Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Feb. 28, 2019 | May 17, 2019 | Aug. 31, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | JUBILANT FLAME INTERNATIONAL, LTD. | ||
Entity Central Index Key | 0001517389 | ||
Document Type | 10-K | ||
Document Period End Date | Feb. 28, 2019 | ||
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 | Non-accelerated Filer | ||
Entity Public Float | $ 234,858 | ||
Entity Common Stock, Shares Outstanding | 18,694,041 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Current assets | ||
Cash | $ 12,115 | $ 8,036 |
Account receivable | 279 | 594 |
Inventory | 7,293 | 5,933 |
Prepaid expenses | 9,000 | 7,500 |
Total current assets | 28,687 | 22,063 |
Other assets | ||
Website net of $25,000 and $21,527 of amortization respectively | 3,473 | |
Total other assets | 3,473 | |
Total Assets | 28,687 | 25,536 |
Current liabilities | ||
Accounts payable and accrued liabilities | 42,011 | |
Due to related party | 2,178 | 12,842 |
Accrued officer compensation | 535,500 | 460,125 |
Loan payable - related parties | 443,606 | 390,828 |
Total current liabilities | 1,023,295 | 863,795 |
Total Liabilities | 1,023,296 | 863,795 |
Stockholders' Deficit: | ||
Common stock, $0.001 par value per share 75,000,000 shares authorized; 18,548,208 and 18,410,708 shares issued and outstanding respectively | 18,548 | 18,411 |
Additional paid in capital | 2,418,733 | 2,259,120 |
Accumulated deficit | (3,431,889) | (3,115,790) |
Total Stockholders' Deficit | (994,608) | (838,259) |
Total Liabilities and Stockholders' Deficit | $ 28,687 | $ 25,536 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Current assets | ||
Website net of amortization | $ 25,000 | $ 21,527 |
Stockholders' Deficit: | ||
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 75,000,000 | 75,000,000 |
Common Stock, shares issued | 18,548,208 | 18,410,708 |
Common Stock, shares outstanding | 18,548,208 | 18,410,708 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Statements Of Operations | ||
Sales of goods | $ 53,143 | $ 5,103 |
Total sales | 53,143 | 5,103 |
Cost and Operating Expenses: | ||
Cost of goods sold | 32,092 | 1,473 |
Operating, selling, general and administrative | 337,150 | 590,201 |
Total operating expenses | 369,242 | 591,674 |
Loss from operations | (316,099) | (586,571) |
Other expense | ||
Change and gain in derivatives liability | (3,120) | |
Debt discount amortization expense | (4,238) | |
Interest expense | (320) | |
Total other expense | (7,678) | |
Loss from continuing operations before provision for income taxes | (316,099) | (594,249) |
Provision for income tax: | ||
Net loss | $ (316,099) | $ (594,249) |
Net loss per share (Basic and fully diluted) | $ (0.02) | $ (0.03) |
Weighted average number of common shares outstanding | 18,455,708 | 18,271,249 |
STATEMENTS OF CHANGES IN STOCKH
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Common Stock | Additional Paid-In Capital | Retained [Deficit] | Total |
Beginning Balance, Shares at Feb. 28, 2017 | 16,557,931 | |||
Beginning Balance, Amount at Feb. 28, 2017 | $ 16,558 | $ 1,513,757 | $ (2,521,541) | $ (991,226) |
Issued stock associated with convertible note conversion, Shares | 1,627,777 | |||
Issued stock associated with convertible note conversion, Amount | $ 1,628 | 4,972 | 6,600 | |
Derivative liability reduction associate with note conversion | 12,276 | 12,276 | ||
Officer accrued compensation forgiven upon resignation | 410,715 | 410,715 | ||
Officer shares cancelled upon resignation, Shares | (175,000) | |||
Officer shares cancelled upon resignation, Amount | $ (175) | 175 | ||
Shares issued for stock compensation, Shares | 400,000 | |||
Shares issued for stock compensation, Amount | $ 400 | 317,225 | 317,625 | |
Net loss for the period | (594,249) | (594,249) | ||
Ending Balance, Shares at Feb. 28, 2018 | 18,410,708 | |||
Ending Balance, Amount at Feb. 28, 2018 | $ 18,411 | 2,259,120 | (3,115,790) | (838,259) |
Shares issued for stock compensation, Shares | 137,500 | |||
Shares issued for stock compensation, Amount | $ 138 | 159,613 | 159,750 | |
Net loss for the period | (316,099) | (316,099) | ||
Ending Balance, Shares at Feb. 28, 2019 | 18,548,208 | |||
Ending Balance, Amount at Feb. 28, 2019 | $ 18,549 | $ 2,418,733 | $ 3,431,889 | $ (994,608) |
STATEMENTS OF CASH FLOW
STATEMENTS OF CASH FLOW - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Cash flows from operating activities | ||
Net loss | $ (316,099) | $ (594,249) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Website amortization | 3,473 | 8,333 |
Debt discount amortization | 4,238 | |
Change in derivative liability | 4,363 | |
Derivatives extinguishment gain due to debt payoff | (1,243) | |
