Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Sep. 30, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Saleen Automotive, Inc. | |
Entity Central Index Key | 0001528098 | |
Document Type | 10-K | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filer | No | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Public Float | $ 0 | |
Entity Common Stock, Shares Outstanding | 24,536,963 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Current Assets | ||
Cash | $ 3,374,234 | $ 523,120 |
Accounts receivable (including $133,742 and $141,200 due from related party, respectively) | 136,387 | 456,938 |
Inventories | 108,498 | 263,277 |
Prepaid expenses | 14,600 | |
Total Current Assets | 3,619,119 | 1,257,935 |
Property and equipment, net | 650,353 | 272,016 |
Security deposits and other assets | 70,800 | 70,780 |
TOTAL ASSETS | 4,340,272 | 1,600,731 |
Current Liabilities | ||
Accounts payable | 351,735 | 1,464,779 |
Accrued compensation, payroll taxes, and other taxes payable | 632,689 | 944,015 |
Income taxes payable | 503,000 | |
Notes payable ($116,406 and $162,326 past due at March 31, 2019 and 2018, respectively) | 224,159 | 365,079 |
Convertible note payable, past due | 100,000 | 100,000 |
Notes payable and advances from related party | 200,000 | |
Accrued interest on notes payable | 37,131 | 90,585 |
Due to related parties | 519,364 | 166,155 |
Engineering contract advance | 1,068,150 | |
Customer deposits (including $100,000 and $300,000 due to related party, respectively) | 511,081 | 605,580 |
Other current liabilities | 451,500 | 634,336 |
TOTAL LIABILITIES | 4,398,809 | 4,570,529 |
Commitments and Contingencies | ||
Stockholders' Deficit | ||
Preferred stock; $0.001 par value; 1,000,000 shares authorized; 667 Series B shares issued and outstanding at March 31, 2019, and none issued and outstanding at March 31, 2018 | 1 | |
Common Stock; $0.001 par value; 100,000,000 shares authorized; 24,536,963 issued and outstanding at March 31, 2019 and 2018, respectively | 24,537 | 24,537 |
Additional paid in capital | 36,406,842 | 36,006,843 |
Accumulated deficit | (36,489,917) | (39,001,178) |
Total Stockholders' Deficit | (58,537) | (2,969,798) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 4,340,272 | $ 1,600,731 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Due from related party | $ 133,742 | $ 141,200 |
Notes payable, past due | 116,406 | 162,326 |
Customer deposits, due to related party | $ 100,000 | $ 300,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Series B Preferred stock, shares issued | 667 | |
Series B Preferred stock, shares outstanding | 667 | |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 24,536,963 | 24,536,963 |
Common stock, shares outstanding | 24,536,963 | 24,536,963 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue | ||
Total revenue, net | $ 13,708,215 | $ 6,039,657 |
Costs of revenue | ||
Total costs of revenue | 4,685,865 | 3,621,652 |
Gross margin | 9,022,350 | 2,418,005 |
Operating expenses | ||
Sales and marketing | 973,533 | 344,977 |
General and administrative (includes stock-based compensation costs of $0 and $1,950,482 issued to officer, directors and other related parties for the years ended March 31, 2019, and 2018, respectively) | 4,888,300 | 4,758,563 |
Research and development | 24,720 | 85,346 |
Depreciation | 89,863 | 108,590 |
Total operating expenses | 5,976,416 | 5,297,476 |
Income (loss) from operations | 3,045,934 | (2,879,471) |
Other income (expense) | ||
Interest and financing costs | (31,673) | (1,713,566) |
Private placement costs | (1,062,264) | |
Gain on extinguishment of derivative liability | 128,905 | |
Total other income (expenses), net | (31,673) | (2,646,925) |
Net income (loss) before provision for income taxes | 3,014,261 | (5,526,396) |
Income tax expense | 503,000 | |
Net income (loss) | 2,511,261 | (5,526,396) |
Deemed dividend related to beneficial conversion feature of Series B Preferred Stock | 92,000 | |
Preferred stock dividends | 372,351 | |
Net income (loss) attributable to common stockholders | $ 2,419,261 | $ (5,898,747) |
Net income (loss) per share attributable to common stockholders: | ||
Basic | $ 0.10 | $ (1.07) |
Diluted | $ 0.09 | $ (1.07) |
Shares used in computing net income (loss) per share attributable to common stockholders: | ||
Basic | 24,536,963 | 5,490,927 |
Diluted | 26,376,950 | 5,490,927 |
Service [Member] | ||
Revenue | ||
Total revenue, net | $ 11,426,174 | $ 4,360,706 |
Costs of revenue | ||
Total costs of revenue | 2,433,851 | 2,516,514 |
Product [Member] | ||
Revenue | ||
Total revenue, net | 2,282,041 | 1,200,951 |
Costs of revenue | ||
Total costs of revenue | 2,252,014 | 1,105,138 |
Royalty [Member] | ||
Revenue | ||
Total revenue, net | $ 478,000 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue from Related Party | $ 685,049 | $ 383,783 |
Stock Based Compensation | ||
Officer, Director and Other Related Parties [Member] | ||
Stock Based Compensation | $ 0 | $ 1,950,482 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid In Capital [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Mar. 31, 2017 | $ 1,119 | $ 20,009,359 | $ (33,102,431) | $ (13,091,953) | |
Beginning balance, shares at Mar. 31, 2017 | 1,118,563 | ||||
Preferred stock issued upon the conversion of convertible notes and accrued interest | $ 711 | 8,420,167 | 8,420,878 | ||
Preferred stock issued upon the conversion of convertible notes and accrued interest, shares | 711,100 | ||||
Proceeds from sale of preferred stock in private placement for cash | $ 175 | 1,399,825 | 1,400,000 | ||
Proceeds from sale of preferred stock in private placement for cash, shares | 175,000 | ||||
Preferred stock issued for settlement of note payable | $ 16 | 127,984 | 128,000 | ||
Preferred stock issued for settlement of note payable, shares | 16,000 | ||||
Conversion of preferred shares into common shares | $ 12,028 | $ (902) | (11,126) | ||
Conversion of preferred shares into common shares, shares | 12,028,000 | (902,100) | |||
Proceeds from sale of common stock and warrants in private placement for cash | $ 1,333 | 798,667 | 800,000 | ||
Proceeds from sale of common stock and warrants in private placement for cash, shares | 1,333,333 | ||||
Common stock issued in settlement of due to related parties | $ 1,091 | 544,261 | 545,352 | ||
Common stock issued in settlement of due to related parties, shares | 1,090,704 | ||||
Fair value of common shares issued to officer, directors and other related parties for compensation | $ 3,801 | 1,946,681 | 1,950,482 | ||
Fair value of common shares issued to officer, directors and other related parties for compensation, shares | 3,800,964 | ||||
Fair value of common shares issued to related parties for interest expense | $ 1,833 | 918,089 | $ 919,922 | ||
Fair value of common shares issued to related parties for interest expense, shares | 1,833,205 | 1,833,205 | |||
Fair value of common shares issued for interest expense | $ 911 | 545,506 | $ 546,417 | ||
Fair value of common shares issued for interest expense, shares | 910,694 | ||||
Fair value of common shares issued for private placement costs | $ 1,800 | 935,700 | 937,500 | ||
Fair value of common shares issued for private placement costs, shares | 1,800,000 | ||||
Fair value of common shares issued as dividend to Preferred stockholders | $ 620 | 371,731 | (372,351) | ||
Fair value of common shares issued as dividend to Preferred stockholders, shares | 620,585 | ||||
Shares issued to effect reverse stock split | $ 1 | (1) | |||
Shares issued to effect reverse stock split, shares | 915 | ||||
Net income (loss) | (5,526,396) | (5,526,396) | |||
Ending balance at Mar. 31, 2018 | $ 24,537 | 36,006,843 | (39,001,178) | $ (2,969,798) | |
Ending balance, shares at Mar. 31, 2018 | 24,536,963 | ||||
Fair value of common shares issued to related parties for interest expense, shares | |||||
Fair value of common shares issued for private placement costs | |||||
Cash proceeds from sales of Series B Preferred Stock and warrants in private placement to related party | $ 1 | 399,999 | 400,000 | ||
Cash proceeds from sales of Series B Preferred Stock and warrants in private placement to related party, shares | 667 | ||||
Beneficial conversion feature of Series B Preferred Stock | 92,000 | 92,000 | |||
Deemed dividend on beneficial conversion feature of Series B Preferred Stock | (92,000) | (92,000) | |||
Net income (loss) | 2,511,261 | 2,511,261 | |||
Ending balance at Mar. 31, 2019 | $ 24,537 | $ 1 | $ 36,406,842 | $ (36,489,917) | $ (58,537) |
Ending balance, shares at Mar. 31, 2019 | 24,536,963 | 667 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities | ||
Net income (loss) | $ 2,511,261 | $ (5,526,396) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||
Depreciation | 89,863 | 108,590 |
Extinguishment of derivative liability | (128,905) | |
Amortization of discount on convertible notes | 31,788 | |
Fair value of common stock issued to officer, directors and other related parties for compensation | 1,950,482 | |
Fair value of common stock issued to related parties as interest expense | 919,922 | |
Fair value of common stock issued as interest expense | 546,417 | |
Fair value of common stock issued as private placement costs | 937,500 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 297,631 | (182,268) |
Inventories | 114,779 | (163,050) |
Prepaid expenses and other assets | 14,580 | (22,743) |
Accounts payable | (1,113,043) | 44,425 |
Payroll, payroll taxes, and other taxes payable | (311,326) | 182,234 |
Income taxes payable | 503,000 | |
Accrued interest on notes payable | (13,454) | 213,557 |
Due to related parties, net | 353,210 | 97,312 |
Engineering contract advance | 1,068,150 | |
Customer deposits | (94,500) | (210,345) |
Other current liabilities | (182,837) | (327,022) |
Net cash provided by (used in) operating activities | 3,237,314 | (1,528,502) |
Cash flows from investing activities | ||
Purchases of property and equipment | (468,200) | (114,567) |
Net cash used in investing activities | (468,200) | (114,567) |
Cash flows from financing activities | ||
Proceeds from sale of Series B Preferred Stock and warrants in private placement to related party | 400,000 | |
Proceeds from private placement of preferred stock | 1,400,000 | |
Proceeds from private placement of common stock and warrants | 800,000 | |
Proceeds from (repayment of) notes payable to related party | (200,000) | 80,000 |
Repayment of notes payable | (118,000) | (118,047) |
Net cash provided by financing activities | 82,000 | 2,161,953 |
Net increase in cash | 2,851,114 | 518,884 |
Cash at beginning of year | 523,120 | 4,236 |
Cash at end of year | 3,374,234 | 523,120 |
Cash paid during the year for: | ||
Interest | 38,633 | 11,881 |
Income taxes | 13,282 | |
Supplemental schedule of non-cash financing activities: | ||
Conversion of convertible notes and accrued interest to preferred stock and common stock | 8,420,878 | |
Common stock issued as dividends to Preferred stockholders | 372,351 | |
Common stock issued upon settlement of amounts due to related parties | 545,352 | |
Preferred stock issued upon settlement of notes payable | 128,000 | |
Reduction of note payable classified as deferred gain | 183,358 | |
Reduction of accrued interest on notes payable offset by a reduction in inventory | 40,000 | |
Reduction in note payables offset by reductions in accounts receivable | 22,920 | |
Fair value of beneficial conversion feature of Series B Preferred Stock | $ 92,000 |
Nature of the Business and Sign
Nature of the Business and Significant Accounting Policies | 12 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Nature of the Business and Significant Accounting Policies | NOTE 1 – NATURE OF THE BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Description of the Company Saleen Automotive, Inc. (the “Company”) is an original equipment manufacturer (“OEM”) of high-performance vehicles (“Saleen OEM”) that are built from the ground up. The Company also designs, develops, manufactures and sells high-performance vehicles built from base chassis of major American automobile manufacturers (“Saleen Signature Cars”). The Company also provides engineering, development, and design consulting services on a project basis for automotive manufacturers worldwide. The Company currently has customers worldwide, including muscle and high-performance car enthusiasts, collectors, automotive dealers, exotic car retail dealers, television and motion picture productions, and consumers in the luxury supercar and motorsports markets. Saleen Automotive, Inc. was incorporated under the laws of the State of Nevada on June 24, 2011. On May 23, 2013, the Company entered into a merger agreement with Saleen California Merger Corporation, Saleen Florida Merger Corporation, Saleen Automotive, Inc., and SMS Signature Cars (“SMS”) (collectively, the “Saleen Entities”), and Steve Saleen (“Saleen”). The merger closed on June 26, 2013, and the Saleen Entities merged with the Company and approximately 93% of the Company’s common stock was owned, collectively, by Saleen and the former holders of the outstanding capital stock of Saleen Automotive. The transaction was accounted for as a recapitalization with the Saleen Entities deemed the acquiring companies for accounting purposes, and the Company deemed the legal acquirer. In June 2013, the Company amended its articles of incorporation to change its name to Saleen Automotive, Inc. On December 19, 2017, the Company effected a 1-for-2,000 reverse stock split of its common stock (“reverse stock split”) following approval by the Company’s Board of Directors and stockholders. All common stock share and per-share amounts for all periods presented in these financial statements have been adjusted retroactively to reflect the reverse stock split. Saleen OEM The Company manufacturers the Saleen S7 supercar (“S7”), a limited production supercar with a 1,500-horsepower engine, in the Company’s production facility in Corona, California. During the years ended March 31, 2019 and 2018, the S7 was produced under an agreement with S7 Supercars, LLC (“S7 Supercars”), a related party, which owned the “S7” name and related intellectual property and assets. Under the agreement, S7 Supercars provided the chassis and all other costs to build the vehicle, and the Company was entitled to a fee for engineering and manufacturing services, plus an additional markup for these services. Separately, upon the sale of the vehicle to the end-users, the Company became entitled to a fee of approximately 33% of the net profit from the sale of the vehicle by S7 Supercars. On May 31, 2019, the Company entered into an asset purchase agreement with S7 Supercars and acquired all of S7 Supercars’ assets, which consisted of chassis and other automotive parts relating to the manufacture of the S7, and related intellectual property and assets (See Note 14). The Company is also in the process of completing the engineering, design, and certification of a new high-performance sports car, the Saleen 1 (“S1”), under an engineering development and design contract with Jiangsu Saleen Automotive Technology Co. (see Note 2), an unaffiliated corporation located in China which holds the intellectual property rights related to the S1 developed under the agreement. Saleen Signature Cars The Company’s Saleen Signature Cars are built from base chassis of major American automobile manufacturers, including Ford Mustangs, Tesla Model S vehicles, and Ford trucks. The Company is a specialist in vehicle design, engineering and manufacturing focusing on the mass customization (the process of customizing automobiles that are mass produced by manufacturers) of American sports and electric vehicles and the production of high-performance USA-engineered sports cars. Saleen-branded products include a line of high performance and upgraded muscle and electric cars, automotive aftermarket specialty parts and lifestyle accessories. Liquidity The Company has incurred significant net losses since inception. During the year ended March 31, 2018, the Company had a net loss of $5.5 million, used cash in operations of $1.5 million, and at March 31, 2018, we had a working capital deficit of $3.2 million, and a stockholders deficit of $2.9 million. However, during the year ended March 31, 2019, the Company’s financial performance significantly improved, and we recorded net income of $2.5 million and generated cash flows from operations of $3.2 million, primarily due to an engineering services contract we entered into in April 2018 with Jiangsu Saleen Automotive Technology Co., Ltd (“JSAT”), an unaffiliated corporation located in China (see Note 2). The Company also entered into a Saleen S1 Cup Vehicle Development and Production Agreement (the “Cup Agreement”) with JSAT in November 2018, and amended in May 2019 (see Note 2), that is expected to generate aggregate revenue in excess of $15.6 million. As of March 31, 2019, our working capital deficit had been reduced to $780,000, which included a contract advance (deferred revenue) from JSAT of $1 million. Our ability to continue to generate net income and positive cash flows from operations is primarily dependent on our ability to continue to generate revenue from the contract with JSAT, and to generate revenue from the sale of our Signature Cars (See Note 2). Based on current internal projections, the Company believes it has and/or will generate sufficient cash for its operational needs, for at least one year from the date these financial statements are issued. During the year ended March 31, 2019, the Company recognized revenue from JSAT totaling $10.7 million, made up of $5.8 million for completed performances under the engineering services contract, $4.7 million for the reimbursement of costs and expenses plus an additional mark-up, that were not part of the engineering services contract or Cup Agreement, and $220,000 of consulting fees. Subsequent to March 31, 2019, and through September 26, 2019, the Company received another $20.3 million from JSAT, made up of $14.7 million for completed performances under the engineering services contract and Cup Agreement, and $5.6 million for the reimbursement of costs and expenses, plus an additional mark-up, that were not part of the engineering services contract or Cup Agreement. Our cash balance at September 30, 2019 was $4.4 million. The Company cannot give assurance that it can maintain its cash balances or limit its cash consumption and maintain sufficient cash balances for its planned operations. Also, future business demands may lead to cash utilization at levels greater than recently experienced or anticipated. While we believe that our existing cash balances will be sufficient to fund our currently planned level of operations and investment activity, we may require additional financing to fund our planned future operations if we encounter unanticipated difficulties, or if our estimates of the amount of cash necessary to operate our business prove to be wrong, and we use our available financial resources faster than we currently expect. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Subject to the foregoing, management has adopted a budget that we believe will allow the Company sufficient capital and liquidity to fund its operations for at least one year from the date these financial statements are issued. Consolidation Policy The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Saleen Signature Cars, a California corporation, and Saleen Sales Corporation, a California corporation. Intercompany transactions and balances have been eliminated in consolidation. Use of Estimates Financial statements prepared in accordance with accounting principles generally accepted in the United States require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Among other things, management estimates include the estimated collectability of its accounts receivable, the valuation of long-lived assets, warranty reserves, the assumptions used to calculate derivative liabilities, assumptions used to value equity instruments issued for financing and compensation, and the valuation of deferred tax assets. Actual results could differ from those estimates. Revenue recognition Prior to April 1, 2018, the Company recognized its revenue in accordance with Accounting Standards Codification (ASC) 605 Revenue Recognition, upon the delivery of its services or products when: (1) delivery had occurred or services rendered; (2) persuasive evidence of an arrangement existed; (3) there are no continuing obligations to the customer; and (4) the collection of related accounts receivable was reasonably assured. Effective April 1, 2018, the Company adopted the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. The implementation of ASC 606 did not have a material impact on the Company’s consolidated financial statements. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients. The Company’s revenue consists of primarily from the sale of its Signature Cars and services provided under its engineering and design, and development consulting services contracts. See Note 2 for further discussion of Revenue. Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. From time to time, the Company’s cash account balances exceed the balances as covered by the Federal Deposit Insurance System. The Company has never suffered a loss due to such excess balances. Accounts Receivable The Company evaluates the collectability of its trade accounts receivable based on a number of factors. In circumstances where the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded, which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer identification of potential bad debts, bad debt charges are recorded based on the Company’s historical losses and an overall assessment of past due trade accounts receivable outstanding. The Company recognizes an allowance for doubtful accounts to ensure trade receivables are not overstated due to collectability. For the most part, the Company generally requires advance payments for its Signature Cars and credit card payments for parts and merchandise. As of March 31, 2019, and 2018, the Company deemed an allowance for doubtful accounts was not required. Inventories Inventories are stated at the lower of cost or market. Cost is determined principally on a first-in-first-out cost basis for automobile parts and merchandise, and on a specific cost basis for work-in-process and finished cars. Inventories consist primarily of parts for the Company’s Signature Car conversions, Signature Car conversions in process, finished Signature Cars, and retail sales merchandise. March 31, 2019 March 31, 2018 Automobile parts $ 108,498 $ 56,089 Finished Cars - 186,215 Merchandise - 20,973 Total inventories $ 108,498 $ 263,277 Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for major renewals and improvements that extend the useful lives of property and equipment or increase production capacity are capitalized, and expenditures for repairs and maintenance are charged to expense as incurred. The cost of property and equipment is depreciated on a straight-line basis over the following estimated useful lives: Computer equipment and software 3-7 years Tooling 3-7 years Furniture and fixtures 5-7 years Automobiles and trailer 5-7 years Machinery and equipment 3-7 years Leasehold improvement Shorter of the lease term or useful life Management assesses the carrying value of property and equipment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If there is an indication of impairment, management prepares an estimate of future cash flows expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. The Company did not record an impairment loss for the years ended March 31, 2019, and 2018. Customer Deposits Sales orders received from customers of Signature Cars generally require customers to make deposits at the time of signing the related sales order. The Company receives either partial or full deposits related to Signature Car sales orders in advance of shipment and is generally paid in full prior to the shipment of the finished Signature Cars. Customer deposits as of March 31, 2019, and 2018 comprised of funds received in advance of shipment and amounted to $511,081 and $605,580, respectively, which will be recorded as revenue upon shipment of finished Signature Cars and satisfaction of the revenue recognition requirements discussed above. Warranty Policy The Company provides a three-year or 36,000 miles New Vehicle Limited Warranty for its Signature Cars. The vehicle limited warranty applies to installed parts and/or assemblies in new Saleen high performance cars. All of the unaltered parts are covered under the original full warranty of the OEM manufacturer of the base vehicles. Accrued warranty costs are included in other current liabilities on the accompanying consolidated balance sheets. Changes in the product warranty accrual for the years ended March 31, 2019, and 2018 were as follows: Balance at Warranty Provision for Balance at Fiscal 2019 $ 20,000 $ (35,392 ) $ 35,392 $ 20,000 Fiscal 2018 $ 20,000 $ (7,895 ) $ 7,895 $ 20,000 Advertising, Sales and Marketing Costs Advertising and sales and marketing costs are expensed as incurred and are included in sales and marketing expenses. During the year ended March 31, 2019, advertising expenses were $123,262, while sales and marketing expenses were $850,271. During the year ended March 31, 2018, advertising expenses were $17,812, while sales and marketing expenses were $327,165. Income Taxes The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits or that future deductibility is uncertain. Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate. Stock Compensation The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board (the “FASB”) whereas the value of the award is measured on the date of grant and recognized as compensation expense on the straight-line basis over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the FASB whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Options granted to non-employees are revalued each reporting period to determine the amount to be recorded as an expense in the respective period. As the options vest, they are valued on each vesting date and an adjustment is recorded for the difference between the value already recorded and the then current value on the date of vesting. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested, and the total stock-based compensation charge is recorded in the period of the measurement date. The Company uses the fair value recognition provision of ASC 718, “Stock Compensation,” which requires the Company to expense the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of such instruments. The Company uses the Black-Scholes-Merton option pricing model to calculate the fair value of any equity instruments on the grant date. The Company also uses the provisions of ASC 505-50, “ Equity Based Payments to Non-Employees, Fair Value of Financial Instruments The Company accounts for the fair value of financial instruments in accordance with the FASB Accounting Standards Codification (“ASC”) topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 defines “fair value” as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Authoritative guidance provided by the FASB defines the following levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these financial assets: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Inputs, other than the quoted prices in active markets, that is observable either directly or indirectly. Level 3 Unobservable inputs based on the Company’s assumptions. The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable, accrued liabilities, and customer deposits. The carrying amounts of such financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature. The carrying values of notes payable approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. It is management’s opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments. Income (loss) per Share Basic income (loss) per common share is computed by dividing income (loss) attributable to common stockholders by the weighted average number of common shares outstanding. Diluted net income (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares that would have been outstanding during the period assuming the issuance of common stock for all potential dilutive common shares outstanding. Potential common shares consist of shares issuable upon the exercise of stock options and warrants and the conversion of convertible notes payable. The following table sets forth the computation of basic and diluted net income (loss) per common share for the year ended: March 31, 2019 March 31, 2018 Numerator: Net income (loss) attributable to common stockholders $ 2,419,261 $ (5,898,747 ) Denominator: Weighted average number of shares outstanding, basic 24,536,963 5,490,927 Adjustment for dilutive effects of warrants 1,673,320 - Adjustment for dilutive effects of convertible note payable 166,667 - Weighted average number of common shares outstanding, diluted 26,376,950 5,490,927 Net income (loss) per common share, basic $ 0.10 $ (1.07 ) Net income (loss) per common share, diluted $ 0.09 $ (1.07 ) The following table sets forth the number of potential common shares excluded from the calculations of net loss per diluted share because their inclusion would be anti-dilutive: March 31, 2019 March 31, 2018 Outstanding options to purchase common stock 2,602 2,602 Warrants to purchase common stock - 1,339,990 Note payable convertible to common stock - 166,667 Total 2,602 1,509,259 Significant Concentrations Sales to one China-based customer, Jiangsu Saleen Automotive Technology Co. (see Note 2) comprised 78% and 66% of revenues for the years ended March 31, 2019, and 2018, respectively. One customer, a related party, comprised 98% of accounts receivable at March 31, 2019. Two customers comprised 69% and 31%, respectively, of accounts receivable at March 31, 2018. The Company utilizes automobile platform vehicles for its Signature Cars from major manufacturers including Ford and Tesla and generally receives the base vehicle platforms directly from dealers. The Company enters into sourcing agreements with individual car dealerships but does not have supply agreements with the major manufacturers. Accordingly, the Company’s supply of base vehicle platforms may be limited to the allocation allotted from its source dealerships. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consisted primarily of cash, to the extent balances exceeded limits that were insured by the Federal Deposit Insurance Corporation. The Company does not require collateral and maintains reserves for potential credit losses. Such losses have historically been immaterial and have been within management’s expectations. Recently Issued Accounting Standards In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to nonemployee share-based payment accounting Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | NOTE 2 – REVENUE FROM CONTRACTS WITH CUSTOMERS The Company recognizes revenue from the following sources: Revenue from services The Company recognizes revenue from its engineering and design contracts and consulting services contracts as the services are provided and accepted by the customer. Deferred revenue is recorded for any payments received for services yet to be completed. Under the terms of its engineering design and development contract, costs are invoiced as incurred plus a markup. Revenue from Saleen S1 The Company provides engineering, design and development services to Jiangsu Saleen Automotive Technology Co., Ltd (“JSAT”) an unaffiliated corporation located in China, under a consulting agreement entered into in September 2016, and an engineering services contract entered into in April 2018. Under the engineering services contract, the Company agreed to provide engineering, design, and development services for the S1 and other high-performance vehicles for manufacture in the United States and China. The Company expects to complete the engineering, designing and developing of the S1 in the first quarter of calendar year 2020. Under the terms of the engineering services contract, as amended, the total contract amount is approximately $31,605,000. An early termination fee based on a percentage of the remaining unbilled contract amount will apply in the event the contract is cancelled by JSAT. The Company also entered into a Saleen S1 Cup Vehicle Development and Production Agreement (Cup Agreement) with JSAT in November 2018, as amended in May 2019. Under the Cup Agreement, the Company agreed to provide engineering, design, and development services for the Saleen S1 racing vehicle including prototype development, and assembly of racing vehicles to be used in the S1 Cup Racing Series in the United States and China. The Company expects to complete the Cup Agreement during calendar year 2019. The Cup Agreement provides for aggregate revenues to the Company of approximately $15,631,000. During the year ended March 31, 2019, the Company recognized $5,792,315 related to its completed performance under the engineering services contract. In addition, the Company recognized $4,728,811 for the reimbursement of costs and expenses, plus an additional mark-up, related to JSAT that were not part of the engineering services contract or Cup Agreement. In addition, during the years ended March 31, 2019 and 2018, the Company recognized $220,000 and $3,976,917 of consulting fees related to JSAT. During the year ended March 31, 2019, no revenue was recognized under the Cup Agreement as no performance obligation was completed during the period. Revenue from Saleen S7 The Company recognized revenue for engineering and manufacturing services as these services were performed. Separately, upon the sale by S7 Supercars of an S7 to the end user, the Company recognized a fee of approximately 33% of the net profit from the sale of the vehicle by S7 Supercars when such sale was completed, the title transferred to the buyer, and the buyer has accepted the vehicle. (See Note 14). During the year ended March 31, 2019, the Company recognized revenue of $485,048 for reimbursement of engineering and manufacturing services and a $200,000 fee from the sale of one S7. During the year ended March 31, 2018, the Company recognized revenue of $383,783 for reimbursement of engineering and manufacturing services. Revenue from Products Revenue from sale of Signature Cars The Company recognizes revenue from the sale of its Signature Cars when control is transferred which generally occurs upon shipment or delivery of the Signature Cars from its manufacturing facility to the destination specified by the customer. Signature Cars revenue represents the amount of consideration which the Company expects to be entitled in exchange for the delivery of the modified vehicle. The Company determines whether delivery has occurred based on when title transfers and the risks of ownership have transferred to the buyer, which usually occurs when the Company places the cars on the carrier. The Company regularly reviews its customers’ financial positions to ensure that collectability is reasonably assured and generally collects deposits before work is started and final payments are received prior to shipment. Except for warranties, the Company has no post-sales obligations nor does the Company accept returns. During the years ended March 31, 2019 and 2018, the Company recognized revenue from signature cars of $2,205,667 and $1,183,117, respectively. Revenue from Royalty The Company recognizes revenue from licenses when the performance obligation is satisfied through the transfer of the license. In the case where a royalty is paid to the Company in advance, the royalty payment is initially recorded as a liability and recognized as revenue as the royalties are deemed to be earned. During the year ended March 31, 2019, the Company did not recognize any royalty revenue. During the year ended March 31, 2018, the Company recognized royalty revenue of $478,000 (see Note 12). Revenue by Services Lines and Geographic Area The following table provides information about disaggregated revenue based on revenue by service lines and revenue by geographic area: Year Ended March 31, 2019 2018 Revenue by service lines: Services S1 engineering, design and development contract $ 10,741,126 $ 3,976,923 S7 agreement (related party) 685,048 383,783 Products Signature cars 2,205,667 1,183,117 Royalty - 478,000 Other 76,374 17,834 Total revenue $ 13,708,215 $ 6,039,657 Year Ended March 31, 2019 2018 Revenue by geographic area: United States $ 2,967,089 $ 2,062,734 China 10,741,126 3,976,923 Total revenue $ 13,708,215 $ 6,039,657 Deferred Revenue At March 31, 2019, the Company’s contract balances include deferred revenue. For service contracts where the performance obligation is not completed, deferred revenue is recorded for any payments received in advance of the performance obligation. Changes in deferred revenue were as follows: Year ended March 31, 2019 Deferred revenue, April 1, 2018 $ - New contract liabilities 2,968,150 Performance obligations satisfied (1,900,000 ) Deferred revenue, March 31, 2019 $ 1,068,150 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 3 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following at March 31, 2019, and March 31, 2018: March 31, 2019 March 31, 2018 Tooling $ 937,554 $ 743,737 Automobiles and trailers 167,063 - Machinery and equipment 103,233 85,922 Furniture and fixtures 147,960 147,128 Computer equipment and software 89,246 76,760 Leasehold improvements 76,691 - 1,521,747 1,053,547 Accumulated depreciation (871,394 ) (781,531 ) Total Property and Equipment $ 650,353 $ 272,016 Depreciation expense for the years ended March 31, 2019, and 2018 was $89,863 and $108,590, respectively. |
