
Balance at beginning (in shares) at Jul. 25, 2016 | 3,350,000 | 2,450 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (81,104) | (81,104) | ||||
Balance at end at Dec. 31, 2016 | $ 3,350 | $ 2,450 | 13,857 | (100,762) | (81,105) | |
Balance at end (in shares) at Dec. 31, 2016 | 3,350,000 | 2,450 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (83,935) | (83,935) | ||||
Balance at end at Feb. 28, 2017 | $ 3,350 | $ 2,450 | 13,857 | (184,697) | (165,040) | |
Balance at end (in shares) at Feb. 28, 2017 | 3,350,000 | 2,450 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock and preferred stock issued for recapitalization by RAD | $ 1,000 | $ 1,000 | $ 101,987 | 306,588 | (11,070,331) | (10,659,756) |
Common stock and preferred stock issued for recapitalization by RAD (in shares) | 1,000,000 | 1,000 | 101,987,887 | |||
Common stock issued for debt conversion | $ 23,017 | 785,023 | 808,040 | |||
Common stock issued for debt conversion (in shares) | 23,016,667 | |||||
Stock based compensation | 2,840 | 2,840 | ||||
Net loss | (24,249,001) | (24,249,001) | ||||
Balance at end at Feb. 28, 2018 | $ 4,350 | $ 3,450 | $ 125,004 | $ 1,108,308 | $ (35,504,029) | $ (34,262,917) |
Balance at end (in shares) at Feb. 28, 2018 | 4,350,000 | 3,450 | 125,004,554 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 2 Months Ended | 5 Months Ended | 12 Months Ended |
Feb. 28, 2017 | Dec. 31, 2016 | Feb. 28, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (83,935) | $ (81,104) | $ (24,249,001) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 6,194 | 130,081 | |
Stock-based compensation | 2,840 | ||
Loss on impairment of fixed assets | 563,556 | ||
Change in fair value of derivative liabilities | 9,495,321 | ||
Interest expense related to derivative liability in excess of face value of debt | 10,797,663 | ||
Amortization of debt discounts | 1,214,348 | ||
Gain on settlement of debt | (1,175,028) | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | (7,778) | (20,222) | |
Deposits on robots and other current assets | (130,000) | (20,000) | (424,363) |
Robot parts inventory | (270,014) | ||
Accounts payable and accrued expenses | (9,634) | 42,355 | 344,297 |
Accrued interest payable | 291,292 | ||
Customer deposits | (10,000) | ||
Net cash used in operating activities | (225,153) | (58,749) | (3,309,230) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of fixed assets | (85,050) | (228,371) | |
Cash proceeds from the WeSecure transaction | 17,000 | ||
Cash paid for security deposit | (30,141) | ||
Cash acquired in reverse recapitalization | 2,022 | ||
Net cash used in investing activities | (85,050) | (239,490) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from convertible notes payable, net | 315,000 | 50,000 | 2,558,345 |
Principal payment on convertible notes payable | (50,000) | ||
Net borrowings on loan payable - related party | 3,842 | 58,687 | 219,613 |
Loan from OMVS to RAD prior to the reverse recapitalization | 752,500 | ||
Proceeds from vehicle loan | 47,661 | ||
Repayment of vehicle loan | (1,328) | (342) | (11,533) |
Net cash provided by financing activities | 317,514 | 108,345 | 3,516,586 |
Net change in cash | 7,311 | 49,596 | (32,134) |
Cash, beginning of year | 49,596 | 56,907 | |
Cash, end of year | 56,907 | 49,596 | 24,773 |
Supplemental disclosure of cash and non-cash transactions: | |||
Cash paid for interest | 1,058 | 1,183 | 24,193 |
Cash paid for taxes | |||
Noncash investing and financing activities: | |||
Transfer of robots from deposits to fixed assets and revenue earning robots | 491,260 | ||
Vehicle purchased by loan | 47,704 | ||
Debt discount from derivative liabilities | 3,106,385 | ||
Conversion of convertible notes and interest to shares of common stock | 808,040 | ||
Settlement and exchange of convertible notes payable | $ 837,070 |
GENERAL INFORMATION
GENERAL INFORMATION | 12 Months Ended |
Feb. 28, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL INFORMATION | 1. GENERAL INFORMATION On the Move Systems Corp. (“OMVS”) was incorporated in Florida on March 25, 2010 and reincorporated in Nevada on February 17, 2015. Robotic Assistance Devices, LLC (“RAD”) was incorporated in the State of Nevada on July 26, 2016 as an LLC. On July 25, 2017, Robotic Assistance Devices LLC converted to a C Corporation, Robotic Assistance Devices, Inc. through the issuance of 10,000 common shares to its sole shareholder. On August 28, 2017, OMVS completed the acquisition of RAD (the “Acquisition”), whereby OMVS acquired all the ownership and equity interest in RAD for 3,350,000 shares of OMVS Series E Preferred Stock and 2,450 shares of Series F Convertible Preferred Stock. OMVS’s prior business focus was transportation services, and OMVS was exploring the on-demand logistics market by developing a network of logistics partnerships. As a result of the closing of the Acquisition, OMVS has succeeded to the business of RAD, in which OMVS purchased all of the outstanding shares of capital stock of RAD. As a result, OMVS’s business going forward will consist of one segment activity which is the delivery of artificial intelligence and robotic solutions for operational, security and monitoring needs. The Acquisition is being treated as a reverse recapitalization effected by a share exchange for financial accounting and reporting purposes since substantially all of OMVS’s operations were disposed of as part of the consummation of the transaction and therefore no goodwill or other intangible assets were recorded by the Company as a result of the Acquisition. RAD is treated as the accounting acquirer as its stockholders control the Company after the Acquisition, even though OMVS was the legal acquirer. As a result, the assets and liabilities and the historical operations that are reflected in these financial statements are those of RAD as if RAD had always been the reporting company. On April 18, 2018 OMVS’ board of directors approved a name change to Artificial Intelligence Solutions Inc. As at the filing date of these financial statements, this change is not yet effective. |
GOING CONERN
GOING CONERN | 12 Months Ended |
Feb. 28, 2018 | |
Accounting Policies [Abstract] | |
GOING CONERN | 2. GOING CONERN The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern. For the year ended February 28, 2018, the Company had negative cash flow from operating activities of $3,309,230. As of February 28, 2018, the Company has an accumulated deficit of $35,504,029 and negative working capital of $34,292,202. Management does not anticipate having positive cash flow from operations in the near future. These factors raise a substantial doubt about the Company’s ability to continue as a going concern for the twelve months following the issuance of these financial statements. The Company does not have the resources at this time to repay its credit and debt obligations, make any payments in the form of dividends to its shareholders or fully implement its business plan. Without additional capital, the Company will not be able to remain in business. In the near term, management plans to continue to focus on raising the funds necessary to implement the Company’s business plan. Management will continue to seek out debt financing to obtain the capital required to meet the Company’s financial obligations. There is no assurance, however, that lenders will continue to advance capital to the Company or that the new business operations will be profitable. The possibility of failure in obtaining additional funding and the potential inability to achieve profitability raises doubts about the Company’s ability to continue as a going concern. |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 12 Months Ended |
Feb. 28, 2018 | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | 3. ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and in conformity with the instructions on Form 10-K and Rule 8-03 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (“SEC”). Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Robotic Assistance Devices, Inc., On the Move Experience, LLC and OMV Transports, LLC. All significant intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, which are, in the opinion of management, necessary for a fair presentation of such statements. Cash RAD considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market instruments. RAD places its cash and cash equivalents with high-quality, U.S. financial institutions and, to date has not experienced losses on any of its balances. Accounts Receivable Accounts receivable are comprised of balances due from customers, net of estimated allowances for uncollectible accounts. In determining collectability, historical trends are evaluated, and specific customer issues are reviewed on a periodic basis to arrive at appropriate allowances. Robot Parts Inventory Robot parts inventory is stated at the lower of cost or market using the weighted average cost method. The Company records a valuation reserve for obsolete and slow-moving inventory, relying principally on specific identification of such inventory. The Company uses these robot parts in the assembly of revenue earning robots and demo robots as well as research and development. Depending on use, the Company will transfer the parts to the corresponding asset or expense if used in research and development. A charge to income is taken when factors that would result in a need for an increase in the valuation, such as excess or obsolete inventory, are noted. Deposits Deposits are comprised of deposits of $0 and $150,000 as of February 28, 2018 and 2017, respectively, on robots that are expected to be received within one year. Revenue Earning Robots: Revenue earning robots are stated at cost. Depreciation is provided on a straight-line basis over the estimated useful life of 48 months. The Company continually evaluates revenue earning robots to determine whether events or changes in circumstances have occurred that may warrant revision of the estimated useful life or whether the robot should be evaluated for possible impairment. The Company uses a combination of the undiscounted cash flows and market approaches in assessing whether an asset has been impaired. The Company measures impairment losses based upon the amount by which the carrying amount of the asset exceeds the fair value. Fixed Assets Fixed assets are stated at cost. Depreciation is provided on the straight-line method based on the estimated useful lives of the respective assets which range from two to five years. Major repairs or improvements are capitalized. Minor replacements and maintenance and repairs which do not improve or extend asset lives are expensed currently. Demo robots 4 years Computer equipment 3 years Office equipment 4 years Vehicles 3 years Leasehold improvements 5 years, the life of the lease The Company periodically evaluates the fair value of fixed assets whenever events or changes in circumstances indicate that its carrying amounts may not be recoverable. Upon retirement or other disposition of fixed assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is recognized in income. Research and Development Research and development costs are expensed in the period they are incurred, unless they meet specific criteria related to technical, market and financial feasibility, as determined by Management, including but not limited to the establishment of a clearly defined future market for the product, and the availability of adequate resources to complete the project. If all criteria are met, the costs are deferred and amortized over the expected useful life or written off if a product is abandoned. At February 28, 2018, the Company had no deferred development costs. Contingencies Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. RAD records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on RAD’s financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, goods are delivered for rental and/or services are rendered, sales price is determinable, and collection is reasonably assured. Income Taxes On July 25, 2017, Robotic Assistance Devices LLC converted to a C Corporation, Robotic Assistance Devices, Inc. through the issuance of 10,000 common shares to its sole shareholder. Prior to the conversion on July 25, 2017, income taxes are not provided in the financial statements as presented as RAD was an LLC and the income or loss flowed through to the shareholder for the two months ended February 28, 2017. Thereafter, income taxes will be accounted for under the asset and liability method from that date forward. Deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and