Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jan. 31, 2019 | Mar. 18, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Grand Perfecta, Inc. | |
Entity Central Index Key | 0001550053 | |
Document Type | 10-Q | |
Document Period End Date | Jan. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --07-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 4,977,332 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 | |
Entity small business | true | |
Entity emerging growth | true | |
Ex transition emerging growth | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Jan. 31, 2019 | Jul. 31, 2018 |
Current assets | ||
Cash | $ 5,929 | $ 52,716 |
Accounts receivable, net | 6,856 | 8,632 |
Prepaid expenses and other current assets | 5,256 | 0 |
Total current assets | 18,041 | 61,348 |
Total assets | 18,041 | 61,348 |
Current liabilities | ||
Accounts payable and accrued expenses | 618,529 | 627,666 |
Deferred revenues | 5,447 | 8,462 |
Taxes payable | 5,759 | 0 |
Total current liabilities | 629,735 | 636,128 |
Total liabilities | 629,735 | 636,128 |
Commitments and contingencies | ||
Stockholders' equity (deficit) | ||
Preferred stock, $0.001 par value, 100,000,000 shares authorized, zero shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value, 500,000,000 shares authorized, 4,977,332 shares issued and outstanding | 4,977 | 4,977 |
Additional paid-in capital | 4,594,285 | 4,594,285 |
Accumulated deficit | (5,188,681) | (5,152,172) |
Accumulated other comprehensive income | (22,275) | (21,870) |
Total stockholders' equity (deficit) | (611,694) | (574,780) |
Total liabilities and stockholders' equity (deficit) | $ 18,041 | $ 61,348 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jan. 31, 2019 | Jul. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 100,000,000 | 100,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Common stock par value | $ 0.001 | $ 0.001 |
Common stock shares authorized | 500,000,000 | 500,000,000 |
Common stock shares issued | 4,977,332 | 4,977,332 |
Common stock shares outstanding | 4,977,332 | 4,977,332 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 37,180 | $ 86,575 | $ 67,842 | $ 175,021 |
Operating expenses: | ||||
Cost of sales | 35,298 | 86,575 | 61,694 | 175,021 |
General and administrative expenses | 11,786 | 53,321 | 42,028 | 240,230 |
Total operating expenses | 47,084 | 139,896 | 103,722 | 415,251 |
Loss from operations | (9,904) | (53,321) | (35,880) | (240,230) |
Other income (expense): | ||||
Interest income | 1 | 0 | 1 | 0 |
Total other income (expense) | 1 | 0 | 1 | 0 |
Net loss before provision for income taxes | (9,903) | (53,321) | (35,879) | (240,230) |
Provision for income taxes | 630 | 0 | 630 | 0 |
Net loss from continuing operations | (10,533) | (53,321) | (36,509) | (240,230) |
Income from operations of discontinued operations | 0 | 727,250 | 0 | 691,953 |
Provision for income taxes of discontinued operations | 0 | 235,875 | 0 | 158,103 |
Net income of discontinued operations | 0 | 491,375 | 0 | 533,850 |
Net income (loss) | $ (10,533) | $ 438,054 | $ (36,509) | $ 293,620 |
Net income (loss) per share from continuing operations, basic and diluted | $ 0 | $ 0 | $ (0.01) | $ (0.01) |
Net income (loss) per share from discontinued operations, basic and diluted | 0 | 0.02 | 0 | 0.02 |
Net income (loss) per share, basic and diluted | $ 0 | $ 0.01 | $ (0.01) | $ 0.01 |
Weighted average number of common shares outstanding, basic and diluted | 4,977,332 | 31,800,000 | 4,977,332 | 31,800,000 |
Other comprehensive loss | ||||
Foreign currency translation adjustments | $ (544) | $ (39,732) | $ (405) | $ (7,385) |
Comprehensive income (loss) | (11,077) | 398,322 | (36,914) | 286,235 |
Comprehensive income (loss) attributable to non-controlling interest | 0 | 9,000 | 0 | 2,250 |
Comprehensive income (loss) attributable to GPI stockholders | $ (11,077) | $ 407,322 | $ (36,914) | $ 288,485 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | |
Cash flows from operating activities | ||||
Net income (loss) | $ (10,533) | $ 438,054 | $ (36,509) | $ 293,620 |
Less: net income from discontinued operations | 0 | (491,375) | 0 | (533,850) |
Changes in operating assets and liabilities: | ||||
Accounts receivable | 1,925 | 7,037 | ||
Prepaid expenses and other current assets | (5,141) | 2,176 | ||
Accounts payable and accrued expenses | (9,453) | 43,206 | ||
Deferred revenue | (3,133) | 0 | ||
Taxes payable | 5,633 | 0 | ||
Operating cash flows from discontinued operations | 0 | 791,574 | ||
Net cash provided by (used in) operating activities | (46,678) | 603,763 | ||
Cash flows from investing activities | ||||
Investing activities of discontinued operations | 0 | (57,244) | ||
Net cash used in investing activities | 0 | (57,244) | ||
Cash flows from financing activities | ||||
Financing activities of discontinued operations | 0 | (518,400) | ||
Net cash used in financing activities | 0 | (518,400) | ||
Effect of exchange rate fluctuations on cash | (109) | 3,248 | ||
Net change in cash | (46,787) | 31,367 | ||
Cash, beginning of the period | 52,716 | 102,954 | ||
Cash, end of period | 5,929 | 134,321 | 5,929 | 134,321 |
Less cash of discontinued operations, end of period | 0 | 131,611 | 0 | 131,611 |
Cash of continuing operations, end of period | $ 5,929 | $ 2,710 | 5,929 | 2,710 |
Supplemental disclosure of cash flow information: | ||||
Interest paid | 0 | 379,583 | ||
Income taxes paid | $ 0 | $ 0 |
1. Description of Business
1. Description of Business | 6 Months Ended |
Jan. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | 1. DESCRIPTION OF BUSINESS Organization Grand Perfecta, Inc. (“Grand Perfecta”) was incorporated in the State of Nevada on March 25, 2002, as STI Holdings, Inc. (“STI”). On May 12, 2012, Grand Perfecta completed an Agreement and Plan of Reorganization whereby it acquired 100% of the issued and outstanding shares of Link Bit Consulting Co, Ltd. (“LBC”), a Japanese corporation, for 25,000,000 common shares in a transaction accounted for as a recapitalization of LBC. Effective March 29, 2013, STI amended its Articles of Incorporation to change its name to Grand Perfecta, Inc. On May 27, 2013, Grand Perfecta issued 272,668 shares in exchange for 100% of the issued and outstanding shares of Umajin Hong Kong Ltd. (“Umajin HK”), a Hong Kong corporation. In August 2015, Grand Perfecta formed Sports Perfecta, Inc. (“SPI”), as a California subsidiary to pursue development of a fantasy sports offering to horse racing fans. The operations of Grand Perfecta, LBC, Umajin HK, and SPI are collectively referred to as the “Company.” On December 16, 2015, LBC acquired 100% of the outstanding shares of Basougu Shokuninkai Co., Ltd. (“Basougu”), a Japanese corporation. On January 7, 2016, SPI acquired 100% of the outstanding