Document and Entity Information
Document and Entity Information | 9 Months Ended |
Dec. 31, 2018 | |
Document And Entity Information | |
Entity Registrant Name | Earth Science Tech, Inc. |
Entity Central Index Key | 0001538495 |
Document Type | S-1 |
Document Period End Date | Dec. 31, 2018 |
Amendment Flag | false |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business Flag | true |
Entity Emerging Growth Company | false |
Entity Ex Transition Period | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2017 |
Current Assets: | |||
Cash | $ 99,685 | $ 72,038 | $ 172,295 |
Accounts Receivable(net allowance of $110,066, $111,301, and $23,959 respectively ) | 110,101 | 69,050 | 27,084 |
Prepaid expenses and other current assets | 60,093 | 6,033 | |
Inventory | 199,485 | 134,784 | 107,181 |
Total current assets | 469,364 | 281,905 | 306,560 |
Property and equipment, net | 14,178 | 18,490 | 60,573 |
Other Assets: | |||
Patent, net | 35,436 | 38,740 | 43,146 |
Deposits | 6,191 | 6,191 | 17,211 |
Total other assets | 41,627 | 44,931 | 60,357 |
Total Assets | 525,169 | 345,326 | 427,490 |
Current Liabilities: | |||
Accounts payable | 113,249 | 80,439 | 128,483 |
Accrued expenses | 70,597 | 93,987 | 6,600 |
Accrued settlement | 231,323 | 231,323 | 223,500 |
Notes payable - related parties | 59,558 | 59,558 | 59,558 |
Total current liabilities | 474,727 | 465,307 | 418,141 |
Total liabilities | 474,727 | 465,307 | 418,141 |
Commitments and contingencies | |||
Stockholders' (Deficit) Equity: | |||
Convertible preferred stock with liquidation preference, par value of $0.001 pre share,10,000,000 shares authorized: 5,200,000 issued and outstanding | 5,200 | 5,200 | 5,200 |
Common stock, par value $0.001 per share, 75,000,000 shares authorized; 51,238,400, 46,150,207 and 42,287,499 shares issued and outstanding as of December 31, 2018, March 31, 2018 and March 31, 2017 respectively | 51,240 | 46,150 | 42,287 |
Additional paid-in capital | 27,142,208 | 25,326,876 | 23,746,430 |
Accumulated deficit | (27,148,206) | (25,498,207) | (23,784,568) |
Total stockholders' (Deficit)Equity | 50,442 | (119,981) | 9,349 |
Total Liabilities and Stockholders' (Deficit) Equity | $ 525,169 | $ 345,326 | $ 427,490 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2017 |
Statement of Financial Position [Abstract] | |||
Net allowance of accounts receivable | $ 110,066 | $ 111,301 | $ 23,959 |
Convertible preferred stock with liquidation preference, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Convertible preferred stock with liquidation preference, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Convertible preferred stock with liquidation preference, shares issued | 5,200,000 | 5,200,000 | 5,200,000 |
Convertible preferred stock with liquidation preference, shares outstanding | 5,200,000 | 5,200,000 | 5,200,000 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 | 75,000,000 |
Common stock, issued | 51,238,400 | 46,150,207 | 42,287,499 |
Common stock, outstanding | 51,238,400 | 46,150,207 | 42,287,499 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||||||
Revenue | $ 202,760 | $ 100,891 | $ 570,975 | $ 291,403 | $ 463,108 | $ 428,199 |
Cost of revenues | 109,799 | 54,497 | 326,398 | 148,125 | 270,222 | 243,813 |
Gross Profit | 92,961 | 46,394 | 244,577 | 143,278 | 192,886 | 184,386 |
Operating Expenses: | ||||||
Compensation - officers | 49,788 | 24,000 | 165,317 | 74,500 | 260,936 | 204,948 |
Officer Compensation Stock | 96,775 | 71,000 | 349,125 | 138,000 | 170,775 | 238,000 |
Employee Compensation Stock | 14,200 | 20,182 | 14,200 | |||
Marketing | 80,550 | 139,438 | 204,461 | 219,984 | 332,986 | 77,857 |
General and administrative | 94,159 | 160,993 | 392,703 | 575,906 | 653,242 | 707,059 |
Donations | 35,500 | |||||
Loss on disposal of assets | 60,792 | |||||
Professional fees | 13,351 | 14,156 | 39,605 | 83,090 | 70,289 | 82,578 |
Bad Debt Expense | 87,342 | |||||
Cost of legal proceedings | 142,064 | 63,211 | 413,611 | 67,506 | 79,447 | 15,528 |
Research and development | 136,489 | 97,587 | 305,999 | 97,587 | 150,451 | |
Total operating expenses | 613,176 | 584,585 | 1,891,003 | 1,270,773 | 1,901,760 | 1,325,970 |
Loss from operations | (520,215) | (538,191) | (1,646,426) | (1,127,495) | (1,708,874) | (1,141,584) |
Other Income (Expenses) | ||||||
Interest expense | (1,191) | (3,573) | (4,765) | (4,773) | ||
Interest income | 3 | |||||
Total other income (expenses) | (1,191) | (3,573) | (4,765) | (4,770) | ||
Net loss before income taxes | (521,406) | (538,191) | (1,649,999) | (1,127,495) | (1,713,639) | (1,146,354) |
Income taxes | ||||||
Net loss | $ (521,406) | $ (538,191) | $ (1,649,999) | $ (1,127,495) | $ (1,713,639) | $ (1,146,354) |
Net loss per common share: | ||||||
Loss per common share-Basic and Diluted | $ (0.04) | $ (0.03) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' (Deficit) Equity - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Mar. 31, 2016 | $ 39,421 | $ 5,200 | $ 22,464,923 | $ (22,638,214) | $ (128,670) |
Balance, shares at Mar. 31, 2016 | 39,420,662 | 5,200,000 | |||
Common stock issued for cash | $ 2,297 | 849,456 | $ 851,753 | ||
Common stock issued for cash, shares | 2,297,802 | 2,297,802 | |||
Common stock issued for services | $ 330 | 194,290 | $ 194,620 | ||
Common stock issued for services, shares | 330,535 | 330,535 | |||
Common stock issued for officer compensation | $ 239 | 237,761 | $ 238,000 | ||
Common stock issued for officer compensation, shares | 238,500 | 238,500 | |||
Common stock returned to company | |||||
Net Loss | (1,146,354) | (1,146,354) | |||
Balance at Mar. 31, 2017 | $ 42,287 | $ 5,200 | 23,746,430 | (23,784,568) | 9,349 |
Balance, shares at Mar. 31, 2017 | 42,287,499 | 5,200,000 | |||
Common stock issued for cash | $ 3,097 | 962,895 | $ 965,992 | ||
Common stock issued for cash, shares | 3,096,698 | 3,096,698 | |||
Common stock issued for services | $ 533 | 447,009 | $ 447,542 | ||
Common stock issued for services, shares | 533,010 | 533,010 | |||
Common stock issued for officer compensation | $ 233 | 170,542 | $ 170,775 | ||
Common stock issued for officer compensation, shares | 233,000 | 233,000 | |||
Common stock returned to company | |||||
Net Loss | (1,713,639) | (1,713,639) | |||
Balance at Mar. 31, 2018 | $ 46,150 | $ 5,200 | 25,326,876 | (25,498,207) | (119,981) |
Balance, shares at Mar. 31, 2018 | 46,150,207 | 5,200,000 | |||
Common stock issued for cash | $ 1,604 | 441,446 | 443,050 | ||
Common stock issued for cash, shares | 1,604,168 | ||||
Common stock issued for services | $ 40 | 29,060 | 29,100 | ||
Common stock issued for services, shares | 40,000 | ||||
Common stock issued for officer compensation | $ 123 | 97,877 | 98,000 | ||
Common stock issued for officer compensation, shares | 122,500 | ||||
Common stock issued for employee compensation | $ 26 | 20,157 | 20,183 | ||
Common stock issued for employee compensation, shares | 25,600 | ||||
Common stock returned to company | |||||
Net Loss | (519,323) | (519,323) | |||
Balance at Jun. 30, 2018 | $ 47,943 | $ 5,200 | 25,915,416 | (26,017,530) | (48,971) |
Balance, shares at Jun. 30, 2018 | 47,942,475 | 5,200,000 | |||
Balance at Mar. 31, 2018 | $ 46,150 | $ 5,200 | 25,326,876 | (25,498,207) | (119,981) |
Balance, shares at Mar. 31, 2018 | 46,150,207 | 5,200,000 | |||
Net Loss | (1,649,999) | ||||
Balance at Dec. 31, 2018 | $ 51,240 | $ 5,200 | 27,142,208 | (27,148,206) | 50,442 |
Balance, shares at Dec. 31, 2018 | 51,238,400 | 5,200,000 | |||
Balance at Jun. 30, 2018 | $ 47,943 | $ 5,200 | 25,915,416 | (26,017,530) | (48,971) |
Balance, shares at Jun. 30, 2018 | 47,942,475 | 5,200,000 | |||
Common stock issued for cash | $ 2,033 | 595,911 | 597,944 | ||
Common stock issued for cash, shares | 2,033,258 | ||||
Common stock issued for services | $ 20 | 14,800 | 14,820 | ||
Common stock issued for services, shares | 20,000 | ||||
Common stock issued for officer compensation | $ 123 | 154,227 | 154,350 | ||
Common stock issued for officer compensation, shares | 122,500 | ||||
Common stock issued for employee compensation | |||||
Common stock issued for employee compensation, shares | |||||
Common stock returned to company | |||||
Net Loss | (609,270) | (609,270) | |||
Balance at Sep. 30, 2018 | $ 50,119 | $ 5,200 | 26,680,354 | (26,626,800) | 108,873 |
Balance, shares at Sep. 30, 2018 | 50,118,233 | 5,200,000 | |||
Common stock issued for cash | $ 983 | 351,717 | 352,700 | ||
Common stock issued for cash, shares | 982,667 | ||||
Common stock issued for services | $ 15 | 13,485 | 13,500 | ||
Common stock issued for services, shares | 15,000 | ||||
Common stock issued for officer compensation | $ 123 | 96,652 | 96,775 | ||
Common stock issued for officer compensation, shares | 122,500 | ||||
Common stock returned to company | |||||
Net Loss | (521,406) | (521,406) | |||
Balance at Dec. 31, 2018 | $ 51,240 | $ 5,200 | $ 27,142,208 | $ (27,148,206) | $ 50,442 |
Balance, shares at Dec. 31, 2018 | 51,238,400 | 5,200,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Cash Flow From Operating Activities: | ||||
Net loss | $ (1,649,999) | $ (1,127,495) | $ (1,713,639) | $ (1,146,354) |
Adjustments to reconcile net loss to net cash from operating activities: | ||||
Stock-based compensation | 369,308 | 152,200 | 170,775 | 238,000 |
Stock issued for services | 57,420 | 320,260 | 447,542 | 194,620 |
Depreciation and amortization | 8,009 | 13,237 | 23,531 | 12,441 |
Changes in operating assets and liabilities: | ||||
Increase/Decrease in deposits | (6,190) | 6,618 | ||
Increase/Decrease in prepaid expenses and other current assets | (137,018) | (118,248) | 70,000 | (19,642) |
Decrease/Increase in inventory | (64,701) | 11,184 | (27,603) | 7,545 |
Increase in other assets | ||||
Increase in accrued settlement | 7,823 | |||
Increase in accounts payable | 51,327 | (26,501) | (38,488) | (17,034) |
Net Cash Used in Operating Activities | (1,365,654) | (775,363) | (1,066,249) | (723,806) |
Investing Activities: | ||||
Purchases of property and equipment | (393) | 1,101 | (146) | |
Patent expenditures | ||||
Net Cash Used in Investing Activities | (393) | 1,101 | (146) | |
Financing Activities: | ||||