Issued stock compensation | 159,750 | 317,625 |
Changes in Current Assets and Liabilities: | ||
Account receivable | 315 | (596) |
Inventory | (1,360) | (5,933) |
Prepaid expense | (1,500) | (312) |
Security deposit | 2,000 | |
Accounts payable and accrued liabilities | 31,347 | 12,267 |
Accrued officers' compensation | 75,375 | 150,750 |
Net cash used in operating activities | (48,699) | (102,756) |
Cash flows from financing activities | ||
Net proceeds from related party loans | 52,778 | 107,939 |
Debt payments | (800) | |
Net cash provided by financing activities | 52,778 | 107,139 |
Net Increase (Decrease) In Cash | 4,079 | 4,383 |
Cash at beginning of period | 8,036 | 3,653 |
Cash at end of period | 12,115 | 8,036 |
Schedule of Non-Cash Investing and Financing Activities | ||
Convertible note reduction associated with note conversion | 6,600 | |
Derivative reduction associated with note conversion | 12,276 | |
Officer debt and stock compensation forgiveness | 410,890 | |
Issued stock to settle liability | ||
Supplemental Disclosure | ||
Cash paid for interest | 320 | |
Cash paid for income taxes |
ORGANIZATION AND OPERATIONS
ORGANIZATION AND OPERATIONS | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
NOTE 1. ORGANIZATION AND OPERATIONS | Jubilant Flame International, Ltd. (the “Company”), was formed on September 29, 2009 under the name Liberty Vision, Inc. The Company provided web development and marketing services for clients. On August 18, 2015, the Company changed its name to Jubilant Flame International, Ltd. From the fourth quarter of the fiscal year ended February 28, 2018, the Company started to market and sell cosmetics products imported from Asia, Acropass Series products, in the United States market. The Company purchased the inventory from a related party company in China. The Company contracted with a third party to operate the online shopping platform and marketing campaign in the United States. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Use of Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s significant estimates include income tax provisions and valuation allowances of deferred tax assets; the fair value of financial instruments and the assumption that the company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less to be cash and cash equivalents. Receivables Receivables are stated at their carrying values, net of a reserve for doubtful accounts. Receivables consist primarily of amounts due from Amazon reserve holding balance Inventories The Company values inventories at the lower of cost or market as determined primarily by the retail inventory method of accounting, using the first-in, first-out (“FIFO”) method. Website and Amortization Website development costs are capitalized and stated at cost, less accumulated amortization. Amortization is provided using the straight-line method over the estimated useful life of three years. Carrying Value, Recoverability and Impairment of Long-Lived Assets The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events. The impairment charges, if any, are included in operating expense in the accompanying statements of income and comprehensive income (loss). Recent Accounting Pronouncements Pronouncements Adopted in Fiscal 2018 In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). On December 22, 2017, the Securities and Exchange Commission (SEC) staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act Original Issuance Discount For certain convertible debt issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded as a debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt. Derivative Financial Instruments Fair value accounting requires bifurcation of embedded derivative instruments such as convertible features in convertible debts or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the binomial option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments. Fair Value of Financial Instruments The Company measures assets and liabilities at fair value based on expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale date of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2: Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, accounts payable, due to related party and loan payable, approximate their fair values because of the current nature of these instruments. . The company converted and paid off its convertible note in full in August 2017. The fair value of derivatives liability is Zero as of February 28, 2019 and 2018 respectively. Commitments and Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Income Taxes Deferred income tax assets and liabilities are provided for based upon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date. Revenue Recognition Sales The Company recognizes