stock of Just Mobile Sdn. Bhd. (“Just Mobile”), a Malaysian company. On January 20, 2016, Just Mobile changed its name to Sports Perfecta Technologies Sdn Bhd (“SPT”). The operations of Just Mobile are referred to as SPT after the acquisition date of January 7, 2016. In June 2018, Grand Perfecta completed a disposition of a substantial portion of its assets and operations through two transactions. On June 26, 2018, the Company transferred 100% of the common stock of Sports Perfecta, Inc., a California corporation and subsidiary of the Company, and a receivable representing a sum owing to the Company by SPI in the amount of JPY 185,540,908 to Neo Sports Ltd., a Japanese company (“Neo Sports”), in exchange for (a) 23,600,000 shares of Company common stock, (b) 100,000 shares of Company Series A Convertible Preferred Stock, and (c) an outstanding contract option right to purchase 3,000,000 shares of the common stock of Company at a price of $1.00 per share (the “SPI Transaction”). After this transaction, Neo Sports did not own any securities of the Company. All common and preferred shares delivered to the Company as part of the SPI Transaction were immediately cancelled. On June 27, 2018, the Company sold 100% of the capital stock of Link Bit Consulting Co, Ltd., a Japanese company and subsidiary of the Company, to IS Digital Ltd., a Cayman Islands company (“ISD”) for $420,000 in cash, and a sale to ISD of a receivable representing a sum owing to the Company by LBC in the amount of JPY 8,089,625 for $80,000 in cash (the “LBC Transaction”). After the foregoing transactions, the Company continues to own as subsidiaries Umajin HK and WRN Co. Ltd. (“WRN”). Nature of Business The Company is engaged in the business of gathering, publishing and disseminating horse racing information and other content related to horse racing in Japan and the Japanese horse racing industry through its wholly owned subsidiaries WRN, a Japanese corporation. Umajin Hong Kong had been delivering information on horse racing to its users through its website, however, it terminated its services at the end of June 2017. Historically, through June 27, 2018, our operations were conducted in Japan through wholly-owned subsidiary, LBC Consulting Co, Ltd. LBC historically had six different websites that it owned and operated through its various subsidiaries, which comprised substantially all of the Company’s revenue. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 6 Months Ended |
Jan. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited consolidated financial statements of the Company as of January 31, 2019, and for the three and six months ended January 31, 2019 and 2018, have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. In the opinion of management, such financial information includes all adjustments considered necessary for a fair presentation of the Company's financial position at such date and the operating results and cash flows for such periods. Operating results for the interim period ended January 31, 2019 are not necessarily indicative of the results that may be expected for the entire year. Certain information and footnote disclosure normally included in financial statements in accordance with GAAP have been omitted pursuant to the rules of the United States Securities and Exchange Commission ("SEC"). These unaudited financial statements should be read in conjunction with our audited financial statements and accompanying notes for the years ended July 31, 2018 and 2017 included in the Company's Form 10-K filed on January 25, 2019. The accompanying unaudited consolidated financial statements include the accounts of Grand Perfecta and its wholly-owned subsidiaries LBC, Umajin HK, WRN and SPI. The Company discontinued the operations of its wholly-owned subsidiaries LBC and SPI in June 2018. The accounts for these subsidiaries have been presented in the discontinued operations in the accompanying consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. The Company has determined that three affiliated entities, Space Cultivation Mobile, Japan Horse Circle and Basougu Shokuninkai, which LBC conducts business with were variable interest entities and that the Company was the primary beneficiary of each entity. As a result, the Company has consolidated the accounts of these variable interest entities into the accompanying consolidated financial statements. As the Company does not have any ownership interest in these variable interest entities, the Company has allocated the contributed capital in these variable interest entities as a component of non-controlling interest. These three variable interest entities did business with LBC. Therefore, these three entities have also been presented in the discontinued operations in the accompanying consolidated financial statements. After the discontinued operations, the Company consists of Grand Perfecta and its two remaining wholly-owned subsidiaries, Umajin HK and WRN. There are no variable interest entities since the Company discontinued operations in June 2018. Financial Statement Reclassification Certain account balances from prior periods have been reclassified in these consolidated financial statements to conform to current period classifications. The prior year amounts have also been modified in these financial statements to properly report amounts under current operations and discontinued operations (see note 6). Use of Estimates The preparation of financial statements in conformity with GAAP 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 reported periods. Amounts could materially change in the future. Going Concern Based on operating losses and negative cash from operations and the discontinued operations of most of the Company’s operations, substantial doubt exists about the Company’s ability to continue as a going concern. Management’s plan in this regard is to find new operations to enter into and focus on building profitable operations. To finance operations while it finds new operations, the Company will continue financing activity such as taking loans and issuing new shares of the Company’s common stock. As of January 31, 2019, we had cash of $5,929 and a working capital deficit of $611,694 as compared to cash of $52,716 and a working capital deficit of 574,780 as of July 31, 2018. We continue to have a significant working capital deficit that adversely affects our business by limiting the resources we have available to pursue the promotion of our information services and develop new service opportunities for potential customers. Historically, we have relied on extensions of note payment due dates and new debt financing to repay note obligations as they came due in order to continue operations. Going forward we will continue to use extensions