Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Feb. 28, 2021 | Apr. 16, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | Exeo Entertainment, Inc. | |
Entity Central Index Key | 0001528760 | |
Document Type | 10-Q | |
Document Period End Date | Feb. 28, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --11-30 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | NV | |
Entity File Number | 333-190690 | |
Entity Common Stock, Shares Outstanding | 30,709,948 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
CONDENSED BALANCE SHEETS (Unaud
CONDENSED BALANCE SHEETS (Unaudited) - USD ($) | Feb. 28, 2021 | Nov. 30, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 82,682 | $ 170,852 |
Inventory, net | 51,622 | 54,325 |
Prepaid expenses | 32,720 | 12,558 |
Accounts receivable | 322 | 645 |
Total current assets | 167,346 | 238,380 |
Operating lease right of use asset | 180,625 | 209,200 |
Property and equipment, net | 26,443 | 29,055 |
Website development costs, net | 31,338 | 24,525 |
Total assets | 405,752 | 501,160 |
Current Liabilities | ||
Accounts payable and accrued expenses | 262,801 | 182,513 |
Accrued interest payable - related party | 33,890 | 32,744 |
Accrued payroll - officers | 210,920 | 203,672 |
Due to related parties | 75,000 | 75,000 |
Royalty payable | 1,904,621 | 1,772,918 |
PPP loan payable | 29,740 | 29,740 |
Operating lease liabilities - current portion | 115,115 | 116,791 |
Total current liabilities | 2,632,087 | 2,413,378 |
Long-Term Liabilities | ||
Operating lease liabilities | 64,835 | 91,559 |
Total long-term liabilities | 64,835 | 91,559 |
Total liabilities | 2,696,922 | 2,504,937 |
Commitments and contingencies - Note F | ||
Stockholders' Deficit | ||
Common stock - $0.0001 par value, 100,000,000 shares authorized; 30,709,948 and 29,853,327 shares issued and outstanding, respectively | 3,071 | 2,985 |
Additional paid-in capital | 7,862,432 | 7,380,018 |
Stock payable | 104,000 | 486,250 |
Accumulated deficit | (12,342,502) | (11,930,308) |
Total stockholders' deficit | (4,372,999) | (4,061,055) |
Total liabilities, redeemable convertible preferred stock and stockholders' deficit | 405,752 | 501,160 |
Series A Redeemable Convertible Preferred Stock | ||
Long-Term Liabilities | ||
Redeemable convertible preferred stock | 183,495 | 192,851 |
Series B Redeemable Convertible Preferred Stock | ||
Long-Term Liabilities | ||
Redeemable convertible preferred stock | 1,898,334 | 1,864,427 |
Convertible Preferred Stock Series A | ||
Stockholders' Deficit | ||
Convertible preferred stock | 0 | 0 |
Convertible Preferred Stock Series B | ||
Stockholders' Deficit | ||
Convertible preferred stock | $ 0 | $ 0 |
CONDENSED BALANCE SHEETS (Una_2
CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Feb. 28, 2021 | Nov. 30, 2020 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 30,709,948 | 29,853,327 |
Common stock, outstanding | 30,709,948 | 29,853,327 |
Treasury stock, Series B Preferred Stock | 2,500 | 2,500 |
Series A Redeemable Convertible Preferred Stock | ||
Preferred stock, par value | $ .0001 | $ 0.0001 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, issued | 17,000 | 19,500 |
Preferred stock, outstanding | 17,000 | 19,500 |
Preferred stock, liquidation preference | $ 123,995 | $ 124,601 |
Series B Redeemable Convertible Preferred Stock | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, issued | 229,250 | 229,250 |
Preferred stock, outstanding | 226,750 | 226,750 |
Preferred stock, liquidation preference | $ 1,108,759 | $ 1,074,852 |
Convertible Preferred Stock Series A | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, issued | 17,000 | 19,500 |
Preferred stock, outstanding | 17,000 | 19,500 |
Convertible Preferred Stock Series B | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, issued | 229,250 | 229,250 |
Preferred stock, outstanding | 229,250 | 229,250 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Income Statement [Abstract] | ||
Revenues | $ 3,445 | $ 9,763 |
Cost of Goods Sold | ||
Cost of direct materials, shipping and labor | (3,302) | (6,597) |
Gross profit | 143 | 3,166 |
Operating Expenses | ||
General and administrative | 253,953 | 322,831 |
Executive compensation | 47,374 | 33,567 |
Professional fees | 15,558 | 11,800 |
Depreciation and amortization | 3,974 | 5,328 |
Total operating expenses | 320,859 | 373,526 |
Loss from operations | (320,716) | (370,360) |
Other Expense | ||
Gain (loss) from foreign currency transactions | (53,205) | 13,688 |
Interest expense - related party | (1,146) | (1,159) |
Interest and financing expense | (76) | (41,535) |
Total other expenses | (54,427) | (29,006) |
Income tax provision | 0 | 0 |
Net loss | (375,143) | (399,366) |
Dividend of redeemable preferred stock | (37,051) | (40,660) |
Net loss attributable to common stockholders | $ (412,194) | $ (440,026) |
Net loss per share: basic and diluted | $ (0.01) | $ (0.02) |
Weighted average number of shares outstanding: basic and diluted | 30,220,428 | 29,065,306 |
CONDENSED STATEMENT OF CONVERTI
CONDENSED STATEMENT OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT (Unaudited) - USD ($) | Series A Preferred Stock | Series B Preferred Stock | Common Shares | Additional Paid-In Capital | Treasury Stock | Stock Payable | Accumulated Deficit | Total |
Beginning balance, shares at Nov. 30, 2019 | 19,500 | 234,250 | 29,054,235 | |||||
Beginning balance, amount at Nov. 30, 2019 | $ 177,985 | $ 1,860,692 | $ 2,905 | $ 6,724,009 | $ (12,500) | $ 22,500 | $ (10,119,541) | $ (3,370,127) |
Cash received for sale of common stock, net of issuance costs, amount | 190,000 | 190,000 | ||||||
Cash received for exercise of warrants, net of issuance costs | 85,000 | 85,000 | ||||||
Stock issued for conversion of preferred stock, shares | 34,740 | |||||||
Stock issued for conversion of preferred stock, amount | $ 4 | 1 | 5 | |||||
Modification of warrants | 41,460 | 41,460 | ||||||
Dividend of redeemable preferred stock | $ 3,657 | $ 37,004 | (40,660) | (40,660) | ||||
Net loss | (440,026) | (440,026) | ||||||
Ending balance, shares at Feb. 29, 2020 | 19,500 | 229,250 | 29,088,975 | |||||
Ending balance, amount at Feb. 29, 2020 | $ 181,642 | $ 1,897,691 | $ 2,909 | 6,765,470 | (12,500) | 297,500 | (10,559,567) | (3,493,688) |
Beginning balance, shares at Nov. 30, 2020 | 19,500 | 22,950 | 29,853,327 | |||||
Beginning balance, amount at Nov. 30, 2020 | $ 181,642 | $ 1,864,427 | $ 2,985 | 7,380,018 | (12,500) | 486,250 | (11,930,308) | (4,061,055) |
Cash received for sale of common stock, net of issuance costs, shares | 669,121 | |||||||
Cash received for sale of common stock, net of issuance costs, amount | $ 67 | 338,683 | (251,000) | 87,750 | ||||
Cash received for exercise of warrants, net of issuance costs | 0 | |||||||
Stock issued for conversion of preferred stock, shares | (2,500) | 12,500 | ||||||