Proceeds from issuance of common stock | 1,393,694 | 712,376 | 965,992 | 851,753 |
Proceeds from notes payable- related party | ||||
Repayment of advances from related party | ||||
Net Cash Provided by Financing Activities | 1,393,694 | 712,376 | 965,992 | 851,753 |
Net Decrease in Cash | 27,647 | (61,886) | (100,257) | 127,801 |
Cash - Beginning of year | 72,038 | 172,295 | 172,295 | 44,494 |
Cash - End of year | $ 99,685 | $ 131,056 | $ 72,038 | $ 172,295 |
Organization and Nature of Oper
Organization and Nature of Operations | 9 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Organization and Nature of Operations | Note 1 — Organization and Nature of Operations Earth Science Tech, Inc. (“ETST” or the “Company”) was incorporated under the laws of the State of Nevada on April 23, 2010. ETST is a unique biotechnology company focused on cutting edge nutraceuticals and Bioceuticals designed to excel in industries such as health, wellness, nutrition, supplement, cosmetic and alternative medicine to improve illnesses and the quality of life for consumers worldwide. The Company sells its products through its retail store located in Coral Gables Florida and through the internet. ETST is currently focused on delivering nutritional and dietary supplements that help with treating symptoms such as: chronic pain, joint pain, inflammation, seizures, high blood pressure, memory loss, depression, weight management, nausea and aging. ETSC products include vitamins, minerals, herbs, botanicals, personal care products, homeopathies, functional foods, and other products. These products are marketed in various formulations and delivery forms including capsules, tablets, soft gels, chewables, liquids, creams, sprays, powders, and whole herbs. During 2015, ETST entered into a license and distribution agreement to provide its Cannabidiol oil to retailers in the vaping industry. | Note 1 — Organization and Nature of Operations Earth Science Tech, Inc. (“ETST” or the “Company”) was incorporated under the laws of the State of Nevada on April 23, 2010. ETST is a unique biotechnology company focused on cutting edge nutraceuticals and bioceuticals designed to excel in industries such as health, wellness, nutrition, supplement, cosmetic and alternative medicine to improve illnesses and the quality of life for consumers worldwide. The Company sells its products through its retail store located in Coral Gables Florida and through the internet. ETST is currently focused on delivering nutritional and dietary supplements that help with treating symptoms such as: chronic pain, joint pain, inflammation, seizures, high blood pressure, memory loss, depression, weight management, nausea and aging. ETSC products include vitamins, minerals, herbs, botanicals, personal care products, homeopathies, functional foods, and other products. These products are marketed in various formulations and delivery forms including capsules, tablets, soft gels, chewables, liquids, creams, sprays, powders, and whole herbs. During 2015, ETST entered into a license and distribution agreement to provide its Cannabidiol oil to retailers in the vaping industry which led it into the industrial hemp based CBD and full-spectrum oil and products made with them. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | Note 2 — Summary of Significant Accounting Policies Basis of presentation The Company’s accounting policies used in the presentation of the accompanying consolidated financial statements conform to accounting principles generally accepted in the United States of America (“US GAAP”) and have been consistently applied. Principles of consolidation The accompanying consolidated financial statements include all of the accounts of the Company and its wholly-owned subsidiaries. The subsidiaries include Earth Science Tech Inc, Nutrition Empire Co. Ltd., Earth Science Vapor, Earth Science Pharmaceutical Inc., Kannabidioid Inc. All intercompany balances and transactions have been eliminated on consolidation. Use of estimates and assumptions The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company’s significant estimates and assumptions include the fair value of financial instruments; the accrual of the legal settlement, the carrying value recoverability and impairment, if any, of long-lived assets, including the estimated useful lives of fixed assets; the valuation allowance of deferred tax assets; stock based compensation, the valuation of the inventory reserves and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Carrying value, recoverability and impairment of long-lived assets The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC’) 360 to evaluate its long-lived assets. The Company’s long-lived assets, which include property and equipment and a patent are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. Carrying value, recoverability and impairment of long-lived assets The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events. Impairment of changes, if any, are included in operating expenses. Cash and cash equivalents The Company considers all highly liquid investments with a maturity of three months or less to be cash and cash equivalents. Related parties The Company follows ASC 850 for the identification of related parties and disclosure of related party transactions. Pursuant to this ASC related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. Commitments and contingencies The Company follows ASC 450 to account for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. This may result in contingent liabilities that are required to be accrued or disclosed in the financial statements. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. Revenue recognition The Company follows and implemented ASC 606, Revenue from Contracts with Customers for revenue recognition. Although the new revenue standard is expected to have an immaterial effect, if any, on our ongoing net income, we did implement changes to our processes related to revenue recognition and the control activities within them. These included the development of new policies based on the five-step model provided in the new revenue standard, ongoing contract review requirements, and gathering of information provided for disclosures. The Company recognizes revenue from product sales or services rendered when control of the promised goods are transferred to our clients in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation. The Company recognizes its retail store revenue at point of sale, net of sales tax. Inventories Inventories consist of various types of nutraceuticals and bioceuticals at the Company’s retail store and main office. Inventories are stated at the lower of cost or market using the first in, first out (FIFO) method. A reserve is established if necessary to reduce excess or obsolete inventories to their net realizable value. Cost of Sales Components of costs of sales include product costs, shipping costs to customers and any inventory adjustments. Shipping and Handling Costs The Company includes shipping and handling fees billed to customers as revenues and shipping and handling costs for shipments to customers as cost of revenues. Research and development Research and development costs are expensed as incurred. The Company’s research and development expenses relate to its engineering activities, which consist of the design and development of new products for specific customers, as well as the design and engineering of new or redesigned products for the industry in general. Net loss per common share The Company follows ASC 260 to account for earnings per share. Basic earnings per common share calculations are determined by dividing net results from operations by the weighted average number of shares of common stock outstanding during the year. Diluted loss per common share calculations are determined by dividing net results from operations by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. As of December 31, 2018 the Company has no warrants that are anti-dilutive and not included in the calculation of diluted loss per share. Cash flows reporting The Company follows ASC 230 to report cash flows. This standard classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by this standard to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports separately information about investing and financing activities not resulting in cash receipts or payments in the period pursuant this standard. Stock based compensation The Company follows ASC 718 in accounting for its stock based compensation to employees. This standard states that compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. The Company values stock based compensation at the market price of the Company’s common stock as of the date in which the obligation for payment of service is incurred. The Company accounts for transactions in which service are received from non-employees in exchange for equity instruments based on the fair value of the equity instrument exchanged in accordance with ASC 505-50. Property and equipment Property and equipment is recorded at cost net of accumulated depreciation. Depreciation is computed using the straight-line method based upon the estimated useful lives of the respective assets as follows: Leasehold improvements Shorter of useful life or term of lease Signage 5 years Furniture and equipment 5 years Computer equipment 5 years The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from accounts and any resulting gains or losses are included in operations. | Note 2 — Summary of Significant Accounting Policies Basis of presentation The Company’s accounting policies used in the presentation of the accompanying consolidated financial statements conform to accounting principles generally accepted in the United States of America (“US GAAP”) and have been consistently applied. Principles of consolidation The accompanying consolidated financial statements include all of the accounts of the Company and its wholly-owned subsidiaries. The subsidiaries include Earth Science Tech Inc, Nutrition Empire Co. Ltd., Kannabidioid, Inc. (fka Earth Science Vapor, Inc.) and Earth