eCommerce sales revenue, net of sales taxes and estimated sales returns, upon delivery to the customer. Additionally, estimated sales returns are calculated using historical experience of actual returns as a percent of sales. The company started to market and sell cosmetics products from the fourth quarter of the fiscal year ended February 28, 2018 and collected all receivable from customers by the year end. No estimated sales returns were recorded by the year end February 28, 2019. Cost of Sales Cost of sales includes actual product cost, the cost of transportation to the Company’s distribution facilities. Operating, Selling, General and Administrative Expenses Operating, selling, general and administrative expenses include all operating costs of the Company, except cost of sales, as described above. Advertising Costs Advertising costs are expensed as incurred, consist primarily of video advertisements and are recorded in operating, selling, general and administrative expenses in the Company’s Statements of Income. Advertising costs $1,599 and $44,472 for fiscal 2019 and 2018, respectively. Net Loss Per Common Share Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. Since the company has incurred losses for all periods, the impact of the common stock equivalents would be anti- dilutive and therefore are not included in the calculation. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
NOTE 3. GOING CONCERN | The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. As of February 28, 2019, the Company had a working capital deficit of $994,608. The Company currently has limited profitable trading activities and has an accumulated deficit of $3,431,889 as of February 28, 2019. This raises substantial doubt about the Company’s ability to continue as a going concern. The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions or related parties. By doing so, the Company hopes to generate sufficient capital to execute its new business plan in the medical and cosmetics sector on an ongoing basis. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. There is no guarantee the Company will be successful in achieving these objectives. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
CONVERTIBLE DEBT
CONVERTIBLE DEBT | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
NOTE 4. CONVERTIBLE DEBT | On December 9, 2015, the Company issued a convertible debenture of $60,000 which was determined to contain embedded conversion features required to be bifurcated from the host contract and reported at fair value. During the second quarter ended at August 31, 2017, the company paid off the remaining outstanding balance of $800 in full plus 40% interest. As a result, the convertible debenture balance net of discount amortization as of February 28, 2018 was zero. Before the company paid off the remaining balance of $800 in full in year 2018, the holder of the convertible note converted $6,600 of principal into 1,627,777 common shares during the year end February 28, 2018. The following is a summary of the debt conversions: Date Principle Converted Shares issued Conversion Price 16-Mar-17 2,900 805,555 0.0036 7-Apr-17 3,700 822,222 0.0045 Total year ended 2-28-18 $ 6,600 1,627,777 The following is a detail of convertible debt as of February 28, 2019 and February 28, 2018: Description Feb 28, 2019 Feb 28, 2018 One convertible promissory note in the amount of $60,000, with maturity date of December 9, 2018, bearing interest 0% per annum, convertible into common stock at conversion prices equal to 60% of the lowest price in the prior 20 trading days. $ - $ 800 Less: debt discount - Less: debt payoff - (800 ) Total - - Less: current portion - - Long-term convertible debt, net $ - $ - Debt Discount No Debt discount was recorded during the year ended February 28, 2019 and the year ended February 28, 2018. The Company amortized $0 and $4,238 during the year ended February 28, 2019, and February 28, 2018, respectively, to amortization of debt discount. Debt discount consisted of the following at February 28, 2019 and February 28, 2018, respectively: As of As of February 28, 2019 February 28, 2018 Debt discount $ - $ 58,026 Accumulated amortization of debt discount - (58,026 ) Debt discount - net $ - $ - Derivative Liabilities The Company identified the conversion features embedded within its convertible debts as financial derivatives. The Company has determined that the embedded conversion option should be accounted for at fair value. The following schedule shows the fair value of the derivative liabilities for the years ending February 28, 2018 after the convertible note was paid off in full. For the year ended February 28, 2018 Derivative liabilities - February 28, 2017 $ 9,156 Add