Stock issued for conversion of preferred stock, amount | $ (12,500) | $ 1 | 12,499 | 12,500 | ||||
Stock issued for services, shares | 175,000 | |||||||
Stock issued for services, amount | $ 18 | 131,232 | (131,250) | 0 | ||||
Modification of warrants | 0 | |||||||
Dividend of redeemable preferred stock | $ 3,144 | $ 33,907 | (37,051) | (37,051) | ||||
Net loss | (412,194) | (412,194) | ||||||
Ending balance, shares at Feb. 28, 2021 | 17,000 | 22,950 | 30,709,948 | |||||
Ending balance, amount at Feb. 28, 2021 | $ 183,495 | $ 1,898,334 | $ 3,071 | $ 7,862,432 | $ (12,500) | $ 104,000 | $ (12,342,502) | $ (4,372,999) |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (375,143) | $ (399,366) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 3,974 | 5,328 |
Non cash lease expense | 175 | 1,525 |
Modification of warrants | 0 | 41,460 |
Changes in assets and liabilities | ||
Decrease (increase) in accounts receivable | 323 | 10,934 |
Decrease (increase) in prepaid expenses | (20,162) | (4,019) |
Decrease (increase) in inventory | 2,703 | 4,477 |
(Decrease) increase in accounts payable and accrued expenses | 80,288 | (15,933) |
Decrease in accrued interest - related party | 1,146 | 1,159 |
Increase in accrued payroll - officers | 7,248 | 5,136 |
Increase in royalty payable | 131,703 | 62,210 |
Net cash used in operating activities | (167,745) | (287,090) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Website development | (8,175) | 0 |
Acquisition of property and equipment | 0 | (7,180) |
Cash flows used in investing activities | (8,175) | (7,180) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of common stock, net of issuance costs | 87,750 | 190,000 |
Proceeds from exercise of warrants | 0 | 85,000 |
Payments on notes payable - auto loan | 0 | (2,523) |
Cash flows provided by financing activities | 87,750 | 272,477 |
Net change in cash and cash equivalents | (88,170) | (21,793) |
Cash and cash equivalents, beginning of the period | 170,852 | 96,923 |
Cash and cash equivalents, end of the period | 82,682 | 75,130 |
Cash paid during the period for: | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | 0 | 0 |
Non-cash financing activities: | ||
Conversion of preferred stock | 12,500 | 0 |
Dividend of redeemable preferred stock | $ 37,051 | $ 40,660 |
Note A_ BASIS OF PRESENTATION
Note A: BASIS OF PRESENTATION | 3 Months Ended |
Feb. 28, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Note A: BASIS OF PRESENTATION | The foregoing unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. These unaudited interim financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended November 30, 2020. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented. Operating results for the three-month period ended February 28, 2021 are not necessarily indicative of the results that may be expected for the year ending November 30, 2021. The preparation of financial statements in accordance with generally accepted accounting principles in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumption are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company’s financial position and results of operations. Reclassification of Treasury Stock The accompanying condensed consolidated balance sheet as of November 30, 2020 has been corrected to reclassify $12,500 from Stockholders’ deficit to a reduction in the amount of Series B redeemable convertible preferred stock after the Company reevaluated the net redemption value of Series B redeemable convertible preferred stock. |
Note B_ SUMMARY OF SIGNIFICANT
Note B: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Feb. 28, 2021 | |
Accounting Policies [Abstract] | |
Note B: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Use of Estimates The preparation of condensed financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amount of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. A significant estimate includes the carrying value of the Company’s patents, fair value of the Company’s common stock, assumptions used in calculating the value of stock options, depreciation and amortization. Fair Value of Financial Instruments Effective January 1, 2008, the Company adopted FASB ASC 820, Fair Value Measurements and Disclosures, Pre Codification SFAS No. 157, “Fair Value Measurements”, which provides a framework for measuring fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standard also expands disclosures about instruments measured at fair value and establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1 — Quoted prices for identical assets and liabilities in active markets; Level 2 — Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The Company designates cash equivalents (consisting of money market funds) and investments in securities of publicly traded companies as Level 1. The total amount of the Company’s investment classified as Level 3 is de minimis. Fair value of financial instruments: The carrying amounts of financial instruments, including cash and cash equivalents, short-term investments, accounts payable, accrued expenses and notes payables approximated fair value as of February 28, 2021 and November 30, 2020 because of the relative short term nature of these instruments. At February 28, 2021 and November 30, 2020, the fair value of the Company’s debt approximates carrying value. Foreign Currency Transactions Transaction gains and losses, such as those resulting from the settlement of nonfunctional currency receivables or payables, including intercompany balances, are included in foreign currency gain (loss) in our consolidated statements of earnings. Additionally, payable and receivable balances denominated in nonfunctional currencies are marked-to-market at month-end, and the gain or loss is recognized in our statements of operations. Cash and Cash Equivalents The Company considers cash on hand, cash in banks, certificates of deposit, time deposits, and U.S. government and other short-term securities with maturities of three months or less when purchased as cash and cash equivalents. The Company does not have cash equivalents. Inventory Inventories are stated at the lower of cost or market, using the average cost method, which approximates the first in, first out method (“FIFO”). If net realized value is less than cost at the balance sheet date, the carrying amount is reduced to the realizable value, and the difference is recognized as a loss on valuation of inventories within cost of sales. Inventory reserves are established when conditions indicate that the net realizable value is less than costs due to physical deterioration, obsolescence, changes in price levels, or other causes based on individual facts and circumstances. See Note C for additional information. Accounts Receivable Accounts receivable are stated at the amount the Company expects to collect from outstanding balances and do not bear interest. The Company provides for probable uncollectible amounts through an allowance for doubtful accounts, if an allowance is deemed necessary. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable; however, changes in circumstances relating to accounts receivable may result in a requirement for additional allowances in the future. On a periodic basis, management evaluates its accounts receivable and determines the requirement for an allowance for doubtful accounts based on its assessment of the current and collectible status of individual accounts with past due balances over 90 days. Account balances are charged against the allowance after all collection efforts have been exhausted and the potential for recovery is considered remote. Allowance for Uncollectible Accounts The Company estimates losses on receivables based on known troubled accounts, if any, and historical experience of losses incurred. There was no allowance for doubtful customer receivables at February 28, 2021 and November 30, 2020, respectively. Property and Equipment Property and equipment are stated at the lower of cost or fair value. Depreciation is provided on a straight-line basis over the estimated useful lives of the assets, as follows: Description Estimated Life Furniture & Equipment 5 years Vehicles 5 years Computer Equipment 3 years The estimated useful lives are based on the nature of the assets as well as current operating strategy and legal considerations such as contractual life. Future events, such as property expansions, property developments, new competition, or new regulations, could result in a change in the manner in which the Company uses certain assets requiring a change in the estimated useful lives of such assets. Maintenance and repairs that neither materially add to the value of the asset nor appreciably prolong its life are charged to expense as incurred. Gains or losses on disposition of property and equipment are included in the statements of operations. There were no dispositions during the periods presented. KrankzAudio Website The Company decided to redesign a new Shopify website (krankzaudio.com) in October 2020. The redesign is to increase online sales with a hyper-focused conversion strategy. The website consists of a search engine that users may access in order to compare the prices of different consumer products, which is known as a price comparison website. The new website was launched on January 18, 2021, and the estimated useful life is 3 years. Impairment of Long-Lived Assets The Company evaluates its property and equipment and other long-lived assets for impairment in accordance with related accounting standards. No impairments were recorded at February 28, 2021. For assets to be held and used (including projects under development), fixed assets are reviewed for impairment whenever indicators of impairment exist. If an indicator of impairment exists, the Company first groups its assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (the “asset group”). Secondly, the Company estimates the undiscounted future cash flows that are directly associated with and expected to arise from the completion, use and eventual disposition of such asset group. The Company estimates the undiscounted cash flows over the remaining useful life of the primary asset within the asset group. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then impairment is measured based on fair value compared to carrying value, with fair value typically based on a discounted cash flow model. Revenue Recognition The Company recognizes revenue in accordance with generally accepted accounting principles as outlined in the Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts with Customers, which consists of five steps to evaluating contracts with customers for revenue recognition: (i) identify the contract with the customer; (ii) identity the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity satisfied a performance obligation. Revenue recognition occurs at the time we satisfy a performance obligation to our customers, when control transfers to customers, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance. We only record revenue when collectability is probable. For the three months ended February 28, 2021 and February 29, 2020, the Company recognized $3,445 and $9,763 in revenue, respectively. Income Taxes Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. Basic Income (Loss) Per Share Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Stock-Based Compensation The Company follows ASC 718-10, “Stock Compensation”, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 is a revision to SFAS No. 123, “Accounting for Stock-Based Compensation,” and supersedes Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related implementation guidance. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized. Concentrations of Risk The Company’s bank accounts are deposited in insured institutions. The maximum insured by the FDIC per bank account is not an issue here since the Company’s bank accounts do not bear any interest and the FDIC limits far exceed balances on deposit. The Company’s funds were held in a single account. At February 28, 2021, the Company’s bank balance did not exceed the insured amounts. Accounting for Research and Development Costs The Company records an expense in the current period for all research and development costs, which include Hardware Development Costs. The Company does not capitalize such amounts. Pursuant to ASC Topic 730 Research and Development, once we determine that our Extreme Gamer video game console is technologically feasible and a working model is put into use, the Company will capitalize Software Development costs associated with its products. Once this occurs we will determine a useful life of our software and apply a reasonable economic life of five years or less. At this time, our software development costs only relate to the Extreme Gamer and Zaaz keyboard hardware. The software development costs cannot be separated from the associated hardware development. We do not develop stand-alone software for sale to the retail consumers, rather we develop software in order to operate the designed hardware. The software is designed to be encoded within chips inside the hardware. Thus, it has been determined that the current software development costs, which are intertwined within the hardware development, are to be expensed rather than capitalized pursuant to ASC Topic 730. This conclusion is also based upon our decision to devote further research and development costs in the support of our product interface to the video game players: Sony PS4® (and other products such as Nintendo Switch® and Microsoft Xbox One®). Liquidity and Going Concern The Company’s ability to continue as a going concern is dependent on the Company’s ability to generate revenues and raise capital. The Company has not generated sufficient revenues from product sales to provide sufficient cash flows to enable the Company to finance its operations internally. At February 28, 2021, the Company has an accumulated deficit of $12,342,502. For the three months ended February 28, 2021, the Company had a net loss of $375,143, and a working capital deficiency of $2,464,741. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date of filing. Over the next twelve months management plans raise additional capital and to invest its working capital resources in sales and marketing in order to increase the distribution and demand for its products. If the Company fails to generate sufficient revenue and obtain additional capital to continue at its expected level of operations, the Company may be forced to scale back or discontinue its sales and marketing efforts. However, there is no guarantee the Company will generate sufficient revenues or raise capital to continue operations. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. In December 2019, an outbreak of a novel strain of coronavirus originated in Wuhan, China (“COVID-19”) and has since spread worldwide, including to the Unites States, posing public health risks that have reached pandemic proportions (the “COVID-19 Pandemic”). The COVID-19 Pandemic poses a threat to the health and economic wellbeing of our employees, customers and vendors. Like most businesses world-wide, the COVID-19 Pandemic has impacted the Company financially; however, management cannot presently predict the scope and severity with which COVID-19 will impact our business, financial condition, results of operations and cash flow. Recent Accounting Pronouncements The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow except as noted below. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, |
Note C_ INVENTORIES
Note C: INVENTORIES | 3 Months Ended |
Feb. 28, 2021 | |
Inventory Disclosure [Abstract] | |
Note C: INVENTORIES | The value of inventory was $51,622 and $54,325 as of February 28, 2021 and November 30, 2020, respectively, and consists of 100% of finished goods. Inventory reserves are established when conditions indicate that the net realizable value is less than costs due to physical deterioration, obsolescence, changes in price levels, or other causes based on individual facts and circumstances. The Company has established an allowance for slow moving inventory. As of February 28, 2021 and November 30, 2020, the inventory reserve was $217,297 and $217,297, respectively. February 28, 2021 November 30, 2020 Headphones $ 64,610 $ 67,310 Licensed Ford Accessories 204,309 204,312 Total Inventory 268,919 271,622 Less: inventory reserve (217,297 ) (217,297 ) Inventory, net $ 51,622 $ 54,325 |
Note D_ WEBSITE DEVELOPMENT COS
Note D: WEBSITE DEVELOPMENT COSTS | 3 Months Ended |
Feb. 28, 2021 | |
Capitalized Computer Software, Net [Abstract] | |
Note D: WEBSITE DEVELOPMENT COSTS | The Company decided to redesign a new Shopify website (krankzaudio.com) in October 2020. The redesign is to increase online sales with a hyper-focused conversion strategy. The website consists of a search engine that users may access in order to compare the prices of different consumer products, which is known as a price comparison website. The new website was launched on January 18, 2021. The Company recorded at cost, and the estimated useful life is 3 years. For the three months ended February 28, 2021, the Company recorded $1,362 in the amortization expense. |
Note E_ COMMON STOCK
Note E: COMMON STOCK | 3 Months Ended |
Feb. 28, 2021 | |
Equity [Abstract] | |
Note E: COMMON STOCK | The Company has 100,000,000 shares at $0.0001 par value common stock authorized and 30,709,948 and 29,853,327 shares issued and outstanding at February 28, 2021 and November 30, 2020, respectively. On June 25, 2020, the Company issued 20,000 shares of common stock for warrants exercise, which was considered owed as a common stock payable. On July 1, 2020, the Company sold 17,301 shares of common stock to an investor in exchange of $12,500. On January 22, 2021, the 25,000 shares had been issued. On July 10, 2020, the Company received $60,000 for warrants exercises of 150,000 common shares. The stock was considered owed as a common stock payable as of February 28, 2021. As the date of filing, the shares have not been issued. On August 19, 2020 the Company sold 17,301 shares of common stock to an investor in exchange of $12,500. On January 22, 2021, the shares have been issued. On September 28, 2020, the Company sold 50,000 common shares in exchange of $25,000. The Stock was considered owed as a common stock payable as of November 30, 2020. On January 22, 2021, the shares have been issued. On September 29, 2020, the Company sold 200,000 common shares in exchange of $100,000. The Stock was considered owed as a common stock payable as of November 30, 2020. On January 22, 2021, the shares have been issued. On September 30, 2020, the Company sold 20,000 common shares in exchange of $10,000. The Stock was considered owed as a common stock payable as of November 30, 2020. On January 22, 2021, the shares have been issued. On September 30, 2020, the Company sold 17,301 common shares in exchange of $12,500. On January 22, 2021, the shares have been issued. On October 5, 2020, the Company sold 18,383 common shares in exchange of $12,500. The Stock was considered owed as a common stock payable as of November 30, 2020. On January 22, 2021, the shares have been issued. On October 8, 2020, the Company sold 150,000 common shares in exchange of $75,000. The Stock was considered owed as a common stock payable as of November 30, 2020 On January 22, 2021, the shares have been issued. On November 18, 2020, the Company sold 25,000 common shares to an investor in exchange of $12,500. The Stock was considered owed as a common stock payable as of November 30, 2020. On January 22, 2021, the shares have been issued. On December 14, 2020, the Company issued 12,500 shares of common stock for the conversion of 2,500 shares of Series A Preferred Stock. On January 5, 2021, the Company sold 12,500 common shares in exchange of cash $6,250. On January 22, 2021, the shares have been issued. On January 12, 2021, the Company sold 113,636 common shares to an investor in exchange of cash $50,000. On January 22, 2021, the shares have been issued. On January 28, 2021, the Company sold 20,000 common shares in exchange of cash $5,000. The stock was considered owed as a common stock payable as of February 28, 2021. As of the date of filing, the shares have not been issued. On February 15, 2021, the Company sold 31,289 common