Science Pharmaceutical Inc.. We operate through wholly-owned subsidiaries which provide products, marketing and distribution. As of December 2014, Nutrition Empire, Inc. was opened as a brick and mortar retail store that provides health, wellness, sports nutrition and dietary supplement products at competitive prices. In March 2015, the Company created Earth Science Tech Vapor One, Inc., a license and distribution company allowing us entry in the maturing marketplace of the vaping industry. In 8/22/2016 Earth Science Pharmaceuticals, Inc. was formed toacquire Beo Its, Inc. Our licensing relationship gives us the market mobility, allowing us to capture the emerging market offering our Cannabidiol oil to our retail partners as demand emerges. All intercompany balances and transactions have been eliminated on consolidation. Use of estimates and assumptions The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company’s significant estimates and assumptions include the fair value of financial instruments; the accrual of the legal settlement, the carrying value recoverability and impairment, if any, of long-lived assets, including the estimated useful lives of fixed assets; the valuation allowance of deferred tax assets; stock based compensation, the valuation of the inventory reserves and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Carrying value, recoverability and impairment of long-lived assets The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC’) 360 to evaluate its long-lived assets. The Company’s long-lived assets, which include property and equipment and a patent are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. Carrying value, recoverability and impairment of long-lived assets The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events. Impairment of changes, if any, are included in operating expenses. Cash and cash equivalents The Company considers all highly liquid investments with a maturity of three months or less to be cash and cash equivalents. Related parties The Company follows ASC 850 for the identification of related parties and disclosure of related party transactions. Pursuant to this ASC related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. Commitments and contingencies The Company follows ASC 450 to account for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. This may result in contingent liabilities that are required to be accrued or disclosed in the financial statements. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. Revenue recognition The Company follows ASC 605 for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The Company derives its revenues from sales contracts with its customer with revenues being generated upon rendering of products. Persuasive evidence of an arrangement is demonstrated via invoice; products are considered provided when the product is delivered to the customers; and the sales price to the customer is fixed upon acceptance of the purchase order and there is no separate sales rebate, discount, or volume incentive. The Company recognizes its retail store revenue at point of sale, net of sales tax. Inventories Inventories consist of various types of nutraceuticals and bioceuticals at the Company’s retail store and main office. Inventories are stated at the lower of cost or market using the first in, first out (FIFO) method. A reserve is established if necessary to reduce excess or obsolete inventories to their net realizable value. Cost of Sales Components of costs of sales include product costs, shipping costs to customers and any inventory adjustments. Shipping and Handling Costs The Company includes shipping and handling fees billed to customers as revenues and shipping and handling costs for shipments to customers as cost of revenues. Research and development Research and development costs are expensed as incurred. The Company’s research and development expenses relate to its engineering activities, which consist of the design and development of new products for specific customers, as well as the design and engineering of new or redesigned products for the industry in general. Income taxes The Company follows ASC 740 in accounting for income taxes. Deferred tax assets and liabilities are determined based on the estimated future tax effects of net operating loss carryforwards and temporary differences between the tax bases of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records a valuation allowance for its deferred tax assets when management concludes that it is not more likely than not that such assets will be recognized. The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of March 31, 2018 the Company has not recorded any unrecognized tax benefits. Interest and penalties related to liabilities for uncertain tax positions will be charged to interest and operating expenses, respectively. The Company has net operating loss carry forwards (NOL) for income tax purposes of approximately $4,114,916. This loss is allowed to be offset against future income until the year 2038 when the NOL’s will expire. The tax benefits relating to all timing differences have been fully reserved for in the valuation allowance account due to the substantial losses incurred through March 31, 2018. The change in the valuation allowance for the years ended March 31, 2018 and 2017 was an increase of $0 and $0, respectively. Internal Revenue Code Section 382 (“Section 382”) imposes limitations on the availability of a company’s net operating losses after certain ownership changes occur. The Section 382 limitation is based upon certain conclusions pertaining to the dates of ownership changes and the value of the Company on the dates of the ownership changes. It was determined that an ownership change occurred in October 2013 and March 2014. The amount of the Company’s net operating losses incurred prior to the ownership changes are limited based on the value of the Company on the date of the ownership change. Management has not determined the amount of net operating losses generated prior to the ownership change available to offset taxable income subsequent to the ownership change. Net loss per common share The Company follows ASC 260 to account for earnings per share. Basic earnings per common share calculations are determined by dividing net results from operations by the weighted average number of shares of common stock outstanding during the year. Diluted loss per common share calculations are determined by dividing net results from operations by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. As of March 31, 2018 and March 31, 2017 the Company has no warrants. Cash flows reporting The Company follows ASC 230 to report cash flows. This standard classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by this standard to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports separately information about investing and financing activities not resulting in cash receipts or payments in the period pursuant this standard. Stock based compensation The Company follows ASC 718 in accounting for its stock based compensation to employees. This standard states that compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. The Company values stock based compensation at the market price of the Company’s common stock as of the date in which the obligation for payment of service is incurred. The Company accounts for transactions in which service are received from non-employees in exchange for equity instruments based on the fair value of the equity instrument exchanged in accordance with ASC 505-50. Property and equipment Property and equipment is recorded at cost net of accumulated depreciation. Depreciation is computed using the straight-line method based upon the estimated useful lives of the respective assets as follows: Leasehold improvements Shorter of useful life or term of lease Signage 5 years Furniture and equipment 5 years Computer equipment 5 years The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from accounts and any resulting gains or losses are included in operations. Recently issued accounting pronouncements In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-15, Classification of Certain Cash Receipts and Cash Payments In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation – Stock Compensation In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. This guidance will supersede Topic 605, Revenue Recognition, in addition to other industry-specific guidance, once effective. The new standard requires a company to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, as a revision to ASU 2014-09, which revised the effective date to fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted but not prior to periods beginning after December 15, 2016 (i.e., the original adoption date per ASU 2014-09). In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations, which clarifies certain aspects of the principal- versus-agent guidance, including how an entity should identify the unit of accounting for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements, such as service transactions. The amendments also reframe the indicators to focus on evidence that an entity is acting as a principal rather than as an agent. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, which clarifies how an entity should evaluate the nature of its promise in granting a license of intellectual property, which will determine whether it recognizes revenue over time or at a point in time. The amendments also clarify when a promised good or service is separately identifiable (i.e., distinct within the context of the contract) and allow entities to disregard items that are immaterial in the context of a contract. The Company continues to assess the impact this new standard may have on its ongoing financial reporting. The Company has identified its revenue streams both by contract and product type and is assessing each for potential impacts. For the revenue streams assessed, the Company does not anticipate a material impact in the timing or amount of revenue recognized. Recently issued accounting pronouncements (continued) In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles-Goodwill and Other, which simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill impairment test. Instead, if “the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.” The guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this new standard will have on its Consolidated Financial Statements. All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable. Intangible Assets In October 2014, the Company acquired a patent that is being amortized over its useful life of fifteen years in accordance with ASC 350, “Intangibles - Goodwill and Other”. The Company purchased the patent through a cash payment of $25,000. Additionally, the Company capitalized patent fees of $26,528. The Company’s balance of intangible assets on the condensed consolidated balance sheet net of accumulated amortization is $38,740 and $43,146 as of March 31, 2018 and March 31, 2017, respectively. Amortization expense related to the intangible assets was $ 4,406 and $4,406, respectively for the years ended March 31, 2018 and 2017, respectively. Reclassification Certain amounts from the prior period have been reclassified to conform to the current period presentation. |