net operating loss and other tax credit carry-forwards. These items are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. RAD will record a valuation allowance to reduce the deferred income tax assets to the amount that is more likely than not to be realized. Leases Lease agreements are evaluated to determine if they are capital leases meeting any of the following criteria at inception: (a) transfer of ownership; (b) bargain purchase option; (c) the lease term is equal to 75 percent or more of the estimated economic life of the leased property; or (d) the present value at the beginning of the lease term of the minimum lease payments, excluding that portion of the payments representing executory costs such as insurance, maintenance, and taxes to be paid by the lessor, including any profit thereon, equals or exceeds 90 percent of the excess of the fair value of the leased property to the lessor at lease inception over any related investment tax credit retained by the lessor and expected to be realized by the lessor. If, at its inception, a lease meets any of the four lease criteria above, the lease is classified by the Company as a capital lease; and if none of the four criteria are met, the lease is classified by RAD as an operating lease. Operating lease payments are recognized as an expense in the income statement on a straight-line basis over the lease term, whereby an equal amount of rent expense is attributed to each period during the term of the lease, regardless of when actual payments are made. This generally results in rent expense in excess of cash payments during the early years of a lease and rent expense less than cash payments in the later years. The difference between rent expense recognized and actual rental payments is recorded as deferred rent and included in liabilities. Distinguishing Liabilities from Equity The Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet (“temporary equity”). The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e. at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity. Initial Measurement The Company records its financial instruments classified as liability, temporary equity or permanent equity at issuance at the fair value, or cash received. Subsequent Measurement – Financial Instruments Classified as Liabilities The Company records the fair value of its financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial instruments classified as liabilities are recorded as other income (expenses). Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurements and Disclosures ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes 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 under ASC Topic 820 are described as follows: ● Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date. ● Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include 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; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3 – Inputs that are unobservable for the asset or liability. Measured on a Recurring Basis The following table presents information about our liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fell: Fair Value Measurement Using Amount at Fair Value Level 1 Level 2 Level 3 February 28, 2018 Liabilities Derivative liability – conversion features pursuant to convertible notes payable $ 31,113,844 $ — $ — $ 31,113,844 February 28, 2017 Liabilities Derivative liability – conversion features pursuant to convertible notes payable $ — $ — $ — $ — Earnings (Loss) per Share Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted EPS excluded all dilutive potential shares if their effect was anti-dilutive. Basic net loss per share is based on the weighted average number of common and common-equivalent shares outstanding. For the period from inception (July 26, 2016) through February 28, 2017, there were no common shares outstanding. Potential common shares includable in the computation of fully-diluted per share results are not presented in the consolidated financial statements for year ended February 28, 2018 and period from inception (July 26, 2016) through February 28, 2017 as their effect would be anti-dilutive. Basic loss per common share is computed based on the weighted average number of shares outstanding during the period. Diluted loss per share is computed in a manner similar to the basic loss per share, except the weighted-average number of shares outstanding is increased to include all common shares, including those with the potential to be issued by virtue of convertible debt and other such convertible instruments. Diluted loss per share contemplates a complete conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share. The anti-dilutive shares of common stock outstanding for the year ended February 28, 2018, the two months ended February 28, 2017 and for the period from inception (July 26, 2016) through February 28, 2017 were as follows: Year Ended February 28, 2018 Two Months Ended February 28, 2017 Period from Inception (July 26, 2016) through December 31, 2016 Potentially dilutive securities: Convertible notes payable and embedded warrants 114,994,181 — — Series F Convertible Preferred Stock 431,265,711 351,858,210 — Recently Adopted Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2017-01, Business Combinations: Clarifying the Definition of a Business Revenue from Contracts with Customers Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) from Contracts with Customers (Topic 606): Deferral of the Effective Date. From March 2016 through September 2017, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting, Revenue from Contracts with Customers (Topic 606):Narrow-Scope Improvements and Practical Expedients Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) Restricted Cash a consensus of the FASB Emerging Issues Task Force In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception Topic 480, Distinguishing Liabilities from Equity Subsequent Events The Company has evaluated all transactions through the date the financial statements were issued for subsequent event disclosure consideration. |
PREPAID EXPENSES AND DEPOSITS
PREPAID EXPENSES AND DEPOSITS | 12 Months Ended |
Feb. 28, 2018 | |
Prepaid Expenses And Deposits | |
PREPAID EXPENSES AND DEPOSITS | 4. PREPAID EXPENSES AND DEPOSITS Prepaid expenses and deposits on robots expected to be received within one year were comprised of the following: February 28, 2018 February 28, 2017 Deposits on robots $ — $ 150,000 Prepaid insurance 22,076 — Prepaid travel 10,488 — Prepaid trade show expenses 50,539 — $ 83,103 $ — |
REVENUE EARNING ROBOTS
REVENUE EARNING ROBOTS | 12 Months Ended |
Feb. 28, 2018 | |
Revenue Earning Robots | |
REVENUE EARNING ROBOTS | 5. REVENUE EARNING ROBOTS Revenue earning robots consisted of the following: February 28, 2018 February 28, 2017 Revenue earning robots $ — $ 85,050 Less: Accumulated depreciation — (3,544 ) $ — $ 81,506 During the year ended February 28, 2018, the Company made total additions to revenue earning robots of $384,588. Additions to revenue earning robots for the two months ended February 28, 2017 were $85,050 and for the period from inception (July 26, 2016) through December 31, 2016 were $0. Due to all the revenue earning robots becoming non-operational through February 28, 2018, the Company wrote down revenue earning robots with a net book value of $414,746 to $0 as loss on impairment of fixed assets. Depreciation expense was $51,348 for the year ended February 28, 2018, $3,544 for the two months ended February 28, 2017 and $0 for the period from inception (July 26, 2016) through December 31, 2016. |
FIXED ASSETS
FIXED ASSETS | 12 Months Ended |
Feb. 28, 2018 | |
Fixed Assets | |
FIXED ASSETS | 6. FIXED ASSETS Fixed assets consisted of the following: February 28, 2018 February 28, 2017 Automobile $ 136,318 $ 47,702 Computer equipment 17,361 — Office equipment 11,829 — Leasehold improvements 29,329 — 194,837 47,702 Less: Accumulated depreciation (36,632 ) (2,650 ) $ 158,205 $ 45,052 During the year ended February 28, 2018, the Company acquired total fixed assets of $335,043. Additions to fixed assets for the two months ended February 28, 2017 were $ and for the period from inception (July 26, 2016) through December 31, 2016 were $0. Due to all the demo robots becoming non-operational through February 28, 2018, the Company wrote down fixed assets with a net book value of $148,810 to $0 as loss on impairment of fixed assets. Depreciation expense was $73,080 for the year ended February 28, 2018, $2,650 for the two months ended February 28, 2017, and $0 for the period from inception (July 26, 2016) through December 31, 2016. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Feb. 28, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | 7. INTANGIBLE ASSETS Intangible assets consisted of the following: February 28, 2018 February 28, 2017 Intangible asset $ 61,901 $ — Less accumulated amortization (5,653 ) — $ 56,248 $ — On October 2, 2017, the Company acquired goods and other intangibles through an asset purchase agreement with WeSecure Robotics, Inc. (“WeSecure”) in exchange for $125,000 payable in 5 monthly $25,000 installments commencing in October 2017 and ending February 2018. The intangible asset primarily consisted of customer relationships and lists acquired as a part of the asset purchase agreement. The Company is treating this transaction as a business combination The Company is treating this transaction as a business combination under ASU 2017-01 – Business Combinations: Clarifying the Definition of a Business. Under the asset purchase agreement, the two principals of WeSecure were also hired on at will basis: one as a sales director for a salary of $8,000 per month and the other as a consultant at $1,000 per month. The salary has been committed to until September 1, 2019, regardless of employment within the Company. In addition, the two principals will receive collectively a commission of $500/month for each SMP robot rented by an identified customer for one year, as long as the customer stays with the Company for two years and an additional year of commission if the two principals remain employed with the Company through September 1, 2020. They will also receive a commission of 5% net revenues on sales to identified customers for non-SMP robots for 2 years. In addition, the Company agreed to issue 450,000 options to the two principals to purchase shares its common stock at an exercise price of $0.05 per share that vest on October 2, 2021 (see further discussion in Note 14). The Company acquired the following net assets and liabilities as a part of this transaction: Assets Acquired: Cash $ 17,000 Robots, parts, and equipment 46,099 Intangible assets 61,901 Total assets acquired $ 125,000 Liabilities Assumed: Acquisition cost $ 125,000 Total liabilities assumed $ 125,000 Amortization expense was $5,653 for the year ended February 28, 2018, and $0 both for the two months ended February 28, 2017 , and for the period from inception (July 26, 2016) through December 31, 2016. At February 28, 2018, the Company had made four payments totaling $100,000, with a remaining balance due of $25,000 that has been included on the balance sheet as balance due on acquisition to WeSecure. The acquisition was to be fully paid at February 28, 2018 per the agreement, however no notices have been sent. |
NOTE RECEIVABLE
NOTE RECEIVABLE | 12 Months Ended |
Feb. 28, 2018 | |
Note Receivable | |
NOTE RECEIVABLE | 8. NOTE RECEIVABLE On March 13, 2017, the Company loaned $40,000 to a third party. The note bore interest at 18% per annum and was payable on April 13, 2017. The note was not repaid by the due date. The note was subsequently amended to bear interest of 2% per month plus a $10,000 fee. The note was payable on December 31, 2017 and is secured in senior rank on all assets of the borrower. The Company evaluated the note receivable to determine whether its lending activities create a variable interest entity that would require consolidation and determined that it does not create a variable interest entity. The third party is in the process of repaying the loan and expects to have the funds available as a result of the commencement of principal business operations in the near term. |
CUSTOMER DEPOSITS
CUSTOMER DEPOSITS | 12 Months Ended |
Feb. 28, 2018 | |
Customer Deposits | |
CUSTOMER DEPOSITS | 9. CUSTOMER DEPOSITS As of February 28, 2017, the Company received a $10,000 deposit from a customer towards the rental of equipment with an expected delivery in the third quarter of calendar year 2018. |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 12 Months Ended |
