| 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. and Earth Science Foundation , Inc. We
operate through wholly owned subsidiaries which provide products, marketing and distribution. As of January 31, 2018 the Company created
Earth Science Foundation, Inc., the Company’s favored entity, effectively being a non-profit organization on February 11, 2019
and is structured to accept grants and donations to conduct further studies and help donate to the Company’s effective CBD products
to those in need. Provided that we are currently in escrow stages to acquire RxCompoundStore.com, LLC. and Peaks Curative, LLC., once
closed, both entrees will be wholly owned under the Company, (See Note 4, Related Party and Transaction). 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 three patent applications
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. On
June 4, 2019 the Company let its patents be abandoned based upon the advice of IP counsel. IP counsel indicated that only one patent
application had a reasonable chance of being granted and based upon this advice the Company determined that it would discontinue this
approach of using the patent process to protect product formulations in general and rather, revert to proprietary formulae and trade
secrets to protect its intellectual property (unless it was clear from the beginning of the process that the formula was patentable.
As a result, on Jun 4, 2019, the company wrote down or otherwise impaired approximately $ 27,000 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 has 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 main facility. 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 carry forwards 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 those 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% no 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 $ 6,150,613 the year 2039 when the NOL’s will expire 0 0 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 2022, 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 are 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: Schedule
of Property Plant and Equipment
Leasehold
improvements Shorter
of useful life or term of lease
Signage
5
Furniture
and equipment 5
Computer
equipment 5 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. 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 25,000 26,528 0 38,740 4,406 4,406 Reclassification Certain
amounts from the prior period have been reclassified to conform to the current period presentation. |