Going Concern
Going Concern | 9 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Going Concern | Note 3 — Going Concern The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. At December 31, 2018, the Company had negative working capital, an accumulated deficit of $27,148,206 and was in negotiations to extend the maturity date on notes payable that are in default. These factors raise substantial doubt about the Company’s ability to continue as a going concern. While the Company is attempting to generate sufficient revenues, the Company’s cash position may not be sufficient to pay its obligations and support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate sufficient revenues may provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate sufficient revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenues. The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. | Note 3 — Going Concern The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. At March 31, 2018, the Company had negative working capital, an accumulated deficit of $ 25,498,207 and was in negotiations to extend the maturity date on notes payable that are in default. These factors raise substantial doubt about the Company’s ability to continue as a going concern. While the Company is attempting to generate sufficient revenues, the Company’s cash position may not be sufficient to pay its obligations and support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate sufficient revenues may provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate sufficient revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenues. The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Related Party Balances and Tran
Related Party Balances and Transactions | 12 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Balances and Transactions | Note 4 — Related Party Balances and Transactions During 2014, a former stockholder provided funds to the Company evidenced by 8% uncollateralized notes payable due September 30, 2014. As of March 31, 2018 and March 31, 2017, the Company had $59,558 and $59,558, respectively of these notes payable which are in default. The Company is in current negotiations to extend the maturity of these notes for an additional 2 years. Interest expense for the years ended March 31, 2018 and 2017, were $ 4,765 and $ 4,765 During the years March 31, 2018 and 2017 consulting fees were paid to Majorca Group, Ltd in the amounts of $21,776 and $50,172 respectively. Kannabidioid, Inc had related party revenue from Earth Science Tech Inc in the amount of $1,030 for the year ended March 31, 2018. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Note 5 — Stockholders’ Equity During the years ended March 31, 2018 and 2017, the Company issued 3,096,698 and 2,297,802 common shares for cash of $965,992 and $851,753 respectively. During the years ended March 31, 2018 and 2017, the Company issued 533,010 and 330,535 common shares for services at a fair value of $447,542 and $194,620 respectively. During the years ended March 31, 2018 and 2017, the Company issued 233,000 and 238,500 common shares with a fair value of $170,775 and $238,000, respectively to officers as compensation. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | Note 4 - Commitments and Contingencies Legal Proceedings Cromongen Biotechnology Corporation vs. Earth Science Tech, Inc. The Company is engaged in a legal controversy with a former supplier, Cromogen Biotechnology Corporation (“Cromogen”). The controversy is a matter involving a distribution agreement and the alleged actions outside of the distribution agreement by prior management. The Company claimed that Cromogen did not perform in accordance with its contract to supply high quality hemp oil to the Company on a consistent and timely manner. In accordance with the arbitration clause stipulated to in the distribution agreement, the parties agreed to arbitrate any controversy arising out of the distribution agreement. Notwithstanding the fact that their agreement to arbitrate was limited to disputes arising out of the agreement, Cromogen counterclaimed damages from lost business due to prior managements’ failure to forward samples of CBD oil to another potential customer of Cromogen’s, something that had not been covered by the distribution agreement. In the arbitration proceeding, the Company filed a counterclaim and affirmative defenses to Cromogen’s claims for damages. The Company also filed a legal action in the courts of Florida against Cromogen, its principals and related companies, wherein fraud is alleged in connection with Cromogen’s representations regarding the formulation and quality of the hemp oil supplied. The legal action in the Florida courts has been stayed by court order. Since then the arbitration panel issued an award in favor of Cromogen (the “Award”) on June 8, 2018. The Award denied the Company’s counterclaims and certain of Cromogen’s claims. However, the Award was ultimately in favor of Cromogen on three issues which came in at a total of $3,994,522.55. This consisted of a sum for breach of contract against the Company in the amount of $120,265.00, a sum for costs and fees against the Company in the amount of $111,057.55 and a sum for the claim of tortuous interference and conversion against the Company in the amount of $3,763,200.00 based on alleged lost profits based on the claimed lost contract that would have allegedly resulted in business of $48 million in revenue for Cromogen. On December 17, 2018, after the issuance of a Federal Magistrate’s Report and Recommendations, the Company received notice that the District Court in Florida, had confirmed the Award that had been previously granted by the arbitration panel, denying however, the award of fees that the arbitration panel had granted Cromogen. The Company believes that the arbitration panel exceeded the scope of its authority in ruling on the tort matter on at least two grounds. First, the claim for tortuous interference and conversion do not involve the parties’ performance under the distribution agreement nor were such extra-contractual matters covered by the language in the arbitration clause. The only way to reach that conclusion is for the arbitration panel to broaden its scope to include them. As such, it is the Company’s position that the arbitration panel exceeded the scope of its authority in hearing and ruling on the tort claims. Second, as a matter of law, the allowance of the tort claims violates the economic loss principles in contract law in the State of New York; and because of the forgoing reasons, among others, the court erred in failing to vacate the tort portions of the Award. This matter is now on appeal and the Company is optimistic about its prospects on appeal because of several recent cases in the jurisdiction where lower courts’ judgments confirming arbitration awards have been overturned because the arbitrators exceeded the scope of their authority. Nevertheless, the outcome remains speculative and as such (although argument has been made that only the breach of contract portion of damages should be accrued), the Company elected not to modify the reserve previously established as “accrued settlement” until the matter is either resolved on appeal or by the receiver. Additionally, notwithstanding its prospects for success on appeal, faced with such a large judgment, the Company considered its options and settled on the appointment of a receiver and putting the Company into receivership. On January 11, 2019 the Company received notice that Strongbow Advisors, Inc., and Robert Stevens (the “Receiver”) had been appointed as receiver by the Nevada District Court, Clark County Nevada in Case No. A-18-784952-C. In addition to appointing the Receiver, the Court issued a Writ of Injunction or “Blanket Stay” covering the Company and its assets during the time that the Company is in receivership. The Blanket Stay will remain in place unless otherwise waived by the Receiver, or it is vacated by the Court or alternatively, lifted by the Court, upon a “motion to lift stay” duly made and approved by the Nevada District Court. The purpose of the “Blanket Stay” is to protect the estate and prevent interference with its administration while the Company’s financial issues are fully analyzed and resolved. As part of this process, creditors will be notified and required to provide claims in writing under oath on or before the deadline stated in the notice provided by the Receiver or those claims will be barred under NRS §78.675. The Registrant determined that it was in its best interest and those of its shareholders and creditors to seek protection under receivership after evaluating its options following the order for judgment in favor of Cromogen in the matter entitled Cromogen Biotechnology Corporation vs. Earth Science Tech, Inc.. The appointment of Strongbow Advisors, Inc. and Robert Stevens as