fair value at the commitment date for convertible notes issued during the three months - Fair value reduction for derivatives due to note conversion (12,276 ) Fair value mark to market adjustment for derivatives 4,363 Derivatives extinguishment due to debt payoff (1,243 ) Derivative liabilities – February 28, 2018 - Less: current portion - Long-term derivative liabilities February 28, 2018 $ - During the year ended February 28, 2018, the Company recorded change in derivatives liability of $4,363 and reduction of derivatives liability of $12,276 due to conversion and derivatives extinguishment of $1,243 due to debt payoff. The fair value at the commitment and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions during the year: Commitment Re-measurement Assumption Date Date Expected dividends: 0 % 0 % Expected volatility: 45 % 203.7%~245.3 % Expected term (years): 3 1.39~1.73 Risk free interest rate: 1.22 % 1.19%~1.35 % |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
NOTE 5. RELATED PARTY TRANSACTIONS | In support of the Company’s efforts and cash requirements, it must rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders. The advances are considered temporary in nature and have not been formalized by a promissory note. As of February 28, 2019, the Company had a $443,607 loan outstanding with its CEO, Ms. Yan Li. This compares with the outstanding balance of $390,828 for Ms. Yan Li at February 28, 2018. The loans are non-interest bearing, due upon demand and unsecured. A related party created a website that was active beginning in August of 2015 and billed the Company $25,000. The expense of this website is being amortized over 36 months at the rate of $694 per month. It was fully amortized by August of 2018. A related party company is providing accounting service to the company at an estimated annual service fee of $23,000. From November 2017, the Company started to purchase cosmetic products from a related party controlled by our CEO. The Company purchased a total of $33,093 and $8,842 in inventory from the related party at the end of February 28, 2019 and 2018 respectively. |
ACCRUED OFFICER COMPENSATION AN
ACCRUED OFFICER COMPENSATION AND STOCK COMPENSATION | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
NOTE 6. ACCRUED OFFICER COMPENSATION AND STOCK COMPENSATION | On December 15, 2015, the Company entered into employment agreements with its president, Ms. Yan Li, and its former secretary and treasurer, Mr. Robert Ireland. Both agreements were retroactively effective as of December 4, 2015, for a term of 36 months (measured from December 4, 2015). Pursuant to the agreement, both Ms. Yan and Mr. Ireland shall receive an annual salary of $100,500 and 100,000 shares of the Company’s common stock. On August 30, 2017, Mr. Robert Ireland resigned as Secretary/Treasurer of the company. Additionally, upon his resignation, he surrendered all outstanding equity compensation to the company and agreed to cancel all outstanding debt of the company that was owed to him for past compensation in the amount of $410,715. On January 15, 2019, the board of the company approved new compensation to its five officers including two new appointed directors. The five directors waived their salary and receives total 500,000 shares each year for a term of three years. As of February 28, 2019, a total of $535,500 had been accrued as salary compensation payable to its president compared to $460,125 to her at February 28, 2018. As of February 28, 2019, a total of $159,750 in stock compensation expense had been recorded to five officers compared to a total of $317,625 in stock compensation had been recorded for the same period in the prior year to four officers, including one resigned officer. |
INCOME TAX
INCOME TAX | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
NOTE 7. INCOME TAX | At February 28, 2019, the Company had unused federal and state net operating loss carryforwards available of approximately $900,194, which may be applied against future taxable income, if any, and which expire in various years through 2038. This loss carry-forward expires according to the following schedule: Year Ending February 28, 2019 Amount 2034 $ 54,197 2035 - 2036 539,420 2037 107,453 2038 118,828 2039 80,296 Total $ 900,194 The following is a reconciliation of the tax provision as calculated at the statutory tax rate to the provision as recognized for the years ended February 28, 2019 and February 28, 2018: 2019 2018 Tax provision at statutory rates $ (66,381 ) $ (207,987 ) Effect of permanent and Temporary difference(s) 49,519 166,397 Change in valuation allowance 16,862 41,590 Net tax expense $ - $ - There were permanent differences and temporary differences to reconcile the tax provision for the years ended February 28, 2019 and 2018, other than the change in valuation allowance of $16,862 and $41,590, respectively. All tax years from inception remain open for examination by the tax authorities. In addition to tax loss carry forward, unrecognized deferred tax assets as of February 28, 2019 and 2018, primarily related to accrued officer compensation not deductible until paid for income tax purposes amounted to $ 15,829 and $52,763, respectively. |