Feb. 28, 2018 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES PAYABLE | 10. CONVERTIBLE NOTES PAYABLE Convertible notes payable consisted of the following: Balance Balance Interest Conversion February 28, February 28, Issued Maturity Rate Rate per Share 2018 2017 February 28, 2011 February 26, 2013 * 7% $0.015 $ 32,600 $ — January 31, 2013 February 28, 2017 * 10% $0.010 119,091 — May 31, 2013 November 30, 2016 * 10% $0.010 261,595 — November 30, 2013 November 30, 2017 10% $0.010 — — August 31, 2014 November 30, 2016 * 10% $0.002 355,652 — November 30, 2014 November 30, 2016 * 10% $0.002 103,950 — February 28, 2015 February 28, 2017 * 10% $0.001 63,357 — May 31, 2015 August 31, 2017 10% $1.000 65,383 — August 31, 2015 August 31, 2017 10% $0.300 91,629 — November 30, 2015 November 30, 2018 10% $0.300 269,791 — February 3, 2016 February 3, 2017 * 5% 49% discount (2) — — February 29, 2016 February 28, 2019 10% 60% discount (2) 95,245 — March 22, 2016 March 22, 2017 10% $0.003 — — May 31, 2016 May 31, 2019 10% $0.003 35,100 — July 18, 2016 July 18, 2017 10% $0.003 3,500 — September 6, 2016 September 6, 2017 10% $0.003 — — December 31, 2016 December 31, 2020 8% 35% discount (2) 65,000 65,000 January 4, 2017 January 4, 2018 0% — — — January 13, 2017 October 13, 2017 0% 50% discount (1) — — January 15, 2017 January 15, 2021 8% 35% discount (2) 50,000 50,000 January 15, 2017 January 15, 2021 8% 35% discount (2) 100,000 100,000 January 16, 2017 January 16, 2021 8% 35% discount (2) 150,000 150,000 March 1, 2017 March 1, 2018 8% 40% discount (2) — — March 3, 2017 October 3, 2017 8% 40% discount (1) — — March 8, 2017 March 8, 2018 8% 40% discount (2) — — March 8, 2017 March 8, 2020 10% 40% discount (2) 100,000 — March 9, 2017 March 9, 2021 8% 35% discount (2) 50,000 — March 21, 2017 March 21, 2018 8% 40% discount (2) 30,000 — April 4, 2017 December 4, 2017 10% 40% discount (2) 12,066 — April 19, 2017 April 19, 2018 15% 50% discount (2) 96,250 — April 20, 2017 January 30, 2018 8% 40% discount (1) 28,000 — April 26, 2017 April 26, 2018 0% $0.001 67 — May 1, 2017 May 1, 2021 8% 35% discount (2) 50,000 — May 4, 2017 May 4, 2018 8% 40% discount (2) 150,000 — May 15, 2017 May 15, 2018 0% $0.001 1,280 — May 17, 2017 May 17, 2020 10% 40% discount (1) 85,000 — June 7, 2017 June 7, 2018 8% 40% discount (2) 200,000 — June 16, 2017 June 16, 2018 0% $0.001 750 — July 12, 2017 July 12, 2018 0% $0.001 — — July 8, 2017 July 8, 2018 8% 40% discount 200,000 — July 28, 2017 July 28, 2018 15% $0.001 — — July 31, 2017 July 31, 2018 8% 40% discount (2) — — August 8, 2017 August 8, 2018 8% 40% discount (2) 125,000 — July 28, 2017 July 28, 2018 15% 50% discount (2) 116,875 — August 29, 2017 August 29, 2018 15% 50% discount (2) 247,500 — September 1, 2017 September 1, 2018 0% lower of 50% discount/$0.005 187,000 — September 12, 2017 September 12, 2018 8% 40% discount (2) 128,000 — September 25, 2017 September 25, 2018 15% 50% discount (2) 398,750 — October 4, 2017 May 4, 2018 8% 40% discount (2) 150,000 — October 16, 2017 October 16, 2018 15% 50% discount (2) 345,000 — November 22, 2017 November 22, 2018 15% 50% discount (2) 500,250 — December 28, 2017 December 28, 2017 10% 40% discount (2) 60,500 — December 29, 2017 December 29, 2018 15% 50% discount (2) 330,000 — January 9, 2018 January 9, 2019 8% 40% discount (2) 82,500 — January 30, 2018 January 30, 2019 15% 50% discount (2) 300,000 — February 21, 2018 February 21, 2019 15% 50% discount (2) 300,000 — 6,136,681 365,000 Less: current portion of convertible notes payable (5,536,582 ) — Less: discount on noncurrent convertible notes payable (505,039 ) — Noncurrent convertible notes payable, net of discount $ 95,060 $ 365,000 Current portion of convertible notes payable $ 5,536,582 $ — Less: discount on current portion of convertible notes payable (3,418,636 ) — Current portion of convertible notes payable, net of discount $ 2,117,946 $ — * The indicated notes were in default as of February28, 2018 and bear default interest of between 18% and 25% per annum. (1) The note is convertible beginning six months after the date of issuance. (2) The notes are accounted for and evaluated under ASC 480 as discussed in Note 3. During the year ended February 28, 2018, the Company incurred total original issue discounts of $251,500 and derivative discounts of $3,106,385. These amounts are included in discounts on convertible notes payable and are being amortized to interest expense over the life of the convertible notes payable. During the year ended February 28, 2018, the Company recognized interest expense related to the amortization of debt discount of $1,102,430. All of the notes above are unsecured. As of February 28, 2018, the Company had total accrued interest payable of $750,509, of which $694,592 is classified as current and $55,917 is classified as noncurrent. In September 2017, the Company settled the March 8, 2017 note and paid $72,762, including the remaining $50,000 of principal balance and $1,929 in accrued interest, and a prepayment penalty of $20,833. The Company incurred this penalty to avoid additional costs related to the conversion of this note. The Company recorded a gain on settlement of debt of $84,507 related to the write-off of the associated derivative liability. During the year ended February 28, 2018, the Company repaid principal on convertible notes payable of $50,000. During the year ended February 28, 2018, a debt holder transferred debt of $337,958 and accrued interest of $147,713 to a third party who exchanged it for new convertible note for $300,000, maturing September 1, 2018 and bearing no interest. A gain on settlement of debt of $1,090,521 was recorded that includes the amount of associated derivative liability that was written off. Conversions to common stock During the year ended February 28, 2018, holders of certain convertible note payables elected to convert principal and accrued interest in the amounts shown below into shares of common stock. No gain or loss was recognized on conversions as they occurred within the terms of the agreement that provided for conversion. Conversion Date Principal Converted Interest Converted Total Amount Converted Shares Converted September 5, 2017 $ 26,250 $ — $ 26,250 5,250,000 September 18, 2017 27,250 — 27,250 5,450,000 September 27, 2017 29,000 — 29,000 5,800,000 October 16, 2017 30,500 — 30,500 6,100,000 October 16, 2017 10,000 — 10,000 416,667 $ 123,000 $ — $ 123,000 23,016,667 During the year ended February 28, 2018 and prior to the reverse merger, the Company canceled 600,000 shares of common stock. The shares had been issued during the year ended February 28, 2017 for the conversion of principal of a convertible note payable of $600. As a result of the shares being canceled, $600 was added back to the principal of the note. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Feb. 28, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 11. RELATED PARTY TRANSACTIONS For the year ended February 28, 2018, the Company received net advances of $219,613 from its loan payable to a related party. At February 28, 2018, the balance due to the related party was $316,142, and $62,529 at February 28, 2017. During the year ended February 28, 2018, the Company paid $236,853 in consulting fees for research and development to a company owned by a principal shareholder. |
OTHER DEBT - VEHICLE LOANS
OTHER DEBT - VEHICLE LOANS | 12 Months Ended |
Feb. 28, 2018 | |
Debt Disclosure [Abstract] | |
OTHER DEBT - VEHICLE LOANS | 12. OTHER DEBT – VEHICLE LOANS In December 2016, RAD entered into a vehicle loan for $47,704 secured by the vehicle. The loan is repayable over 5 years maturing November 9, 2021 and repayable $1,019 per month including interest and principal. In November 2017, the Company entered into another vehicle loan secured by the vehicle for $47,704. The loan is repayable over 5 years, maturing October 24, 2022 and repayable at $923 per month including interest and principal. The principal repayments were $11,533 for the year ended February 28, 2018. The balances of the amounts owed on the vehicle loan were $82,162 and $46,034 as of February 28, 2018 and February 28, 2017, respectively, of which $17,830 and $7,900 were classified as current and $64,332 and $38,134 as long-term, respectively. |
DERIVATIVE LIABILITES
DERIVATIVE LIABILITES | 12 Months Ended |
Feb. 28, 2018 | |
Derivative Liabilites | |
DERIVATIVE LIABILITES | 13. DERIVATIVE LIABILITES As of February 28, 2018, the Company revalued the fair value of the Company’s derivative liabilities associated with the conversion features on the convertible notes payable and determined that it had total derivative liabilities of $31,113,844. The Company estimated the fair value of the derivative liabilities using the Monte-Carlo model using the following key assumptions during the year ended February 28, 2018: Strike price $1.00 - $0.001 Fair value of Company common stock $0.17 Dividend yield 0.00% Expected volatility 85% - 65% Risk free interest rate 1.01% - 1.57% Expected term (years) 0.26 - 4.00 During the year ended February 28, 2018, the Company released $685,040 of the Company’s derivative liability to equity due to the conversions of principal and interest on the associated notes. The changes in the derivative liabilities (Level 3 financial instruments) measured at fair value on a recurring basis for the year ended February 28, 2018 were as follows: Addition of derivative liability pursuant to reverse recapitalization $ 9,035,437 Release of derivative liability on conversion of convertible notes payable recorded to equity (685,040 ) Debt discount due to derivative liabilities 3,106,385 Derivative liability in excess of face value of debt recorded to interest expense 10,797,663 Reduction in derivative liability due to debt settlement (635,922 ) Change in fair value of derivative liabilities 9,495,321 Balance as of February 28, 2018 $ 31,113,844 |
SHAREHOLDERS' EQUITY (DEFICIT)
SHAREHOLDERS' EQUITY (DEFICIT) | 12 Months Ended |
Feb. 28, 2018 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY (DEFICIT) | 14. SHAREHOLDERS’ EQUITY (DEFICIT) Summary of Common Stock Activity During the year ended February 28, 2018 and prior to the Acquisition, OMVS issued the following shares of common stock: ● Issued 76,008,764 shares of its common stock totaling $76,009 in connection with debt converted during the period; ● Cancelled 600,000 shares of its common stock totaling $600; and ● Issued 8,922,279 shares of its common stock totaling $8,922 in connections with warrants exercised during the period. Following the Acquisition through February 28, 2018, the Company issued 23,016,667 shares of its common stock for the conversion of $123,000 of outstanding convertible debt. On April 18, 2018, the board of directors approved a 100:1 reverse stock split on the issued and outstanding common shares. As of the filing date this change is not yet effective. Summary of Preferred Stock Activity During the year ended February 28, 2018, OMVS issued 1,000,000 and 1,000 shares of its Series E and Series F preferred stock, respectively, totaling $1,000 and $1,000, respectively, in connection with the recapitalization of OMVS by RAD. Summary of Stock Option Activity As part of the asset purchase agreement described in Note 7, the Company issued 450,000 options to purchase shares at an exercise price of $0.05 per share that vest on October 2, 2021. The options have a fair value of $27,843, based on the Black-Scholes Option Pricing model with the following assumptions: Strike price $0.05 Fair value of Company’s common stock $0.06 Dividend yield 0.00% Expected volatility 303.81% Risk free interest rate 1.94% Expected term (years) 4.00 The Company will amortize the $27,843 over the four-year term on a straight line basis as stock based compensation. During the year ended February 28, 2018, the company recorded $2,840 of stock-based compensation with a corresponding increase in paid-in capital. At February 28, 2018, the unamortized expense was $25,003 and the intrinsic value was $0. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Feb. 28, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 15. COMMITMENTS AND CONTINGENCIES Litigation Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s condensed consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. In February 2016, OMVS received notice that it had been sued in the Clark County District Court of Nevada. The plaintiff alleges that OMVS obtained certain trade secrets through a third party also named in the suit. OMVS believes the suit is without merit and intend to vigorously defend it. An arbitration was conducted on May 9, 2017, Plaintiff filed a Notice of Trial de Novo, seeking a review of the merit dismissal. It is counsel’s opinion this Trial de Novo is without merit and OMVS should prevail. Operating Lease The Company’s principal facility is located in Orange County, California. The lease agreement includes, escalating lease payments, renewal provisions and other provisions. The lease began in April 2017 and expires in March 2022. Rent expense is recorded over the lease terms on a straight-line basis. The security deposit of $25,747 was recorded as a long-term asset as of August 31, 2017. The Company also leases premises in northern California. The lease began in August 2017 and expires in August 2020. The security deposit of $5,126 was paid on September 1, 2017. The Company shares premises with a supplier who is the co-lessee. Through agreement with the supplier, the Company will pay 75% of the lease costs and the supplier will pay 25%. On February 1, 2018, the Company entered into an additional lease for premises for a robotic control center. The lease runs from February 1, 2018 to January 31, 2021 for $550 per month. The Company’s leases are accounted for as operating leases. Rent expense is recorded over the lease terms on a straight-line basis. Rent expense was $90,582 for the year ended February 28, 2018 and $0 for both the two months ended February 28, 2017, and for the period from inception (July 26, 2016) through December 31, 2016. At February 28, 2018, the Company had deferred rent of $6,742 (February 28, 2017-$0). At February 28, 2018, the Company’s future minimum payments are as follows: February 28, 2019 $ 98,855 February 28, 2020 99,980 February 28, 2021 75,355 February 28, 2022+ 62,647 $ 336,837 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Feb. 28, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 16. INCOME TAXES Due to the Company’s net losses, there were no provisions for income taxes for the year ended February 28, 2018. On December 22, 2017, new federal tax reform legislation was enacted in the United States (the “2017 Tax Act”), resulting in significant changes from previous tax law. The 2017 Tax Act reduces the federal corporate income tax rate to 21% from 34% effective January 1, 2018. The rate change, along with certain immaterial changes in tax basis resulting from the 2017 Tax Act, resulted in a reduction of the Company’s deferred tax assets of 202,948 and a corresponding reduction in the valuation allowance. The following table reconciles the U.S. federal statutory income tax rate in effect for the year ended February 28, 2018, and the Company’s effective tax rate: Year Ended February 28, 2018 U.S. federal statutory income tax $ (7,938,439 ) Amortization of debt discount 3,534,829 Fair value of derivative liabilities on issuance 3,108,482 Change in fair value of derivative liabilities 384,669 Gain on debt settlement 397,541 Stock-based compensation 930 Tax rate changes and other 202,948 Valuation allowance for deferred income tax assets 309,040 Effective income tax rate $ — Deferred income tax assets as of February 28, 2018 and 2016 are as follows (in thousands): Deferred Tax Assets February 28, 2018 Net operating loss carry forwards $ 1,561,140 Less valuation allowance (1,561,140 ) Total deferred tax assets $ — In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of deferred assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based on the available objective evidence, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, management has applied a full valuation allowance against its net deferred tax assets at February 28, 2018. The net change in the total valuation allowance from February 28, 2017 and February 28, 2018 was an increase of $1,561,140 The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of February 28, 2018, the Company did not have any significant uncertain tax positions or unrecognized tax benefits. The Company did not have associated accrued interest or penalties, nor was any interest expense or penalties recognized for the year ended February 28, 2018. As of February 28, 2018, the Company has federal net operating loss carryforwards of approximately $3,914,000 (not subject to limitations) and $3,520,000 (subject to limitations), which if not utilized, will expire beginning in 2038 and 2030, respectively. Utilization of NOL and tax credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by the Internal Revenue Code (the “Code”), as amended, as well as similar state provisions. In general, an “ownership change” as defined by the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percent of the outstanding stock of a company by certain shareholders or public groups. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Feb. 28, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 17. SUBSEQUENT EVENTS On March 14, 2018, the Company amended a note issued to a lender on January 5, 2018 to include the issuance of warrants to purchase 333,333 shares of the Company’s common stock with an exercise price of $0.15, with a 3-year maturity, and to change the date of the note to March 14, 2018, coinciding with the payment of the first tranche of $50,000 including cash proceeds of $43,000, fees of $2,000 and an original issue discount of $5,000. The original note issued on January 5, 2018 was issued with an aggregate principal amount of $250,000, for cash proceeds of $225,000 payable in tranches, with an original issue discount of $25,000. Each tranche matures one year after disbursement. The promissory note is convertible into common shares of the Company and a conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 25 trading days prior to conversion, and has a 10% per annum interest rate commencing on March 14, 2018. On March 16, 2018, the Company issued a convertible redeemable note to a lender with an aggregate principal amount of $95,000, due on March 16, 2019 for cash proceeds of $95,000. The promissory note is convertible into units of the Company comprised of one share of common stock and one warrant to purchase a share of common stock with a three-year maturity and a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion, and has a 15% per annum interest rate commencing on March 16, 2018. On April 9, 2018, the Company issued a convertible redeemable note to a lender with an aggregate principal amount of $55,000, due on April 9, 2019 for cash proceeds of $55,000. The promissory note is convertible into units of the Company comprised of one share of common stock and one warrant to purchase a share of common stock with a three-year maturity and a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion, and has a 15% per annum interest rate commencing on April 9, 2018. In March and April 2018, the Company received $200,000 in proceeds from the June 7, 2018 collateralized promissory note for $200,000 from a lender maturing June 7, 2018, bearing interest at 8%. On April 23, 2018, the Company received $76,000 of proceeds from a lender on the two March 21, 2018 collateralized promissory notes of $40,000, each including fess of $4,000, bearing interest at 8% and maturing on March 21, 2018. On April 9, 2018, the Company issued a convertible redeemable note to a lender with an aggregate principal amount of $55,000, due on April 9, 2019 for cash proceeds of $55,000. The promissory note is convertible into units of the Company comprised of one share of common stock and one warrant to purchase a share of common stock with a three-year maturity and a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion, and has a 15% per annum interest rate commencing on April 9, 2018. On May 3, 2018, the Company received $66,500 of proceeds from a lender on a $70,000 promissory note that matured on May 31, 2018. The note has an original issue discount of $3,500 and bears interest at 15% per annum. The loan was repaid in May 2018. On May 2, 2018, the Company issued a convertible redeemable note to a lender with an aggregate principal amount of $77,000, due on May 2, 2019 for cash proceeds of $70,000. The promissory note is convertible into one share of common stock and a conversion price equal to 40% of the lowest bid price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 10% per annum interest rate commencing on May 2, 2018. On May 4, 2018, the Company issued a convertible redeemable note to a lender with an aggregate principal amount of $82,500, due on May 4, 2019 for cash proceeds of $71,500. The principal amount includes an original issue discount of $7,500 and fees of $3,500. The promissory note is convertible into one share of common stock and a conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 20 trading days prior to conversion, and has a 12% per annum interest rate commencing on May 2, 2018. Subsequent to year-end, convertible note holders converted $317,433 in principal and $1,500 in fees for 29,256,243 shares of the Company’s common stock. On April 16, 2018, the Company issued warrants with a fair value of $472,960 to purchase 6,400,000 shares of the Company’s common stock with a three year maturity and an exercise price of $0.0265 per share. |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Feb. 28, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and in conformity with the instructions on Form 10-K and Rule 8-03 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (“SEC”). |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Robotic Assistance Devices, Inc., On the Move Experience, LLC and OMV Transports, LLC. All significant intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, which are, in the opinion of management, necessary for a fair presentation of such statements. |
Cash | Cash RAD considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market instruments. RAD places its cash and cash equivalents with high-quality, U.S. financial institutions and, to date has not experienced losses on any of its balances. |
Accounts Receivable | Accounts Receivable Accounts receivable are comprised of balances due from customers, net of estimated allowances for uncollectible accounts. In determining collectability, historical trends are evaluated, and specific customer issues are reviewed on a periodic basis to arrive at appropriate allowances. |
Robot Parts Inventory | Robot Parts Inventory Robot parts inventory is stated at the lower of cost or market using the weighted average cost method. The Company records a valuation reserve for obsolete and slow-moving inventory, relying principally on specific identification of such inventory. The Company uses these robot parts in the assembly of revenue earning robots and demo robots as well as research and development. Depending on use, the Company will transfer the parts to the corresponding asset or expense if used in research and development. A charge to income is taken when factors that would result in a need for an increase in the valuation, such as excess or obsolete inventory, are noted. |
Deposits | Deposits Deposits are comprised of deposits of $0 and $150,000 as of February 28, 2018 and 2017, respectively, on robots that are expected to be received within one year. |
Revenue Earning Robots | Revenue Earning Robots: Revenue earning robots are stated at cost. Depreciation is provided on a straight-line basis over the estimated useful life of 48 months. The Company continually evaluates revenue earning robots to determine whether events or changes in circumstances have occurred that may warrant revision of the estimated useful life or whether the robot should be evaluated for possible impairment. The Company uses a combination of the undiscounted cash flows and market approaches in assessing whether an asset has been impaired. The Company measures impairment losses based upon the amount by which the carrying amount of the asset exceeds the fair value. |
Fixed Assets | Fixed Assets Fixed assets are stated at cost. Depreciation is provided on the straight-line method based on the estimated useful lives of the respective assets which range from two to five years. Major repairs or improvements are capitalized. Minor replacements and maintenance and repairs which do not improve or extend asset lives are expensed currently. Demo robots 4 years Computer equipment 3 years Office equipment 4 years Vehicles 3 years Leasehold improvements 5 years, the life of the lease The Company periodically evaluates the fair value of fixed assets whenever events or changes in circumstances indicate that its carrying amounts may not be recoverable. Upon retirement or other disposition of fixed assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is recognized in income. |