Receiver was approved unanimously by the Registrant’s Board of Directors and a majority of its debt holders. Strongbow and Stevens were selected because of their reputation of helping companies restructure and continue to execute on their business plans, albeit under a debt and capital structure that allows them to succeed. Unlike many receivers who simply look to wind up the affairs of a company and liquidate its assets, Stevens and Strongbow have built a reputation and differentiated themselves by assisting companies with financings and working in the capital markets to help companies raise the capital needed not only to pay debts but to build and grow their businesses. As a result, they are almost hyper-vigilant in protecting their companies’ shareholders and are not focused solely on creditors. About Strongbow Advisors, Inc. After lengthy discussions with its principal, Robert Stevens, and after having had an opportunity to research the history of some of the companies for which he and his firm were judicially appointed as receiver, Earth Science’s management is optimistic about having Strongbow Advisors serve as its Receiver. As stated, unlike many receivers who take a liquidation approach to their judicial roles, Stevens has a pragmatic philosophy of helping companies to restructure and use, what is generally considered, a negative situation as an opportunity for them to become better, stronger, more vibrant, operating companies. Stevens has a firm commitment to protecting creditors and shareholders alike; however, it’s his attention to an enterprise as a whole and in particular on the business’ shareholders that truly differentiates Strongbow Advisors and him from other receivers. In his role as receiver, Stevens has reorganized companies that emerge from receivership having fully settled all of their liabilities and recovered significant value for their shareholders, to continue as stronger successful companies. As an example, in one case we reviewed, while in receivership the company was not only able to raise capital and pay its creditors in full, it was also able to recover all of the value for the investing shareholders dating back to its IPO in 2008; and in that case, those IPO investors had not only not lost money, but were able to realize substantial returns on their investments as shareholders. In short, Stevens has a breadth of experience as a receiver helping companies and their creditors, shareholders and other constituents who have effectively “found themselves with lemons,” to “make high quality lemonade.” As such Earth Science is optimistic that it will be another one of Strongbow’s success stories. Lease Agreements On August 14, 2017, the Company entered into an office lease covering its new Doral, Florida headquarters, with landlord Doral Flex. The Lease term is for 37 months commencing on September 1, 2017 and ending on September 30, 2020. The monthly rent, including sales tax is $1,990, $2,056 and $2,124 for the years ending 9/30/2018, 9/30/2019 and 9/30/2020 respectively. A deposit of $6,191 was tendered to secure the lease. Rent expense for the three months and nine months ended December 31, 2018 were $6,996 and $20,218 respectively. | Note 6 - Commitments and Contingencies Legal Proceedings Cromongen Biotechnology Corporation vs. Earth Science Tech, Inc. Since then the Company has received a copy of the Final Award (the “Award”) from the Arbitration Panel that was rendered June 8, 2018. The Award denied the Company’s counterclaims and certain of Cromogen’s claims. However, the Award was ultimately in favor of Cromogen on three issues which came in at a total of $3,994,522.55. This consisted of a sum for breach of contract against the Company in the amount of $120,265.00, a sum for costs and fees against the Company in the amount of $111,057.55 and a sum for the claim of tortuous interference and conversion against the Company in the amount of $3,763,200.00 based on alleged lost profits based on the claimed lost contract that would have allegedly resulted in business of $48 million in revenue for Cromogen. The Award has not been confirmed; and in reviewing it, the Company’s counsel found significant problems with the calculations based on Cromogen’s own numbers that it believes is will be successful in disputing either pursuant to a motion before the Arbitration Panel or at such time as Cromogen seeks to have the Award confirmed in court. Regardless of the Award, the Company intends to vigorously dispute the confirmation of the Award and although there can be no assurances, is optimistic because of the basis for appeal that its counsel has identified Management has consulted with legal counsel and has recorded an estimated accrual based on the probability of an arbitration award and legal fees against the Company of $231,323 as of March 31, 2018. In May of 2016, Earth Science Tech entered into a contract with Greenlink Software Services, LLC, aka Digital Exchange, as Earth Science Tech’s merchant service processor. In September of 2017, Digital Exchange closed their business and Earth Science moved to T1 Payments as their merchant processor. As of September 2017, Digital Exchange owes Earth Science Tech $74,918.86 in undisbursed bank holds and sales. Currently, Earth Science Tech is in negotiations with Digital Exchange, and both parties’ legal representatives in an attempt to resolve this matter. We are uncertain of the amount of monies that will be received. Consulting Agreement Effective May 1, 2015, the Company entered into a Product Development and Marketing Agreement with Majorca Group, Inc. (“Developer”) a principal stockholder for cash compensation equal to 15% of certain net sales. Under the Agreement, the Company engaged Majorca to assist with the development and marketing of new product lines and to effect introductions of business prospects to the Company. This Agreement shall terminate on the 30th day of April, 2018 and is renewable for a second term of three years at the option of the Developer by 60-day notice to the Company prior to the expiration of the first term. Lease Agreements On August 14, 2017, the Company entered into an office lease covering its new Doral, Florida headquarters, with landlord Doral Flex. The Lease term is for 37 months commencing on September 1, 2017 and ending on September 30, 2020. The monthly rent, including sales tax is $1,990, $2,056 and $2,124 for the years ending 9/30/2018, 9/30/2019 and 9/30/2020 respectively. A deposit of $6,191 was tendered to secure the lease. Rent expense for the years ending March 1, 2018 and 2017 was $15,098 and $19,942 respectively. |
Balance Sheet and Income Statem
Balance Sheet and Income Statement Footnotes | 9 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Mar. 31, 2018 | |
Balance Sheet And Income Statement Footnotes | ||
Balance Sheet and Income Statement Footnotes | Note 6 - Balance Sheet and Income Statement Footnotes A c Prepaid expenses and other current assets of $60,093 as of December 31, 2018 mainly represent $61,386 in prepaid expenses for an accounts payable invoice from Greybeard Holding dated 7/24/18 for inventory but not yet delivered and $(1,881) in refunds from November 2018 to be processed by T1 Payments. Accounts payable are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities Accrued expenses of $70,597 as of December 31, 2018 mainly represent $22,597 of accrued interest on notes payable and accrued payroll for Michael Aube for $48,000. General and administrative expenses were $94,159 and $392,703 for the three months ended December 31, 2018 and 2017 respectively and $392,703 and $ 575,906 for the nine months ended December 31, 2018 and 2017 respectively. For the three months ended December 31, 2018, the majority comprised of consulting fees in the amount of $36,247 and accounting fees of $1,600. The remainder of, $56,312 was for employee compensation, rent, and other expenses. For the Nine months ended December 31, 2018 the majority comprised of consulting fees of $144,656 and accounting fees of $73,400. The remainder of $174,647 was for employee compensation, rent and other expenses. Professional fees were $13,351 and $39,605 for the three months and nine months ended December 31, 2018 respectively. The bulk of these expenses were paid to transfer agent for issuance of stock. Costs of legal proceedings and other legal matters were $142,064 and $413,611 for the three months and nine months ended December 31, 2018. Legal expenses were for expenses of counsel handling litigation, intellectual property, Exchange Act reporting and general corporate and transactional issues. Research and development were $136,489 and $ 305,999 for the three months and nine months ended December 31, 2018. These expenses were for new products and a medical device. | Note 7 - Balance Sheet and Income Statement Footnotes Accounts receivable represent normal trade obligations from customers that are subject to normal trade collection terms, without discounts or rebates. If collection is expected in one year or less they are classified as current assets. If not, they are presented as non-current assets. Notwithstanding, these collections, the Company periodically evaluates the collectability of accounts receivable and considers the need to establish an allowance for doubtful debts based upon historical collection experience and specifically identifiable information about its customers. As of March 31, 2018 and 2017, the Company had allowances of $111,301 and $23,959 respectively. The Company used an allowance of 40% of receivables over 90 days to charge bad debt expense. Prepaid expenses and other current assets for $6,033 for the year ended March 31, 2018 represent un-deposited funds. Accounts payable are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities Accrued expenses of $93,987 as of March 31, 2018 represent $38,963 owed to Natural Vitamins for inventory,$19,024 of accrued interest on notes payable and accrued payroll for Michael Aube for $36,000.00. Marketing expenses were $332,986 and $77,857 for March 31, 2018 and 2017 respectively. For the period March 31, 2018, expenses were