shares to an investor in exchange of cash $12,500. The stock was considered owed as a common stock payable as of February 28, 2021. As of the date of filing, the shares have not been issued. On February 19, 2021, the Company sold 56,000 common shares to an investor in exchange of cash $14,000. The stock was considered owed as a common stock payable as of February 28, 2021. As of the date of filing, the shares have not been issued. The price per share is equal to eighty-five percent of the average daily “Ask Price” as quoted on the OTC Electronic Bulletin Board Quotation System for the ten trading days immediately preceding the Closing. In addition, for each share of common stock purchased, each investor shall receive two warrants. Warrant A shall provide the investor the right to purchase one additional share of the Company’s common stock equal to one hundred percent of the average daily “Ask Price” as quoted on the OTC Electronic Bulletin Board Quotation System for the ten trading days immediately preceding the Closing. Warrant B shall provide the investor the right to purchase one additional share of the Company’s common stock equal to one hundred twenty-five percent of the average daily “Ask Price” as quoted on the OTC Electronic Bulletin Board Quotation System for the ten trading days immediately preceding the Closing. Warrant C shall provide the investor the right to purchase two additional shares of the Company common stock at a price equal to $0.50 per share. |
Note F_ COMMITMENTS AND CONTING
Note F: COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Feb. 28, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Note F: COMMITMENTS AND CONTINGENCIES | Royalty Payable Obligation At January 1, 2015, the Company is obligated to pay minimum monthly royalties of approximately $80,000 (CDN $100,000) per quarter for the remaining term of the Psyko Audio Labs contract. The company carries the risk of currency exchange rate fluctuations as our royalty obligation under the license agreement is stated in Canadian dollars. Royalty payable was $1,904,621 as of February 28, 2021. For the three months ended February 28, 2021 and February 29, 2020, royalty expense and the related gain/(loss) on foreign currency transactions were ($53,205) and 13,688, respectively. |
Note G_ LEASES
Note G: LEASES | 3 Months Ended |
Feb. 28, 2021 | |
Leases [Abstract] | |
Note G: LEASES | In the first quarter of fiscal 2019, the Company adopted Accounting Standards Update (“ASU”) 2016-02, “ Leases Topic 842 The Company leases certain property consisting principally of its corporate headquarters, its retail stores, the majority of its distribution and fulfillment centers, and certain equipment under operating leases. Many of the Company’s leases include options to renew at the Company’s discretion. The renewal options are not included in the measurement of right-of-use (“ROU”) assets and lease liabilities as the Company is not reasonably certain to exercise available options. Rent escalations occurring during the term of the leases are included in the calculation of the future minimum lease payments and the rent expense related to these leases is recognized on a straight-line basis over the lease term. The Company determines whether an agreement contains a lease at inception based on the Company’s right to obtain substantially all of the economic benefits from the use of the identified asset and its right to direct the use of the identified asset. Lease liabilities represent the present value of future lease payments and the ROU assets represent the Company’s right to use the underlying assets for the respective lease terms. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. The ROU asset is further adjusted to account for previously recorded lease-related expenses such as deferred rent and other lease liabilities. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate as the discount rate to calculate the present value of lease payments. The incremental borrowing rate represents an estimate of the interest rate that would be required to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company elected not to recognize a ROU asset and a lease liability for leases with an initial term of twelve months or less and not to separate lease and non-lease components. In addition to minimum lease payments, certain leases require payment of a proportionate share of real estate taxes and certain building operating expenses or payments based on a percentage of sales in excess of a specified base. These variable lease costs are not included in the measurement of the ROU asset or lease liability due to unpredictability of the payment amount and are recorded as a lease expense in the period incurred. The Company’s lease agreements do not contain residual value guarantees or significant restrictions or covenants other than those customary in such arrangements. As of February 28, 2021, the Company did not have material leases that had been signed but not yet commenced. The Company entered into the office lease extension agreement with the landlord in September 2020 for two years and is set to expire on September 30, 2022. The monthly minimum rental payment is $9,162 from October 1, 2020 to September 30, 2021 and $9,391 from October 1, 2021 to September 30, 2022. The components of lease cost are as follows: For the three months ended Operating lease cost $ 31,554 Total lease cost $ 31,554 The following table discloses the weighted average remaining lease term and weighted average discount rate for the Company’s leases as of February 28, 2021: For the three months ended Remaining lease term – operating leases (years) 1.45 Incremental borrowing rate 5.57 % As of February 28, 2021, the Company had the following future minimum operating lease payments: Fiscal Year 2021 92,997 2022 93,912 Total lease payments 186,909 Adjusted for interest 6,959 Total lease obligation $ 179,950 |
Note H_ LOAN PAYABLE
Note H: LOAN PAYABLE | 3 Months Ended |
Feb. 28, 2021 | |
Loans Payable [Abstract] | |
Note H: LOAN PAYABLE | On May 26, 2020, the Company executed the Paycheck Protection Loan (“Loan”) with Wells Fargo Bank for $29,740. The loan is due on May 26, 2022. The Company agreed the loan bears interest at 1% per annum. The Company needs to pay $1,252.09 monthly payment starting at November 26, 2020. The accrued interest is $235 as of February 28, 2021. The Company believes current economic uncertainty relating to the Coronavirus crisis makes the loan necessary to support our ongoing operations. The Company anticipates that the entire balance of the loan will be forgiven based on our disbursements of payroll and rent. |
Note I_ NET LOSS PER SHARE ATTR
Note I: NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | 3 Months Ended |
Feb. 28, 2021 | |
Earnings Per Share [Abstract] | |