Notes Payable
Notes Payable | 12 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 4 – NOTES PAYABLE Notes payable consisted of the following at March 31, 2019 and March 31, 2018: March 31, 2019 March 31, 2018 (1) Settlement agreement for senior secured note $ 40,000 $ 120,000 (2) Unsecured note payable, interest at 5% per annum, due on demand 67,753 82,753 (3) Unsecured note payable, interest at 10% per annum, due July 27, 2017, past due 83,980 111,900 (4) Note Payable to American Express, past due 32,426 50,426 Total notes payable $ 224,159 $ 365,079 (1) In December 2016, the Company entered into a settlement agreement with Citizens Business Bank for a $400,000 loan that was then in default, was initially issued in 2009, and secured by all assets of the Company. Pursuant to the settlement agreement, the Company paid $200,000 in December 2016 and agreed to pay the balance of $200,000 through June 2019. As of March 31, 2018, the balance of the loan was $120,000. During the year ended March 31, 2019, the Company made payments of $80,000, and at March 31, 2019, the balance of the loan of $40,000. (2) In June 2016, the Company entered into an unsecured note payable with its landlord for past due rent of $389,922, covering the period from September 2013 to June 2016. The note bears interest at 5% per annum and is due on demand. At March 31, 2017, the principal balance of the note was $283,358. In September 2017, upon entering into an addendum to the lease agreement to renew the lease term through January 2028 (see Note 13), the landlord agreed to reduce the balance of the note by $183,358. At March 31, 2018, the outstanding balance of the note was $82,753. During the year ended March 31, 2019, the landlord, and the Company, agreed to reduce the note payable balance by $15,000, by offsetting an accounts receivable balance owed to the Company by the note holder of $15,000. At March 31, 2019, the balance of the loan was $67,753. (3) Note payable issued on September 8, 2014, with an amended maturity date of July 27, 2017. The note accrues interest at 10% per annum. Payments due in accordance with the amended note were past due as of March 31, 2019, and 2018. As of March 31, 2018, the outstanding balance of the note payable was $111,900. During the year ended March 31, 2019, the note holder, and the Company, agreed to reduce the note payable balance by $7,920, by offsetting an accounts receivable balance owed to the Company by the note holder of $7,290. In addition, the Company made payments of $20,000, which resulted in the balance of the loan at March 31, 2019, of $83,980. (4) Per a settlement reached with American Express, the Company makes monthly payments of $1,500 against prior balances due. The balance of the note payable at March 31, 2018, was $50,426. During the year ended March 31, 2019, the Company made $18,000 of payments and the balance of the note payable was $32,426 as of March 31, 2019. Payments due in accordance with the settlement agreement were past due as of March 31, 2019, and 2018. |
Convertible Notes Payable, Past
Convertible Notes Payable, Past Due | 12 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable, Past Due | NOTE 5 – CONVERTIBLE NOTES PAYABLE, PAST DUE At March 31, 2019, and 2018, the Company had one unsecured convertible note outstanding for $100,000. The note bears interest at 7% per annum, was due in March 2017 and is currently in default. The note is convertible into 166,667 shares of common stock. At March 31, 2017, the Company had 12 convertible notes outstanding aggregating $7,228,612. During the year ended March 31, 2018, such convertible notes plus accrued interest aggregating $1,192,266 (total of $8,420,878) were exchanged at $8 to $16 per share into 711,100 shares of the Company’s Series A Preferred Stock (see Note 11). In addition, the Company issued the holders of the convertible notes a bonus of 910,694 shares of common stock valued at $546,417 which was included in interest expense during the year ended March 31, 2018. |
Notes Payable and Advances from
Notes Payable and Advances from Related Party | 12 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable and Advances from Related Party | NOTE 6 – NOTES PAYABLE AND ADVANCES FROM RELATED PARTY In 2015, the Company executed two notes payable to a major stockholder, for an aggregate amount of $120,000, which bear interest at 10% per annum and were due on demand. During the year ended March 31, 2018, the Company received advances from the same stockholder for an aggregate amount of $80,000, which were unsecured, non-interest bearing and due on demand. As of March 31, 2018, the outstanding balance of the notes payable and advances to major stockholder was $200,000. During the year ended March 31, 2019, the Company repaid the outstanding notes payable and advances to the stockholder amounting to $200,000, plus accrued interest of approximately $40,000. |
Accrued Compensation, Payroll T
Accrued Compensation, Payroll Taxes, and Other Taxes Payable | 12 Months Ended |
Mar. 31, 2019 | |
Accrued Compensation Payroll Taxes And Other Taxes Payable | |
Accrued Compensation, Payroll Taxes, and Other Taxes Payable | NOTE 7 – ACCRUED COMPENSATION, PAYROLL TAXES, AND OTHER TAXES PAYABLE Payroll, payroll taxes, and other taxes payables consist of the following as of March 31, 2019, and 2018: March 31, 2019 March 31, 2018 Accrued payroll $ 453,492 $ 55,076 Accrued vacation 142,466 67,532 Current payroll taxes and withholdings 36,731 160,339 Past due payroll taxes and other taxes - 661,068 $ 632,689 $ 944,015 During the year ended March 31, 2019, $661,068 in past due payroll and other taxes due to the Internal Revenue Service at March 31, 2018 was paid in full. |
Other Current Liabilities
Other Current Liabilities | 12 Months Ended |
Mar. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | NOTE 8 – OTHER CURRENT LIABILITIES Other current liabilities consist of the following as of March 31, 2019, and 2018: March 31, 2019 March 31, 2018 Deferred rent $ 263,955 $ 198,367 Deferred vendor consideration 150,000 250,000 Other current payables 37,544 185,969 $ 451,499 $ 634,336 |
Related Party Transactions and
Related Party Transactions and Employment Agreements | 12 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Employment Agreements | NOTE 9 – RELATED PARTY TRANSACTIONS AND EMPLOYMENT AGREEMENTS Due to related parties The amounts payable to related parties as of March 31, 2019, and 2018 are as follows: March 31, 2019 March 31, 2018 Related Party: Steve Saleen (a) $ 457,692 $ 104,483 Top Hat Capital and Crystal Research (b) 61,672 61,672 $ 519,364 $ 166,155 Steve Saleen (a) Amounts payable to Steve Saleen, founder and Chief Executive Officer of the Company, include accrued salary, accrued bonuses, and advances provided to the Company. The advances are non-interest bearing, with no formal terms of repayment. At March 31, 2017, the balance due to Mr. Saleen was $545,352. On March 22, 2018, Mr. Saleen was issued 1,090,704 shares of the Company’s common stock to settle the total amount owed to him at that date of $545,352. The shares were valued at $0.50 per share based on a contemporaneous private placement of Series A Preferred Stock (see Note 11). Jeffrey Kraws, Top Hat Capital and Crystal Research (b) At March 31, 2019, and 2018, the Company owes Top Hat Capital and Crystal Research, whose co-founder and Managing Partner, Jeffrey Kraws, is a director of the Company, $61,672 for investment advisor and research services provided to the Company. Fair value of common shares issued to officer and directors for compensation During the year ended March 31, 2019, there were no shares of common stock issued to officers or directors for compensation. During the year ended March 31, 2018, 3,800,964 shares of common stock valued at $1,950,482 were issued to officers or directors for compensation as follows: ● 1,575,964 shares of the Company’s common stock valued at $787,982 were issued to Mr. Saleen in exchange for services provided to the Company; ● 1,150,000 shares of the Company’s common stock valued at $575,000 were issued as consideration to Mr. Saleen for the relinquishment of his right to be issued a warrant to purchase preferred stock; ● 575,000 shares of the Company’s common stock valued at $287,500 were issued to Mr. Kraws in exchange for services provided to the Company; ● 500,000 shares of common stock valued at $300,000 were issued to Harris Family Living Trust (“Harris”), a greater than 5% holder of the Company’s common stock, in exchange for consulting services provided to the Company by Cyrano Group, which assigned its shares to Harris. Fair value of common shares issued to related parties for interest During the year ended March 31, 2019, there were no shares of common stock issued to related parties for interest. During the year ended March 31, 2018, 1,833,205 shares of common stock valued at $919,922 were issued to related parties for interest expense as follows: ● 1,800,000 shares of the Company’s common stock valued at $900,000 were issued to Certitude Trust (“Certitude”), as consideration for the relinquishment of their right to be issued a warrant to purchase preferred stock; ● 33,205 shares of the Company’s common stock valued at $19,922 were issued to Harris. Fair value of common shares issued to related parties for private placement costs During the year ended March 31, 2019, there were no shares of common stock issued to for private placement costs. During the year ended March 31, 2018, 741,667 shares of common stock valued at $387,500 were issued to related parties for interest expense as follows: ● 166,667 shares of the Company’s common stock valued at $100,000 were issued to Certitude pursuant to a letter agreement dated December 29, 2017; ● 575,000 shares of the Company’s common stock valued at $287,500 were issued to Joseph Bianco, a director of the Company, as consideration for the relinquishment of his right to be issued a warrant to purchase preferred stock pursuant to a letter agreement dated October 12, 2017. Mr. Bianco assigned the ownership of his shares to a non-related party. The shares issued above to officer and directors for compensation and to related parties for interest and private placement costs were valued at $0.50 to $0.60 per share based on the effective price per share of the contemporaneous sale of the Company’s common stock and Series A Preferred Stock during the year ended March 31, 2018 (See Note 11). Employment agreements On March 20, 2017, the Company entered into an at-will employment agreement with Amy Boylan, President, and Chief Operating Officer. Effective June 21, 2019, Ms. Boylan resigned as the President and Chief Operating Officer of the Company. Ms. Boylan continues to serve as a director of the Company. The agreement provided for an initial annual salary of $150,000 to be increased to $200,000 in the event of an outside investment of $3 million or more, and further increased to $250,000 on November 1, 2017. The agreement also provided for bonus and stock option grant programs as determined by the Company’s Board of Directors and a Black Label Signature Car. Salaries and bonuses paid to Ms. Boylan during the years ended March 31, 2019 and 2018, aggregated $415,838 and $208,908, respectively. On December 19, 2017, the Company entered into a new employment agreement with Mr. Saleen. The agreement has a term of six years and automatically renews for successive twelve-month periods, provides for an annual salary of $400,000 with 3% annual increases, bonus and stock option grant programs as determined by the Company’s Board of Directors, a Saleen branded car with an approximate value of $100,000, and a bonus of $150,000 in the event the Company raises capital in the future of $500,000 or more. Mr. Saleen may terminate the employment agreement at any time with 30-days written notice. In the event Mr. Saleen is terminated for any reason by the Company, Mr. Saleen will be entitled to receive the greater of the remaining obligations due under his employment agreement or four years’ salary as a severance payment due within 30 days of his termination by the Company. Salaries and bonuses paid to Mr. Saleen during the years ended March 31, 2019 and 2018, aggregated $700,000 and $362,500, respectively. S7 Supercars, LLC The Company serves as the original equipment manufacturer (OEM) for the Saleen S7, a limited production supercar. During the year ended March 31, 2019, the S7 was produced under a joint venture with S7 Supercars, LLC, an entity that is controlled by affiliates of two of the Company’s principal shareholders. Under the agreement, S7 Supercars provided the chassis and all other costs to build the vehicle, and the Company was entitled to a fee for engineering and manufacturing services, plus an additional markup for these services. The Company recognized revenue as these engineering and manufacturing services were performed. The cars produced under this agreement were owned by S7 Supercars until title passed to the ultimate buyer. Separately, upon the sale of the vehicle to the end users, the Company became entitled to a fee of approximately 33% of the net profit from the sale of the vehicle by S7 Supercars when such sale was completed, the title transferred to the buyer, and the buyer accepted the vehicle. During the years ended March 31, 2019, and 2018, the Company recognized revenue from S7 Supercars of $485,048 and $383,783, respectively, for engineering and manufacturing services. In addition, during the year ended March 31, 2019, S7 Supercars sold the first S7, and the Company recognized $200,000 for its share of the net profit from the sale, which is included in service revenue. At March 31, 2019, and 2018, the Company had accounts receivable due from S7 Supercars of $133,742 and $141,200, respectively. At March 31, 2019, and 2018, deposits of $100,000 and $300,000, respectively, from S7 Supercars were included in customer deposits. On May 31, 2019, the Company entered into an Asset Purchase Agreement with S7 Supercars pursuant to which the Company purchased all of the assets of S7 Supercars and terminated the joint venture agreement with it (see Note 14). |
Income Taxes