incurred for obtaining a new chief of sales officer and a new team of representatives, Additional marketing expenses assisted in the product revamp launched in February 2018, increasing our revenues. General and administrative expenses were $653,242 and $761,559 for March 31, 2018 and 2017 respectively. For the period March 31, 2018, the majority comprised of consulting fees in the amount of $448,409 which was incurred for negotiation and setting up joint ventures, the new headquarters and assisted in marketing product revamp and management team. The remainder, $204,833 was for employee compensation, rent, accounting fees and other expenses. Donations represent $50,000 shares of common stock issued to Earth Science Foundation for the fair value of $35,500. Loss on disposal of assets as of March 31, 2018 in the amount of $60,792 was a result of the entity Nutrition Empire Co Ltd which was dormant as of February, 2018 and all assets were disposed. All inventory had expired. Professional fees were $106,289 and $82,578 for years ended March 31, 2018 and 2017, respectively. The bulk of these expenses were paid to transfer agent for issuance of stock. Cost of legal proceedings were $79,447 and $15,528 for years ending March 31, 2018 and 2017, respectively. Legal expenses were for patent, security exchange and corporate attorney fees., Research and development were $150,451 for year ending March 31, 2018. These expenses were for new products and a medical device. |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Mar. 31, 2018 | |
Subsequent Events [Abstract] | ||
Subsequent Events | Note 6-Subsequent Events On January 1, 2019 the Company engaged David Barbash as chief sales officer (“CSO”) transitioning Jill Buzan, the Company’s previous CSO, to the position as a Florida sales representative. On January 11, 2019 the Company signed an agreement to transfer of majority ownership and control of its wholly owned subsidiary, Kannabinoid, Inc., to a third party, retaining an interest in an ongoing 5% royalty on all sales of its Kana product. On January 09, 2019 the Company entered into receivership with the judicial appointment of Robert Stevens and Strongbow Advisors, Inc. The Company determined that it was in its best interest and those of its shareholders and creditors to seek protection under receivership after evaluating its options following the order for judgment in favor of Cromogen in the matter entitled Cromogen Biotechnology Corporation vs. Earth Science Tech, Inc.. The appointment of Strongbow Advisors, Inc. and Robert Stevens as Receiver was approved unanimously by the Registrant’s Board of Directors and a majority of its debt holders. Strongbow and Stevens were selected because of their reputation of helping companies restructure and continue to execute on their business plans, albeit under a debt and capital structure that allows them to succeed. Unlike many receivers who simply look to wind up the affairs of a company and liquidate its assets, Stevens and Strongbow have built a reputation and differentiated themselves by assisting companies with financings and working in the capital markets to help companies raise the capital needed not only to pay debts but to build and grow their businesses. As a result, they are almost hyper-vigilant in protecting their companies’ shareholders and are not focused solely on creditors. The Company has a motion for shortening of time for claims for Cromogen on March 27, 2019 to move to compel Cromogen to file the claim in the State of Nevada. | Note 8-Subsequent Events On May 14, 2018 the company submitted its Form 10 to become fully reporting and is currently in approval process. On May 30, 2018 the company entered a distribution agreement with AATAC to conduct a marketing program directing distributors and wholesalers, as well as providing fulfillment facilities and account representatives. On January 1, 2019 the Company engaged David Barbash as chief sales officer (“CSO”) transitioning Jill Buzan, the Company’s previous CSO, to the position as a Florida sales representative. On January 11, 2019 the Company signed an agreement to transfer of majority ownership and control of its wholly owned subsidiary, Kannabinoid, Inc., to a third party, retaining an interest in an ongoing 5% royalty on all sales of its Kana product. On January 09, 2019 the Company entered into receivership with the judicial appointment of Robert Stevens and Strongbow Advisors, Inc. The Company determined that it was in its best interest and those of its shareholders and creditors to seek protection under receivership after evaluating its options following the order for judgment in favor of Cromogen in the matter entitled Cromogen Biotechnology Corporation vs. Earth Science Tech, Inc.. The appointment of Strongbow Advisors, Inc. and Robert Stevens as Receiver was approved unanimously by the Registrant’s Board of Directors and a majority of its debt holders. Strongbow and Stevens were selected because of their reputation of helping companies restructure and continue to execute on their business plans, albeit under a debt and capital structure that allows them to succeed. Unlike many receivers who simply look to wind up the affairs of a company and liquidate its assets, Stevens and Strongbow have built a reputation and differentiated themselves by assisting companies with financings and working in the capital markets to help companies raise the capital needed not only to pay debts but to build and grow their businesses. As a result, they are almost hyper-vigilant in protecting their companies’ shareholders and are not focused solely on creditors. The Company has a motion for shortening of time for claims for Cromogen on March 27, 2019 to move to compel Cromogen to file the claim in the State of Nevada. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of presentation The Company’s accounting policies used in the presentation of the accompanying consolidated financial statements conform to accounting principles generally accepted in the United States of America (“US GAAP”) and have been consistently applied. | Basis of presentation The Company’s accounting policies used in the presentation of the accompanying consolidated financial statements conform to accounting principles generally accepted in the United States of America (“US GAAP”) and have been consistently applied. |
Principles of Consolidation | Principles of consolidation The accompanying consolidated financial statements include all of the accounts of the Company and its wholly-owned subsidiaries. The subsidiaries include Earth Science Tech Inc, Nutrition Empire Co. Ltd., Earth Science Vapor, Earth Science Pharmaceutical Inc., Kannabidioid Inc. All intercompany balances and transactions have been eliminated on consolidation. | Principles of consolidation The accompanying consolidated financial statements include all of the accounts of the Company and its wholly-owned subsidiaries. The subsidiaries include Earth Science Tech Inc, Nutrition Empire Co. Ltd., Kannabidioid, Inc. (fka Earth Science Vapor, Inc.) and Earth Science Pharmaceutical Inc.. We operate through wholly-owned subsidiaries which provide products, marketing and distribution. As of December 2014, Nutrition Empire, Inc. was opened as a brick and mortar retail store that provides health, wellness, sports nutrition and dietary supplement products at competitive prices. In March 2015, the Company created Earth Science Tech Vapor One, Inc., a license and distribution company allowing us entry in the maturing marketplace of the vaping industry. In 8/22/2016 Earth Science Pharmaceuticals, Inc. was formed toacquire Beo Its, Inc. Our licensing relationship gives us the market mobility, allowing us to capture the emerging market offering our Cannabidiol oil to our retail partners as demand emerges. All intercompany balances and transactions have been eliminated on consolidation. |
Use of Estimates and Assumptions | Use of estimates and assumptions The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company’s significant estimates and assumptions include the fair value of financial instruments; the accrual of the legal settlement, the carrying value recoverability and impairment, if any, of long-lived assets, including the estimated useful lives of fixed assets; the valuation allowance of deferred tax assets; stock based compensation, the valuation of the inventory reserves and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. | Use of estimates and assumptions The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company’s significant estimates and assumptions include the fair value of financial instruments; the accrual of the legal settlement, the carrying value recoverability and impairment, if any, of long-lived assets, including the estimated useful lives of fixed assets; the valuation allowance of deferred tax assets; stock based compensation, the valuation of the inventory reserves and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. |
Carrying Value, Recoverability and Impairment of Long-lived Assets | Carrying value, recoverability and impairment of long-lived assets The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC’) 360 to evaluate its long-lived assets. The Company’s long-lived assets, which include property and equipment and a patent are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events. Impairment of changes, if any, are included in operating expenses. | Carrying value, recoverability and impairment of long-lived assets The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC’) 360 to evaluate its long-lived assets. The Company’s long-lived assets, which include property and equipment and a patent are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events. Impairment of changes, if any, are included in operating expenses. |
Cash and Cash Equivalents | Cash and cash equivalents The Company considers all highly liquid investments with a maturity of three months or less to be cash and cash equivalents. | Cash and cash equivalents The Company considers all highly liquid investments with a maturity of three months or less to be cash and cash equivalents. |