STOCKHOLDERS DEFICIT
STOCKHOLDERS DEFICIT | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
NOTE 8. STOCKHOLDERS DEFICIT | Common Stock The Company has authorized share capital of 75,000,000 shares of common stock authorized with a par value of $0.001 per share. As referenced in Note 6, On December 15, 2015, the Company entered into Employment Agreements with its president and its former secretary and treasurer. The Agreements are retroactively effective as of December 4, 2015, for a term of 36 months (measured from December 4, 2015). Pursuant to the Agreement, each officer will receive 100,000 shares of the Company’s common stock as compensation each year. The company valued these shares of stock compensation at $2.10 per share based on the quoted market price of shares of common stock on the effective date of the Agreement. On August 30, 2017, 175,000 granted shares valued at $367,500 have been canceled as stock compensation to the former Company treasury upon his resignation with the par value of $175 reducing the balance of common stock outstanding. Additionally, upon his resignation, he surrendered all outstanding equity compensation to the company and agreed to cancel all outstanding debt of the company that was owed to him for past compensation in the amount of $410,715. On August 30, 2017, the company granted its new Chief Financial Officer 200,000 shares of restricted common stock at the time of his appointment, which vests immediately. The restricted stock has a value of $2,100 based on stock market price of $0.0105 per share at stock grant date. On August 30, 2017, the company granted its new Secretary, Treasurer 50,000 shares of restricted common stock at the time of his appointment. The restricted stock has a value of $525 base on stock market price of $0.0105 per share at stock grant date. During the year ended February 28, 2018, total 150,000 shares valued at $315,000 stock compensation to its CEO and former secretary and treasurer was recorded based on above Employment Agreements. During the year ended February 28, 2018, convertible debt of $6,600 was converted into 1,627,777 shares of common stock as provided for in the convertible note agreement. Associated with the note conversion, derivative liability was reduced by $12,276. On January 15, 2019, Company’s Board of Directors renewed the employment agreement with its CEO and decided to grant its CEO and other four officers and directors, including two new appointed directors, total 500,000 shares as stock compensation each year for a term of three years. The granted restricted stock is valued based on stock market price of $0.036 per share at stock grant date. During the year ended February 28, 2019, total 137,500 shares valued at $159,750 stock compensation to its CEO and other four officers was recorded based on above Employment Agreements and board meeting resolution. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
NOTE 9. SUBSEQUENT EVENTS | In accordance with ASC 855-10, “Subsequent Events”, the Company has analyzed its operations subsequent to February 28, 2019 to May 17, 2019, the date when the financial statements were issued. The Management of the Company determined that there were no reportable events that occurred during that subsequent period to be disclosed or recorded. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Feb. 28, 2019 | |
Summary Of Significant Accounting Policies Policies | |
Basis of Presentation | The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Use of Estimates and Assumptions | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s significant estimates include income tax provisions and valuation allowances of deferred tax assets; the fair value of financial instruments and the assumption that the company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. |
Cash and Cash Equivalents | The Company considers all highly liquid investments with a maturity of three months or less to be cash and cash equivalents. |
Receivables | Receivables are stated at their carrying values, net of a reserve for doubtful accounts. Receivables consist primarily of amounts due from Amazon reserve holding balance |