Research and Development | Research and Development Research and development costs are expensed in the period they are incurred, unless they meet specific criteria related to technical, market and financial feasibility, as determined by Management, including but not limited to the establishment of a clearly defined future market for the product, and the availability of adequate resources to complete the project. If all criteria are met, the costs are deferred and amortized over the expected useful life or written off if a product is abandoned. At February 28, 2018, the Company had no deferred development costs. |
Contingencies | Contingencies Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. RAD records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on RAD’s financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. |
Revenue Recognition | Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, goods are delivered for rental and/or services are rendered, sales price is determinable, and collection is reasonably assured. |
Income Taxes | Income Taxes On July 25, 2017, Robotic Assistance Devices LLC converted to a C Corporation, Robotic Assistance Devices, Inc. through the issuance of 10,000 common shares to its sole shareholder. Prior to the conversion on July 25, 2017, income taxes are not provided in the financial statements as presented as RAD was an LLC and the income or loss flowed through to the shareholder for the two months ended February 28, 2017. Thereafter, income taxes will be accounted for under the asset and liability method from that date forward. Deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and net operating loss and other tax credit carry-forwards. These items are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. RAD will record a valuation allowance to reduce the deferred income tax assets to the amount that is more likely than not to be realized. |
Leases | Leases Lease agreements are evaluated to determine if they are capital leases meeting any of the following criteria at inception: (a) transfer of ownership; (b) bargain purchase option; (c) the lease term is equal to 75 percent or more of the estimated economic life of the leased property; or (d) the present value at the beginning of the lease term of the minimum lease payments, excluding that portion of the payments representing executory costs such as insurance, maintenance, and taxes to be paid by the lessor, including any profit thereon, equals or exceeds 90 percent of the excess of the fair value of the leased property to the lessor at lease inception over any related investment tax credit retained by the lessor and expected to be realized by the lessor. If, at its inception, a lease meets any of the four lease criteria above, the lease is classified by the Company as a capital lease; and if none of the four criteria are met, the lease is classified by RAD as an operating lease. Operating lease payments are recognized as an expense in the income statement on a straight-line basis over the lease term, whereby an equal amount of rent expense is attributed to each period during the term of the lease, regardless of when actual payments are made. This generally results in rent expense in excess of cash payments during the early years of a lease and rent expense less than cash payments in the later years. The difference between rent expense recognized and actual rental payments is recorded as deferred rent and included in liabilities. |
Distinguishing Liabilities from Equity | Distinguishing Liabilities from Equity The Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet (“temporary equity”). The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e. at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity. Initial Measurement The Company records its financial instruments classified as liability, temporary equity or permanent equity at issuance at the fair value, or cash received. Subsequent Measurement – Financial Instruments Classified as Liabilities The Company records the fair value of its financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial instruments classified as liabilities are recorded as other income (expenses). |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurements and Disclosures ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes 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 under ASC Topic 820 are described as follows: ● Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date. ● Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include 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; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3 – Inputs that are unobservable for the asset or liability. Measured on a Recurring Basis The following table presents information about our liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fell: Fair Value Measurement Using Amount at Fair Value Level 1 Level 2 Level 3 February 28, 2018 Liabilities Derivative liability – conversion features pursuant to convertible notes payable $ 31,113,844 $ — $ — $ 31,113,844 February 28, 2017 Liabilities Derivative liability – conversion features pursuant to convertible notes payable $ — $ — $ — $ — |
Earnings (Loss) per Share | Earnings (Loss) per Share Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted EPS excluded all dilutive potential shares if their effect was anti-dilutive. Basic net loss per share is based on the weighted average number of common and common-equivalent shares outstanding. For the period from inception (July 26, 2016) through February 28, 2017, there were no common shares outstanding. Potential common shares includable in the computation of fully-diluted per share results are not presented in the consolidated financial statements for year ended February 28, 2018 and period from inception (July 26, 2016) through February 28, 2017 as their effect would be anti-dilutive. Basic loss per common share is computed based on the weighted average number of shares outstanding during the period. Diluted loss per share is computed in a manner similar to the basic loss per share, except the weighted-average number of shares outstanding is increased to include all common shares, including those with the potential to be issued by virtue of convertible debt and other such convertible instruments. Diluted loss per share contemplates a complete conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share. The anti-dilutive shares of common stock outstanding for the year ended February 28, 2018, the two months ended February 28, 2017 and for the period from inception (July 26, 2016) through February 28, 2017 were as follows: Year Ended February 28, 2018 Two Months Ended February 28, 2017 Period from Inception (July 26, 2016) through December 31, 2016 Potentially dilutive securities: Convertible notes payable and embedded warrants 114,994,181 — — Series F Convertible Preferred Stock 431,265,711 351,858,210 — |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2017-01, Business Combinations: Clarifying the Definition of a Business Revenue from Contracts with Customers |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) from Contracts with Customers (Topic 606): Deferral of the Effective Date. From March 2016 through September 2017, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting, Revenue from Contracts with Customers (Topic 606):Narrow-Scope Improvements and Practical Expedients Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) Restricted Cash a consensus of the FASB Emerging Issues Task Force In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception Topic 480, Distinguishing Liabilities from Equity |
Subsequent Events | Subsequent Events The Company has evaluated all transactions through the date the financial statements were issued for subsequent event disclosure consideration. |
ACCOUNTING POLICIES (Tables)
ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Accounting Policies [Abstract] | |
Schedule of fixed assets lives | Major repairs or improvements are capitalized. Minor replacements and maintenance and repairs which do not improve or extend asset lives are expensed currently. Demo robots 4 years Computer equipment 3 years Office equipment 4 years Vehicles 3 years Leasehold improvements 5 years, the life of the lease |
Schedule of measured on a recurring basis | The following table presents information about our liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fell: Fair Value Measurement Using Amount at Fair Value Level 1 Level 2 Level 3 February 28, 2018 Liabilities Derivative liability – conversion features pursuant to convertible notes payable $ 31,113,844 $ — $ — $ 31,113,844 February 28, 2017 Liabilities Derivative liability – conversion features pursuant to convertible notes payable $ — $ — $ — $ — |
Schedule of earnings (loss) per Share | The anti-dilutive shares of common stock outstanding for the year ended February 28, 2018, the two months ended February 28, 2017 and for the period from inception (July 26, 2016) through February 28, 2017 were as follows: Year Ended February 28, 2018 Two Months Ended February 28, 2017 Period from Inception (July 26, 2016) through December 31, 2016 Potentially dilutive securities: Convertible notes payable and embedded warrants 114,994,181 — — Series F Convertible Preferred Stock 431,265,711 351,858,210 — |
PREPAID EXPENSES AND DEPOSITS (
PREPAID EXPENSES AND DEPOSITS (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Prepaid Expenses And Deposits | |
Schedule of Prepaid expenses and deposits | Prepaid expenses and deposits on robots expected to be received within one year were comprised of the following: February 28, 2018 February 28, 2017 Deposits on robots $ — $ 150,000 Prepaid insurance 22,076 — Prepaid travel 10,488 — Prepaid trade show expenses 50,539 — $ 83,103 $ — |
REVENUE EARNING ROBOTS (Tables)
REVENUE EARNING ROBOTS (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Revenue Earning Robots | |
Schedule of revenue earning robots | Revenue earning robots consisted of the following: February 28, 2018 February 28, 2017 Revenue earning robots $ — $ 85,050 Less: Accumulated depreciation — (3,544 ) $ — $ 81,506 |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Fixed Assets | |
Schedule of fixed assets | Fixed assets consisted of the following: February 28, 2018 February 28, 2017 Automobile $ 136,318 $ 47,702 Computer equipment 17,361 — Office equipment 11,829 — Leasehold improvements 29,329 — 194,837 47,702 Less: Accumulated depreciation (36,632 ) (2,650 ) $ 158,205 $ 45,052 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets consisted of the following: February 28, 2018 February 28, 2017 Intangible asset $ 61,901 $ — Less accumulated amortization (5,653 ) — $ 56,248 $ — |
Schedule of assets and liabilities | The Company acquired the following net assets and liabilities as a part of this transaction: Assets Acquired: Cash $ 17,000 Robots, parts, and equipment 46,099 Intangible assets 61,901 Total assets acquired $ 125,000 Liabilities Assumed: Acquisition cost $ 125,000 Total liabilities assumed $ 125,000 |
CONVERTIBLE NOTES PAYABLE (Tabl