Related Parties | Related parties The Company follows ASC 850 for the identification of related parties and disclosure of related party transactions. Pursuant to this ASC related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. | Related parties The Company follows ASC 850 for the identification of related parties and disclosure of related party transactions. Pursuant to this ASC related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. |
Commitments and Contingencies | Commitments and contingencies The Company follows ASC 450 to account for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. This may result in contingent liabilities that are required to be accrued or disclosed in the financial statements. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. | Commitments and contingencies The Company follows ASC 450 to account for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. This may result in contingent liabilities that are required to be accrued or disclosed in the financial statements. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. |
Revenue Recognition | Revenue recognition The Company follows and implemented ASC 606, Revenue from Contracts with Customers for revenue recognition. Although the new revenue standard is expected to have an immaterial effect, if any, on our ongoing net income, we did implement changes to our processes related to revenue recognition and the control activities within them. These included the development of new policies based on the five-step model provided in the new revenue standard, ongoing contract review requirements, and gathering of information provided for disclosures. The Company recognizes revenue from product sales or services rendered when control of the promised goods are transferred to our clients in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation. The Company recognizes its retail store revenue at point of sale, net of sales tax. | Revenue recognition The Company follows ASC 605 for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The Company derives its revenues from sales contracts with its customer with revenues being generated upon rendering of products. Persuasive evidence of an arrangement is demonstrated via invoice; products are considered provided when the product is delivered to the customers; and the sales price to the customer is fixed upon acceptance of the purchase order and there is no separate sales rebate, discount, or volume incentive. The Company recognizes its retail store revenue at point of sale, net of sales tax. |
Inventories | Inventories Inventories consist of various types of nutraceuticals and bioceuticals at the Company’s retail store and main office. Inventories are stated at the lower of cost or market using the first in, first out (FIFO) method. A reserve is established if necessary to reduce excess or obsolete inventories to their net realizable value. | Inventories Inventories consist of various types of nutraceuticals and bioceuticals at the Company’s retail store and main office. Inventories are stated at the lower of cost or market using the first in, first out (FIFO) method. A reserve is established if necessary to reduce excess or obsolete inventories to their net realizable value. |
Cost of Sales | Cost of Sales Components of costs of sales include product costs, shipping costs to customers and any inventory adjustments. | Cost of Sales Components of costs of sales include product costs, shipping costs to customers and any inventory adjustments. |
Shipping and Handling Costs | Shipping and Handling Costs The Company includes shipping and handling fees billed to customers as revenues and shipping and handling costs for shipments to customers as cost of revenues. | Shipping and Handling Costs The Company includes shipping and handling fees billed to customers as revenues and shipping and handling costs for shipments to customers as cost of revenues. |
Research and Development | Research and development Research and development costs are expensed as incurred. The Company’s research and development expenses relate to its engineering activities, which consist of the design and development of new products for specific customers, as well as the design and engineering of new or redesigned products for the industry in general. | Research and development Research and development costs are expensed as incurred. The Company’s research and development expenses relate to its engineering activities, which consist of the design and development of new products for specific customers, as well as the design and engineering of new or redesigned products for the industry in general. |
Income Taxes | Income taxes The Company follows ASC 740 in accounting for income taxes. Deferred tax assets and liabilities are determined based on the estimated future tax effects of net operating loss carryforwards and temporary differences between the tax bases of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records a valuation allowance for its deferred tax assets when management concludes that it is not more likely than not that such assets will be recognized. The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of March 31, 2018 the Company has not recorded any unrecognized tax benefits. Interest and penalties related to liabilities for uncertain tax positions will be charged to interest and operating expenses, respectively. The Company has net operating loss carry forwards (NOL) for income tax purposes of approximately $4,114,916. This loss is allowed to be offset against future income until the year 2038 when the NOL’s will expire. The tax benefits relating to all timing differences have been fully reserved for in the valuation allowance account due to the substantial losses incurred through March 31, 2018. The change in the valuation allowance for the years ended March 31, 2018 and 2017 was an increase of $0 and $0, respectively. Internal Revenue Code Section 382 (“Section 382”) imposes limitations on the availability of a company’s net operating losses after certain ownership changes occur. The Section 382 limitation is based upon certain conclusions pertaining to the dates of ownership changes and the value of the Company on the dates of the ownership changes. It was determined that an ownership change occurred in October 2013 and March 2014. The amount of the Company’s net operating losses incurred prior to the ownership changes are limited based on the value of the Company on the date of the ownership change. Management has not determined the amount of net operating losses generated prior to the ownership change available to offset taxable income subsequent to the ownership change. | |
Net Loss Per Common Share | Net loss per common share The Company follows ASC 260 to account for earnings per share. Basic earnings per common share calculations are determined by dividing net results from operations by the weighted average number of shares of common stock outstanding during the year. Diluted loss per common share calculations are determined by dividing net results from operations by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. As of December 31, 2018 the Company has no warrants that are anti-dilutive and not included in the calculation of diluted loss per share. | Net loss per common share The Company follows ASC 260 to account for earnings per share. Basic earnings per common share calculations are determined by dividing net results from operations by the weighted average number of shares of common stock outstanding during the year. Diluted loss per common share calculations are determined by dividing net results from operations by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. As of March 31, 2018 and March 31, 2017 the Company has no warrants. |
Cash Flows Reporting | Cash flows reporting The Company follows ASC 230 to report cash flows. This standard classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by this standard to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports separately information about investing and financing activities not resulting in cash receipts or payments in the period pursuant this standard. | Cash flows reporting The Company follows ASC 230 to report cash flows. This standard classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by this standard to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports separately information about investing and financing activities not resulting in cash receipts or payments in the period pursuant this standard. |
Stock Based Compensation | Stock based compensation The Company follows ASC 718 in accounting for its stock based compensation to employees. This standard states that compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. The Company values stock based compensation at the market price of the Company’s common stock as of the date in which the obligation for payment of service is incurred. The Company accounts for transactions in which service are received from non-employees in exchange for equity instruments based on the fair value of the equity instrument exchanged in accordance with ASC 505-50. | Stock based compensation The Company follows ASC 718 in accounting for its stock based compensation to employees. This standard states that compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. The Company values stock based compensation at the market price of the Company’s common stock as of the date in which the obligation for payment of service is incurred. The Company accounts for transactions in which service are received from non-employees in exchange for equity instruments based on the fair value of the equity instrument exchanged in accordance with ASC 505-50. |