Inventories | The Company values inventories at the lower of cost or market as determined primarily by the retail inventory method of accounting, using the first-in, first-out (“FIFO”) method. |
Website and Amortization | Website development costs are capitalized and stated at cost, less accumulated amortization. Amortization is provided using the straight-line method over the estimated useful life of three years. |
Carrying Value, Recoverability and Impairment of Long-Lived Assets | The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events. The impairment charges, if any, are included in operating expense in the accompanying statements of income and comprehensive income (loss). |
Recent Accounting Pronouncements | Pronouncements Adopted in Fiscal 2018 In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). On December 22, 2017, the Securities and Exchange Commission (SEC) staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act |
Original Issuance Discount | For certain convertible debt issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded as a debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt. |
Derivative Financial Instruments | Fair value accounting requires bifurcation of embedded derivative instruments such as convertible features in convertible debts or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the binomial option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments. |
Fair Value of Financial Instruments | The Company measures assets and liabilities at fair value based on expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale date of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2: Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, accounts payable, due to related party and loan payable, approximate their fair values because of the current nature of these instruments. . The company converted and paid off its convertible note in full in August 2017. The fair value of derivatives liability is Zero as of February 28, 2019 and 2018 respectively. |
Commitments and Contingencies | Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. |
Income Taxes | Deferred income tax assets and liabilities are provided for based upon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date. |
Revenue Recognition | Sales The Company recognizes eCommerce sales revenue, net of sales taxes and estimated sales returns, upon delivery to the customer. Additionally, estimated sales returns are calculated using historical experience of actual returns as a percent of sales. The company started to market and sell cosmetics products from the fourth quarter of the fiscal year ended February 28, 2018 and collected all receivable from customers by the year end. No estimated sales returns were recorded by the year end February 28, 2019. |
Cost of Sales | Cost of sales includes actual product cost, the cost of transportation to the Company’s distribution facilities. |
Operating, Selling, General and Administrative Expenses | Operating, selling, general and administrative expenses include all operating costs of the Company, except cost of sales, as described above. |
Advertising Costs | Advertising costs are expensed as incurred, consist primarily of video advertisements and are recorded in operating, selling, general and administrative expenses in the Company’s Statements of Income. Advertising costs $1,599 and $44,472 for fiscal 2019 and 2018, respectively. |
Net Loss Per Common Share | Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. Since the company has incurred losses for all periods, the impact of the common stock equivalents would be anti- dilutive and therefore are not included in the calculation. |
CONVERTIBLE DEBT (Tables)
CONVERTIBLE DEBT (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Convertible Debt Tables | |
Summary of conversion of convertible debt | Date Principle Converted Shares issued Conversion Price 16-Mar-17 2,900 805,555 0.0036 7-Apr-17 3,700 822,222 0.0045 Total year ended 2-28-18 $ 6,600 1,627,777 |
Summary of convertible debt | Description Feb 28, 2019 Feb 28, 2018 One convertible promissory note in the amount of $60,000, with maturity date of December 9, 2018, bearing interest 0% per annum, convertible into common stock at conversion prices equal to 60% of the lowest price in the prior 20 trading days. $ - $ 800 Less: debt discount - Less: debt payoff - (800 ) Total - - Less: current portion - - Long-term convertible debt, net $ - $ - |
Schdule of amortization debt discount | As of As of February 28, 2019 February 28, 2018 Debt discount $ - $ 58,026 Accumulated amortization of debt discount - (58,026 ) Debt discount - net $ - $ - |