and new debt financing to address note obligations that come due, endeavor to gradually reduce obligations with cash flow provided by operations, and pursue over the next 12 months equity financing that we can apply to debt reduction and business development. Nevertheless, the shortage of working capital adversely affects our ability to develop, sponsor, or participate in activities that promote our information services to prospective customers and to develop new content, because a substantial portion of cash flow goes to reduce debt rather than to advance operating activities. There is no assurance that our plans for addressing our working capital shortages will be successful, and our failure to be reasonably successful should be expected to result in a significant contraction of our operations and potentially a failure of the business. Foreign Exchange The Company’s primary operations are conducted in Japan and performed by its wholly owned subsidiaries WRN and until sold, LBC. The Company also conducted operations through SPI, and its Malaysian subsidiary SPT. A wholly owned subsidiary, Umajin HK, had been delivering information on horse racing to its users through its website similar to LBC, however it terminated its service at the end of June 2017. WRN and LBC’s functional currency is the Japanese Yen and Umajin HK’s functional currency is the Hong Kong Dollar. SPT’s functional currency is the Malaysian Ringgit. The financial statements of each entity are prepared using the applicable functional currencies, and have been translated into U.S. dollars (“USD”). Assets and liabilities are translated into USD at the applicable exchange rates at period-end. Stockholders’ equity is translated using historical exchange rates. Revenue and expenses are translated at the average exchange rates for the period. Any translation adjustments are included as foreign currency translation adjustments in accumulated other comprehensive income in the Company’s stockholders’ equity. The following rates were used to translate the accounts of Umajin HK and WRN into USD at the following balance sheet dates. Balance Sheet Dates January 31, 2019 July 31, 2018 Japanese Yen to USD 0.0092 0.0090 Hong Kong Dollars to USD 0.1275 0.1274 The following rates were used to translate the accounts of LBC, Umajin HK, SPT and WRN into USD for the following operating periods. For the Six Months Ended January 31, 2019 January 31, 2018 Japanese Yen to USD 0.0090 0.0090 Hong Kong Dollars to USD 0.1276 0.1280 Malaysian Ringgit to USD N/A 0.2407 Cash and Cash Equivalents The Company considers all highly liquid holdings with maturities of three months or less at the time of purchase to be cash equivalents. The Company had no cash equivalents as of January 31, 2019 and July 31, 2018. Accounts Receivable Accounts receivable are carried at net realizable value, representing the outstanding balance less an allowance for doubtful accounts based on a review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering each customer's financial condition and credit history, as well as current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. The Company had no allowance for doubtful accounts as of January 31, 2019 and July 31, 2018. Fair Value of Financial Instruments In accordance with ASC 820, the carrying value of cash and cash equivalents and accounts payable approximates fair value due to the short-term maturity of these instruments. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2- Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3- Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The Company has determined that the book value of its outstanding financial instruments as of January 31, 2019 and July 31, 2018 approximates the fair value. Concentration of Credit Risk Financial instruments that potentially expose the Company to concentration of credit risk include cash and accounts receivable. The Company maintains its cash in banks located in Japan, Hong Kong and the United States in financial institutions with high credit ratings. Substantially all of the Company’s revenues are generated from customers in Japan. The Company conducts periodic reviews of the financial condition and payment practices of its customers. The Company had no losses related to the write off of accounts receivable during the six months ended January 31, 2019 and 2018. Revenue Recognition Effective August 1, 2018 we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 606-10, Revenue from Contracts with Customers (“ASC 606-10”). The adoption of ASC 606-10 had no impact on prior year or previously disclosed amounts. In accordance with ASC 606-10, revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. The Company’s revenue consists primarily of sales of comprehensive horse racing information through multiple websites focusing on all aspects of the horse racing industry in Japan. Publication of horse racing digital magazines, and participating in other public events and media programs related to the horse racing industry do not generate significant revenue directly. These activities are undertaken for the purpose of increasing the number of horse racing fans and driving potential customers to our websites so as to hopefully eventually convert them to paying customers. The majority of the Company’s revenue is generated by per-item sales. For certain users, payment is received at the time of purchase and for others it is received after purchase. In either case, our performance obligation is to provide the requested information to users. Therefore, we recognize revenue for per-item sales when the requested information is supplied to the user or for information packages that span a period of time, ratably over the subscription period. Revenues are presented net of refunds, credits and known and estimated credit card chargebacks. The Company reports revenue net of any required taxes collected from customers and remitted to government authorities, with the collected taxes recorded as current liabilities until remitted to the relevant government authority. Rights to information purchased by customers in advance of the information being provided are recorded as deferred. As of January 31, 2019, the Company had $5,447 in deferred revenues. The Company will amortize these deferred revenues based on the monthly subscriptions and record revenue in line with the amortization of these advance payments. Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes, using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Advertising Costs The Company expenses advertising costs as incurred. Advertising costs incurred amounted to $0 and $70,384 (all from discontinued operations) for the six months ended January 31, 2019 and 2018, respectively. Basic and Diluted Earnings Per Share In accordance with ASC 260, Earnings Per Share, the basic income per common share is computed by dividing the net income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share reflect per share amounts that would have resulted if diluted potential common stock had been converted to common stock. No dilutive potential common shares were included in the computation of diluted net income per share because their impact was anti-dilutive. As of January 31, 2018, the Company had total options of 3,000,000 which were excluded from the computation of net income per share because they are anti-dilutive. As of January 31, 2019, the Company did not have any convertible notes or the options of 3,000,000. As a result, the basic and diluted earnings per share were the same for each of the periods presented. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption. |