Property and Equipment | Property and equipment Property and equipment is recorded at cost net of accumulated depreciation. Depreciation is computed using the straight-line method based upon the estimated useful lives of the respective assets as follows: Leasehold improvements Shorter of useful life or term of lease Signage 5 years Furniture and equipment 5 years Computer equipment 5 years The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from accounts and any resulting gains or losses are included in operations. | Property and equipment Property and equipment is recorded at cost net of accumulated depreciation. Depreciation is computed using the straight-line method based upon the estimated useful lives of the respective assets as follows: Leasehold improvements Shorter of useful life or term of lease Signage 5 years Furniture and equipment 5 years Computer equipment 5 years The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from accounts and any resulting gains or losses are included in operations. |
Recently Issued Accounting Pronouncements | Recently issued accounting pronouncements In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-15, Classification of Certain Cash Receipts and Cash Payments In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation – Stock Compensation In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. This guidance will supersede Topic 605, Revenue Recognition, in addition to other industry-specific guidance, once effective. The new standard requires a company to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, as a revision to ASU 2014-09, which revised the effective date to fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted but not prior to periods beginning after December 15, 2016 (i.e., the original adoption date per ASU 2014-09). In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations, which clarifies certain aspects of the principal- versus-agent guidance, including how an entity should identify the unit of accounting for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements, such as service transactions. The amendments also reframe the indicators to focus on evidence that an entity is acting as a principal rather than as an agent. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, which clarifies how an entity should evaluate the nature of its promise in granting a license of intellectual property, which will determine whether it recognizes revenue over time or at a point in time. The amendments also clarify when a promised good or service is separately identifiable (i.e., distinct within the context of the contract) and allow entities to disregard items that are immaterial in the context of a contract. The Company continues to assess the impact this new standard may have on its ongoing financial reporting. The Company has identified its revenue streams both by contract and product type and is assessing each for potential impacts. For the revenue streams assessed, the Company does not anticipate a material impact in the timing or amount of revenue recognized. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles-Goodwill and Other, which simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill impairment test. Instead, if “the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.” The guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this new standard will have on its Consolidated Financial Statements. All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable. | |
Intangible Assets | Intangible Assets In October 2014, the Company acquired a patent that is being amortized over its useful life of fifteen years in accordance with ASC 350, “Intangibles - Goodwill and Other”. The Company purchased the patent through a cash payment of $25,000. Additionally, the Company capitalized patent fees of $26,528. The Company’s balance of intangible assets on the condensed consolidated balance sheet net of accumulated amortization is $38,740 and $43,146 as of March 31, 2018 and March 31, 2017, respectively. Amortization expense related to the intangible assets was $ 4,406 and $4,406, respectively for the years ended March 31, 2018 and 2017, respectively. | |
Reclassification | Reclassification Certain amounts from the prior period have been reclassified to conform to the current period presentation. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | ||
Schedule of Property and Equipment Estimated Useful Lives | Depreciation is computed using the straight-line method based upon the estimated useful lives of the respective assets as follows: Leasehold improvements Shorter of useful life or term of lease Signage 5 years Furniture and equipment 5 years Computer equipment 5 years | Depreciation is computed using the straight-line method based upon the estimated useful lives of the respective assets as follows: Leasehold improvements Shorter of useful life or term of lease Signage 5 years Furniture and equipment 5 years Computer equipment 5 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Oct. 31, 2014 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||||
Income tax likelihood percentage, description | The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. | |||
Net operating loss carry forwards | $ 4,114,916 | |||
Operating loss carry forwards expiration term | year 2038 | |||
Change in the valuation allowance | $ 0 | $ 0 | ||
Payments to acquire patent | $ 25,000 | |||
Capitalized patent fees | $ 26,528 | |||
Intangible assets, accumulated amortization | 38,740 | 43,146 | $ 35,436 | |
Amortization expense of intangible assets | $ 4,406 | $ 4,406 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Property and Equipment Estimated Useful Lives (Details) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Mar. 31, 2018 | |
Leasehold Improvements [Member] | ||
Property and Equipment, Estimated Useful Lives | Shorter of useful life or term of lease | Shorter of useful life or term of lease |
Signage [Member] | ||
Property and Equipment, Useful Life | 5 years | 5 years |
Furniture and Equipment [Member] | ||
Property and Equipment, Useful Life | 5 years | 5 years |
Computer Equipment [Member] | ||
Property and Equipment, Useful Life | 5 years | 5 years |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | Dec. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accumulated deficit | $ (27,148,206) | $ (25,498,207) | $ (23,784,568) |
Related Party Balances and Tr_2
Related Party Balances and Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2014 | |
Notes payable related parties | $ 59,558 | $ 59,558 | $ 59,558 | $ 59,558 | |||
Debt extend maturity term | 2 years | ||||||
Interest expense | 1,191 | 3,573 | $ 4,765 | 4,773 | |||
Consulting fees | $ 36,247 | $ 144,656 | 448,409 | ||||
Majorca Group, Ltd [Member] | |||||||
Consulting fees | 21,776 | $ 50,172 | |||||
Kannabidioid, Inc [Member] | |||||||
Revenue from related parties | $ 1,030 | ||||||
Former Stockholder [Member] | Uncollateralized [Member] | |||||||
Percentage of notes payable | 8.00% | ||||||
Notes payable due date | Sep. 30, 2014 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | |
Equity [Abstract] | |||||
Number of common stock issued for cash, shares | 3,096,698 | 2,297,802 | |||
Number of common stock issued for cash | $ 352,700 | $ 597,944 | $ 443,050 | $ 965,992 | $ 851,753 |
Number of common stock issued for services, shares | 533,010 | 330,535 | |||
Number of common stock issued for services | 13,500 | 14,820 | 29,100 | $ 447,542 | $ 194,620 |
Number of common stock issued for officer compensation, shares | 233,000 | 238,500 | |||
Number of common stock issued for officer compensation | $ 96,775 | $ 154,350 | $ 98,000 | $ 170,775 | $ 238,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | May 01, 2015 | Dec. 31, 2018 | Dec. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2017 |
Number of shares issued value | $ 3,994,523 | $ 3,994,523 | ||||
Breach of contract amount | 120,265 | 120,265 | ||||
Costs and fees amount | 111,058 | 111,058 | ||||
Conversion value | 3,763,200 | 3,763,200 | ||||
Claimed lost contract revenue | 48,000,000 | 48,000,000 | ||||
Accrued settlement | $ 231,323 | $ 231,323 | $ 231,323 | $ 223,500 | ||
Undisbursed bank holds and sales | $ 74,919 | |||||
Lease terms | 37 months | 37 months | ||||
Deposits | 6,191 | $ 6,191 | $ 6,191 | 17,211 | ||
Rent expenses | 6,996 | 20,218 | 15,098 | $ 19,942 | ||
September 30 2018 [Member] | ||||||
Rent including sales tax | 1,990 | 1,990 | 1,990 | |||
September 30 2019 [Member] | ||||||
Rent including sales tax | 2,056 | 2,056 | 2,056 | |||
September 30 2020 [Member] | ||||||
Rent including sales tax | $ 2,124 | $ 2,124 | $ 2,124 | |||
Majorca Group, Ltd [Member] | Sales Revenue, Net [Member] | ||||||
Concentration risk, percentage | 15.00% |
Balance Sheet and Income Stat_2
Balance Sheet and Income Statement Footnotes (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Net allowance of accounts receivable | $ 110,066 | $ 110,066 | $ 111,301 | $ 23,959 | ||
Allowance for accounts receivable percentage | 40.00% | 40.00% | ||||
Prepaid expenses and other current assets | 60,093 | $ 60,093 | $ 6,033 | |||
Accounts payable | 113,249 | 113,249 | 80,439 | 128,483 | ||
Refunds included in prepaid expenses | (1,881) | (1,881) | ||||
Accrued expenses | 70,597 | 70,597 | 93,987 | 6,600 | ||
Inventory owed | 38,963 | |||||
Accrued interest | 22,597 | 22,597 | 19,024 | |||
Accrued payroll | 36,000 | |||||
Marketing expenses | 332,986 | 77,857 | ||||
General and administrative | 94,159 | $ 160,993 | 392,703 | $ 575,906 | 653,242 | 707,059 |
Consulting fees | 36,247 | 144,656 | 448,409 | |||
Accounting fees | 1,600 | 73,400 | ||||
Remainder of employee compensation expense | 56,312 | 204,833 | ||||
Number of common stock issued during period for donations | 50,000 | |||||
Number of common stock issued during period for fair value | 35,500 | |||||
Loss on disposal of assets | 60,792 | |||||
Employee compensation rent and other expenses | 174,647 | |||||
Professional fees | 13,351 | 14,156 | 39,605 | 83,090 | 70,289 | 82,578 |
Cost of legal proceedings | 142,064 | 413,611 | 79,447 | 15,528 | ||
Research and development expenses | 136,489 | $ 97,587 | 305,999 | $ 97,587 | $ 150,451 | |
Michael Aube [Member] | ||||||
Accrued payroll | 48,000 | 48,000 | ||||
Greybeard Holding [Member] | ||||||
Accounts payable | $ 61,386 | $ 61,386 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Jan. 11, 2019 |
Subsequent Event [Member] | |
Royalty percentage on sales retained by the Company | 5.00% |