Schedule of derivative liabilities at fair value | Derivative liabilities - February 28, 2017 $ 9,156 Add fair value at the commitment date for convertible notes issued during the three months - Fair value reduction for derivatives due to note conversion (12,276 ) Fair value mark to market adjustment for derivatives 4,363 Derivatives extinguishment due to debt payoff (1,243 ) Derivative liabilities – February 28, 2018 - Less: current portion - Long-term derivative liabilities February 28, 2018 $ - |
Fair value at commitment and re-measurement | Commitment Re-measurement Assumption Date Date Expected dividends: 0 % 0 % Expected volatility: 45 % 203.7%~245.3 % Expected term (years): 3 1.39~1.73 Risk free interest rate: 1.22 % 1.19%~1.35 % |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Income Tax | |
Loss carry forward | Year Ending February 28, 2019 Amount 2034 $ 54,197 2035 - 2036 539,420 2037 107,453 2038 118,828 2039 80,296 Total $ 900,194 |
Reconciliation of the tax provision | 2019 2018 Tax provision at statutory rates $ (66,381 ) $ (207,987 ) Effect of permanent and Temporary difference(s) 49,519 166,397 Change in valuation allowance 16,862 41,590 Net tax expense $ - $ - |
ORGANIZATION AND OPERATIONS (De
ORGANIZATION AND OPERATIONS (Details Narrative) | 12 Months Ended |
Feb. 28, 2019 | |
Organization And Operations | |
Date of Incorporation | Sep. 29, 2009 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Summary Of Significant Accounting Policies | ||
Advertising costs | $ 1,599 | $ 44,472 |
Fair value of derivative liabilities | $ 0 | $ 0 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Going Concern Details Narrative | ||
Working capital deficit | $ (994,608) | |
Accumulated deficit | $ (3,431,889) | $ (3,115,790) |
CONVERTIBLE DEBT (Details)
CONVERTIBLE DEBT (Details) | 12 Months Ended |
Feb. 28, 2019USD ($)$ / sharesshares | |
Principle converted | $ | $ 6,600 |
Shares issued | shares | 1,627,777 |
16 Mar 17 | |
Principle converted | $ | $ 2,900 |
Shares issued | shares | 805,555 |
Conversion price | $ / shares | $ 0.0036 |
7 Apr 17 | |
Principle converted | $ | $ 3,700 |
Shares issued | shares | 822,222 |
Conversion price | $ / shares | $ 0.0045 |
CONVERTIBLE DEBT (Details 1)
CONVERTIBLE DEBT (Details 1) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Convertible Debt | ||
One convertible promissory note in the amount of $60,000, with maturity date of December 9, 2018, bearing interest 0% per annum, convertible into common stock at conversion prices equal to 60% of the lowest price in the prior 20 trading days. | $ 800 | |
Less: debt discount | ||
Less: debt payoff | (800) | |
Total | ||
Less: current portion | ||
Long-term convertible debt, net |
CONVERTIBLE DEBT (Details 2)
CONVERTIBLE DEBT (Details 2) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Convertible Debt Details 3 | ||
Debt discount | $ 58,026 | |
Accumulated amortization of debt discount | (58,026) | |
Debt discount - net |
CONVERTIBLE DEBT (Details 3)
CONVERTIBLE DEBT (Details 3) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Convertible Debt Details 3 | ||
Derivative liabilities, Beginning | $ 9,156 | |
Add fair value at the commitment date for convertible notes issued during the three months | ||
Fair value reduction for derivatives due to note conversion | (12,276) | |
Fair value mark to market adjustment for derivatives | 4,363 | |
Derivatives extinguishment due to debt payoff | 1,243 | |
Derivative liabilities, Ending | ||
Less: current portion | ||
Long-term derivative liabilities |
CONVERTIBLE DEBT (Details 4)
CONVERTIBLE DEBT (Details 4) | 12 Months Ended |
Feb. 28, 2019 | |
Commitment date | |
Expected dividends | 0.00% |
Expected volatility | 45.00% |
Expected term (years) | 3 years |
Risk free interest rate | 1.22% |
Re-measurement date | |
Expected dividends | 0.00% |
Re-measurement date | Minimum [Member] | |
Expected volatility | 203.70% |
Expected term (years) | 1 year 4 months 20 days |
Risk free interest rate | 1.19% |
Re-measurement date | Maximum [Member] | |
Expected volatility | 245.30% |
Expected term (years) | 1 year 8 months 23 days |
Risk free interest rate | 1.35% |
CONVERTIBLE DEBT (Details Narra
CONVERTIBLE DEBT (Details Narrative) - USD ($) | 12 Months Ended | |||
Feb. 28, 2019 | Feb. 28, 2018 | Aug. 31, 2017 | Dec. 09, 2015 | |
Convertible promissory notes | $ 800 | |||
Interest rate | 40.00% | |||
Convertible debt | $ 60,000 | |||
Convertible debt, outstanding balance, paid | $ 800 | |||
Debt Conversion | $ 6,600 | |||
Debt Conversion common stock shares | 1,627,777 | |||
Amortization of debt discount | $ 4,238 | |||
Change in derivative liability | 4,363 | |||
Fair value reduction for derivatives due to note conversion | 12,276 | |||
Derivatives extinguishment due to debt payoff | $ (1,243) | |||
One convertible promissory note [Member] | ||||
Convertible promissory notes | $ 60,000 | |||
Interest rate | 0.00% | |||
