Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
May 31, 2018 | Aug. 24, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Life On Earth, Inc. | |
Entity Central Index Key | 0001579010 | |
Document Type | 10-K/A | |
Document Period End Date | May 31, 2018 | |
Amendment Flag | true | |
Current Fiscal Year End Date | --05-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Public Float | $ 10,635,295 | |
Entity Common Stock, Shares Outstanding | 23,581,586 | 26,564,720 |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2018 | |
Amendment Description | restatement | |
Is Entity Emerging Growth Company? | false | |
Entity Small Business | true | |
Entity Shell Business | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | May 31, 2018 | May 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 189,317 | $ 217,598 |
Accounts receivable, net of allowance for doubtful accounts of $14,000 and $0 as of May 31, 2018 and 2017, respectively | 181,551 | 160,306 |
Inventory | 338,920 | 293,207 |
Prepaid expenses | 102,243 | |
Total current assets | 812,031 | 671,111 |
Other Assets: | ||
Equipment, net of accumulated depreciation of $30,937 and $14,508 as of May 31, 2018 and 2017, respectively | 111,777 | 60,492 |
Notes receivable | 47,909 | |
Goodwill | 921,890 | |
Customer lists, net of accumulated amortization of $80,822 and $35,625 as of May 31, 2018 and 2017, respectively | 801,178 | 339,375 |
Security deposits | 22,245 | 5,245 |
Total Assets | 2,717,030 | 1,076,223 |
Current Liabilities | ||
Accounts payable and accrued expenses | 1,815,958 | 719,193 |
Note payable - related party | 2,000 | |
Notes payable, net of unamortized deferred financing costs of $0 and $129,208 as of May 31, 2018 and May 31, 2017, respectively | 560,000 | 229,506 |
Convertible notes payable, net of unamortized deferred financing costs of $513,000 and $246,213 as of May 31, 2018 and May 31, 2017, respectively | 935,000 | 556,787 |
Loans payable, net of unamortized deferred financing costs of $67,834 and $100,322 as of May 31, 2018 and 2017, respectively | 185,689 | 278,865 |
Lines of credit | 38,898 | 11,413 |
Loans payable - stockholder | 52,394 | |
Total current liabilities | 3,589,939 | 1,795,764 |
Loans payable | 49,479 | |
Loans payable - stockholders | 57,601 | |
Total Liabilities | 3,697,019 | 1,795,764 |
Commitments and contingencies | ||
Stockholders' Deficiency: | ||
Series A Preferred stock, $0.001 par value; 10,000,000 shares authorized, 1,200,000 shares issued and outstanding | 1,200 | 1,200 |
Common stock, $0.001 par value; 100,000,000 shares authorized, 23,581,586 and 18,717,922 shares issued and outstanding as of May 31, 2018 and 2017, respectively | 23,582 | 18,717 |
Additional paid in capital | 5,793,569 | 3,055,121 |
Accumulated deficit | (6,798,340) | (3,794,579) |
Total stockholders' equity (deficiency) | (979,989) | (719,541) |
Total liabilities and stockholders' equity (deficiency) | $ 2,717,030 | $ 1,076,223 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | May 31, 2018 | May 31, 2017 |
Accumulated Depreciation | $ 30,937 | $ 14,508 |
Accumulated Amortization | $ 80,822 | $ 35,625 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized shares | 10,000,000 | 10,000,000 |
Preferred stock, issued shares | 1,200,000 | 1,200,000 |
Preferred stock, outstanding shares | 1,200,000 | 1,200,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, Authorized | 100,000,000 | 100,000,000 |
Common stock, Issued | 23,581,586 | 18,717,922 |
Common stock, outstanding | 23,581,586 | 18,717,922 |
Notes Payable[Member] | ||
Capitalized financing costs | $ 0 | $ 129,208 |
Notes Payable [Member] | ||
Capitalized financing costs | 513,000 | 246,213 |
Loans Payable [Member] | ||
Capitalized financing costs | 67,834 | 100,322 |
Notes Payable - Long Term [Member] | ||
Capitalized financing costs | $ 617,371 | $ 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Income Statement [Abstract] | ||
Sales, net | $ 3,255,679 | $ 2,458,037 |
Cost of goods sold | 2,529,418 | 1,779,678 |
Gross profit | 726,261 | 678,359 |
Expenses: | ||
Salaries and benefits | 549,426 | 457,984 |
Professional fees | 309,942 | 386,364 |
Consultancy - share based compensation | 204,720 | 1,023,625 |
Travel | 113,423 | 97,093 |
Repairs and maintenance | 107,930 | 63,850 |
Rent | 77,182 | 67,799 |
Depreciation and amortization | 59,837 | 50,133 |
Advertising and promotion | 72,907 | 23,818 |
Officers' compensation | 49,233 | 21,183 |
Other | 207,995 | 145,776 |
Total expenses | 1,752,594 | 2,337,625 |
Loss from operations | (1,026,333) | (1,659,266) |
Other income and (expenses) | ||
Vendor settlement | 97,731 | |
Interest and financing costs | (2,114,319) | (1,418,496) |
Loss before income tax benefit | (3,140,651) | (2,980,031) |
Income tax benefit | 136,890 | |
Net loss before income tax benefit | $ (3,003,761) | $ (2,980,031) |