Income Taxes | 12 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 10 – INCOME TAXES For the fiscal years ended March 31, 2019, and 2018, a reconciliation of the effective income tax rate to the U.S. statutory rate is as follows: March 31, 2019 March 31, 2018 Tax expense at the U.S. statutory income tax 21.0 % (34.0 )% State tax net of federal tax benefit 7.0 % (5.8 )% Other - % 12.7 % Increase (decrease) in the valuation allowance (11.3 )% 27.1 % Effective tax rate 16.7 % - % The provision for income taxes consists of the following: March 31, 2019 March 31, 2018 Federal current tax $ 577,000 $ - State current tax 209,000 - Federal and State deferred tax (283,000 ) - Income tax expense $ 503,000 $ - In assessing the realizability of the net deferred tax assets, the Company considers all relevant positive and negative evidence to determine whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The realization of the gross deferred tax assets is dependent on several factors, including the generation of sufficient taxable income prior to the expiration of the net operating loss carryforwards. At March 31, 2019 and 2018, the Company believes that it is more likely than not that the Company’s deferred income tax assets will not be realized. As such, there is a full valuation allowance against the net deferred tax assets as of March 31, 2019 and 2018. Net deferred tax assets consist of the following: March 31, 2019 March 31, 2018 Deferred tax assets Net operating loss carryforwards $ 850,000 $ 3,216,000 Other temporary differences - 410,000 Total deferred tax asset before valuation allowance 850,000 3,626,000 Valuation allowance (850,000 ) (3,626,000 ) Deferred tax assets, net of a valuation allowance $ - $ - As of March 31, 2019, the Company generated regular tax federal net operating losses (“NOLs”) of approximately $18.2 million. The Company’s ability to realize tax benefit from the NOL’s is subject to Internal Revenue Code Section 382 (“Section 382”), which generally imposes an annual limitation on the amount of net operating loss carryforwards that may be used to offset taxable income when a corporation has undergone significant changes in its stock ownership. The Company estimates it will never get the benefit of $15.2 million of NOL’s generated prior to July 31, 2017. The deferred tax asset has been adjusted to reflect the Section 382 limitation. At March 31, 2019, the Company estimates it had utilizable federal net operating loss carry forwards of approximately $3.0 million. The Company’s operations are based in California and it is subject to Federal and California state income tax. Tax years after 2013 are open to examination by Federal and state tax authorities. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Deficit | NOTE 11 – STOCKHOLDERS’ DEFICIT Series A Preferred stock In 2017, the Company filed Certificates of Designation designating the rights and restrictions of its Series A Preferred stock, par value $0.001. All shares of Series A Preferred Stock issued by the Company automatically converted into common stock upon the effectiveness of the reverse stock split in December 2017. The Series A Preferred Stock provided for preferential liquidation rights in the event of any liquidation, dissolution or winding up of the Company, paid from the Company’s assets not delegated to parties with greater priority at $8.00 per share (the “Original Issue Price”). Holders of Series A Preferred Stock, in preference to the holders of common stock, were entitled to receive cash dividends of 12% of the Original Issue Price on each outstanding share of Series A Preferred Stock. The Series A Preferred Stock was automatically convertible to a number of shares of common stock equal to the Original Issue Price of $8 divided by $0.60 on the date the Company effects an increase in its authorized shares of common stock and/or a reverse stock split of its common stock sufficient to provide for the conversion of all Series A Preferred Stock into common stock. Each share of Series A Preferred Stock had the voting power of the number of shares of common stock issuable upon conversion. During the year ended March 31, 2018, the Company issued: ● 191,000 shares of Series A Preferred Stock for cash proceeds of $1,400,000, and exchange of a $128,000 note payable to a stockholder; ● 711,100 shares of Series A Preferred Stock in exchange for convertible notes payable and accrued interest of $8,420,878. All outstanding shares of Series A Preferred Stock automatically converted into an aggregate of 13,361,333 shares of common stock when the Company effected a reverse stock split in December 2017. Series B Preferred Stock In August 2018, the Company filed a Certificate of Designation designating the rights and restrictions of its Series B Preferred Stock. Of the 1,000,000 preferred shares authorized at a par value of $0.001, 1,000 were designated as Series B Preferred Stock. The Series B Preferred Stock is convertible at the option of the holder into 1,000 common shares per one share of Series B Preferred Stock. The Series B Preferred Stock provides for liquidation and dividend rights on an as-if-converted basis into equivalent common shares. The Series B Preferred Stockholders have voting rights with the common shareholders on an as-if-converted basis. The holders of Series B Preferred Stock have the right, voting as a separate class, following a “Change of Control” (as defined), to elect a majority of the members of the Company’s Board of Directors and to remove from office such directors and to fill any vacancy caused by the resignation, death or removal of such directors. On September 11, 2018, the Company issued 666.66 units of Series B Preferred Stock and warrants for $600 per unit, for total cash proceeds of $400,000 to a related party. Each unit consisted of one share of Series B Preferred Stock that is convertible into 1,000 shares of the Company’s common stock, and a three-year warrant to purchase 500 shares of the Company’s common stock at an exercise price of $.70 per share. A total of 666.66 shares of Series B Preferred Stock convertible into 666,666 shares of common stock and warrants exercisable into 333,330 shares of common stock were issued. The warrants have a term of three years and vested immediately. The aggregate value of the warrants issued was $92,000 and were valued using the Black-Scholes-Merton option valuation model with the following assumptions; risk-free interest rate of 2.83%; dividend yield of 0%; and volatility of 100. The Company also determined that the Series B Preferred Stock contained a beneficial conversion feature of $92,000 which was recorded as a deemed dividend. A portion of the proceeds from the sale of the Series B Preferred Stock was allocated to the warrants based on their relative fair value, which amounted to $92,000, using the Black Scholes option pricing model. The assumptions used in the Black Scholes model were as follows: risk-free interest rate of 2.83%; dividend yield of 0%; and volatility rate of 100%. The $92,000 has been recorded as a deemed dividend to the preferred shareholders and as a charge to additional paid-in capital (as there is a deficit in the Company’s retained earnings). Issuance of Common Stock During the year ended March 31, 2019, there were no shares of common stock issued. During the year ended March 31, 2018, the Company issued shares of its common stock as follows: ● 1,333,333 shares of common stock and warrants to purchase 1,333,333 shares of common stock were issued for total cash proceeds of $800,000. ● 1,090,704 shares of common stock issued in settlement of amounts due to related party of $545,352 (see Note 9); ● 3,800,964 shares of common stock issued to an officer and directors for compensation valued at $1,950,482 (see Note 9); ● 1,833,205 shares of common stock issued to related parties for interest expense valued at $919,922 (see Note 9); ● 910,694 shares of common stock issued to the holders of the 3% Notes, 7% Notes, and 8% Note as bonus shares valued at $546,417 and included in interest expense (see Note 5); ● 1,800,000 shares of common stock issued for private placement costs valued at $937,500, of which 741,667 shares valued at $387,500 were issued to related parties (Note 9); ● 620,585 shares of common stock issued as a dividend valued at $372,351 to the holders of 711,100 shares of Series A Preferred Stock issued upon exchange of the convertible notes and accrued interest, and to the investors of 191,000 shares (out of the total 291,000 shares issued) of Series A Preferred Stock sold during the current fiscal year. Based on the above issuances of shares of the Company’s common stock during the year ended March 31, 2018, of the aggregate 11,389,485 shares issued, 1,333,333 shares were sold at $0.60 per share for total proceeds of $800,000, and a total of 2,439,484 shares were valued at $0.60 price per share or total fair value of $1,463,691, which was the effective price per share of the contemporaneous sale of the Company’s common stock and Series A Preferred Stock during the year ended March 31, 2018. The remaining total 7,616,668 shares were valued at $0.50 per share or total fair value of $3,808,333. The $0.50 price per share was based on the contemporaneous sale of the Company’s Series A Preferred Stock at an effective price of $0.60 price per share, adjusted to reflect a preferred stock dividend not applicable to the common stockholders. Options Omnibus Incentive Plan In December 2013, the Company’s board of directors approved the 2013 Omnibus Incentive Plan (the “Plan”), which is administered by the Company’s board of directors or a committee thereof (the “Administrator”) as set forth in the Plan. The Plan provides for the granting of stock options, stock appreciation rights, restricted share awards, and restricted stock units to employees, directors (including non-employee directors), advisors and consultants. Grants under the Plan vest and expire based on periods determined by the Administrator, but in no event can the expiration date be later than ten years from the date of grant (five years after the date of grant if the grant is an incentive stock option to an employee who owns more than 10% of the total combined voting power of all classes of the Company’s capital stock (a “10% owner”)). Grants of stock options may be either incentive stock options or nonqualified stock options. The per share exercise price on an option, other than with respect to substitute awards, shall not be less than 100% of the fair market value of the Company’s Common Stock on the date the option is granted (110% of the fair market value if the grant is to a 10% owner). A total of 14,153 shares of common stock have been authorized for issuance and reserved under the Plan. The Plan was approved by the Company’s stockholders on December 11, 2013. The Company utilizes the Black-Scholes option valuation model to estimate the fair value of stock options granted. The Company’s assessment of the estimated fair value of stock options is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables and the related tax impact. Stock option activity is set forth below: Number of Shares Weighted Average Exercise Average Intrinsic Weighted (in years) Outstanding at April 1, 2017 2,602 $ 108 $ - 7.5 Granted during the year — — - - Cancelled during the year — — - - Exercised during the year — — - - Outstanding at March 31, 2018 2,602 108 - 6.5 Granted during the year — — - - Cancelled during the year — — - - Exercised during the year — — - - Outstanding at March 31, 2019 2,602 $ 108 - 5.5 Exercisable at March 31, 2019 2,602 $ 108 $ - 5.5 The aggregate intrinsic value shown in the table above represents the difference between the fair market value of the Company’s Common Stock per share on March 31, 2018 and the exercise price of each option. During the years ended March 31, 2019 and 2018, the Company recorded no stock-based compensation expense related to stock options. Warrants Warrant activity is set forth below: Number of Shares Weighted Average Exercise Price per Share Average Intrinsic Value Weighted Average Remaining Contractual Term (in years) Outstanding at April 1, 2017 6,657 $ 300.00 - 1.9 Granted during the year 1,333,333 .60 - 3.8 Canceled during the year - - - - Exercised during the year - - - - Outstanding at March 31, 2018 1,339,990 2.09 - 3.7 Granted during the year 333,330 0.70 3.0 Canceled during the year - Exercised during the year - Outstanding at March 31, 2019 1,673,320 $ 1.81 - 2.75 Exercisable at March 31, 2019 1,673,320 $ 1.81 $ - 2.75 In January 2018, warrants exercisable into 1,333,333 shares of common stock were issued by the Company in conjunction with the issuance of 1,333,333 shares of common stock. The warrants have a term of two years and an exercise price of $0.60 per share. In September 2018, warrants exercisable into 333,330 shares of common stock were issued by the Company in conjunction with the issuance of Series B Preferred Stock. The warrants have a term of three years and an exercise price of $.70 per share. The intrinsic value of the Company’s warrants was nil at March 31, 2019, and 2018. |
Royalty Revenue from Intellectu
Royalty Revenue from Intellectual Property License | 12 Months Ended |
Mar. 31, 2019 | |
Royalty Revenue From Intellectual Property License | |
Royalty Revenue from Intellectual Property License | NOTE 12 –ROYALTY REVENUE FROM INTELLECTUAL PROPERTY LICENSE In June 2015, the Company entered into an Intellectual Property License Agreement with Saleen Motors International, LLC (“SMI”), an unrelated party and wholly owned subsidiary of GreenTech Automotive, Inc. The license agreement had an initial term of 10 years. As part of the license agreement, SMI advanced the Company $500,000. In March 2018, SMI filed for bankruptcy and the Company provided notice to SMI of immediate termination of the license agreement. Pursuant to the termination provisions provided in the license agreement, the Company recorded $478,000 as royalty revenue during the year ended March 31, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 13 – COMMITMENTS AND CONTINGENCIES Facilities Leases In January 2015, the Company entered into lease agreements for the lease of two buildings totaling approximately 76,000 square feet under non-cancellable operating leases (the “Leases”). The Leases were on a triple net basis and required aggregate monthly payments of approximately $45,000 with annual rent escalations as negotiated. The Leases covered the period from February 2015 through January 2018. In September 2017, the Company entered into amendments to the Leases to renew the lease terms for the period from February 1, 2018, through January 31, 2028 (the “New Leases”). The New Leases require monthly payments beginning at approximately $57,000 with annual rent escalations at a negotiated rate. The Company has also entered into a sublease agreement that requires monthly payments of $17,700 from the sub-lessee on a month-to-month basis. In June 2016, the Company entered into an unsecured note payable with its landlord for past due rent of $389,922 for the period from September 2013 to June 2016. The note bears interest at 5% per annum and is due on demand. As of March 31, 2017, the principal balance of the note was $283,358. In September 2017, upon entering into the New Leases, the landlord agreed to reduce the balance of the note by $183,358 (see Note 4). The Company recorded the gain on the reduction of the note payable of $183,358 as deferred rent. Deferred rent is amortized on a straight-line basis over the term of the New Leases. Rent expense during each of the years ended March 31, 2019, and 2018, net of sublease income, was approximately $450,000. The Company accounts for its rental payments (including rent escalations) on a straight-line basis over the term of the leases and records the difference between straight-line rent expense and cash payments as deferred rent. At March 31, 2019 and 2018, deferred rent amounted to $263,955 and $198,367, respectively. The future minimum rental payments required under the non-cancelable operating leases described above as of March 31, 2019, are as follows: Years ending March 31: Lease 2020 $ 636,806 2021 655,910 2022 675,587 2023 695,855 2024 716,731 Thereafter 2,950,697 Total $ 6,331,586 Litigation The Company is involved in certain legal proceedings that arise from time to time in the ordinary course of its business. The Company is currently a party to several legal proceedings related to claims for payment that are currently accrued for in its financial statements as other current liabilities or accounts payable. The Company records accruals for contingencies to the extent that management concludes that the occurrence is probable and that the related amount of loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. The Company is not currently involved in any legal proceedings that could potentially have a material impact on its statement of operations. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 14 – SUBSEQUENT EVENTS On May 31, 2019, the Company entered into an asset purchase agreement with S7 Supercars, LLC pursuant to which S7 Supercars sold all of its assets, consisting of chassis and other automotive parts relating to the manufacture of the S7 supercar, and related intellectual property, to the Company for an initial purchase price of $1,165,000 comprised of a cash payment of $800,000, and the elimination of an accounts receivable balance of $365,000 owed to us by S7 Supercars. In addition, the Company is required to pay the S7 Supercars, LLC up to four additional payments of $50,000 each, upon sales by the Company of S7 supercars within the two-year period following the closing, subject to the conditions provided for in the purchase agreement. Pursuant to the purchase agreement, the joint venture agreement between the Company and S7 Supercars was terminated, except for indemnification obligations of the Company thereunder. |
Nature of the Business and Si_2