3. Stockholders' Equity
3. Stockholders' Equity | 6 Months Ended |
Jan. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 3. STOCKHOLDERS’ EQUITY Preferred Stock The Company is authorized to issue up to 100,000,000 shares of preferred stock with a par value of $0.001, with 100,000 shares designated as Series A Preferred Stock. The Series A Preferred Stock receive a 10 to 1 voting preference over common stock. Accordingly, for every share of Series A Preferred Stock held, the holder receives the voting rights equal to 10 shares of common stock. As such, the holders of the Series A Preferred Stock have the equivalent voting capability of 1,000,000 shares of common stock. The Series A Preferred Stock also has a $0.05 per share liquidation preference over common stock, and can be redeemed by the Company at any time, upon thirty days’ notice, for $0.05 per share. The Company had zero shares of Series A Preferred Stock issued and outstanding as of January 31, 2019 and July 31, 2018. Common Stock The Company had 4,977,332 shares of Common Stock issued and outstanding as of January 31, 2019 and July 31, 2018. |
4. Commitments and Contingencie
4. Commitments and Contingencies | 6 Months Ended |
Jan. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 4. COMMITMENTS AND CONTINGENCIES Operating Leases Prior to June 27, 2018, the Company was leasing its corporate headquarters and administrative offices in Tokyo, Japan, as well as the administrative offices of SPT in Kuala Lumpur, Malaysia under non-cancelable operating leases extending through April 15, 2019. These leases were transferred with the discontinued operations. The Company also leases other office space as needed on a month-to-month basis. The Company incurred rent expense of $0 for the six months ended January 31, 2019 and $0 for continuing operations and $207,695 for discontinued operations for the six months ended January 31, 2018. Litigation In the ordinary course of business, the Company may be or has been involved in legal proceedings from time to time. As of the date of this annual report, there have been no material legal proceedings relating to the Company. |
5. Related Party Transactions
5. Related Party Transactions | 6 Months Ended |
Jan. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 5. RELATED PARTY TRANSACTIONS In June 2018, the Company entered into a consulting agreement with its new CEO and sole director. The agreement was for five months from June through October. The Company agreed to pay him $3,000 per month for his services in running the Company and making sure that the required audit and filings get completed. This agreement was extended for three additional months through January 2019. During the three and six months ending January 31, 2019 the Company had expensed $9,000 and $18,000 in consulting fees for this agreement, respectively. The following related party transactions were all related to the Company’s previous management and the discontinued operations. These related party transactions all were eliminated with the discontinuation of LBC and SPI: The Company and Umajin Co., Ltd.(“Umajin Japan”), a related party entity owned by a former director, modified the service agreement between them effective November 1, 2015, to set the monthly fee payable by the Company to Umajin Japan for providing horserace information at 16 million Yen per month (inclusive of consumption tax), and to set the monthly fee payable for providing a horseracing related email magazine and web page content at 7 million Yen per month (inclusive of consumption tax) for a total of 23 million Yen per month. The Company and Umajin Japan agreed to reduce the monthly fees from 23 million Yen to 11 million Yen subsequent to October 2016. Subsequent to February 2017, the Company and Umajin Japan agreed to reduce the fee to 8 million Yen per month through October 2017. Total fees paid to Umajin Japan for the three months ended January 31, 2019 and 2018 amounted to $0 and $217,505, respectively. Total fees paid to Umajin Japan for the six months ended January 31, 2019 and 2018 amounted to $0 and $433,534, respectively. The fees paid to Umajin Japan are included in discontinued operations under cost of sales in the accompanying consolidated statements of operations. During the three months ended January 31, 2019 and 2018, the Company received consulting services from Cheval Attache Co., Ltd. (“Cheval Attache”) of $0 and $29,160, respectively. During the six months ended January 31, 2019 and 2018, the Company received consulting services from Cheval Attache Co., Ltd. (“Cheval Attache”), a related party entity owned by a former director (inclusive of consumption tax) of $0 and $58,320, respectively, which are included in discontinued operations under cost of sales in the accompanying consolidated statements of operations. G-Liberta, a subsidiary of Cheval Attache, performed certain advertising and research services for the Company. Total expenses related to G-Liberta during the three months ended January 31, 2019 and 2018 amounted to $0 and $364, respectively. Total expenses related to G-Liberta during the six months ended January 31, 2019 and 2018 amounted to $0 and $1,312, respectively, and are reflected as part of discontinued operations under cost of sales in the accompanying consolidated financial statements. |
6. Discontinued Operations
6. Discontinued Operations | 6 Months Ended |