Note I: NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | The Company calculates basic and diluted net loss per share attributable to common stockholders in conformity with the two-class method required for companies with participating securities. The Company considers all series of convertible preferred stock issued and outstanding to be participating securities. Under the two-class method, the net loss attributable to common stockholders is not allocated to the convertible preferred stock as the holders of convertible preferred stock issued and outstanding do not have a contractual obligation to share in losses. The diluted net loss per share attributable to common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, options to purchase common stock, common stock warrants and securities such as convertible preferred stock and convertible preferred stock warrants that were issued and outstanding, which are considered common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is antidilutive. Basic and diluted net loss per common share was the same for each period presented, as the inclusion of all potential common shares outstanding would have been antidilutive. Three Months Ended February 28, February 29, Numerator: Net loss $ (412,194) $ (440,026) Denominator: Weighted-average basic shares outstanding 30,220,428 29,065,306 Effect of dilutive securities - - Weighted-average diluted shares 30,220,428 29,065,306 Net loss per common share – basic and diluted $ (0.01) $ (0.02) The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because the impact of including them would have been antidilutive: February 28, 2021 February 29, 2020 Convertible preferred stock (as converted) 821,836 842,052 Common stock warrants (as exercised) 4,624,213 5,133,482 Total 5,446,049 5,975,534 |
Note J_ SUBSEQUENT EVENTS
Note J: SUBSEQUENT EVENTS | 3 Months Ended |
Feb. 28, 2021 | |
Subsequent Events [Abstract] | |
Note I: SUBSEQUENT EVENTS | In accordance with ASC 855-10, Company management reviewed all material events through the date of this report and determined that there are no additional material subsequent events to report except for the disclosure below. As of the date of this filing, the Company is obligated to issue 273,628 common shares to various investors, and these common shares are recorded as $104,000 in stock payable. These common shares have not been issued. |
Note B_ SUMMARY OF SIGNIFICAN_2
Note B: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Feb. 28, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates | The preparation of condensed financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amount of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. A significant estimate includes the carrying value of the Company’s patents, fair value of the Company’s common stock, assumptions used in calculating the value of stock options, depreciation and amortization. |
Fair Value of Financial Instruments | Effective January 1, 2008, the Company adopted FASB ASC 820, Fair Value Measurements and Disclosures, Pre Codification SFAS No. 157, “Fair Value Measurements”, which provides a framework for measuring fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standard also expands disclosures about instruments measured at fair value and establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1 — Quoted prices for identical assets and liabilities in active markets; Level 2 — Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The Company designates cash equivalents (consisting of money market funds) and investments in securities of publicly traded companies as Level 1. The total amount of the Company’s investment classified as Level 3 is de minimis. Fair value of financial instruments: The carrying amounts of financial instruments, including cash and cash equivalents, short-term investments, accounts payable, accrued expenses and notes payables approximated fair value as of February 28, 2021 and November 30, 2020 because of the relative short term nature of these instruments. At February 28, 2021 and November 30, 2020, the fair value of the Company’s debt approximates carrying value. |
Foreign Currency Transactions | Transaction gains and losses, such as those resulting from the settlement of nonfunctional currency receivables or payables, including intercompany balances, are included in foreign currency gain (loss) in our consolidated statements of earnings. Additionally, payable and receivable balances denominated in nonfunctional currencies are marked-to-market at month-end, and the gain or loss is recognized in our statements of operations. |
Cash and Cash Equivalents | The Company considers cash on hand, cash in banks, certificates of deposit, time deposits, and U.S. government and other short-term securities with maturities of three months or less when purchased as cash and cash equivalents. The Company does not have cash equivalents. |
Inventory | Inventories are stated at the lower of cost or market, using the average cost method, which approximates the first in, first out method (“FIFO”). If net realized value is less than cost at the balance sheet date, the carrying amount is reduced to the realizable value, and the difference is recognized as a loss on valuation of inventories within cost of sales. Inventory reserves are established when conditions indicate that the net realizable value is less than costs due to physical deterioration, obsolescence, changes in price levels, or other causes based on individual facts and circumstances. See Note C for additional information. |
Accounts Receivable | Accounts receivable are stated at the amount the Company expects to collect from outstanding balances and do not bear interest. The Company provides for probable uncollectible amounts through an allowance for doubtful accounts, if an allowance is deemed necessary. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable; however, changes in circumstances relating to accounts receivable may result in a requirement for additional allowances in the future. On a periodic basis, management evaluates its accounts receivable and determines the requirement for an allowance for doubtful accounts based on its assessment of the current and collectible status of individual accounts with past due balances over 90 days. Account balances are charged against the allowance after all collection efforts have been exhausted and the potential for recovery is considered remote. |
Allowance for Uncollectible Accounts | The Company estimates losses on receivables based on known troubled accounts, if any, and historical experience of losses incurred. There was no allowance for doubtful customer receivables at February 28, 2021 and November 30, 2020, respectively. |