Nature of the Business and Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Description of the Company | Description of the Company Saleen Automotive, Inc. (the “Company”) is an original equipment manufacturer (“OEM”) of high-performance vehicles (“Saleen OEM”) that are built from the ground up. The Company also designs, develops, manufactures and sells high-performance vehicles built from base chassis of major American automobile manufacturers (“Saleen Signature Cars”). The Company also provides engineering, development, and design consulting services on a project basis for automotive manufacturers worldwide. The Company currently has customers worldwide, including muscle and high-performance car enthusiasts, collectors, automotive dealers, exotic car retail dealers, television and motion picture productions, and consumers in the luxury supercar and motorsports markets. Saleen Automotive, Inc. was incorporated under the laws of the State of Nevada on June 24, 2011. On May 23, 2013, the Company entered into a merger agreement with Saleen California Merger Corporation, Saleen Florida Merger Corporation, Saleen Automotive, Inc., and SMS Signature Cars (“SMS”) (collectively, the “Saleen Entities”), and Steve Saleen (“Saleen”). The merger closed on June 26, 2013, and the Saleen Entities merged with the Company and approximately 93% of the Company’s common stock was owned, collectively, by Saleen and the former holders of the outstanding capital stock of Saleen Automotive. The transaction was accounted for as a recapitalization with the Saleen Entities deemed the acquiring companies for accounting purposes, and the Company deemed the legal acquirer. In June 2013, the Company amended its articles of incorporation to change its name to Saleen Automotive, Inc. On December 19, 2017, the Company effected a 1-for-2,000 reverse stock split of its common stock (“reverse stock split”) following approval by the Company’s Board of Directors and stockholders. All common stock share and per-share amounts for all periods presented in these financial statements have been adjusted retroactively to reflect the reverse stock split. Saleen OEM The Company manufacturers the Saleen S7 supercar (“S7”), a limited production supercar with a 1,500-horsepower engine, in the Company’s production facility in Corona, California. During the years ended March 31, 2019 and 2018, the S7 was produced under an agreement with S7 Supercars, LLC (“S7 Supercars”), a related party, which owned the “S7” name and related intellectual property and assets. Under the agreement, S7 Supercars provided the chassis and all other costs to build the vehicle, and the Company was entitled to a fee for engineering and manufacturing services, plus an additional markup for these services. Separately, upon the sale of the vehicle to the end-users, the Company became entitled to a fee of approximately 33% of the net profit from the sale of the vehicle by S7 Supercars. On May 31, 2019, the Company entered into an asset purchase agreement with S7 Supercars and acquired all of S7 Supercars’ assets, which consisted of chassis and other automotive parts relating to the manufacture of the S7, and related intellectual property and assets (See Note 14). The Company is also in the process of completing the engineering, design, and certification of a new high-performance sports car, the Saleen 1 (“S1”), under an engineering development and design contract with Jiangsu Saleen Automotive Technology Co. (see Note 2), an unaffiliated corporation located in China which holds the intellectual property rights related to the S1 developed under the agreement. Saleen Signature Cars The Company’s Saleen Signature Cars are built from base chassis of major American automobile manufacturers, including Ford Mustangs, Tesla Model S vehicles, and Ford trucks. The Company is a specialist in vehicle design, engineering and manufacturing focusing on the mass customization (the process of customizing automobiles that are mass produced by manufacturers) of American sports and electric vehicles and the production of high-performance USA-engineered sports cars. Saleen-branded products include a line of high performance and upgraded muscle and electric cars, automotive aftermarket specialty parts and lifestyle accessories. Liquidity The Company has incurred significant net losses since inception. During the year ended March 31, 2018, the Company had a net loss of $5.5 million, used cash in operations of $1.5 million, and at March 31, 2018, we had a working capital deficit of $3.2 million, and a stockholders deficit of $2.9 million. However, during the year ended March 31, 2019, the Company’s financial performance significantly improved, and we recorded net income of $2.5 million and generated cash flows from operations of $3.2 million, primarily due to an engineering services contract we entered into in April 2018 with Jiangsu Saleen Automotive Technology Co., Ltd (“JSAT”), an unaffiliated corporation located in China (see Note 2). The Company also entered into a Saleen S1 Cup Vehicle Development and Production Agreement (the “Cup Agreement”) with JSAT in November 2018, and amended in May 2019 (see Note 2), that is expected to generate aggregate revenue in excess of $15.6 million. As of March 31, 2019, our working capital deficit had been reduced to $780,000, which included a contract advance (deferred revenue) from JSAT of $1 million. Our ability to continue to generate net income and positive cash flows from operations is primarily dependent on our ability to continue to generate revenue from the contract with JSAT, and to generate revenue from the sale of our Signature Cars (See Note 2). Based on current internal projections, the Company believes it has and/or will generate sufficient cash for its operational needs, for at least one year from the date these financial statements are issued. During the year ended March 31, 2019, the Company recognized revenue from JSAT totaling $10.7 million, made up of $5.8 million for completed performances under the engineering services contract, $4.7 million for the reimbursement of costs and expenses plus an additional mark-up, that were not part of the engineering services contract or Cup Agreement, and $220,000 of consulting fees. Subsequent to March 31, 2019, and through September 26, 2019, the Company received another $20.3 million from JSAT, made up of $14.7 million for completed performances under the engineering services contract and Cup Agreement, and $5.6 million for the reimbursement of costs and expenses, plus an additional mark-up, that were not part of the engineering services contract or Cup Agreement. Our cash balance at September 30, 2019 was $4.4 million. The Company cannot give assurance that it can maintain its cash balances or limit its cash consumption and maintain sufficient cash balances for its planned operations. Also, future business demands may lead to cash utilization at levels greater than recently experienced or anticipated. While we believe that our existing cash balances will be sufficient to fund our currently planned level of operations and investment activity, we may require additional financing to fund our planned future operations if we encounter unanticipated difficulties, or if our estimates of the amount of cash necessary to operate our business prove to be wrong, and we use our available financial resources faster than we currently expect. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Subject to the foregoing, management has adopted a budget that we believe will allow the Company sufficient capital and liquidity to fund its operations for at least one year from the date these financial statements are issued. |
Consolidation Policy | Consolidation Policy The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Saleen Signature Cars, a California corporation, and Saleen Sales Corporation, a California corporation. Intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates Financial statements prepared in accordance with accounting principles generally accepted in the United States require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Among other things, management estimates include the estimated collectability of its accounts receivable, the valuation of long-lived assets, warranty reserves, the assumptions used to calculate derivative liabilities, assumptions used to value equity instruments issued for financing and compensation, and the valuation of deferred tax assets. Actual results could differ from those estimates. |
Revenue Recognition | Revenue recognition Prior to April 1, 2018, the Company recognized its revenue in accordance with Accounting Standards Codification (ASC) 605 Revenue Recognition, upon the delivery of its services or products when: (1) delivery had occurred or services rendered; (2) persuasive evidence of an arrangement existed; (3) there are no continuing obligations to the customer; and (4) the collection of related accounts receivable was reasonably assured. Effective April 1, 2018, the Company adopted the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. The implementation of ASC 606 did not have a material impact on the Company’s consolidated financial statements. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients. The Company’s revenue consists of primarily from the sale of its Signature Cars and services provided under its engineering and design, and development consulting services contracts. See Note 2 for further discussion of Revenue. |
Cash and Cash Equivalents | Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. From time to time, the Company’s cash account balances exceed the balances as covered by the Federal Deposit Insurance System. The Company has never suffered a loss due to such excess balances. |
Accounts Receivable | Accounts Receivable The Company evaluates the collectability of its trade accounts receivable based on a number of factors. In circumstances where the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded, which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer identification of potential bad debts, bad debt charges are recorded based on the Company’s historical losses and an overall assessment of past due trade accounts receivable outstanding. The Company recognizes an allowance for doubtful accounts to ensure trade receivables are not overstated due to collectability. For the most part, the Company generally requires advance payments for its Signature Cars and credit card payments for parts and merchandise. As of March 31, 2019, and 2018, the Company deemed an allowance for doubtful accounts was not required. |
Inventories | Inventories Inventories are stated at the lower of cost or market. Cost is determined principally on a first-in-first-out cost basis for automobile parts and merchandise, and on a specific cost basis for work-in-process and finished cars. Inventories consist primarily of parts for the Company’s Signature Car conversions, Signature Car conversions in process, finished Signature Cars, and retail sales merchandise. March 31, 2019 March 31, 2018 Automobile parts $ 108,498 $ 56,089 Finished Cars - 186,215 Merchandise - 20,973 Total inventories $ 108,498 $ 263,277 |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for major renewals and improvements that extend the useful lives of property and equipment or increase production capacity are capitalized, and expenditures for repairs and maintenance are charged to expense as incurred. The cost of property and equipment is depreciated on a straight-line basis over the following estimated useful lives: Computer equipment and software 3-7 years Tooling 3-7 years Furniture and fixtures 5-7 years Automobiles and trailer 5-7 years Machinery and equipment 3-7 years Leasehold improvement Shorter of the lease term or useful life Management assesses the carrying value of property and equipment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If there is an indication of impairment, management prepares an estimate of future cash flows expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. The Company did not record an impairment loss for the years ended March 31, 2019, and 2018. |
Customer Deposits | Customer Deposits Sales orders received from customers of Signature Cars generally require customers to make deposits at the time of signing the related sales order. The Company receives either partial or full deposits related to Signature Car sales orders in advance of shipment and is generally paid in full prior to the shipment of the finished Signature Cars. Customer deposits as of March 31, 2019, and 2018 comprised of funds received in advance of shipment and amounted to $511,081 and $605,580, respectively, which will be recorded as revenue upon shipment of finished Signature Cars and satisfaction of the revenue recognition requirements discussed above. |
Warranty Policy | Warranty Policy The Company provides a three-year or 36,000 miles New Vehicle Limited Warranty for its Signature Cars. The vehicle limited warranty applies to installed parts and/or assemblies in new Saleen high performance cars. All of the unaltered parts are covered under the original full warranty of the OEM manufacturer of the base vehicles. Accrued warranty costs are included in other current liabilities on the accompanying consolidated balance sheets. Changes in the product warranty accrual for the years ended March 31, 2019, and 2018 were as follows: Balance at Warranty Provision for Balance at Fiscal 2019 $ 20,000 $ (35,392 ) $ 35,392 $ 20,000 Fiscal 2018 $ 20,000 $ (7,895 ) $ 7,895 $ 20,000 |
Advertising, Sales and Marketing Costs | Advertising, Sales and Marketing Costs Advertising and sales and marketing costs are expensed as incurred and are included in sales and marketing expenses. During the year ended March 31, 2019, advertising expenses were $123,262, while sales and marketing expenses were $850,271. During the year ended March 31, 2018, advertising expenses were $17,812, while sales and marketing expenses were $327,165. |
Income Taxes | Income Taxes The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits or that future deductibility is uncertain. Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate. |
Stock Compensation | Stock Compensation The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board (the “FASB”) whereas the value of the award is measured on the date of grant and recognized as compensation expense on the straight-line basis over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the FASB whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Options granted to non-employees are revalued each reporting period to determine the amount to be recorded as an expense in the respective period. As the options vest, they are valued on each vesting date and an adjustment is recorded for the difference between the value already recorded and the then current value on the date of vesting. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested, and the total stock-based compensation charge is recorded in the period of the measurement date. The Company uses the fair value recognition provision of ASC 718, “Stock Compensation,” which requires the Company to expense the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of such instruments. The Company uses the Black-Scholes-Merton option pricing model to calculate the fair value of any equity instruments on the grant date. The Company also uses the provisions of ASC 505-50, “ Equity Based Payments to Non-Employees, |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company accounts for the fair value of financial instruments in accordance with the FASB Accounting Standards Codification (“ASC”) topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 defines “fair value” as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Authoritative guidance provided by the FASB defines the following levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these financial assets: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Inputs, other than the quoted prices in active markets, that is observable either directly or indirectly. Level 3 Unobservable inputs based on the Company’s assumptions. The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable, accrued liabilities, and customer deposits. The carrying amounts of such financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature. The carrying values of notes payable approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. It is management’s opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments. |
Income (loss) Per Share | Income (loss) per Share Basic income (loss) per common share is computed by dividing income (loss) attributable to common stockholders by the weighted average number of common shares outstanding. Diluted net income (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares that would have been outstanding during the period assuming the issuance of common stock for all potential dilutive common shares outstanding. Potential common shares consist of shares issuable upon the exercise of stock options and warrants and the conversion of convertible notes payable. The following table sets forth the computation of basic and diluted net income (loss) per common share for the year ended: March 31, 2019 March 31, 2018 Numerator: Net income (loss) attributable to common stockholders $ 2,419,261 $ (5,898,747 ) Denominator: Weighted average number of shares outstanding, basic 24,536,963 5,490,927 Adjustment for dilutive effects of warrants 1,673,320 - Adjustment for dilutive effects of convertible note payable 166,667 - Weighted average number of common shares outstanding, diluted 26,376,950 5,490,927 Net income (loss) per common share, basic $ 0.10 $ (1.07 ) Net income (loss) per common share, diluted $ 0.09 $ (1.07 ) The following table sets forth the number of potential common shares excluded from the calculations of net loss per diluted share because their inclusion would be anti-dilutive: March 31, 2019 March 31, 2018 Outstanding options to purchase common stock 2,602 2,602 Warrants to purchase common stock - 1,339,990 Note payable convertible to common stock - 166,667 Total 2,602 1,509,259 |