Jan. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 6. DISCONTINUED OPERATIONS During the year ended July 31, 2018, the Company decided to discontinue operations of most of its operating activities. These discontinued operations consisted of two transactions as follows: On June 26, 2018, the Company exchanged all the issued and outstanding shares of common stock of its wholly owned subsidiary, Sports Perfecta, Inc. to Neo Sports, Ltd, a Japanese company, for 100,000 shares of the Company’s series A preferred stock, 23,600,000 shares of the Company’s common stock and an option contract right for 3,000,000 shares of the Company’s common stock. This transaction included SPI’s wholly owned subsidiary, Sports Perfecta Technologies Sdn Bhd. On June 27, 2018, the Company exchanged all the issued and outstanding shares of common stock of its wholly owned subsidiary, Link Bit Consulting Co. Ltd. to IS Digital Ltd., a Cayman Island company for $420,000 in cash and 100% of the account receivable balance owed to the Company by LBC for $80,000 in cash. This transaction included all of LBC’s subsidiaries, except for WRN Co. Ltd. WRN’s issued and outstanding common stock was transferred to the Company from LBC on this date. In accordance with the provisions of ASC 205-20, the results of operations for these entities have been reflected as discontinued operations in the Consolidated Statements of Operations and Comprehensive Loss for the six months ended January 31, 2019 and 2018, and consist of the following: For the Six Months Ended January 31, 2019 January 31, 2018 REVENUES OF DISCONTINUED OPERATIONS $ – $ 5,773,195 OPERATING EXPENSES OF DISCONTINUED OPERATIONS: Cost of sales – 1,199,810 Depreciation and amortization expense – 13,999 Advertising expense – 70,384 Rent Expense – 207,695 Salaries and wages expense – 1,691,404 Other general and administrative expenses – 1,455,220 – 4,638,512 OPERATING INCOME (LOSS) OF DISCONTINUED OPERATIONS – 1,134,683 OTHER (INCOME) EXPENSE OF DISCONTINUED OPERATIONS Other (income) expense – (73 ) (Gain) loss on foreign exchange – (10,414 ) Interest income – (3,253 ) Interest expense – 456,470 – 442,730 INCOME (LOSS) BEFORE INCOME TAXES OF DISCONTINUED OPERATIONS – 691,953 Provision for income taxes of discontinued operations – 158,103 NET INCOME (LOSS) OF DISCONTINUED OPERATIONS $ – $ 533,850 In accordance with the provisions of ASC 205-20, the cash flow activity from discontinued operations have been reflected as discontinued operations in the Consolidated Statements of Cash Flows for the six months ended January 31, 2019 and 2018, and consist of the following: For the Six Months Ended January 31, 2019 January 31, 2018 DISCONTINUED OPERATING ACTIVITIES Net income $ – $ 533,850 Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization – 13,999 Amortization of debt discount – 16,333 Changes in operating assets and liabilities: Accounts receivable – (215,825 ) Accounts receivable - related party – 27,000 Prepaid expenses and other current assets – (7,035 ) Other assets – (5,886 ) Accounts payable and accrued expenses – 35,005 Accounts payable to related party – 16,427 Deferred revenue – (38,409 ) Taxes payable – 416,115 Net cash provided by operating activities of discontinued operations $ – $ 791,574 INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS Purchase of property and equipment $ – $ (4,212 ) Proceeds from collection of notes receivables – 79,426 Payments for notes receivable lending – (132,458 ) Net cash provided by (used in) investing activities of discontinued operations $ – $ (57,244 ) FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS Proceeds from notes payable $ – $ 180,000 Payments on note payable – (702,000 ) Payments on notes payable - related parties – (86,400 ) Proceeds from notes payable - related parties – 90,000 Net cash used in financing activities of discontinued operations $ – $ (518,400 ) |
7. Subsequent Events
7. Subsequent Events | 6 Months Ended |
Jan. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 7. SUBSEQUENT EVENTS Management has evaluated subsequent events, in accordance with FASB ASC Topic 855, “Subsequent Events,” through the date which the consolidated financial statements were issued and there are no material subsequent events. |
2. Summary of Significant Acc_2
2. Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jan. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements of the Company as of January 31, 2019, and for the three and six months ended January 31, 2019 and 2018, have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. In the opinion of management, such financial information includes all adjustments considered necessary for a fair presentation of the Company's financial position at such date and the operating results and cash flows for such periods. Operating results for the interim period ended January 31, 2019 are not necessarily indicative of the results that may be expected for the entire year. Certain information and footnote disclosure normally included in financial statements in accordance with GAAP have been omitted pursuant to the rules of the United States Securities and Exchange Commission ("SEC"). These unaudited financial statements should be read in conjunction with our audited financial statements and accompanying notes for the years ended July 31, 2018 and 2017 included in the Company's Form 10-K filed on January 25, 2019. The accompanying unaudited consolidated financial statements include the accounts of Grand Perfecta and its wholly-owned subsidiaries LBC, Umajin HK, WRN and SPI. The Company discontinued the operations of its wholly-owned subsidiaries LBC and SPI in June 2018. The accounts for these subsidiaries have been presented in the discontinued operations in the accompanying consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. The Company has determined that three affiliated entities, Space Cultivation Mobile, Japan Horse Circle and Basougu Shokuninkai, which LBC conducts business with were variable interest entities and that the Company was the primary beneficiary of each entity. As a result, the Company has consolidated the accounts of these variable interest entities into the accompanying consolidated financial statements. As the Company does not have any ownership interest in these variable interest entities, the Company has allocated the contributed capital in these variable interest entities as a component of non-controlling interest. These three variable interest entities did business with LBC. Therefore, these three entities have also been presented in the discontinued operations in the accompanying consolidated financial statements. After the discontinued operations, the Company consists of Grand Perfecta and its two remaining wholly-owned subsidiaries, Umajin HK and WRN. There are no variable interest entities since the Company discontinued operations in June 2018. |
Financial Statement Reclassification | Financial Statement Reclassification Certain account balances from prior periods have been reclassified in these consolidated financial statements to conform to current period classifications. The prior year amounts have also been modified in these financial statements to properly report amounts under current operations and discontinued operations (see note 6). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP 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 reported periods. Amounts could materially change in the future. |