Maturity date | Dec. 9, 2018 | |||
Percentage of stock price | 60.00% | |||
Convertible conversion description | Convertible into common stock at conversion prices equal to 60% of the lowest price in the prior 20 trading days |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2015 | Feb. 28, 2019 | Feb. 28, 2018 | |
Loan payable - related party | $ 2,178 | $ 12,842 | |
Website expenses | $ 25,000 | ||
Amortization expense, monthly | $ 694 | ||
Estimated useful life | 36 months | ||
Accounting service fee | 23,000 | ||
CEO [Member] | |||
Purchase of inventory from related party | 33,093 | 8,842 | |
Ms. Yan Li [Member] | |||
Loan payable - related party | $ 390,828 | ||
Ms. Yan Li [Member] | Employment Agreement [Member] | |||
Loan payable - related party | $ 443,607 |
ACCRUED OFFICER COMPENSATION (D
ACCRUED OFFICER COMPENSATION (Details Narrative) - USD ($) | Jan. 15, 2019 | Dec. 04, 2015 | Feb. 28, 2019 | Feb. 28, 2018 | Aug. 30, 2017 | Dec. 15, 2015 |
Accrued compensation | $ 535,500 | $ 460,125 | ||||
Share based compensation | 159,750 | 317,625 | ||||
5 Directors [Member] | ||||||
Term of agreement | 3 years | |||||
Shares issuable each year as compensation to related party | 500,000 | |||||
Officers [Member] | ||||||
Accrued compensation | 535,500 | $ 460,125 | ||||
Five Officers [Member] | ||||||
Share based compensation | 159,750 | |||||
Four Officers [Member] | ||||||
Share based compensation | $ 317,625 | |||||
Mr. Ireland [Member] | ||||||
Canceled outstanding debt | $ 410,715 | |||||
President [Member] | Employment Agreement [Member] | ||||||
Annual salary | $ 100,500 | |||||
Shares issued | 100,000 | |||||
Term of agreement | 36 months | |||||
Treasurer and secretary [Member] | Employment Agreement [Member] | ||||||
Annual salary | $ 100,500 | |||||
Shares issued | 100,000 | |||||
Term of agreement | 36 months |
INCOME TAX (Details)
INCOME TAX (Details) | Feb. 28, 2019USD ($) |
Total | $ 900,194 |
2034 | |
Total | 54,197 |
2035 | |
Total | |
2036 | |
Total | 539,420 |
2037 | |
Total | 107,453 |
2038 | |
Total | 118,828 |
2039 | |
Total | $ 80,296 |
INCOME TAX (Details 1)
INCOME TAX (Details 1) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Income Tax Details 1Abstract | ||
Tax provision at statutory rates | $ (66,381) | $ (207,987) |
Effect of permanent and Temporary difference(s) | 49,519 | 166,397 |
Change in valuation allowance | 16,862 | 41,590 |
Net tax expense |
INCOME TAX (Details Narrative)
INCOME TAX (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Income Taxes Details Narrative Abstract | ||
Net operating loss carry forwards | $ 900,194 | |
Net operating loss carry forwards expire year | 2038 | |
Change in the valuation allowance | $ 16,862 | $ 41,590 |
Deferred tax assets | $ 15,829 | $ 52,763 |
STOCKHOLDERS EQUITY (Details Na
STOCKHOLDERS EQUITY (Details Narrative) - USD ($) | Jan. 15, 2019 | Dec. 15, 2015 | Dec. 04, 2015 | Aug. 30, 2017 | Feb. 28, 2019 | Feb. 28, 2018 |
Common stock, shares authorized | 75,000,000 | 75,000,000 | ||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||
Debt Conversion | $ 6,600 | |||||
Debt conversion common stock shares | 1,627,777 | |||||
Fair value reduction for derivatives due to note conversion | $ (12,276) | |||||
Issuable stock compensation | $ 159,750 | $ 317,625 | ||||
Canceled outstanding debt of past compensation | $ 410,715 | |||||
Granted shares | 175,000 | |||||
Stock compensation cancelled | $ 367,500 | |||||
Reducing Common stock outstanding | $ 175 | |||||
Employment Agreement [Member] | President [Member] | ||||||
Term of agreement | 36 months | |||||
Shares issued | 100,000 | |||||
Employment Agreement [Member] | Treasurer and secretary [Member] | ||||||
Term of agreement | 36 months | |||||
Shares issued | 100,000 | |||||
CEO and former secretary and treasurer [Member] | ||||||
Shares issued | 150,000 | |||||
Issuable stock compensation | $ 315,000 | |||||
New Secretary [Member] | Restricted Stock [Member] | ||||||
Shares issued | 50,000 | |||||
Restricted stock value | $ 525 | |||||
Market price per share | 0.0105 | |||||
New Chief Financial Officer [Member] | Restricted Stock [Member] | ||||||
Shares issued | 200,000 | |||||
Restricted stock value | $ 2,100 | |||||
Market price per share | 0.0105 | |||||
Officers [Member] | Employment Agreement [Member] | ||||||
Common stock, par value | $ 2.10 | |||||
Common stock, shares issued for compensation | 100,000 | |||||
5 Directors [Member] | ||||||
Term of agreement | 3 years | |||||
Share price | $ 0.036 | |||||
Shares issuable each year as compensation to related party | 500,000 | |||||
Five Officers [Member] | ||||||
Common stock, shares issued for compensation | 137,500 | |||||
Issuable stock compensation | $ 159,750 |