Significant Concentrations | Significant Concentrations Sales to one China-based customer, Jiangsu Saleen Automotive Technology Co. (see Note 2) comprised 78% and 66% of revenues for the years ended March 31, 2019, and 2018, respectively. One customer, a related party, comprised 98% of accounts receivable at March 31, 2019. Two customers comprised 69% and 31%, respectively, of accounts receivable at March 31, 2018. The Company utilizes automobile platform vehicles for its Signature Cars from major manufacturers including Ford and Tesla and generally receives the base vehicle platforms directly from dealers. The Company enters into sourcing agreements with individual car dealerships but does not have supply agreements with the major manufacturers. Accordingly, the Company’s supply of base vehicle platforms may be limited to the allocation allotted from its source dealerships. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consisted primarily of cash, to the extent balances exceeded limits that were insured by the Federal Deposit Insurance Corporation. The Company does not require collateral and maintains reserves for potential credit losses. Such losses have historically been immaterial and have been within management’s expectations. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to nonemployee share-based payment accounting Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Nature of the Business and Si_3
Nature of the Business and Significant Accounting Policies (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Inventories | March 31, 2019 March 31, 2018 Automobile parts $ 108,498 $ 56,089 Finished Cars - 186,215 Merchandise - 20,973 Total inventories $ 108,498 $ 263,277 |
Schedule of Estimated Useful Lives | The cost of property and equipment is depreciated on a straight-line basis over the following estimated useful lives: Computer equipment and software 3-7 years Tooling 3-7 years Furniture and fixtures 5-7 years Automobiles and trailer 5-7 years Machinery and equipment 3-7 years Leasehold improvement Shorter of the lease term or useful life |
Schedule of Changes in Product Warranty Accrual | Changes in the product warranty accrual for the years ended March 31, 2019, and 2018 were as follows: Balance at Warranty Provision for Balance at Fiscal 2019 $ 20,000 $ (35,392 ) $ 35,392 $ 20,000 Fiscal 2018 $ 20,000 $ (7,895 ) $ 7,895 $ 20,000 |
Summary of Computation of Basic and Diluted Net Income (Loss) Per Common Share | The following table sets forth the computation of basic and diluted net income (loss) per common share for the year ended: March 31, 2019 March 31, 2018 Numerator: Net income (loss) attributable to common stockholders $ 2,419,261 $ (5,898,747 ) Denominator: Weighted average number of shares outstanding, basic 24,536,963 5,490,927 Adjustment for dilutive effects of warrants 1,673,320 - Adjustment for dilutive effects of convertible note payable 166,667 - Weighted average number of common shares outstanding, diluted 26,376,950 5,490,927 Net income (loss) per common share, basic $ 0.10 $ (1.07 ) Net income (loss) per common share, diluted $ 0.09 $ (1.07 ) |
Schedule of Anti-Dilutive Securities | The following table sets forth the number of potential common shares excluded from the calculations of net loss per diluted share because their inclusion would be anti-dilutive: March 31, 2019 March 31, 2018 Outstanding options to purchase common stock 2,602 2,602 Warrants to purchase common stock - 1,339,990 Note payable convertible to common stock - 166,667 Total 2,602 1,509,259 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Services Lines and Geographic Area | Revenue by Services Lines and Geographic Area The following table provides information about disaggregated revenue based on revenue by service lines and revenue by geographic area: Year Ended March 31, 2019 2018 Revenue by service lines: Services S1 engineering, design and development contract $ 10,741,126 $ 3,976,923 S7 agreement (related party) 685,048 383,783 Products Signature cars 2,205,667 1,183,117 Royalty - 478,000 Other 76,374 17,834 Total revenue $ 13,708,215 $ 6,039,657 Year Ended March 31, 2019 2018 Revenue by geographic area: United States $ 2,967,089 $ 2,062,734 China 10,741,126 3,976,923 Total revenue $ 13,708,215 $ 6,039,657 |
Schedule of Deferred Revenue | Changes in deferred revenue were as follows: Year ended March 31, 2019 Deferred revenue, April 1, 2018 $ - New contract liabilities 2,968,150 Performance obligations satisfied (1,900,000 ) Deferred revenue, March 31, 2019 $ 1,068,150 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following at March 31, 2019, and March 31, 2018: March 31, 2019 March 31, 2018 Tooling $ 937,554 $ 743,737 Automobiles and trailers 167,063 - Machinery and equipment 103,233 85,922 Furniture and fixtures 147,960 147,128 Computer equipment and software 89,246 76,760 Leasehold improvements 76,691 - 1,521,747 1,053,547 Accumulated depreciation (871,394 ) (781,531 ) Total Property and Equipment $ 650,353 $ 272,016 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable consisted of the following at March 31, 2019 and March 31, 2018: March 31, 2019 March 31, 2018 (1) Settlement agreement for senior secured note $ 40,000 $ 120,000 (2) Unsecured note payable, interest at 5% per annum, due on demand 67,753 82,753 (3) Unsecured note payable, interest at 10% per annum, due July 27, 2017, past due 83,980 111,900 (4) Note Payable to American Express, past due 32,426 50,426 Total notes payable $ 224,159 $ 365,079 (1) In December 2016, the Company entered into a settlement agreement with Citizens Business Bank for a $400,000 loan that was then in default, was initially issued in 2009, and secured by all assets of the Company. Pursuant to the settlement agreement, the Company paid $200,000 in December 2016 and agreed to pay the balance of $200,000 through June 2019. As of March 31, 2018, the balance of the loan was $120,000. During the year ended March 31, 2019, the Company made payments of $80,000, and at March 31, 2019, the balance of the loan of $40,000. (2) In June 2016, the Company entered into an unsecured note payable with its landlord for past due rent of $389,922, covering the period from September 2013 to June 2016. The note bears interest at 5% per annum and is due on demand. At March 31, 2017, the principal balance of the note was $283,358. In September 2017, upon entering into an addendum to the lease agreement to renew the lease term through January 2028 (see Note 13), the landlord agreed to reduce the balance of the note by $183,358. At March 31, 2018, the outstanding balance of the note was $82,753. During the year ended March 31, 2019, the landlord, and the Company, agreed to reduce the note payable balance by $15,000, by offsetting an accounts receivable balance owed to the Company by the note holder of $15,000. At March 31, 2019, the balance of the loan was $67,753. (3) Note payable issued on September 8, 2014, with an amended maturity date of July 27, 2017. The note accrues interest at 10% per annum. Payments due in accordance with the amended note were past due as of March 31, 2019, and 2018. As of March 31, 2018, the outstanding balance of the note payable was $111,900. During the year ended March 31, 2019, the note holder, and the Company, agreed to reduce the note payable balance by $7,920, by offsetting an accounts receivable balance owed to the Company by the note holder of $7,290. In addition, the Company made payments of $20,000, which resulted in the balance of the loan at March 31, 2019, of $83,980. (4) Per a settlement reached with American Express, the Company makes monthly payments of $1,500 against prior balances due. The balance of the note payable at March 31, 2018, was $50,426. During the year ended March 31, 2019, the Company made $18,000 of payments and the balance of the note payable was $32,426 as of March 31, 2019. Payments due in accordance with the settlement agreement were past due as of March 31, 2019, and 2018. |
Accrued Compensation, Payroll_2
Accrued Compensation, Payroll Taxes, and Other Taxes Payable (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Accrued Compensation Payroll Taxes And Other Taxes Payable | |
Schedule of Payroll, Payroll Taxes, and Other Taxes Payables | Payroll, payroll taxes, and other taxes payables consist of the following as of March 31, 2019, and 2018: March 31, 2019 March 31, 2018 Accrued payroll $ 453,492 $ 55,076 Accrued vacation 142,466 67,532 Current payroll taxes and withholdings 36,731 160,339 Past due payroll taxes and other taxes - 661,068 $ 632,689 $ 944,015 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Current Liabilities | Other current liabilities consist of the following as of March 31, 2019, and 2018: March 31, 2019 March 31, 2018 Deferred rent $ 263,955 $ 198,367 Deferred vendor consideration 150,000 250,000 Other current payables 37,544 185,969 $ 451,499 $ 634,336 |
Related Party Transactions an_2
Related Party Transactions and Employment Agreements (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Amounts Payable to Related Parties | The amounts payable to related parties as of March 31, 2019, and 2018 are as follows: March 31, 2019 March 31, 2018 Related Party: Steve Saleen (a) $ 457,692 $ 104,483 Top Hat Capital and Crystal Research (b) 61,672 61,672 $ 519,364 $ 166,155 Steve Saleen (a) Amounts payable to Steve Saleen, founder and Chief Executive Officer of the Company, include accrued salary, accrued bonuses, and advances provided to the Company. The advances are non-interest bearing, with no formal terms of repayment. At March 31, 2017, the balance due to Mr. Saleen was $545,352. On March 22, 2018, Mr. Saleen was issued 1,090,704 shares of the Company’s common stock to settle the total amount owed to him at that date of $545,352. The shares were valued at $0.50 per share based on a contemporaneous private placement of Series A Preferred Stock (see Note 11). Jeffrey Kraws, Top Hat Capital and Crystal Research (b) At March 31, 2019, and 2018, the Company owes Top Hat Capital and Crystal Research, whose co-founder and Managing Partner, Jeffrey Kraws, is a director of the Company, $61,672 for investment advisor and research services provided to the Company. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | For the fiscal years ended March 31, 2019, and 2018, a reconciliation of the effective income tax rate to the U.S. statutory rate is as follows: March 31, 2019 March 31, 2018 Tax expense at the U.S. statutory income tax 21.0 % (34.0 )% State tax net of federal tax benefit 7.0 % (5.8 )% Other - % 12.7 % Increase (decrease) in the valuation allowance (11.3 )% 27.1 % Effective tax rate 16.7 % - % |
Schedule of Income Tax Expense | The provision for income taxes consists of the following: March 31, 2019 March 31, 2018 Federal current tax $ 577,000 $ - State current tax 209,000 - Federal and State deferred tax (283,000 ) - Income tax expense $ 503,000 $ - |
Schedule of Deferred Tax Assets | Net deferred tax assets consist of the following: March 31, 2019 March 31, 2018 Deferred tax assets Net operating loss carryforwards $ 850,000 $ 3,216,000 Other temporary differences - 410,000 Total deferred tax asset before valuation allowance 850,000 3,626,000 Valuation allowance (850,000 ) (3,626,000 ) Deferred tax assets, net of a valuation allowance $ - $ - |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule of Stock Option Plan Activity | Stock option activity is set forth below: Number of Shares Weighted Average Exercise Average Intrinsic Weighted (in years) Outstanding at April 1, 2017 2,602 $ 108 $ - 7.5 Granted during the year — — - - Cancelled during the year — — - - Exercised during the year — — - - Outstanding at March 31, 2018 2,602 108 - 6.5 Granted during the year — — - - Cancelled during the year — — - - Exercised during the year — — - - Outstanding at March 31, 2019 2,602 $ 108 - 5.5 Exercisable at March 31, 2019 2,602 $ 108 $ - 5.5 |
Schedule of Warrant Activity | Warrant activity is set forth below: Number of Shares Weighted Average Exercise Price per Share Average Intrinsic Value Weighted Average Remaining Contractual Term (in years) Outstanding at April 1, 2017 6,657 $ 300.00 - 1.9 Granted during the year 1,333,333 .60 - 3.8 Canceled during the year - - - - Exercised during the year - - - - Outstanding at March 31, 2018 1,339,990 2.09 - 3.7 Granted during the year 333,330 0.70 3.0 Canceled during the year - Exercised during the year - Outstanding at March 31, 2019 1,673,320 $ 1.81 - 2.75 Exercisable at March 31, 2019 1,673,320 $ 1.81 $ - 2.75 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | The future minimum rental payments required under the non-cancelable operating leases described above as of March 31, 2019, are as follows: Years ending March 31: Lease 2020 $ 636,806 2021 655,910 2022 675,587 2023 695,855 2024 716,731 Thereafter 2,950,697 Total $ 6,331,586 |
Nature of the Business and Si_4
Nature of the Business and Significant Accounting Policies (Details Narrative) | Dec. 19, 2017 | May 31, 2019USD ($) | Sep. 26, 2019USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2019USD ($) | Mar. 31, 2017USD ($) | Jun. 26, 2013 |
Related Party Transaction [Line Items] | ||||||||
Reverse stock split | 1-for-2,000 reverse stock split | |||||||
Net income (loss) | $ 2,511,261 | $ (5,526,396) | ||||||
Net cash used in operations | 3,237,314 | (1,528,502) | ||||||
Working capital deficit | (780,000) | (3,200,000) | ||||||
Stockholders' deficit | (58,537) | (2,969,798) | $ (13,091,953) | |||||
Deferred revenue | 1,068,150 | |||||||
Revenue recognized | 13,708,215 | 6,039,657 | ||||||
Cash | 3,374,234 | 523,120 | ||||||
Customer deposits | 511,081 | 605,580 | ||||||
Advertising expenses | 123,262 | 17,812 | ||||||
Sales and marketing expense | $ 973,533 | $ 344,977 | ||||||
Customer Concentration Risk [Member] | Revenues [Member] | One Customer [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Concentration risk percentage | 78.00% | 66.00% | ||||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | One Customer [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Concentration risk percentage | 98.00% | |||||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer One [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Concentration risk percentage | 69.00% | |||||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Two [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Concentration risk percentage | 31.00% | |||||||
Subsequent Event [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Cash | $ 4,400,000 | |||||||
S7 Agreement (Related Party) [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Percentage of net profit from sale of vehicle | 0.33 | |||||||
Revenue recognized | $ 685,048 | $ 383,783 | ||||||
Saleen S1 [Member] | Cup Agreement [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revenue recognized | ||||||||
Saleen S1 [Member] | Subsequent Event [Member] | Amended Cup Agreement [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Expected to generate aggregate revenue | $ 15,631,000 | |||||||
S1 Engineering Design and Development Contract [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revenue recognized | 10,741,126 | 3,976,923 | ||||||
S1 Engineering Design and Development Contract [Member] | Engineering Services Contract [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revenue recognized | 5,792,315 | |||||||
S1 Engineering Design and Development Contract [Member] | Reimbursement of Costs and Expenses [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revenue recognized | 4,728,811 | |||||||
S1 Engineering Design and Development Contract [Member] | Consulting Fees [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revenue recognized | $ 3,976,917 | |||||||
S1 Engineering Design and Development Contract [Member] | Cup Agreement [Member] | Consulting Fees [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revenue recognized | $ 220,000 | |||||||
Reimbursement of Costs and Expenses [Member] | Subsequent Event [Member] | Cup Agreement [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revenue recognized | $ 5,600,000 | |||||||
Saleen Entities [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Equity method investment ownership percentage | 93.00% | |||||||
JSAT [Member] | Subsequent Event [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revenue recognized | 20,300,000 | |||||||
JSAT [Member] | Engineering Services Contract [Member] | Subsequent Event [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revenue recognized | $ 14,700,000 |
Nature of the Business and Si_5
Nature of the Business and Significant Accounting Policies - Schedule of Inventories (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Accounting Policies [Abstract] | ||
Automobile parts | $ 108,498 | $ 56,089 |
Finished Cars | 186,215 | |
Merchandise | 20,973 | |
Total inventories | $ 108,498 | $ 263,277 |
Nature of the Business and Si_6
Nature of the Business and Significant Accounting Policies - Schedule of Estimated Useful Lives (Details) | 12 Months Ended |
Mar. 31, 2019 | |
Computer Equipment and Software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Computer Equipment and Software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Tooling [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Tooling [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Automobiles and trailer [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Automobiles and trailer [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Machinery and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Leasehold improvement [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives, description | Shorter of the lease term or useful life |