Going Concern | Going Concern Based on operating losses and negative cash from operations and the discontinued operations of most of the Company’s operations, substantial doubt exists about the Company’s ability to continue as a going concern. Management’s plan in this regard is to find new operations to enter into and focus on building profitable operations. To finance operations while it finds new operations, the Company will continue financing activity such as taking loans and issuing new shares of the Company’s common stock. As of January 31, 2019, we had cash of $5,929 and a working capital deficit of $611,694 as compared to cash of $52,716 and a working capital deficit of 574,780 as of July 31, 2018. We continue to have a significant working capital deficit that adversely affects our business by limiting the resources we have available to pursue the promotion of our information services and develop new service opportunities for potential customers. Historically, we have relied on extensions of note payment due dates and new debt financing to repay note obligations as they came due in order to continue operations. Going forward we will continue to use extensions and new debt financing to address note obligations that come due, endeavor to gradually reduce obligations with cash flow provided by operations, and pursue over the next 12 months equity financing that we can apply to debt reduction and business development. Nevertheless, the shortage of working capital adversely affects our ability to develop, sponsor, or participate in activities that promote our information services to prospective customers and to develop new content, because a substantial portion of cash flow goes to reduce debt rather than to advance operating activities. There is no assurance that our plans for addressing our working capital shortages will be successful, and our failure to be reasonably successful should be expected to result in a significant contraction of our operations and potentially a failure of the business. |
Foreign Exchange | Foreign Exchange The Company’s primary operations are conducted in Japan and performed by its wholly owned subsidiaries WRN and until sold, LBC. The Company also conducted operations through SPI, and its Malaysian subsidiary SPT. A wholly owned subsidiary, Umajin HK, had been delivering information on horse racing to its users through its website similar to LBC, however it terminated its service at the end of June 2017. WRN and LBC’s functional currency is the Japanese Yen and Umajin HK’s functional currency is the Hong Kong Dollar. SPT’s functional currency is the Malaysian Ringgit. The financial statements of each entity are prepared using the applicable functional currencies, and have been translated into U.S. dollars (“USD”). Assets and liabilities are translated into USD at the applicable exchange rates at period-end. Stockholders’ equity is translated using historical exchange rates. Revenue and expenses are translated at the average exchange rates for the period. Any translation adjustments are included as foreign currency translation adjustments in accumulated other comprehensive income in the Company’s stockholders’ equity. The following rates were used to translate the accounts of Umajin HK and WRN into USD at the following balance sheet dates. Balance Sheet Dates January 31, 2019 July 31, 2018 Japanese Yen to USD 0.0092 0.0090 Hong Kong Dollars to USD 0.1275 0.1274 The following rates were used to translate the accounts of LBC, Umajin HK, SPT and WRN into USD for the following operating periods. For the Six Months Ended January 31, 2019 January 31, 2018 Japanese Yen to USD 0.0090 0.0090 Hong Kong Dollars to USD 0.1276 0.1280 Malaysian Ringgit to USD N/A 0.2407 |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid holdings with maturities of three months or less at the time of purchase to be cash equivalents. The Company had no cash equivalents as of January 31, 2019 and July 31, 2018. |
Accounts Receivable | Accounts Receivable Accounts receivable are carried at net realizable value, representing the outstanding balance less an allowance for doubtful accounts based on a review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering each customer's financial condition and credit history, as well as current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. The Company had no allowance for doubtful accounts as of January 31, 2019 and July 31, 2018. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments In accordance with ASC 820, the carrying value of cash and cash equivalents and accounts payable approximates fair value due to the short-term maturity of these instruments. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2- Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3- Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The Company has determined that the book value of its outstanding financial instruments as of January 31, 2019 and July 31, 2018 approximates the fair value. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially expose the Company to concentration of credit risk include cash and accounts receivable. The Company maintains its cash in banks located in Japan, Hong Kong and the United States in financial institutions with high credit ratings. Substantially all of the Company’s revenues are generated from customers in Japan. The Company conducts periodic reviews of the financial condition and payment practices of its customers. The Company had no losses related to the write off of accounts receivable during the six months ended January 31, 2019 and 2018. |