Property and Equipment | Property and equipment are stated at the lower of cost or fair value. Depreciation is provided on a straight-line basis over the estimated useful lives of the assets, as follows: Description Estimated Life Furniture & Equipment 5 years Vehicles 5 years Computer Equipment 3 years The estimated useful lives are based on the nature of the assets as well as current operating strategy and legal considerations such as contractual life. Future events, such as property expansions, property developments, new competition, or new regulations, could result in a change in the manner in which the Company uses certain assets requiring a change in the estimated useful lives of such assets. Maintenance and repairs that neither materially add to the value of the asset nor appreciably prolong its life are charged to expense as incurred. Gains or losses on disposition of property and equipment are included in the statements of operations. There were no dispositions during the periods presented. |
KrankzAudio Website | The Company decided to redesign a new Shopify website (krankzaudio.com) in October 2020. The redesign is to increase online sales with a hyper-focused conversion strategy. The website consists of a search engine that users may access in order to compare the prices of different consumer products, which is known as a price comparison website. The new website was launched on January 18, 2021, and the estimated useful life is 3 years. |
Impairment of Long-Lived Assets | The Company evaluates its property and equipment and other long-lived assets for impairment in accordance with related accounting standards. No impairments were recorded at February 28, 2021. For assets to be held and used (including projects under development), fixed assets are reviewed for impairment whenever indicators of impairment exist. If an indicator of impairment exists, the Company first groups its assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (the “asset group”). Secondly, the Company estimates the undiscounted future cash flows that are directly associated with and expected to arise from the completion, use and eventual disposition of such asset group. The Company estimates the undiscounted cash flows over the remaining useful life of the primary asset within the asset group. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then impairment is measured based on fair value compared to carrying value, with fair value typically based on a discounted cash flow model. |
Revenue Recognition | The Company recognizes revenue in accordance with generally accepted accounting principles as outlined in the Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts with Customers, which consists of five steps to evaluating contracts with customers for revenue recognition: (i) identify the contract with the customer; (ii) identity the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity satisfied a performance obligation. Revenue recognition occurs at the time we satisfy a performance obligation to our customers, when control transfers to customers, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance. We only record revenue when collectability is probable. For the three months ended February 28, 2021 and February 29, 2020, the Company recognized $3,445 and $9,763 in revenue, respectively. |
Income Taxes | Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. |
Basic Income (Loss) Per Share | Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. |
Stock-Based Compensation | The Company follows ASC 718-10, “Stock Compensation”, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 is a revision to SFAS No. 123, “Accounting for Stock-Based Compensation,” and supersedes Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related implementation guidance. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized. |
Concentrations of Risk | The Company’s bank accounts are deposited in insured institutions. The maximum insured by the FDIC per bank account is not an issue here since the Company’s bank accounts do not bear any interest and the FDIC limits far exceed balances on deposit. The Company’s funds were held in a single account. At February 28, 2021, the Company’s bank balance did not exceed the insured amounts. |
Accounting for Research and Development Costs | The Company records an expense in the current period for all research and development costs, which include Hardware Development Costs. The Company does not capitalize such amounts. Pursuant to ASC Topic 730 Research and Development, once we determine that our Extreme Gamer video game console is technologically feasible and a working model is put into use, the Company will capitalize Software Development costs associated with its products. Once this occurs we will determine a useful life of our software and apply a reasonable economic life of five years or less. At this time, our software development costs only relate to the Extreme Gamer and Zaaz keyboard hardware. The software development costs cannot be separated from the associated hardware development. We do not develop stand-alone software for sale to the retail consumers, rather we develop software in order to operate the designed hardware. The software is designed to be encoded within chips inside the hardware. Thus, it has been determined that the current software development costs, which are intertwined within the hardware development, are to be expensed rather than capitalized pursuant to ASC Topic 730. This conclusion is also based upon our decision to devote further research and development costs in the support of our product interface to the video game players: Sony PS4® (and other products such as Nintendo Switch® and Microsoft Xbox One®). |
Liquidity and Going Concern | The Company’s ability to continue as a going concern is dependent on the Company’s ability to generate revenues and raise capital. The Company has not generated sufficient revenues from product sales to provide sufficient cash flows to enable the Company to finance its operations internally. At February 28, 2021, the Company has an accumulated deficit of $12,342,502. For the three months ended February 28, 2021, the Company had a net loss of $375,143, and a working capital deficiency of $2,464,741. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date of filing. Over the next twelve months management plans raise additional capital and to invest its working capital resources in sales and marketing in order to increase the distribution and demand for its products. If the Company fails to generate sufficient revenue and obtain additional capital to continue at its expected level of operations, the Company may be forced to scale back or discontinue its sales and marketing efforts. However, there is no guarantee the Company will generate sufficient revenues or raise capital to continue operations. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. In December 2019, an outbreak of a novel strain of coronavirus originated in Wuhan, China (“COVID-19”) and has since spread worldwide, including to the Unites States, posing public health risks that have reached pandemic proportions (the “COVID-19 Pandemic”). The COVID-19 Pandemic poses a threat to the health and economic wellbeing of our employees, customers and vendors. Like most businesses world-wide, the COVID-19 Pandemic has impacted the Company financially; however, management cannot presently predict the scope and severity with which COVID-19 will impact our business, financial condition, results of operations and cash flow. |