Nature of the Business and Si_7
Nature of the Business and Significant Accounting Policies - Schedule of Changes in Product Warranty Accrual (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | ||
Balance at Beginning of Fiscal Year | $ 20,000 | $ 20,000 |
Warranty Expenditures | (35,392) | (7,895) |
Provision for Estimated Warranty Cost | 35,392 | 7,895 |
Balance at End of Fiscal Year | $ 20,000 | $ 20,000 |
Nature of the Business and Si_8
Nature of the Business and Significant Accounting Policies - Summary of Computation of Basic and Diluted Net Income (Loss) Per Common Share (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | ||
Numerator: Net income (loss) attributable to common stockholders | $ 2,419,261 | $ (5,898,747) |
Denominator: Weighted average number of shares outstanding, basic | 24,536,963 | 5,490,927 |
Denominator: Adjustment for dilutive effects of warrants | 1,673,320 | |
Denominator: Adjustment for dilutive effects of convertible note payable | 166,667 | |
Denominator: Weighted average number of common shares outstanding, diluted | 26,376,950 | 5,490,927 |
Net income (loss) per common share, basic | $ 0.10 | $ (1.07) |
Net income (loss) per common share, diluted | $ 0.09 | $ (1.07) |
Nature of the Business and Si_9
Nature of the Business and Significant Accounting Policies - Schedule of Anti-Dilutive Securities (Details) - shares | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Total anti-dilutive securities | 2,602 | 1,509,259 |
Outstanding Options to Purchase Common Stock [Member] | ||
Total anti-dilutive securities | 2,602 | 2,602 |
Warrants to Purchase Common Stock [Member] | ||
Total anti-dilutive securities | 1,339,990 | |
Note Payable Convertible to Common Stock [Member] | ||
Total anti-dilutive securities | 166,667 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details Narrative) | 1 Months Ended | 12 Months Ended | |
May 31, 2019USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | |||
Revenue recognized | $ 13,708,215 | $ 6,039,657 | |
Saleen S1 [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Contract amount | 31,605,000 | ||
Saleen S1 [Member] | Cup Agreement [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue recognized | |||
Saleen S1 [Member] | Subsequent Event [Member] | Amended Cup Agreement [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Expected to generate aggregate revenue | $ 15,631,000 | ||
S1 Engineering Design and Development Contract [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue recognized | 10,741,126 | 3,976,923 | |
S1 Engineering Design and Development Contract [Member] | Engineering Services Contract [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue recognized | 5,792,315 | ||
S1 Engineering Design and Development Contract [Member] | Reimbursement of Costs and Expenses [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue recognized | 4,728,811 | ||
S1 Engineering Design and Development Contract [Member] | Consulting Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue recognized | 3,976,917 | ||
S1 Engineering Design and Development Contract [Member] | Cup Agreement [Member] | Consulting Fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue recognized | 220,000 | ||
S7 Agreement (Related Party) [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue recognized | $ 685,048 | 383,783 | |
Percentage of net profit from sale of vehicle | 0.33 | ||
S7 Agreement (Related Party) [Member] | Reimbursement of Engineering and Manufacturing Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue recognized | $ 485,048 | 383,783 | |
S7 Agreement (Related Party) [Member] | Fee from Sale of One S7 [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue recognized | 200,000 | ||
Signature Cars [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue recognized | 2,205,667 | 1,183,117 | |
Royalty [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue recognized | $ 478,000 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Schedule of Revenue by Services Lines and Geographic Area (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 13,708,215 | $ 6,039,657 |
United States [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 2,967,089 | 2,062,734 |
China [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 10,741,126 | 3,976,923 |
S1 Engineering Design and Development Contract [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 10,741,126 | 3,976,923 |
S7 Agreement (Related Party) [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 685,048 | 383,783 |
Signature Cars [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 2,205,667 | 1,183,117 |
Royalty [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 478,000 | |
Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 76,374 | $ 17,834 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Schedule of Deferred Revenue (Details) | 12 Months Ended |
Mar. 31, 2019USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Deferred revenue, April 1, 2018 | |
New contract liabilities | 2,968,150 |
Performance obligations satisfied | (1,900,000) |
Deferred revenue, March 31, 2019 | $ 1,068,150 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 89,863 | $ 108,590 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,521,747 | $ 1,053,547 |
Accumulated depreciation and amortization | (871,394) | (781,531) |
Total Property and Equipment | 650,353 | 272,016 |
Tooling [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 937,554 | 743,737 |
Automobiles and trailer [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 167,063 | |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 103,233 | 85,922 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 147,960 | 147,128 |
Computer Equipment and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 89,246 | 76,760 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 76,691 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2016 | Jun. 30, 2016 | |||
Debt Instrument [Line Items] | |||||||
Total notes payable | $ 224,159 | $ 365,079 | |||||
American Express [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Total notes payable | [1] | 32,426 | 50,426 | ||||
Senior Secured Note [Member] | Settlement Agreement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Total notes payable | 40,000 | [2] | 120,000 | [2] | $ 400,000 | ||
5% Unsecured Note Payable [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Total notes payable | 67,753 | [3] | 82,753 | [3] | $ 389,922 | ||
10% Unsecured Note Payable [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Total notes payable | [4] | $ 83,980 | $ 111,900 | ||||
[1] | Per a settlement reached with American Express, the Company makes monthly payments of $1,500 against prior balances due. The balance of the note payable at March 31, 2018, was $50,426. During the year ended March 31, 2019, the Company made $18,000 of payments and the balance of the note payable was $32,426 as of March 31, 2019. Payments due in accordance with the settlement agreement were past due as of March 31, 2019, and 2018. | ||||||
[2] | In December 2016, the Company entered into a settlement agreement with Citizens Business Bank for a $400,000 loan that was then in default, was initially issued in 2009, and secured by all assets of the Company. Pursuant to the settlement agreement, the Company paid $200,000 in December 2016 and agreed to pay the balance of $200,000 through June 2019. As of March 31, 2018, the balance of the loan was $120,000. During the year ended March 31, 2019, the Company made payments of $80,000, and at March 31, 2019, the balance of the loan of $40,000. | ||||||
[3] | In June 2016, the Company entered into an unsecured note payable with its landlord for past due rent of $389,922, covering the period from September 2013 to June 2016. The note bears interest at 5% per annum and is due on demand. At March 31, 2017, the principal balance of the note was $283,358. In September 2017, upon entering into an addendum to the lease agreement to renew the lease term through January 2028 (see Note 13), the landlord agreed to reduce the balance of the note by $183,358. At March 31, 2018, the outstanding balance of the note was $82,753. During the year ended March 31, 2019, the landlord, and the Company, agreed to reduce the note payable balance by $15,000, by offsetting an accounts receivable balance owed to the Company by the note holder of $15,000. At March 31, 2019, the balance of the loan was $67,753. | ||||||
[4] | Note payable issued on September 8, 2014, with an amended maturity date of July 27, 2017. The note accrues interest at 10% per annum. Payments due in accordance with the amended note were past due as of March 31, 2019, and 2018. As of March 31, 2018, the outstanding balance of the note payable was $111,900. During the year ended March 31, 2019, the note holder, and the Company, agreed to reduce the note payable balance by $7,920, by offsetting an accounts receivable balance owed to the Company by the note holder of $7,290. In addition, the Company made payments of $20,000, which resulted in the balance of the loan at March 31, 2019, of $83,980. |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | Sep. 08, 2014 | Sep. 30, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2016 | Mar. 31, 2017 | Jun. 30, 2016 | |||
Debt Instrument [Line Items] | ||||||||||
Notes payable | $ 224,159 | $ 365,079 | ||||||||
Repayments of notes payable | 118,000 | 118,047 | ||||||||
Debt instrument, interest rate | 5.00% | |||||||||
Debt instrument, principal balance | $ 283,358 | |||||||||
Debt instrument, reduce amount | $ 183,358 | |||||||||
American Express [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Notes payable | [1] | 32,426 | 50,426 | |||||||
Repayments of notes payable | 18,000 | 1,500 | ||||||||
Senior Secured Note [Member] | Settlement Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Notes payable | 40,000 | [2] | 120,000 | [2] | $ 400,000 | |||||
Repayments of notes payable | 80,000 | $ 200,000 | ||||||||
Senior Secured Note [Member] | Settlement Agreement [Member] | Through June 2019 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayments of notes payable | 200,000 | |||||||||
5% Unsecured Note Payable [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Notes payable | 67,753 | [3] | 82,753 | [3] | $ 389,922 | |||||
Debt instrument, interest rate | 5.00% | |||||||||
Debt instrument, principal balance | $ 283,358 | |||||||||
Debt instrument, reduce amount | $ 183,358 | 15,000 | ||||||||
10% Unsecured Note Payable [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Notes payable | [4] | 83,980 | $ 111,900 | |||||||
Repayments of notes payable | 20,000 | |||||||||
Debt instrument, interest rate | 10.00% | |||||||||
Debt instrument, reduce amount | $ 7,920 | |||||||||
Debt instrument, maturity date | Jul. 27, 2017 | |||||||||
[1] | Per a settlement reached with American Express, the Company makes monthly payments of $1,500 against prior balances due. The balance of the note payable at March 31, 2018, was $50,426. During the year ended March 31, 2019, the Company made $18,000 of payments and the balance of the note payable was $32,426 as of March 31, 2019. Payments due in accordance with the settlement agreement were past due as of March 31, 2019, and 2018. | |||||||||
[2] | In December 2016, the Company entered into a settlement agreement with Citizens Business Bank for a $400,000 loan that was then in default, was initially issued in 2009, and secured by all assets of the Company. Pursuant to the settlement agreement, the Company paid $200,000 in December 2016 and agreed to pay the balance of $200,000 through June 2019. As of March 31, 2018, the balance of the loan was $120,000. During the year ended March 31, 2019, the Company made payments of $80,000, and at March 31, 2019, the balance of the loan of $40,000. | |||||||||
[3] | In June 2016, the Company entered into an unsecured note payable with its landlord for past due rent of $389,922, covering the period from September 2013 to June 2016. The note bears interest at 5% per annum and is due on demand. At March 31, 2017, the principal balance of the note was $283,358. In September 2017, upon entering into an addendum to the lease agreement to renew the lease term through January 2028 (see Note 13), the landlord agreed to reduce the balance of the note by $183,358. At March 31, 2018, the outstanding balance of the note was $82,753. During the year ended March 31, 2019, the landlord, and the Company, agreed to reduce the note payable balance by $15,000, by offsetting an accounts receivable balance owed to the Company by the note holder of $15,000. At March 31, 2019, the balance of the loan was $67,753. | |||||||||
[4] | Note payable issued on September 8, 2014, with an amended maturity date of July 27, 2017. The note accrues interest at 10% per annum. Payments due in accordance with the amended note were past due as of March 31, 2019, and 2018. As of March 31, 2018, the outstanding balance of the note payable was $111,900. During the year ended March 31, 2019, the note holder, and the Company, agreed to reduce the note payable balance by $7,920, by offsetting an accounts receivable balance owed to the Company by the note holder of $7,290. In addition, the Company made payments of $20,000, which resulted in the balance of the loan at March 31, 2019, of $83,980. |
Convertible Notes Payable, Pa_2
Convertible Notes Payable, Past Due (Details Narrative) - USD ($) | 12 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | Jun. 30, 2016 | |
Debt Instrument [Line Items] | ||||
Notes payable | $ 224,159 | $ 365,079 | ||
Debt instrument, interest rate | 5.00% | |||
Series A Preferred Stock [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 128,000 | |||
Debt instrument, conversion into common stock | 711,100 | |||
Unsecured Convertible Note [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 100,000 | $ 100,000 | ||
Debt instrument, interest rate | 7.00% | 7.00% | ||
Debt instrument, conversion into common stock | 166,667 | 166,667 | ||
12 Convertible Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 8,420,878 | $ 7,228,612 | ||
Accrued interest | $ 1,192,266 | |||
12 Convertible Notes [Member] | Series A Preferred Stock [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, conversion into common stock | 711,100 | |||
Stock Issued during period as bonus | 910,694 | |||
Stock Issued during period as bonus, value | $ 546,417 | |||
12 Convertible Notes [Member] | Series A Preferred Stock [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument conversion price per share | $ 8 | |||
12 Convertible Notes [Member] | Series A Preferred Stock [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument conversion price per share | $ 16 |
Notes Payable and Advances fr_2
Notes Payable and Advances from Related Party (Details Narrative) - USD ($) | 12 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2016 | Mar. 31, 2015 | |
Debt Instrument [Line Items] | ||||
Notes payable and advances from related party | $ 200,000 | |||
Debt instrument, interest rate | 5.00% | |||
Major Stockholder [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable and advances from related party | 200,000 | $ 120,000 | ||
Debt instrument, interest rate | 10.00% | |||
Advance received during period | $ 80,000 | |||
Repayments of related party debt | 200,000 | |||
Accrued interest | $ 40,000 |
Accrued Compensation, Payroll_3
Accrued Compensation, Payroll Taxes, and Other Taxes Payable (Details Narrative) | 12 Months Ended |
Mar. 31, 2019USD ($) | |
Payables and Accruals [Abstract] | |
Payment for past due payroll and other taxes | $ 661,068 |
Accrued Compensation, Payroll_4
Accrued Compensation, Payroll Taxes, and Other Taxes Payable - Schedule of Payroll, Payroll Taxes, and Other Taxes Payables (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued payroll | $ 453,492 | $ 55,076 |
Accrued vacation | 142,466 | 67,532 |
Current payroll taxes and withholdings | 36,731 | 160,339 |
Past due payroll taxes and other taxes | 661,068 | |
Payroll, payroll taxes, and other taxes payables | $ 632,689 | $ 944,015 |
Other Current Liabilities - Sch
Other Current Liabilities - Schedule of Other Current Liabilities (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Deferred rent | $ 263,955 | $ 198,367 |
Deferred vendor consideration | 150,000 | 250,000 |
Other current payables | 37,544 | 185,969 |
Other current liabilities | $ 451,500 | $ 634,336 |
Related Party Transactions an_3
Related Party Transactions and Employment Agreements (Details Narrative) - USD ($) | Dec. 19, 2017 | Nov. 01, 2017 | Mar. 31, 2019 | Mar. 31, 2018 |
Fair value of common shares issued to related parties for interest expense, shares | 1,833,205 | |||
Fair value of common shares issued to related parties for interest expense | $ 919,922 | |||
Fair value of common shares issued for private placement costs | 937,500 | |||
Fair value of common shares issued for interest expense | 546,417 | |||
Total revenue | 13,708,215 | 6,039,657 | ||
Net profit from the sale | $ 2,511,261 | (5,526,396) | ||
Related Parties [Member] | ||||
Fair value of common shares issued for interest expense | $ 741,667 | |||
Fair value of common shares issued for interest expense, shares | 387,500 | |||
Maximum [Member] | ||||
Shares issued price per share | $ 0.60 | |||
Minimum [Member] | ||||
Shares issued price per share | $ 0.50 | |||
Harris Family Living Trust [Member] | ||||