Revenue Recognition | Revenue Recognition Effective August 1, 2018 we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 606-10, Revenue from Contracts with Customers (“ASC 606-10”). The adoption of ASC 606-10 had no impact on prior year or previously disclosed amounts. In accordance with ASC 606-10, revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. The Company’s revenue consists primarily of sales of comprehensive horse racing information through multiple websites focusing on all aspects of the horse racing industry in Japan. Publication of horse racing digital magazines, and participating in other public events and media programs related to the horse racing industry do not generate significant revenue directly. These activities are undertaken for the purpose of increasing the number of horse racing fans and driving potential customers to our websites so as to hopefully eventually convert them to paying customers. The majority of the Company’s revenue is generated by per-item sales. For certain users, payment is received at the time of purchase and for others it is received after purchase. In either case, our performance obligation is to provide the requested information to users. Therefore, we recognize revenue for per-item sales when the requested information is supplied to the user or for information packages that span a period of time, ratably over the subscription period. Revenues are presented net of refunds, credits and known and estimated credit card chargebacks. The Company reports revenue net of any required taxes collected from customers and remitted to government authorities, with the collected taxes recorded as current liabilities until remitted to the relevant government authority. Rights to information purchased by customers in advance of the information being provided are recorded as deferred. As of January 31, 2019, the Company had $5,447 in deferred revenues. The Company will amortize these deferred revenues based on the monthly subscriptions and record revenue in line with the amortization of these advance payments. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes, using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. |
Advertising Costs | Advertising Costs The Company expenses advertising costs as incurred. Advertising costs incurred amounted to $0 and $70,384 (all from discontinued operations) for the six months ended January 31, 2019 and 2018, respectively. |
Basic and Diluted Earnings Per Share | Basic and Diluted Earnings Per Share In accordance with ASC 260, Earnings Per Share, the basic income per common share is computed by dividing the net income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share reflect per share amounts that would have resulted if diluted potential common stock had been converted to common stock. No dilutive potential common shares were included in the computation of diluted net income per share because their impact was anti-dilutive. As of January 31, 2018, the Company had total options of 3,000,000 which were excluded from the computation of net income per share because they are anti-dilutive. As of January 31, 2019, the Company did not have any convertible notes or the options of 3,000,000. As a result, the basic and diluted earnings per share were the same for each of the periods presented. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption. |
2. Summary of Significant Acc_3
2. Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jan. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of foreign translation rates | The following rates were used to translate the accounts of Umajin HK and WRN into USD at the following balance sheet dates. Balance Sheet Dates January 31, 2019 July 31, 2018 Japanese Yen to USD 0.0092 0.0090 Hong Kong Dollars to USD 0.1275 0.1274 The following rates were used to translate the accounts of LBC, Umajin HK, SPT and WRN into USD for the following operating periods. For the Six Months Ended January 31, 2019 January 31, 2018 Japanese Yen to USD 0.0090 0.0090 Hong Kong Dollars to USD 0.1276 0.1280 Malaysian Ringgit to USD N/A 0.2407 |
6. Discontinued Operations (Tab
6. Discontinued Operations (Tables) | 6 Months Ended |
Jan. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of discontinued operations financial information | In accordance with the provisions of ASC 205-20, the results of operations for these entities have been reflected as discontinued operations in the Consolidated Statements of Operations and Comprehensive Loss for the six months ended January 31, 2019 and 2018, and consist of the following: For the Six Months Ended January 31, 2019 January 31, 2018 REVENUES OF DISCONTINUED OPERATIONS $ – $ 5,773,195 OPERATING EXPENSES OF DISCONTINUED OPERATIONS: Cost of sales – 1,199,810 Depreciation and amortization expense – 13,999 Advertising expense – 70,384 Rent Expense – 207,695 Salaries and wages expense – 1,691,404 Other general and administrative expenses – 1,455,220 – 4,638,512 OPERATING INCOME (LOSS) OF DISCONTINUED OPERATIONS – 1,134,683 OTHER (INCOME) EXPENSE OF DISCONTINUED OPERATIONS Other (income) expense – (73 ) (Gain) loss on foreign exchange – (10,414 ) Interest income – (3,253 ) Interest expense – 456,470 – 442,730 INCOME (LOSS) BEFORE INCOME TAXES OF DISCONTINUED OPERATIONS – 691,953 Provision for income taxes of discontinued operations – 158,103 NET INCOME (LOSS) OF DISCONTINUED OPERATIONS $ – $ 533,850 In accordance with the provisions of ASC 205-20, the cash flow activity from discontinued operations have been reflected as discontinued operations in the Consolidated Statements of Cash Flows for the six months ended January 31, 2019 and 2018, and consist of the following: For the Six Months Ended January 31, 2019 January 31, 2018 DISCONTINUED OPERATING ACTIVITIES Net income $ – $ 533,850 Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization – 13,999 Amortization of debt discount – 16,333 Changes in operating assets and liabilities: Accounts receivable – (215,825 ) Accounts receivable - related party – 27,000 Prepaid expenses and other current assets – (7,035 ) Other assets – (5,886 ) Accounts payable and accrued expenses – 35,005 Accounts payable to related party – 16,427 Deferred revenue – (38,409 ) Taxes payable – 416,115 Net cash provided by operating activities of discontinued operations $ – $ 791,574 INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS Purchase of property and equipment $ – $ (4,212 ) Proceeds from collection of notes receivables – 79,426 Payments for notes receivable lending – (132,458 ) Net cash provided by (used in) investing activities of discontinued operations $ – $ (57,244 ) FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS Proceeds from notes payable $ – $ 180,000 Payments on note payable – (702,000 ) Payments on notes payable - related parties – (86,400 ) Proceeds from notes payable - related parties – 90,000 Net cash used in financing activities of discontinued operations $ – $ (518,400 ) |
1. Description of Business (Det
1. Description of Business (Details Narrative) | 11 Months Ended | |
Jun. 27, 2018USD ($) | Jun. 26, 2018JPY (¥)shares | |
Link Bit [Member] | ||
Proceeds from sale of subsidiary | $ | $ 420,000 | |
LBC Transaction [Member] | ||
Proceeds from transfer of note receivable | $ | $ 80,000 | |
Transfer Agreement [Member] | ||
Note receivable for transfer of assets | ¥ | ¥ 185,540,908 | |
Transfer Agreement [Member] | Common Stock | ||
Stock received for transfer agreement, shares | 23,600,000 | |
Transfer Agreement [Member] | Series A Preferred Stock [Member] | ||
Stock received for transfer agreement, shares | 100,000 | |
Transfer Agreement [Member] | Contract Option Right [Member] | ||
Stock received for transfer agreement, shares | 3,000,000 |