CONVERTIBLE NOTES PAYABLE (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of convertible notes payable | Convertible notes payable consisted of the following: Balance Balance Interest Conversion February 28, February 28, Issued Maturity Rate Rate per Share 2018 2017 February 28, 2011 February 26, 2013 * 7% $0.015 $ 32,600 $ — January 31, 2013 February 28, 2017 * 10% $0.010 119,091 — May 31, 2013 November 30, 2016 * 10% $0.010 261,595 — November 30, 2013 November 30, 2017 10% $0.010 — — August 31, 2014 November 30, 2016 * 10% $0.002 355,652 — November 30, 2014 November 30, 2016 * 10% $0.002 103,950 — February 28, 2015 February 28, 2017 * 10% $0.001 63,357 — May 31, 2015 August 31, 2017 10% $1.000 65,383 — August 31, 2015 August 31, 2017 10% $0.300 91,629 — November 30, 2015 November 30, 2018 10% $0.300 269,791 — February 3, 2016 February 3, 2017 * 5% 49% discount (2) — — February 29, 2016 February 28, 2019 10% 60% discount (2) 95,245 — March 22, 2016 March 22, 2017 10% $0.003 — — May 31, 2016 May 31, 2019 10% $0.003 35,100 — July 18, 2016 July 18, 2017 10% $0.003 3,500 — September 6, 2016 September 6, 2017 10% $0.003 — — December 31, 2016 December 31, 2020 8% 35% discount (2) 65,000 65,000 January 4, 2017 January 4, 2018 0% — — — January 13, 2017 October 13, 2017 0% 50% discount (1) — — January 15, 2017 January 15, 2021 8% 35% discount (2) 50,000 50,000 January 15, 2017 January 15, 2021 8% 35% discount (2) 100,000 100,000 January 16, 2017 January 16, 2021 8% 35% discount (2) 150,000 150,000 March 1, 2017 March 1, 2018 8% 40% discount (2) — — March 3, 2017 October 3, 2017 8% 40% discount (1) — — March 8, 2017 March 8, 2018 8% 40% discount (2) — — March 8, 2017 March 8, 2020 10% 40% discount (2) 100,000 — March 9, 2017 March 9, 2021 8% 35% discount (2) 50,000 — March 21, 2017 March 21, 2018 8% 40% discount (2) 30,000 — April 4, 2017 December 4, 2017 10% 40% discount (2) 12,066 — April 19, 2017 April 19, 2018 15% 50% discount (2) 96,250 — April 20, 2017 January 30, 2018 8% 40% discount (1) 28,000 — April 26, 2017 April 26, 2018 0% $0.001 67 — May 1, 2017 May 1, 2021 8% 35% discount (2) 50,000 — May 4, 2017 May 4, 2018 8% 40% discount (2) 150,000 — May 15, 2017 May 15, 2018 0% $0.001 1,280 — May 17, 2017 May 17, 2020 10% 40% discount (1) 85,000 — June 7, 2017 June 7, 2018 8% 40% discount (2) 200,000 — June 16, 2017 June 16, 2018 0% $0.001 750 — July 12, 2017 July 12, 2018 0% $0.001 — — July 8, 2017 July 8, 2018 8% 40% discount 200,000 — July 28, 2017 July 28, 2018 15% $0.001 — — July 31, 2017 July 31, 2018 8% 40% discount (2) — — August 8, 2017 August 8, 2018 8% 40% discount (2) 125,000 — July 28, 2017 July 28, 2018 15% 50% discount (2) 116,875 — August 29, 2017 August 29, 2018 15% 50% discount (2) 247,500 — September 1, 2017 September 1, 2018 0% lower of 50% discount/$0.005 187,000 — September 12, 2017 September 12, 2018 8% 40% discount (2) 128,000 — September 25, 2017 September 25, 2018 15% 50% discount (2) 398,750 — October 4, 2017 May 4, 2018 8% 40% discount (2) 150,000 — October 16, 2017 October 16, 2018 15% 50% discount (2) 345,000 — November 22, 2017 November 22, 2018 15% 50% discount (2) 500,250 — December 28, 2017 December 28, 2017 10% 40% discount (2) 60,500 — December 29, 2017 December 29, 2018 15% 50% discount (2) 330,000 — January 9, 2018 January 9, 2019 8% 40% discount (2) 82,500 — January 30, 2018 January 30, 2019 15% 50% discount (2) 300,000 — February 21, 2018 February 21, 2019 15% 50% discount (2) 300,000 — 6,136,681 365,000 Less: current portion of convertible notes payable (5,536,582 ) — Less: discount on noncurrent convertible notes payable (505,039 ) — Noncurrent convertible notes payable, net of discount $ 95,060 $ 365,000 Current portion of convertible notes payable $ 5,536,582 $ — Less: discount on current portion of convertible notes payable (3,418,636 ) — Current portion of convertible notes payable, net of discount $ 2,117,946 $ — * The indicated notes were in default as of February28, 2018 and bear default interest of between 18% and 25% per annum. (1) The note is convertible beginning six months after the date of issuance. (2) The notes are accounted for and evaluated under ASC 480 as discussed in Note 3. |
Schedule of conversions to common stock | During the year ended February 28, 2018, holders of certain convertible note payables elected to convert principal and accrued interest in the amounts shown below into shares of common stock. No gain or loss was recognized on conversions as they occurred within the terms of the agreement that provided for conversion. Conversion Date Principal Converted Interest Converted Total Amount Converted Shares Converted September 5, 2017 $ 26,250 $ — $ 26,250 5,250,000 September 18, 2017 27,250 — 27,250 5,450,000 September 27, 2017 29,000 — 29,000 5,800,000 October 16, 2017 30,500 — 30,500 6,100,000 October 16, 2017 10,000 — 10,000 416,667 $ 123,000 $ — $ 123,000 23,016,667 |
DERIVATIVE LIABILITES (Tables)
DERIVATIVE LIABILITES (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Derivative Liabilites Tables Abstract | |
Schedule of derivative liabilities using the Monte-Carlo | The Company estimated the fair value of the derivative liabilities using the Monte-Carlo model using the following key assumptions during the year ended February 28, 2018: Strike price $1.00 - $0.001 Fair value of Company common stock $0.17 Dividend yield 0.00% Expected volatility 85% - 65% Risk free interest rate 1.01% - 1.57% Expected term (years) 0.26 - 4.00 |
Schedule of Level 3 financial instruments | The changes in the derivative liabilities (Level 3 financial instruments) measured at fair value on a recurring basis for the year ended February 28, 2018 were as follows: Addition of derivative liability pursuant to reverse recapitalization $ 9,035,437 Release of derivative liability on conversion of convertible notes payable recorded to equity (685,040 ) Debt discount due to derivative liabilities 3,106,385 Derivative liability in excess of face value of debt recorded to interest expense 10,797,663 Reduction in derivative liability due to debt settlement (635,922 ) Change in fair value of derivative liabilities 9,495,321 Balance as of February 28, 2018 $ 31,113,844 |
SHAREHOLDERS' EQUITY (DEFICIT)
SHAREHOLDERS' EQUITY (DEFICIT) (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of black-scholes option pricing model | The options have a fair value of $27,843, based on the Black-Scholes Option Pricing model with the following assumptions: Strike price $0.05 Fair value of Company’s common stock $0.06 Dividend yield 0.00% Expected volatility 303.81% Risk free interest rate 1.94% Expected term (years) 4.00 |
COMMITMENTS & CONTINGENCIES (Ta
COMMITMENTS & CONTINGENCIES (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of RAD's future minimum payments | At February 28, 2018, the Company’s future minimum payments are as follows: February 28, 2019 $ 98,855 February 28, 2020 99,980 February 28, 2021 75,355 February 28, 2022+ 62,647 $ 336,837 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of federal statutory income tax | The following table reconciles the U.S. federal statutory income tax rate in effect for the year ended February 28, 2018, and the Company’s effective tax rate: Year Ended February 28, 2018 U.S. federal statutory income tax $ (7,938,439 ) Amortization of debt discount 3,534,829 Fair value of derivative liabilities on issuance 3,108,482 Change in fair value of derivative liabilities 384,669 Gain on debt settlement 397,541 Stock-based compensation 930 Tax rate changes and other 202,948 Valuation allowance for deferred income tax assets 309,040 Effective income tax rate $ — |
Schedule of deferred income tax assets | Deferred income tax assets as of February 28, 2018 and 2016 are as follows (in thousands): Deferred Tax Assets February 28, 2018 Net operating loss carry forwards $ 1,561,140 Less valuation allowance (1,561,140 ) Total deferred tax assets $ — |
GENERAL INFORMATION (Details Na
GENERAL INFORMATION (Details Narrative) - Robotic Assistance Devices, LLC ("RAD") [Member] - shares | Aug. 28, 2017 | Jul. 25, 2017 |
Issuance of common stock | 10,000 | |
Series E Preferred Stock [Member] | ||
Number of shares isuued under acquisition | 3,350,000 | |
Series F Convertible Preferred Stock [Member] | ||
Number of shares isuued under acquisition | 2,450 |
GOING CONERN (Details Narrative
GOING CONERN (Details Narrative) - USD ($) | 2 Months Ended | 5 Months Ended | 12 Months Ended |
Feb. 28, 2017 | Dec. 31, 2016 | Feb. 28, 2018 | |
Going Conern | |||
Cash flow from operating activities | $ (225,153) | $ (58,749) | $ (3,309,230) |
Accumulated deficit | $ (184,697) | (35,504,029) | |
Working capital | $ (34,292,202) |
ACCOUNTING POLICIES (Details)
ACCOUNTING POLICIES (Details) - Robotic Assistance Devices, LLC ("RAD") [Member] | 12 Months Ended |
Feb. 28, 2018 | |
Demo Robots [Member] | |
Estimated useful lives | 4 years |
Vehicles [Member] | |
Estimated useful lives | 3 years |
Computer Equipment [Member] | |
Estimated useful lives | 3 years |
Office Equipment [Member] | |
Estimated useful lives | 4 years |
Leasehold Improvements [Member] | |
Estimated useful lives | 5 years |
ACCOUNTING POLICIES (Details 1)
ACCOUNTING POLICIES (Details 1) - Fair Value, Measurements, Recurring [Member] - USD ($) | Feb. 28, 2018 | Feb. 28, 2017 |
Liabilities | ||
Derivative liability - conversion features pursuant to convertible notes payable | $ 31,113,844 | |
Level 1 [Member] | ||
Liabilities | ||
Derivative liability - conversion features pursuant to convertible notes payable | ||
Level 2 [Member] | ||
Liabilities | ||
Derivative liability - conversion features pursuant to convertible notes payable | ||
Level 3 [Member] | ||
Liabilities | ||
Derivative liability - conversion features pursuant to convertible notes payable | $ 31,113,844 |
ACCOUNTING POLICIES (Details 2)
ACCOUNTING POLICIES (Details 2) - shares | 2 Months Ended | 5 Months Ended | 12 Months Ended |
Feb. 28, 2017 | Dec. 31, 2016 | Feb. 28, 2018 | |
Series F Convertible Preferred Stock [Member] | |||
Anti-dilutive shares outstanding | 351,858,210 | 431,265,711 | |
Convertible notes payable [Member] | |||
Anti-dilutive shares outstanding | 114,994,181 |
ACCOUNTING POLICIES (Details Na
ACCOUNTING POLICIES (Details Narrative) - Robotic Assistance Devices, LLC ("RAD") [Member] - USD ($) | Jul. 25, 2017 | Feb. 28, 2018 | Feb. 28, 2017 |
Deposits | $ 0 | $ 150,000 | |
Issuance of authorized common shares to sole shareholder | 10,000 | ||
Minimum [Member] | |||
Estimated useful lives | 2 years | ||
Maximum [Member] | |||
Estimated useful lives | 5 years |
PREPAID EXPENSES AND DEPOSITS41
PREPAID EXPENSES AND DEPOSITS (Details) - USD ($) | Feb. 28, 2018 | Feb. 28, 2017 |
Prepaid Expenses And Deposits Details Abstract | ||
Deposits on robots | $ 150,000 | |
Prepaid insurance | 22,076 | |
Prepaid travel | 10,488 | |
Prepaid trade show expenses | 50,539 | |
Total | $ 83,103 |
REVENUE EARNING ROBOTS (Details
REVENUE EARNING ROBOTS (Details) - Robotic Assistance Devices, LLC ("RAD") [Member] - USD ($) | Feb. 28, 2018 | Feb. 28, 2017 |
Revenue earning robots | $ 85,050 | |
Less: Accumulated depreciation | (3,544) | |
Revenue earning robots | $ 81,506 |
REVENUE EARNING ROBOTS (Detai43
REVENUE EARNING ROBOTS (Details Narrative) - USD ($) | 2 Months Ended | 5 Months Ended | 12 Months Ended |
Feb. 28, 2017 | Dec. 31, 2016 | Feb. 28, 2018 | |
Revenue earning | $ 106,476 | ||
Loss on impairment of fixed assets | (563,556) | ||
Depreciation expense | 6,194 | 130,081 | |
Robotic Assistance Devices, LLC ("RAD") [Member] | |||
Revenue earning | 85,050 | 0 | 384,588 |
Loss on impairment of fixed assets | 414,746 | 0 | |
Depreciation expense | $ 3,544 | $ 0 | $ 51,348 |
FIXED ASSETS (Details)
FIXED ASSETS (Details) - USD ($) | Feb. 28, 2018 | Feb. 28, 2017 |
Less: Accumulated depreciation | $ (36,632) | $ (2,650) |
Fixed assets, net of accumulated depreciation | 158,205 | 45,052 |
Robotic Assistance Devices, LLC ("RAD") [Member] | ||
Gross | 194,837 | 47,702 |
Less: Accumulated depreciation | (36,632) | (2,650) |
Fixed assets, net of accumulated depreciation | 158,205 | 45,052 |
Robotic Assistance Devices, LLC ("RAD") [Member] | Automobile [Member] | ||
Gross | 136,318 | 47,702 |
Robotic Assistance Devices, LLC ("RAD") [Member] | Computer Equipment [Member] | ||
Gross | 17,361 | |
Robotic Assistance Devices, LLC ("RAD") [Member] | Office Equipment [Member] | ||
Gross | 11,829 | |
Robotic Assistance Devices, LLC ("RAD") [Member] | Leasehold Improvements [Member] | ||
Gross | $ 29,329 |
FIXED ASSETS (Details Narrative
FIXED ASSETS (Details Narrative) - Robotic Assistance Devices, LLC ("RAD") [Member] - USD ($) | 2 Months Ended | 5 Months Ended | 12 Months Ended |
Feb. 28, 2017 | Dec. 31, 2016 | Feb. 28, 2018 | |
Fixed assets acquired | $ 0 | $ 335,043 | |
Loss on impairment of fixed assets | 148,810 | 0 | |
Depreciation expense | $ 2,650 | $ 0 | $ 73,080 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Feb. 28, 2018 | Feb. 28, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible assets | $ 61,901 | |
Less accumulated amortization | (5,653) | |
Intangible assets, net | $ 56,248 |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) - WeSecure [Member] | Feb. 28, 2018USD ($) |
Assets Acquired: | |
Cash | $ 17,000 |
Robots, parts, and equipment | 46,099 |
Intangible assets | 61,901 |
Total assets acquired | 125,000 |
Liabilities Assumed: | |
Acquisition cost | 125,000 |
Total liabilities assumed | $ 125,000 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) | Oct. 02, 2017USD ($)Number$ / sharesshares | Feb. 28, 2017USD ($) | Dec. 31, 2016USD ($) | Feb. 28, 2018USD ($)shares |
Principal face amount | $ 123,000 | |||
Professional fees, per month | $ 236,853 | |||
Number of options issued | shares | 23,016,667 | |||
Amortization expense | $ 0 | $ 0 | $ 5,653 | |
WeSecure [Member] | ||||
Payment of acquire intangible assets | 100,000 | |||