Recent Accounting Pronouncements | The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow except as noted below. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, |
Note B_ SUMMARY OF SIGNIFICAN_3
Note B: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Feb. 28, 2021 | |
Accounting Policies [Abstract] | |
Property and equipment useful life | Description Estimated Life Furniture & Equipment 5 years Vehicles 5 years Computer Equipment 3 years |
Note C_ INVENTORIES (Tables)
Note C: INVENTORIES (Tables) | 3 Months Ended |
Feb. 28, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory | February 28, 2021 November 30, 2020 Headphones $ 64,610 $ 67,310 Licensed Ford Accessories 204,309 204,312 Total Inventory 268,919 271,622 Less: inventory reserve (217,297 ) (217,297 ) Inventory, net $ 51,622 $ 54,325 |
Note G_ LEASES (Tables)
Note G: LEASES (Tables) | 3 Months Ended |
Feb. 28, 2021 | |
Leases [Abstract] | |
Lease cost | For the three months ended Operating lease cost $ 31,554 Total lease cost $ 31,554 |
Weighted average remaining lease term and weighted average discount rate | For the three months ended Remaining lease term – operating leases (years) 1.45 Incremental borrowing rate 5.57 % |
Future minimum operating lease payments | Fiscal Year 2021 92,997 2022 93,912 Total lease payments 186,909 Adjusted for interest 6,959 Total lease obligation $ 179,950 |
Note I_ NET LOSS PER SHARE AT_2
Note I: NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS (Tables) | 3 Months Ended |
Feb. 28, 2021 | |
Earnings Per Share [Abstract] | |
Basic and diluted net loss per common share | Three Months Ended February 28, February 29, Numerator: Net loss $ (412,194) $ (440,026) Denominator: Weighted-average basic shares outstanding 30,220,428 29,065,306 Effect of dilutive securities - - Weighted-average diluted shares 30,220,428 29,065,306 Net loss per common share – basic and diluted $ (0.01) $ (0.02) |
Antidilutive securities excluded | February 28, 2021 February 29, 2020 Convertible preferred stock (as converted) 821,836 842,052 Common stock warrants (as exercised) 4,624,213 5,133,482 Total 5,446,049 5,975,534 |
Note A_ BASIS OF PRESENTATION (
Note A: BASIS OF PRESENTATION (Details Narrative) - USD ($) | 3 Months Ended | ||
Feb. 28, 2021 | Feb. 29, 2020 | Nov. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Cumulative losses | $ (12,342,502) | $ (11,930,308) | |
Working capital | (2,464,741) | ||
Net loss | $ (375,143) | $ (399,366) |
Note B_ SUMMARY OF SIGNIFICAN_4
Note B: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended |
Feb. 28, 2021 | |
Furniture & Equipment | |
Estimated life | 5 years |
Vehicles | |
Estimated life | 5 years |
Computer Equipment | |
Estimated life | 3 years |
Note B_ SUMMARY OF SIGNIFICAN_5
Note B: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Feb. 28, 2021 | Feb. 29, 2020 | Nov. 30, 2020 | |
Accounting Policies [Abstract] | |||
Allowance for doubtful customer receivables | $ 0 | $ 0 | |
Revenues | 3,445 | $ 9,763 | |
Accumulated deficit | (12,342,502) | $ (11,930,308) | |
Net loss | (375,143) | $ (399,366) | |
Working capital | $ (2,464,741) |
Note C_ INVENTORIES (Details)
Note C: INVENTORIES (Details) - USD ($) | Feb. 28, 2021 | Nov. 30, 2020 |
Total inventory | $ 268,919 | $ 271,622 |
Less: inventory reserve | (217,297) | (217,297) |
Inventory, net | 51,622 | 54,325 |
Headphones | ||
Total inventory | 64,610 | 67,310 |
Licensed Ford Accessories | ||
Total inventory | $ 204,309 | $ 204,312 |
Note C_ INVENTORIES (Details Na
Note C: INVENTORIES (Details Narrative) - USD ($) | Feb. 28, 2021 | Nov. 30, 2020 |
Inventory Disclosure [Abstract] | ||
Inventory | $ 51,622 | $ 54,325 |
Inventory reserve | $ 217,297 | $ 217,297 |
Note D_ WEBSITE DEVELOPMENT C_2
Note D: WEBSITE DEVELOPMENT COSTS (Details Narrative) | 3 Months Ended |
Feb. 28, 2021USD ($) | |
Capitalized Computer Software, Net [Abstract] | |
Amortization expense | $ 1,362 |
Note E_ COMMON STOCK (Details N
Note E: COMMON STOCK (Details Narrative) - $ / shares | Feb. 28, 2021 | Nov. 30, 2020 |
Equity [Abstract] | ||
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, issued | 30,709,948 | 29,853,327 |
Common stock, outstanding | 30,709,948 | 29,853,327 |
Note F_ COMMITMENTS AND CONTI_2
Note F: COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Feb. 28, 2021 | Feb. 29, 2020 | Nov. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Royalty payable | $ 1,904,621 | $ 1,772,918 | |
Royalty expense and related (loss) gain on foreign currency transactions | $ (53,205) | $ 13,688 |
Note G_ LEASES (Details)
Note G: LEASES (Details) | 3 Months Ended |
Feb. 28, 2021USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 31,554 |
Total lease cost | $ 31,554 |
Note G_ LEASES (Details 1)
Note G: LEASES (Details 1) | Feb. 28, 2021 |
Leases [Abstract] | |
Remaining lease term - operating leases (years) | 1 year 5 months 2 days |
Incremental borrowing rate | 5.57% |
Note G_ LEASES (Details 2)
Note G: LEASES (Details 2) | Feb. 28, 2021USD ($) |
Leases [Abstract] | |
2021 | $ 92,997 |
2022 | 93,912 |
Total lease payments | 186,909 |
Adjusted for interest | 6,959 |
Total lease obligation | $ 179,950 |
Note H_ LOAN PAYABLE (Details N
Note H: LOAN PAYABLE (Details Narrative) | Feb. 28, 2021USD ($) |
Loans Payable [Abstract] | |
Accrued interest | $ 235 |
Note I_ NET LOSS PER SHARE AT_3
Note I: NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS (Details) - USD ($) | 3 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Numerator | ||
Net loss | $ (412,194) | $ (440,026) |
Denominator | ||
Weighted average number of shares outstanding: basic and diluted | 30,220,428 | 29,065,306 |
Effect of dilutive securities | $ 0 | $ 0 |
Net loss per share: basic and diluted | $ (0.01) | $ (0.02) |
Note I_ NET LOSS PER SHARE AT_4
Note I: NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS (Details 1) - USD ($) | 3 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Dilutive securities | $ 5,446,049 | $ 5,975,534 |
Convertible Preferred Stock | ||
Dilutive securities | 821,836 | 842,052 |
Common Stock Warrants | ||
Dilutive securities | $ 4,624,213 | $ 5,133,482 |