2. Summary of Significant Acc_4
2. Summary of Significant Accounting Policies (Details - Foreign currency rates) | 6 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jul. 31, 2018 | |
Japan, Yen | |||
Foreign currency rates at balance sheet date | 0.0092 | 0.0090 | |
Foreign currency rates during the period | 0.0090 | 0.0090 | |
Hong Kong, Dollars | |||
Foreign currency rates at balance sheet date | 0.1275 | 0.1274 | |
Foreign currency rates during the period | 0.1276 | 0.1280 | |
Malaysian Ringgit [Member] | |||
Foreign currency rates during the period | 0.2407 |
2. Summary of Significant Acc_5
2. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 6 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jul. 31, 2018 | |
Cash | $ 5,929 | $ 2,710 | $ 52,716 |
Working capital | (611,694) | (574,780) | |
Cash equivalents | 0 | 0 | |
Allowance for doubtful accounts | 0 | $ 0 | |
Deferred revenue | 5,447 | ||
Losses related to write off of accounts receivable | $ 0 | $ 0 | |
Options [Member] | |||
Anti-dilutive shares excluded from computation of net income per share | 0 | 3,000,000 | |
Discontinued Operations [Member] | |||
Advertising expenses | $ 0 | $ 70,384 |
3. Stockholders' Equity (Detail
3. Stockholders' Equity (Details Narrative) - $ / shares | Jan. 31, 2019 | Jul. 31, 2018 |
Equity [Abstract] | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 100,000,000 | 100,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Common stock shares issued | 4,977,332 | 4,977,332 |
Common stock shares outstanding | 4,977,332 | 4,977,332 |
4. Commitments and Contingenc_2
4. Commitments and Contingencies (Details Narrative) - USD ($) | 6 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Continuing Operations [Member] | ||
Rent expense | $ 0 | $ 0 |
Discontinued Operations [Member] | ||
Rent expense | $ 0 | $ 207,695 |
5. Related Party Transactions (
5. Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | |
Chief Executive Officer [Member] | ||||
Consulting services | $ 9,000 | $ 18,000 | ||
Umajin Japan [Member] | Discontinued Operations [Member] | ||||
Consulting services | 0 | $ 217,505 | 0 | $ 433,534 |
Cheval Attache Co, Ltd. [Member] | Discontinued Operations [Member] | ||||
Consulting services | 0 | 29,160 | 0 | 58,320 |
G-Liberta [Member] | Discontinued Operations [Member] | Advertising and Research Services [Member] | ||||
Advertising and research services | $ 0 | $ 364 | $ 0 | $ 1,312 |
6. Discontinued Operations (Det
6. Discontinued Operations (Details - Results of Operations) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | |
OTHER (INCOME) EXPENSE OF DISCONTINUED OPERATIONS | ||||
INCOME (LOSS) BEFORE INCOME TAXES OF DISCONTINUED OPERATIONS | $ 0 | $ 727,250 | $ 0 | $ 691,953 |
Provision for income taxes of discontinued operations | 0 | 235,875 | 0 | 158,103 |
NET INCOME (LOSS) OF DISCONTINUED OPERATIONS | $ 0 | $ 491,375 | 0 | 533,850 |
Discontinued Operations [Member] | ||||
REVENUES OF DISCONTINUED OPERATIONS | 0 | 5,773,195 | ||
OPERATING EXPENSES OF DISCONTINUED OPERATIONS: | ||||
Cost of sales | 0 | 1,199,810 | ||
Depreciation and amortization expense | 0 | 13,999 | ||
Advertising expense | 0 | 70,384 | ||
Rent Expense | 0 | 207,695 | ||
Salaries and wages expense | 0 | 1,691,404 | ||
Other general and administrative expenses | 0 | 1,455,220 | ||
Total operating expenses, disposal group | 0 | 4,638,512 | ||
OPERATING INCOME (LOSS) OF DISCONTINUED OPERATIONS | 0 | 1,134,683 | ||
OTHER (INCOME) EXPENSE OF DISCONTINUED OPERATIONS | ||||
Other (income) expense | 0 | (73) | ||
(Gain) loss on foreign exchange | 0 | (10,414) | ||
Interest income | 0 | (3,253) | ||
Interest expense | 0 | 456,470 | ||
Total other (income) expense of disposal group | 0 | 442,730 | ||
INCOME (LOSS) BEFORE INCOME TAXES OF DISCONTINUED OPERATIONS | 0 | 691,953 | ||
Provision for income taxes of discontinued operations | 0 | 158,103 | ||
NET INCOME (LOSS) OF DISCONTINUED OPERATIONS | $ 0 | $ 533,850 |
6. Discontinued Operations (D_2
6. Discontinued Operations (Details - Cash Flows) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | |
DISCONTINUED OPERATING ACTIVITIES | ||||
Net income | $ 0 | $ 491,375 | $ 0 | $ 533,850 |
Changes in operating assets and liabilities: | ||||
Net cash provided by operating activities of discontinued operations | 0 | 791,574 | ||
INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS | ||||
Net cash used in investing activities of discontinued operations | 0 | (57,244) | ||
FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS | ||||
Net cash used in financing activities of discontinued operations | 0 | (518,400) | ||
Discontinued Operations [Member] | ||||
DISCONTINUED OPERATING ACTIVITIES | ||||
Net income | 0 | 533,850 | ||
Adjustments to reconcile net income to net cash provided by operating activities of discontinued operations: | ||||
Depreciation and amortization | 0 | 13,999 | ||
Amortization of debt discount | 0 | 16,333 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable | 0 | (215,825) | ||
Accounts receivable - related party | 0 | 27,000 | ||
Prepaid expenses and other current assets | 0 | (7,035) | ||
Other assets | 0 | (5,886) | ||
Accounts payable and accrued expenses | 0 | 35,005 | ||
Accounts payable to related party | 0 | 16,427 | ||
Deferred revenue | 0 | (38,409) | ||
Taxes payable | 0 | 416,115 | ||
Net cash provided by operating activities of discontinued operations | 0 | 791,574 | ||
INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS | ||||
Purchase of property and equipment | 0 | (4,212) | ||
Proceeds from collection of notes receivables | 0 | 79,426 | ||
Payments for notes receivable lending | 0 | (132,458) | ||
Net cash used in investing activities of discontinued operations | 0 | (57,244) | ||
FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS | ||||
Proceeds from notes payable | 0 | 180,000 | ||
Payments on note payable | 0 | (702,000) | ||
Payments on notes payable - related parties | 0 | (86,400) | ||
Proceeds from notes payable - related parties | 0 | 90,000 | ||
Net cash used in financing activities of discontinued operations | $ 0 | $ (518,400) |
6. Discontinued Operations (D_3
6. Discontinued Operations (Details Narrative) | 11 Months Ended | |
Jun. 27, 2018USD ($) | Jun. 26, 2018JPY (¥)shares | |
Link Bit [Member] | ||
Proceeds from sale of subsidiary | $ | $ 420,000 | |
Transfer Agreement [Member] | ||
Note receivable for transfer of assets | ¥ | ¥ 185,540,908 | |
Transfer Agreement [Member] | Common Stock | ||
Stock received for transfer agreement, shares | 23,600,000 | |
Transfer Agreement [Member] | Series A Preferred Stock [Member] | ||
Stock received for transfer agreement, shares | 100,000 | |
Transfer Agreement [Member] | Contract Option Right [Member] | ||
Stock received for transfer agreement, shares | 3,000,000 |