Balance due on acquisition of WeSecure | $ 25,000 | |||
WeSecure Robotics, Inc [Member] | Director [Member] | ||||
Salary, per month | $ 8,000 | |||
Commission paid, per month | 500 | |||
WeSecure Robotics, Inc [Member] | Consultant [Member] | ||||
Professional fees, per month | 1,000 | |||
Commission paid, per month | $ 500 | |||
WeSecure Robotics, Inc [Member] | Director & Consultant [Member] | ||||
Number of options issued | shares | 450,000 | |||
Options exericse price (in dollars per share) | $ / shares | $ 0.05 | |||
Vesting date | Oct. 2, 2021 | |||
Asset Purchase Agreement [Member] | WeSecure Robotics, Inc [Member] | Promissory Note [Member] | ||||
Principal face amount | $ 125,000 | |||
Number of installments | Number | 5 | |||
Face amount individual value of installment | $ 25,000 |
NOTE RECEIVABLE (Details Narrat
NOTE RECEIVABLE (Details Narrative) - Notes Receivable [Member] | Mar. 13, 2017USD ($) |
Promissory note fee amount | $ 10,000 |
Third Party [Member] | |
Advances receivable | $ 40,000 |
Maturity date | Dec. 31, 2017 |
Description of note receivable interest | The note was subsequently amended to bear interest of 2% per month plus a $10,000 fee. |
Description of note receivable collateral | It is payable on December 31, 2017 and is secured in senior rank on all assets of the borrower. |
CUSTOMER DEPOSITS (Details Narr
CUSTOMER DEPOSITS (Details Narrative) - USD ($) | Feb. 28, 2018 | Feb. 28, 2017 |
Customer deposits | $ 10,000 | $ 20,000 |
Robotic Assistance Devices, LLC ("RAD") [Member] | ||
Customer deposits | $ 10,000 |
CONVERTIBLE NOTES PAYABLE (Deta
CONVERTIBLE NOTES PAYABLE (Details) | 12 Months Ended | ||
Feb. 28, 2018USD ($)$ / shares | Feb. 28, 2017USD ($) | ||
Total convertible notes payable | $ 6,136,681 | $ 365,000 | |
Less: current portion of convertible notes payable | (5,536,582) | ||
Less: discount on noncurrent convertible notes payable | (505,039) | ||
Noncurrent convertible notes payable, net of discount | 95,060 | 365,000 | |
Current portion of convertible notes payable | 5,536,582 | ||
Less: discount on current portion of convertible notes payable | (3,418,636) | ||
Current portion of convertible notes payable, net of discount | $ 2,117,946 | ||
7% Convertible Note Due February 26, 2013 [Member] | |||
Issuance date | Feb. 28, 2011 | ||
Conversion rate per share | $ / shares | $ 0.015 | ||
Total convertible notes payable | $ 32,600 | ||
10% Convertible Note Due February 28, 2017 [Member] | |||
Issuance date | Jan. 31, 2013 | ||
Conversion rate per share | $ / shares | $ 0.010 | ||
Total convertible notes payable | $ 119,091 | ||
10% Convertible Note Due November 30, 2016 [Member] | |||
Issuance date | May 31, 2013 | ||
Conversion rate per share | $ / shares | $ 0.010 | ||
Total convertible notes payable | $ 261,595 | ||
10% Convertible Note Due November 30, 2017 [Member] | |||
Issuance date | Nov. 30, 2013 | ||
Conversion rate per share | $ / shares | $ 0.010 | ||
Total convertible notes payable | |||
10% Convertible Note Due November 30, 2016 [Member] | |||
Issuance date | Aug. 31, 2014 | ||
Conversion rate per share | $ / shares | $ 0.002 | ||
Total convertible notes payable | $ 355,652 | ||
10% Convertible Note Due November 30, 2016 [Member] | |||
Issuance date | Nov. 30, 2014 | ||
Conversion rate per share | $ / shares | $ 0.002 | ||
Total convertible notes payable | $ 103,950 | ||
10% Convertible Note Due February 28, 2017 [Member] | |||
Issuance date | Feb. 28, 2015 | ||
Conversion rate per share | $ / shares | $ 0.001 | ||
Total convertible notes payable | $ 63,357 | ||
10% Convertible Note Due August 31, 2017 [Member] | |||
Issuance date | May 31, 2015 | ||
Conversion rate per share | $ / shares | $ 1 | ||
Total convertible notes payable | $ 65,383 | ||
10% Convertible Note Due August 31, 2017 [Member] | |||
Issuance date | Aug. 31, 2015 | ||
Conversion rate per share | $ / shares | $ 0.300 | ||
Total convertible notes payable | $ 91,629 | ||
10% Convertible Note Due November 30, 2018 [Member] | |||
Issuance date | Nov. 30, 2015 | ||
Conversion rate per share | $ / shares | $ 0.300 | ||
Total convertible notes payable | $ 269,791 | ||
5% Convertible Note Due February 3, 2017 [Member] | |||
Issuance date | Feb. 3, 2016 | ||
Percentage of conversion rate discount | [1] | 0.49 | |
Total convertible notes payable | |||
10% Convertible Note Due February 28, 2019 [Member] | |||
Issuance date | Feb. 29, 2016 | ||
Percentage of conversion rate discount | [1] | 0.60 | |
Total convertible notes payable | $ 95,245 | ||
10% Convertible Note Due March 22, 2017 [Member] | |||
Issuance date | Mar. 22, 2016 | ||
Conversion rate per share | $ / shares | $ 0.003 | ||
Total convertible notes payable | |||
10% Convertible Note Due May 31, 2019 [Member] | |||
Issuance date | May 31, 2016 | ||
Conversion rate per share | $ / shares | $ 0.003 | ||
Total convertible notes payable | $ 35,100 | ||
10% Convertible Note Due July 18, 2017 [Member] | |||
Issuance date | Jul. 18, 2016 | ||
Conversion rate per share | $ / shares | $ 0.003 | ||
Total convertible notes payable | $ 3,500 | ||
10% Convertible Note Due September 6, 2017 [Member] | |||
Issuance date | Sep. 6, 2016 | ||
Conversion rate per share | $ / shares | $ 0.003 | ||
Total convertible notes payable | |||
8% Convertible Note Due December 31, 2020 [Member] | |||
Issuance date | Dec. 31, 2016 | ||
Percentage of conversion rate discount | [1] | 0.35 | |
Total convertible notes payable | $ 65,000 | 65,000 | |
0% Convertible Note Due January 4, 2018 [Member] | |||
Issuance date | Jan. 4, 2017 | ||
Conversion rate per share | $ / shares | |||
Total convertible notes payable | |||
0% Convertible Note Due October 13, 2017 [Member] | |||
Issuance date | Jan. 13, 2017 | ||
Percentage of conversion rate discount | [2] | 0.50 | |
Total convertible notes payable | |||
8% Convertible Note Due January 15, 2021 [Member] | |||
Issuance date | Jan. 15, 2017 | ||
Percentage of conversion rate discount | [1] | 0.35 | |
Total convertible notes payable | $ 50,000 | 50,000 | |
8% Convertible Note Due January 15, 2021 [Member] | |||
Issuance date | Jan. 15, 2017 | ||
Percentage of conversion rate discount | [1] | 0.35 | |
Total convertible notes payable | $ 100,000 | 100,000 | |
8% Convertible Note Due January 16, 2021 [Member] | |||
Issuance date | Jan. 16, 2017 | ||
Percentage of conversion rate discount | [1] | 0.35 | |
Total convertible notes payable | $ 150,000 | 150,000 | |
8% Convertible Note Due March 1, 2018 [Member] | |||
Issuance date | Mar. 1, 2017 | ||
Percentage of conversion rate discount | [1] | 0.40 | |
Total convertible notes payable | |||
8% Convertible Note Due October 3, 2017 [Member] | |||
Issuance date | Mar. 3, 2017 | ||
Percentage of conversion rate discount | [2] | 0.40 | |
Total convertible notes payable | |||
8% Convertible Note Due March 8, 2018 [Member] | |||
Issuance date | Mar. 8, 2017 | ||
Percentage of conversion rate discount | [1] | 0.40 | |
Total convertible notes payable | |||
10% Convertible Note Due March 8, 2020 [Member] | |||
Issuance date | Mar. 8, 2017 | ||
Percentage of conversion rate discount | [1] | 0.40 | |
Total convertible notes payable | $ 100,000 | ||
8% Convertible Note Due March 9, 2021 [Member] | |||
Issuance date | Mar. 9, 2017 | ||
Percentage of conversion rate discount | [1] | 0.35 | |
Total convertible notes payable | $ 50,000 | ||
8% Convertible Note Due March 21, 2018 [Member] | |||
Issuance date | Mar. 21, 2017 | ||
Percentage of conversion rate discount | [1] | 0.40 | |
Total convertible notes payable | $ 30,000 | ||
10% Convertible Note Due December 4, 2017 [Member] | |||
Issuance date | Apr. 4, 2017 | ||
Percentage of conversion rate discount | [1] | 0.40 | |
Total convertible notes payable | $ 12,066 | ||
15% Convertible Note Due April 19, 2018 [Member] | |||
Issuance date | Apr. 19, 2017 | ||
Percentage of conversion rate discount | [1] | 0.50 | |
Total convertible notes payable | $ 96,250 | ||
8% Convertible Note Due January 30, 2018 [Member] | |||
Issuance date | Apr. 20, 2017 | ||
Percentage of conversion rate discount | [2] | 0.40 | |
Total convertible notes payable | $ 28,000 | ||
0% Convertible Note Due April 26, 2018 [Member] | |||
Issuance date | Apr. 26, 2017 | ||
Conversion rate per share | $ / shares | $ 0.001 | ||
Total convertible notes payable | $ 67 | ||
8% Convertible Note Due May 1, 2021 [Member] | |||
Issuance date | May 1, 2017 | ||
Percentage of conversion rate discount | [1] | 0.35 | |
Total convertible notes payable | $ 50,000 | ||
8% Convertible Note Due May 4, 2018 [Member] | |||
Issuance date | May 4, 2017 | ||
Percentage of conversion rate discount | [1] | 0.40 | |
Total convertible notes payable | $ 150,000 | ||
0% Convertible Note Due May 15, 2018 [Member] | |||
Issuance date | May 15, 2017 | ||
Conversion rate per share | $ / shares | $ 0.001 | ||
Total convertible notes payable | $ 1,280 | ||
10% Convertible Note Due May 17, 2020 [Member] | |||
Issuance date | May 17, 2017 | ||
Percentage of conversion rate discount | [2] | 0.40 | |
Total convertible notes payable | $ 85,000 | ||
8% Convertible Note Due June 7, 2018 [Member] | |||
Issuance date | Jun. 7, 2017 | ||
Percentage of conversion rate discount | [1] | 0.40 | |
Total convertible notes payable | $ 200,000 | ||
0% Convertible Note Due June 16, 2018 [Member] | |||
Issuance date | Jun. 16, 2017 | ||
Conversion rate per share | $ / shares | $ 0.001 | ||
Total convertible notes payable | $ 750 | ||
0% Convertible Note Due July 12, 2018 [Member] | |||
Issuance date | Jul. 12, 2017 | ||
Conversion rate per share | $ / shares | $ 0.001 | ||
Total convertible notes payable | |||
8% Convertible Note Due July 8, 2018 [Member] | |||
Issuance date | Jul. 8, 2017 | ||
Percentage of conversion rate discount | 0.40 | ||
Total convertible notes payable | $ 200,000 | ||
15% Convertible Note Due July 28, 2018 [Member] | |||
Issuance date | Jul. 28, 2017 | ||
Conversion rate per share | $ / shares | $ 0.001 | ||
Total convertible notes payable | |||
8% Convertible Note Due July 31, 2018 [Member] | |||
Issuance date | Jul. 31, 2017 | ||
Percentage of conversion rate discount | [1] | 0.40 | |
Total convertible notes payable | |||
8% Convertible Note Due August 8, 2018 [Member] | |||
Issuance date | Aug. 8, 2017 | ||
Percentage of conversion rate discount | [1] | 0.40 | |
Total convertible notes payable | $ 125,000 | ||
15% Convertible Note Due July 28, 2018 [Member] | |||
Issuance date | Jul. 28, 2017 | ||
Percentage of conversion rate discount | [1] | 0.50 | |
Total convertible notes payable | $ 116,875 | ||
15% Convertible Note Due August 29, 2018 [Member] | |||
Issuance date | Aug. 29, 2017 | ||
Percentage of conversion rate discount | [1] | 0.50 | |
Total convertible notes payable | $ 247,500 | ||
0% Convertible Note Due September 1, 2018 [Member] | |||
Issuance date | Sep. 1, 2017 | ||
Conversion rate per share | $ / shares | $ 500.005 | ||
Total convertible notes payable | $ 187,000 | ||
8% Convertible Note Due September 12, 2018 [Member] | |||
Issuance date | Sep. 12, 2017 | ||
Percentage of conversion rate discount | [1] | 0.40 | |
Total convertible notes payable | $ 128,000 | ||
15% Convertible Note Due September 25, 2018 [Member] | |||
Issuance date | Sep. 25, 2017 | ||
Percentage of conversion rate discount | [1] | 0.50 | |
Total convertible notes payable | $ 398,750 | ||
8% Convertible Note Due May 4, 2018 [Member] | |||
Issuance date | Oct. 4, 2017 | ||
Percentage of conversion rate discount | [1] | 0.40 | |
Total convertible notes payable | $ 150,000 | ||
15% Convertible Note Due October 16, 2018 [Member] | |||
Issuance date | Oct. 16, 2017 | ||
Percentage of conversion rate discount | [1] | 0.50 | |
Total convertible notes payable | $ 345,000 | ||
15% Convertible Note Due November 22, 2018 [Member] | |||
Issuance date | Nov. 22, 2017 | ||
Percentage of conversion rate discount | [1] | 0.50 | |
Total convertible notes payable | $ 500,250 | ||
10% Convertible Note Due December 28, 2017 [Member] | |||
Issuance date | Dec. 28, 2017 | ||
Percentage of conversion rate discount | [1] | 0.40 | |
Total convertible notes payable | $ 60,500 | ||
15% Convertible Note Due December 29, 2018 [Member] | |||
Issuance date | Dec. 29, 2017 | ||
Percentage of conversion rate discount | [1] | 0.50 | |
Total convertible notes payable | $ 330,000 | ||
8% Convertible Note Due January 9, 2019 [Member] | |||
Issuance date | Jan. 9, 2018 | ||
Percentage of conversion rate discount | [1] | 0.40 | |
Total convertible notes payable | $ 82,500 | ||
15% Convertible Note Due January 30, 2019 [Member] | |||
Issuance date | Jan. 30, 2018 | ||
Percentage of conversion rate discount | [1] | 0.50 | |