Shares issued for services | 500,000 | |||
Shares issued for services, value | $ 300,000 | |||
Harris Family Living Trust [Member] | Maximum [Member] | ||||
Shares issued a warrant to purchase preferred stock | 1,800,000 | |||
Shares issued a warrant to purchase preferred stock, value | $ 900,000 | |||
Percentage for common stock in exchange for consulting service | 5.00% | |||
Certitude Trust [Member] | ||||
Fair value of common shares issued to related parties for interest expense, shares | 33,205 | |||
Fair value of common shares issued to related parties for interest expense | $ 19,922 | |||
Certitude Trust [Member] | Letter agreement Dated December 29, 2017 [Member] | ||||
Shares issued for common stock | 166,667 | |||
Shares issued for common stock, value | $ 100,000 | |||
S7 Supercars, LLC [Member] | ||||
Fee percentage | 33.00% | |||
Accounts receivable | $ 133,742 | 141,200 | ||
Deposits | 100,000 | 300,000 | ||
S7 Supercars, LLC [Member] | Engineering and Manufacturing Services [Member] | ||||
Total revenue | 485,048 | $ 383,783 | ||
S7 Supercars, LLC [Member] | Service Revenue [Member] | ||||
Net profit from the sale | $ 200,000 | |||
Officers or Directors [Member] | ||||
Shares issued for compensation | 3,800,964 | |||
Shares issued for compensation, value | $ 1,950,482 | |||
Mr. Steve Saleen [Member] | ||||
Shares issued for services | 1,575,964 | |||
Shares issued for services, value | $ 787,982 | |||
Shares issued a warrant to purchase preferred stock | 1,150,000 | |||
Shares issued a warrant to purchase preferred stock, value | $ 575,000 | |||
Payment for salaries and wages | $ 700,000 | $ 362,500 | ||
Mr. Steve Saleen [Member] | Employment Agreements [Member] | ||||
Initial annual salary | $ 400,000 | |||
Percentage for bonus and stock option program | 3.00% | |||
Stock option granted | $ 100,000 | |||
Bonus | 150,000 | |||
Minimum capital raises in future | $ 500,000 | |||
Mr. Jeffrey Kraws [Member] | ||||
Shares issued for services | 575,000 | |||
Shares issued for services, value | $ 287,500 | |||
Joseph Bianco [Member] | Letter agreement Dated October 12, 2017 [Member] | ||||
Shares issued a warrant to purchase preferred stock | 575,000 | |||
Shares issued a warrant to purchase preferred stock, value | $ 287,500 | |||
Amy Boylan [Member] | ||||
Payment for salaries and wages | $ 415,838 | $ 208,908 | ||
Amy Boylan [Member] | Maximum [Member] | Employment Agreements [Member] | ||||
Initial annual salary | $ 200,000 | |||
Outside investment | 3,000,000 | |||
Amy Boylan [Member] | Minimum [Member] | Employment Agreements [Member] | ||||
Initial annual salary | 150,000 | |||
Outside investment | $ 250,000 |
Related Party Transactions an_4
Related Party Transactions and Employment Agreements - Schedule of Amounts Payable to Related Parties (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 22, 2018 | Mar. 31, 2017 | |||
Due to related parties | $ 519,364 | $ 166,155 | |||||
Steve Saleen [Member] | |||||||
Due to related parties | 457,692 | [1] | 104,483 | [1] | $ 545,352 | $ 545,352 | |
Top Hat Capital and Crystal Research [Member] | |||||||
Due to related parties | [2] | $ 61,672 | $ 61,672 | ||||
[1] | Amounts payable to Steve Saleen, founder and Chief Executive Officer of the Company, include accrued salary, accrued bonuses, and advances provided to the Company. The advances are non-interest bearing, with no formal terms of repayment. At March 31, 2017, the balance due to Mr. Saleen was $545,352. On March 22, 2018, Mr. Saleen was issued 1,090,704 shares of the Company's common stock to settle the total amount owed to him at that date of $545,352. The shares were valued at $0.50 per share based on a contemporaneous private placement of Series A Preferred Stock (see Note 11). | ||||||
[2] | At March 31, 2019, and 2018, the Company owes Top Hat Capital and Crystal Research, whose co-founder and Managing Partner, Jeffrey Kraws, is a director of the Company, $61,672 for investment advisor and research services provided to the Company. |
Related Party Transactions an_5
Related Party Transactions and Employment Agreements - Schedule of Amounts Payable to Related Parties (Details) (Parenthetical) - USD ($) | Mar. 22, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | ||
Due to related parties | $ 519,364 | $ 166,155 | ||||
Steve Saleen [Member] | ||||||
Due to related parties | $ 545,352 | 457,692 | [1] | 104,483 | [1] | $ 545,352 |
Shares issued for common stock to settle | 1,090,704 | |||||
Steve Saleen [Member] | Private Placement [Member] | Series A Preferred Stock [Member] | ||||||
Shares issued price per share | $ 0.50 | |||||
Jeffrey Kraws [Member] | ||||||
Due to related parties | $ 61,672 | $ 61,672 | ||||
[1] | Amounts payable to Steve Saleen, founder and Chief Executive Officer of the Company, include accrued salary, accrued bonuses, and advances provided to the Company. The advances are non-interest bearing, with no formal terms of repayment. At March 31, 2017, the balance due to Mr. Saleen was $545,352. On March 22, 2018, Mr. Saleen was issued 1,090,704 shares of the Company's common stock to settle the total amount owed to him at that date of $545,352. The shares were valued at $0.50 per share based on a contemporaneous private placement of Series A Preferred Stock (see Note 11). |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | Mar. 31, 2019 | Jun. 30, 2017 |
Income Tax Disclosure [Abstract] | ||
Federal net operating losses | $ 18,200,000 | $ 15,200,000 |
Deferred tax adjused, federal net operating loss | $ 3,000,000 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Tax expense at the U.S. statutory income tax | 21.00% | (34.00%) |
State tax net of federal tax benefit | 7.00% | (5.80%) |
Other | 0.00% | 12.70% |
Increase (decrease) in the valuation allowance | (11.30%) | 27.10% |
Effective tax rate | 16.70% |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Expense (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Federal current tax | $ 577,000 | |
State current tax | 209,000 | |
Federal and State deferred tax | (283,000) | |
Income tax expense | $ 503,000 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 850,000 | $ 3,216,000 |
Other temporary differences | 410,000 | |
Total deferred tax asset before valuation allowance | 850,000 | 3,626,000 |
Valuation allowance | (850,000) | (3,626,000) |
Deferred tax assets, net of a valuation allowance |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Sep. 11, 2018 | Aug. 31, 2018 | Dec. 31, 2013 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | Jan. 31, 2018 |
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||
Number of shares issued | 1,333,333 | |||||||
Notes payable | $ 224,159 | $ 365,079 | ||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | ||||||
Proceeds from sale of stock | $ 800,000 | |||||||
Warrant term | 3 years | 2 years | ||||||
Warrant to purchase shares | 1,333,333 | 333,330 | 1,333,333 | |||||
Warrant exercise price | $ 0.70 | $ 0.60 | ||||||
Number of shares issued for dividend | 620,585 | |||||||
Number of shares issued for dividend, value | $ 372,351 | |||||||
Stock-based compensation expense | ||||||||
Warrant intrinsic value | ||||||||
2013 Omnibus Incentive Plan [Member] | ||||||||
Incentive stock option plan description | Grants under the Plan vest and expire based on periods determined by the Administrator, but in no event can the expiration date be later than ten years from the date of grant (five years after the date of grant if the grant is an incentive stock option to an employee who owns more than 10% of the total combined voting power of all classes of the Company's capital stock (a "10% owner")). Grants of stock options may be either incentive stock options or nonqualified stock options. The per share exercise price on an option, other than with respect to substitute awards, shall not be less than 100% of the fair market value of the Company's Common Stock on the date the option is granted (110% of the fair market value if the grant is to a 10% owner). | |||||||
Number of shares reserved | 14,153 | |||||||
Private Placement [Member] | ||||||||
Number of shares issued | 1,800,000 | |||||||
Number of shares issued, value | $ 937,500 | |||||||
Note Holders [Member] | ||||||||
Number of shares issued | 910,694 | |||||||
Number of shares issued, value | $ 546,417 | |||||||
Related Party [Member] | ||||||||
Stock issued for settlement of debt | 1,090,704 | |||||||
Stock issued for settlement of debt, value | $ 545,352 | |||||||
Stock issued for interest expense | 1,833,205 | |||||||
Stock issued for interest expense, value | $ 919,922 | |||||||
Related Party [Member] | Private Placement [Member] | ||||||||
Number of shares issued | 741,667 | |||||||
Number of shares issued, value | $ 387,500 | |||||||
Officer and Directors [Member] | ||||||||
Stock issued for compensation | 3,800,964 | |||||||
Stock issued for compensation, value | $ 1,950,482 | |||||||
Series B Preferred Stock and Warrants [Member] | ||||||||
Preferred stock, conversion description | Each unit consisted of one share of Series B Preferred Stock that is convertible into 1,000 shares of the Company's common stock, and a three-year warrant to purchase 500 shares of the Company's common stock at an exercise price of $.70 per share | |||||||
Number of shares issued | 666.66 | |||||||
Price per share | $ 600 | |||||||
Proceeds from sale of stock | $ 400,000 | |||||||
Warrant term | 3 years | |||||||
Warrant to purchase shares | 500 | |||||||
Warrant exercise price | $ 0.70 | |||||||
Warrant [Member] | ||||||||
Warrant to purchase shares | 333,330 | |||||||
Fair value of warrants issued | $ 92,000 | |||||||
Risk-free interest rate | 2.83% | |||||||
Dividend yield rate | 0.00% | |||||||
Volatility rate | 100.00% | |||||||
Preferred stock, deemed dividend | $ 92,000 | |||||||
Common Stock [Member] | ||||||||
Number of shares issued | 11,389,485 | |||||||
Warrant to purchase shares | 1,333,333 | |||||||
Price per share, description | The $0.50 price per share was based on the contemporaneous sale of the Company's Series A Preferred Stock at an effective price of $0.60 price per share, adjusted to reflect a preferred stock dividend not applicable to the common stockholders. | |||||||
Common Stock One [Member] | ||||||||
Number of shares issued | 1,333,333 | |||||||
Price per share | $ 0.60 | |||||||
Proceeds from sale of stock | $ 800,000 | |||||||
Common Stock Two [Member] | ||||||||
Number of shares issued | 2,439,484 | |||||||
Price per share | $ 0.60 | |||||||
Proceeds from sale of stock | $ 1,463,691 | |||||||
Common Stock Three [Member] | ||||||||
Number of shares issued | 7,616,668 | |||||||
Price per share | $ 0.50 | |||||||
Proceeds from sale of stock | $ 3,808,333 | |||||||
Series A Preferred Stock [Member] | ||||||||
Preferred stock, par value | $ 0.001 | |||||||
Preferred stock, liquidation price per share | $ 8 | |||||||
Preferred stock, dividend rate | 12.00% | |||||||
Preferred stock, conversion description | The Series A Preferred Stock was automatically convertible to a number of shares of common stock equal to the Original Issue Price of $8 divided by $0.60 on the date the Company effects an increase in its authorized shares of common stock and/or a reverse stock split of its common stock sufficient to provide for the conversion of all Series A Preferred Stock into common stock. | |||||||
Number of shares issued | 191,000 | |||||||
Proceeds from issuance of preferred stock | $ 1,400,000 | |||||||
Notes payable | $ 128,000 | |||||||
Number of shares issued for conversion of debt | 711,100 | |||||||
Number of shares issued for conversion of debt, value | $ 8,420,878 | |||||||
Preferred stock converted into common stock | 13,361,333 | |||||||
Series B Preferred Stock [Member] | ||||||||
Preferred stock, par value | $ 0.001 | |||||||
Preferred stock, conversion description | The Series B Preferred Stock is convertible at the option of the holder into 1,000 common shares per one share of Series B Preferred Stock. | |||||||
Preferred stock converted into common stock | 666,666 | |||||||
Preferred stock, shares authorized | 1,000,000 | |||||||
Preferred stock, shares designated | 1,000 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Stock Option Plan Activity (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Equity [Abstract] | ||
Number of Shares, Outstanding, Beginning Balance | 2,602 | 2,602 |
Number of Shares, Granted during the year | ||
Number of Shares, Cancelled during the year | ||
Number of Shares, Exercised during the year | ||
Number of Shares, Outstanding, Ending Balance | 2,602 | 2,602 |
Number of Shares Exercisable, Ending Balance | 2,602 | |
Weighted Average Price, Outstanding, Beginning Balance | $ 108 | $ 108 |
Weighted Average Price, Granted during the year | ||
Weighted Average Price, Cancelled during the year | ||
Weighted Average Price, Exercised during the year | ||
Weighted Average Price, Outstanding, Ending Balance | 108 | $ 108 |
Weighted Average Price, Exercisable, Ending Balance | $ 108 | |
Average Intrinsic Value, Outstanding, Beginning Balance | ||
Average Intrinsic Value, Granted during the year | ||
Average Intrinsic Value, Cancelled during the year | ||
Average Intrinsic Value, Exercised during the year | ||
Average Intrinsic Value, Outstanding, Ending Balance | ||
Average Intrinsic Value, Exercisable, Ending Balance | ||
Weighted Average Remaining Contractual Term, Outstanding, Beginning Balance | 6 years 6 months | 7 years 6 months |
Weighted Average Remaining Contractual Term, Granted during the year | 0 years | 0 years |
Weighted Average Remaining Contractual Term, Cancelled during the year | 0 years | 0 years |
Weighted Average Remaining Contractual Term, Exercised during the year | 0 years | 0 years |
Weighted Average Remaining Contractual Term, Ending Balance | 5 years 6 months | 6 years 6 months |
Weighted Average Remaining Contractual Term, Exercisable, Ending Balance | 5 years 6 months |
Stockholders' Deficit - Sched_2
Stockholders' Deficit - Schedule of Warrant Activity (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Equity [Abstract] | ||
Warrants, Outstanding, Beginning Balance | 1,339,990 | 6,657 |
Warrants, Granted | 333,330 | 1,333,333 |
Warrants, Canceled | ||
Warrants, Exercised | ||
Warrants, Outstanding, Ending Balance | 1,673,320 | 1,339,990 |
Warrants, Exercisable, Outstanding, Ending Balance | 1,673,320 | |
Weighted Average Price, Outstanding, Beginning Balance | 2.09 | 300 |
Weighted Average Price, Granted | 0.70 | 0.60 |
Weighted Average Price, Canceled | ||
Weighted Average Price, Exercised | ||
Weighted Average Price, Outstanding, Ending Balance | 1.81 | 2.09 |
Weighted Average Price, Exercisable, Ending Balance | 1.81 | |
Average Intrinsic Value, Outstanding, Beginning Balance | ||
Average Intrinsic Value, Granted | ||
Average Intrinsic Value, Exercised | ||
Average Intrinsic Value, Canceled | ||
Average Intrinsic Value, Outstanding, Ending Balance | ||
Average Intrinsic Value, Exercisable, Ending Balance | ||
Weighted Average Remaining Contractual Term, Outstanding, Beginning Balance | 3 years 8 months 12 days | 1 year 10 months 25 days |
Weighted Average Remaining Contractual Term, Granted | 3 years | 3 years 9 months 18 days |
Weighted Average Remaining Contractual Term, Ending Balance | 2 years 9 months | 3 years 8 months 12 days |
Weighted Average Remaining Contractual Term, Exercisable, Ending Balance | 2 years 9 months |
Royalty Revenue from Intellec_2
Royalty Revenue from Intellectual Property License (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2015 | Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue recognized | $ 13,708,215 | $ 6,039,657 | |
Royalty [Member] | |||
Revenue recognized | $ 478,000 | ||
Intellectual Property License Agreement [Member] | Saleen Motors International, LLC [Member] | |||
License agreement initial term | 10 years | ||
Advance amount | $ 500,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) | 1 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017USD ($) | Jan. 31, 2015USD ($)ft² | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Jun. 30, 2016USD ($) | |
Rent expense | $ 57,000 | $ 450,000 | $ 450,000 | |||
Lease term | The Company entered into amendments to the Leases to renew the lease terms for the period from February 1, 2018, through January 31, 2028 (the "New Leases"). | |||||
Unsecured note payable | $ 389,922 | |||||
Debt interest rate | 5.00% | |||||
Debt principal balance | $ 283,358 | |||||
Reduction in notes payable | $ 183,358 | |||||
Deferred rent | 183,358 | $ 263,955 | $ 198,367 | |||
Sublease Agreement [Member] | ||||||
Rent expense | $ 17,700 | |||||
Two Buildings [Member] | ||||||
Area of square | ft² | 76,000 | |||||
Rent expense | $ 45,000 | |||||
Lease term | The Leases covered the period from February 2015 through January 2018. |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Rental Payments for Operating Leases (Details) - Lease Commitment [Member] | Mar. 31, 2019USD ($) |
2020 | $ 636,806 |
2021 | 655,910 |
2022 | 675,587 |
2023 | 695,855 |
2024 | 716,731 |
Thereafter | 2,950,697 |
Total | $ 6,331,586 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - S7 Supercars, LLC [Member] - Asset Purchase Agreement [Member] | May 31, 2019USD ($) |
Asset purchase price | $ 1,165,000 |
Payments to acquire assets | 800,000 |
Elimination of accounts receivable | 365,000 |
First Payment [Member] | |
Payments to acquire assets | 50,000 |
Second Payment [Member] | |
Payments to acquire assets | 50,000 |
Third Payment [Member] | |
Payments to acquire assets | 50,000 |
Fourth Payment [Member] | |
Payments to acquire assets | $ 50,000 |