Total convertible notes payable | $ 300,000 | ||
15% Convertible Note Due February 21, 2019 [Member] | |||
Issuance date | Feb. 21, 2018 | ||
Percentage of conversion rate discount | [1] | 0.50 | |
Total convertible notes payable | $ 300,000 | ||
[1] | The notes are accounted for and evaluated under ASC 480 as discussed in Note 3. | ||
[2] | The note is convertible beginning six months after the date of issuance. |
CONVERTIBLE NOTES PAYABLE (De52
CONVERTIBLE NOTES PAYABLE (Details 1) | 12 Months Ended |
Feb. 28, 2018USD ($)shares | |
Principal Converted | $ 123,000 |
Interest Converted | |
Total Amount | $ 123,000 |
Shares Converted | shares | 23,016,667 |
10% Convertible Note Due September 05, 2017 [Member] | |
Principal Converted | $ 26,250 |
Interest Converted | |
Total Amount | $ 26,250 |
Shares Converted | shares | 5,250,000 |
10% Convertible Note Due September 18, 2017 [Member] | |
Principal Converted | $ 27,250 |
Interest Converted | |
Total Amount | $ 27,250 |
Shares Converted | shares | 5,450,000 |
10% Convertible Note Due September 27, 2017 [Member] | |
Principal Converted | $ 29,000 |
Interest Converted | |
Total Amount | $ 29,000 |
Shares Converted | shares | 5,800,000 |
10% Convertible Note Due October 16, 2017 [Member] | |
Principal Converted | $ 30,500 |
Interest Converted | |
Total Amount | $ 30,500 |
Shares Converted | shares | 6,100,000 |
10% Convertible Note Due October 16, 2017 [Member] | |
Principal Converted | $ 10,000 |
Interest Converted | |
Total Amount | $ 10,000 |
Shares Converted | shares | 416,667 |
CONVERTIBLE NOTES PAYABLE (De53
CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($) | 2 Months Ended | 5 Months Ended | 12 Months Ended |
Feb. 28, 2017 | Dec. 31, 2016 | Feb. 28, 2018 | |
Debt discount recognized from derivative liabilities | $ 3,106,385 | ||
Amortization of discount on convertible note payable | 1,214,348 | ||
Current accrued interest payable | 694,592 | ||
Noncurrent accrued interest payable | 55,917 | ||
Accrued interest payable | 55,917 | ||
Debt conversion amount converted | 123,000 | ||
Original issue discounts | 123,000 | ||
Convertible notes payable [Member] | |||
Amortization of discount on convertible note payable | $ 1,102,430 | ||
Number of common stock shares canceled | 600,000 | ||
Debt conversion amount converted | $ 600 | ||
Repayment of debt prinicipal | 50,000 | ||
Original issue discounts | 251,500 | ||
0% Convertible Note Due October 13, 2017 [Member] | |||
Gain on settlement of debt | 84,507 | ||
Repayment of convertible promissory notes | 72,762 | ||
Prepayment penalty and other | 20,833 | ||
Repayment of debt prinicipal | 50,000 | ||
Repayment of debt interest | 1,929 | ||
10% Convertible Note Due September 1, 2018 [Member] | |||
Debt conversion amount converted | 300,000 | ||
Gain on settlement of debt | 1,090,521 | ||
Repayment of debt prinicipal | 337,958 | ||
Repayment of debt interest | $ 147,713 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 2 Months Ended | 5 Months Ended | 12 Months Ended |
Feb. 28, 2017 | Dec. 31, 2016 | Feb. 28, 2018 | |
Related Party Transactions | |||
Net borrowings on loan payable - related party | $ 3,842 | $ 58,687 | $ 219,613 |
Loan payable - related party | $ 62,529 | 316,142 | |
Consulting fees for research and development | $ 236,853 |
OTHER DEBT - VEHICLE LOAN (Deta
OTHER DEBT - VEHICLE LOAN (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2017 | Dec. 31, 2016 | Feb. 28, 2018 | Feb. 28, 2017 | |
Vehicle loan secured by automobile | $ 123,000 | |||
Robotic Assistance Devices, LLC ("RAD") [Member] | Vehicle Loan [Member] | ||||
Vehicle loan secured by automobile | $ 47,704 | $ 47,704 | ||
Term of debt | 5 years | 5 years | ||
Payment of debt interest and principal | $ 923 | $ 1,019 | ||
Principal repayment of debt | 11,533 | |||
Total vehicle loan | 82,162 | $ 46,034 | ||
Current portion vehicle loan | 17,830 | 7,900 | ||
Long-term vehicle loan | $ 64,332 | $ 38,134 |
DERIVATIVE LIABILITES (Details)
DERIVATIVE LIABILITES (Details) | 12 Months Ended |
Feb. 28, 2018$ / shares | |
Strike price | $ 0.05 |
Fair value of Company common stock | $ 0.17 |
Dividend yield | 0.00% |
Minimum [Member] | |
Strike price | $ 0.001 |
Dividend yield | 65.00% |
Risk free interest rate | 1.01% |
Expected term (years) | 3 months 4 days |
Maximum [Member] | |
Strike price | $ 1 |
Dividend yield | 85.00% |
Risk free interest rate | 1.57% |
Expected term (years) | 4 years |
DERIVATIVE LIABILITES (Details
DERIVATIVE LIABILITES (Details 1) | 12 Months Ended |
Feb. 28, 2018USD ($) | |
Derivative liability in excess of face value of debt recorded to interest expense | $ 10,797,663 |
Reduction in derivative liability due to debt settlement | 3,106,385 |
Balance as of February 28, 2018 | 31,113,844 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | |
Addition of derivative liability pursuant to reverse recapitalization | 9,035,437 |
Release of derivative liability on conversion of convertible notes payable recorded to equity | (685,040) |
Debt discount due to derivative liabilities | 3,106,385 |
Derivative liability in excess of face value of debt recorded to interest expense | 10,797,663 |
Reduction in derivative liability due to debt settlement | (635,922) |
Change in fair value of derivative liabilities | 9,495,321 |
Balance as of February 28, 2018 | $ 31,113,844 |
DERIVATIVE LIABILITES (Detail58
DERIVATIVE LIABILITES (Details Narrative) | 12 Months Ended |
Feb. 28, 2018USD ($) | |
Derivative Liabilites Details Narrative Abstract | |
Derivative liabilities | $ 31,113,844 |
Due to equity conversions derivative liability | $ 685,040 |
SHAREHOLDERS' EQUITY (DEFICIT59
SHAREHOLDERS' EQUITY (DEFICIT) (Details) | 12 Months Ended |
Feb. 28, 2018$ / shares | |
Stockholders' Equity Note [Abstract] | |
Strike price | $ 0.05 |
Fair value of Company's common stock | $ 0.06 |
Dividend yield | 0.00% |
Expected volatility | 303.81% |
Risk free interest rate | 1.94% |
Expected term (years) | 4 years |
SHAREHOLDERS' EQUITY (DEFICIT60
SHAREHOLDERS' EQUITY (DEFICIT) (Details Narrative) - USD ($) | Apr. 18, 2018 | Oct. 02, 2017 | Feb. 28, 2018 |
Number of common stock shares issued | 76,008,764 | ||
Debt conversion amount converted | $ 123,000 | ||
Value of shares issued | (10,659,756) | ||
Principal face amount | $ 123,000 | ||
Number of options issued | 23,016,667 | ||
Intrinsic value | $ 0 | ||
Fair value of stock options | 27,843 | ||
Unamortized expense | 25,003 | ||
Amortized expense | $ 27,843 | ||
Amortized period | 4 years | ||
Stock based compensation | $ 2,840 | ||
Reserve stock split | 100:1 | ||
WeSecure Robotics, Inc [Member] | Director & Consultant [Member] | |||
Number of options issued | 450,000 | ||
Options exericse price (in dollars per share) | $ 0.05 | ||
Vesting date | Oct. 2, 2021 | ||
Series E Preferred Stock [Member] | |||
Number of shares issued | 1,000,000 | ||
Value of shares issued | $ 1,000 | ||
Series F Convertible Preferred Stock [Member] | |||
Number of shares issued | 1,000 | ||
Value of shares issued | $ 1,000 | ||
Warrant [Member] | |||
Number of shares issued | 8,922,279 | ||
Value of shares issued | $ 8,922 | ||
Convertible notes payable [Member] | |||
Debt conversion amount converted | $ 600 | ||
Number of common stock shares canceled | 600,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | Feb. 28, 2018USD ($) |
Commitments And Contingencies | |
February 28, 2019 | $ 98,855 |
February 28, 2020 | 99,980 |
February 28, 2021 | 75,355 |
February 28, 2022 | 62,647 |
Total | $ 336,837 |
COMMITMENTS AND CONTINGENCIES62
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Feb. 01, 2018 | Feb. 28, 2017 | Dec. 31, 2016 | Feb. 28, 2018 |
Security deposit | $ 30,141 | |||
Rent expense | 0 | $ 0 | 90,582 | |
Deferred Rent | $ 0 | 6,742 | ||
Robotic control center [Member] | ||||
Rent lease expire | 2021-01 | |||
Rent expense | $ 550 | |||
Orange County, CALIFORNIA [Member] | ||||
Security deposit | $ 25,747 | |||
Rent lease expire | 2022-03 | |||
Northern CALIFORNIA [Member] | ||||
Security deposit | $ 5,216 | |||
Rent lease expire | 2020-08 | |||
Percentager of lease cost paid by company | 75.00% | |||
Percentager of lease cost paid by supplier | 25.00% |
INCOME TAXES (Details)
INCOME TAXES (Details) | 12 Months Ended |
Feb. 28, 2018USD ($) | |
Income Tax Disclosure [Abstract] | |
U.S. federal statutory income tax | $ (7,938,439) |
Amortization of debt discount | 3,534,829 |
Fair value of derivative liabilities on issuance | 3,108,482 |
Change in fair value of derivative liabilities | 384,669 |
Gain on debt settlement | 397,541 |
Stock-based compensation | 930 |
Tax rate changes and other | 202,948 |
Valuation allowance for deferred income tax assets | 309,040 |
Effective income tax rate |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) | Feb. 28, 2018USD ($) |
Deferred Tax Assets | |
Net operating loss carry forwards | $ 1,561,140 |
Less valuation allowance | (1,561,140) |
Total deferred tax assets |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 12 Months Ended |
Feb. 28, 2018USD ($) | |
Corporate income tax rate (in percent) | 21.00% |
Previously corporate income tax rate (in percent) | 34.00% |
Change in deferred tax assets | $ 202,948 |
Change in valuation allowance | 1,561,140 |
Net operating loss carryforwards without expiration | 3,914,000 |
Net operating loss carryforwards with expiration | $ 3,520,000 |
Minimum [Member] | |
Net operating loss carryforwards with expiration date | Feb. 28, 2030 |
Maximum [Member] | |
Net operating loss carryforwards with expiration date | Feb. 28, 2038 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | May 04, 2018 | May 03, 2018 | May 02, 2018 | Apr. 23, 2018 | Apr. 16, 2018 | Apr. 09, 2018 | Apr. 02, 2018 | Mar. 16, 2018 | Mar. 14, 2018 | Jan. 05, 2018 | Apr. 30, 2018 | Mar. 31, 2018 | Feb. 28, 2018 |
Principal face amount | $ 123,000 | ||||||||||||
Original issue discounts | $ 123,000 | ||||||||||||
Issued of common stock shares | 23,016,667 | ||||||||||||
Warrant [Member] | |||||||||||||
Number of shares issued | 8,922,279 | ||||||||||||
Promissory Note [Member] | Lender [Member] | |||||||||||||
Principal face amount | $ 250,000 | ||||||||||||
Proceeds from note | 225,000 | ||||||||||||
Original issue discounts | $ 25,000 | ||||||||||||
Note maturity term | 1 year | ||||||||||||
Description of debt conversion | A conversion price equal to 60% of the lowest trading price of the Company’s common stock for the last 25 trading days prior to conversion. | ||||||||||||
Debt interest rate | 10.00% | ||||||||||||
Subsequent Event [Member] | |||||||||||||
Warrant exercise price (in dollars per share) | $ 0.0265 | ||||||||||||
Notes fees | $ 1,500 | ||||||||||||
Original issue discounts | $ 317,433 | ||||||||||||
Issued of common stock shares | 29,256,243 | ||||||||||||
Warrants fair value | $ 472,960 | ||||||||||||
Common stock purchased | 6,400,000 | ||||||||||||
Subsequent Event [Member] | Promissory Note [Member] | Lender [Member] | |||||||||||||
Principal face amount | $ 71,500 | $ 70,000 | $ 70,000 | $ 40,000 | $ 200,000 | $ 200,000 | |||||||
Proceeds from note | 82,500 | 66,500 | $ 77,000 | 76,000 | $ 200,000 | $ 200,000 | |||||||
Notes fees | $ 3,500 | $ 4,000 | |||||||||||
Original issue discounts | $ 3,500 | ||||||||||||
Description of debt conversion | A conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion | A conversion price equal to 40% of the lowest bid price of the Company’s common stock for the last 20 trading days prior | |||||||||||
Debt interest rate | 12.00% | 15.00% | 10.00% | 8.00% | 8.00% | 8.00% | |||||||
Subsequent Event [Member] | Promissory Note [Member] | Lender [Member] | Warrant [Member] | |||||||||||||
Issuance date | Jan. 5, 2018 | ||||||||||||
Number of shares issued | 333,333 | ||||||||||||
Warrant exercise price (in dollars per share) | $ 0.15 | ||||||||||||
Warrant maturity | 3 years | ||||||||||||
Repayment of notes | $ 50,000 | ||||||||||||
Proceeds from note | 43,000 | ||||||||||||
Notes fees | 2,000 | ||||||||||||
Original issue discounts | $ 5,000 | ||||||||||||
Subsequent Event [Member] | 15% Convertible Note Due March 16, 2019 [Member] | Lender [Member] | |||||||||||||
Principal face amount | $ 55,000 | $ 95,000 | |||||||||||
Proceeds from note | $ 55,000 | $ 95,000 | |||||||||||
Note maturity term | 3 years | 3 years | |||||||||||
Description of debt conversion | A conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion | A conversion price equal to 50% of the lowest bid price of the Company’s common stock for the last 40 trading days prior to conversion | |||||||||||
Debt interest rate | 15.00% | 15.00% |