Basic and diluted loss per share | $ (0.14) | $ (0.19) |
Basic and diluted weighted average number of shares outstanding | 20,782,736 | 15,877,927 |
Consoldiated Statement of Stock
Consoldiated Statement of Stockholders Deficit - USD ($) | Common Stock | Series A Preferred | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance, Shares at Jun. 30, 2016 | 13,040,471 | 1,200,000 | ||||
Beginning Balance, Amount at Jun. 30, 2016 | $ 13,040 | $ 1,200 | $ 721,413 | $ (814,549) | $ (78,896) | |
Issuance of commonstock for services,shares | 1,888,941 | |||||
Issuance of common stock services, amount | $ 1,889 | 1,371,737 | 1,373,626 | |||
Issuance of stock for interest, shares | 157,480 | |||||
Issuance of stock interest, amount | $ 157 | 199,843 | 199,999 | |||
Issuance of common stock for repayment of note, shares | 339,772 | |||||
Issuance of common stock for repayment of note, amount | $ 340 | 102,594 | 102,934 | |||
Discount on issuance of convertible debt | 662,826 | 662,826 | ||||
Warrant Exericse, shares | 1,501,258 | |||||
Warrant Exericse, amount | $ 1,501 | (1,501) | ||||
Issuance of common shares for convertible debt at par value, shares | 1,790,000 | |||||
Issuance of common shares for convertible debt at par value, amount | $ 1,790 | (1,790) | ||||
Net loss | (2,980,031) | (2,980,031) | ||||
Ending Balance, Shares at Jun. 30, 2017 | 18,717,922 | 1,200,000 | ||||
Ending Balance, Amount at Jun. 30, 2017 | $ 18,717 | $ 1,200 | 3,055,121 | (3,794,579) | (719,541) | |
Beginning Balance, Amount at May. 31, 2017 | (719,541) | |||||
Net loss | (3,003,761) | |||||
Ending Balance, Amount at May. 31, 2018 | (979,989) | |||||
Beginning Balance, Amount at Jun. 30, 2017 | $ 18,717 | $ 1,200 | 3,055,121 | (3,794,579) | (719,541) | |
Issuance of commonstock for services,shares | 1,079,498 | |||||
Issuance of common stock services, amount | $ 1,080 | 296,609 | 297,689 | |||
Issuance of common stock for deferred financing costs, shares | 2,733,333 | |||||
Issuance of common stock for deferred financing costs, amount | $ 2,733 | 947,267 | 950,000 | |||
Issuance of common shares for convertible debt at par value, shares | 383,333 | |||||
Issuance of common shares for convertible debt at par value, amount | $ 383 | 122,213 | 122,596 | |||
Issuance of common stock for in connection with acquisitions, shares | 1,767,500 | |||||
Issuance of common stock for in connection with acquisitions, amount | $ 1,769 | 745,244 | 747,013 | |||
Common shares repurchased for treasury, shares | (1,100,000) | 1,100,000 | ||||
Common shares repurchased for treasury, amount | $ (1,100) | $ 1,100 | (62,744) | (62,744) | ||
Retirement of treasury stock, shares | (1,100,000) | |||||
Retirement of treasury stock, amount | $ (1,100) | 1,100 | ||||
Deferred financing costs on convertible debt | 689,589 | 689,589 | ||||
Net loss | (3,003,761) | (3,003,761) | ||||
Ending Balance, Shares at Jun. 30, 2018 | 23,581,586 | 1,200,000 | ||||
Ending Balance, Amount at Jun. 30, 2018 | $ 23,582 | $ 1,200 | $ 5,793,571 | $ (6,798,340) | $ (979,989) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Cash Flows From Operating Activities | ||
Net loss | $ (3,003,761) | $ (2,980,031) |
Adjustments to reconcile net loss to net cash (used in) operating activities: | ||
Stock based compensation | 204,719 | 1,023,625 |
Stock paid for interest | 240,173 | |
Depreciation and amortization | 59,837 | 50,133 |
Amortization of financing costs included in interest and financing costs | 1,605,659 | 1,058,358 |
Interest on note payable settlement | 195,865 | |
Provision for bad debts | 14,000 | |
Forgiveness of notes receivables | 13,435 | |
Income tax benefit | 136,890 | |
(Increase) decrease in: | ||
Accounts receivable | 14,144 | (158,614) |
Inventory | 74,135 | (280,320) |
Notes receivable | ||
Prepaid expenses and other current assets | (9,273) | 14,740 |
Increase (decrease) in: | ||
Accounts payable and accrued expenses | 567,076 | 691,143 |
Customer advances | (20,880) | |
Net cash (used in) operating activities | (127,275) | (361,673) |
Cash Flows From Investing Activities | ||
Cash acquired in acquisitions | 12,216 | |
Equipment acquired | (75,000) | |
Customer list acquired | (375,000) | |
Payment of security deposit | (17,000) | (5,245) |
Net cash (used in) investment activities | (4,784) | (455,245) |
Cash Flows From Financing Activities | ||
Proceeds from loans payable, net of financing costs | 420,176 | 656,276 |
Repayment of loans payable | (513,352) | (648,413) |
Proceeds from notes payable | 645,784 | |
Repayment of notes payable | (309,786) | |
Proceeds from lines of credit, net of financing costs | 85,650 | 15,000 |
Payment of lines of credit | (73,998) | (3,587) |
Proceeds from loan payable - related party | 20,000 | |
Payment of loan payable - related party | (23,600) | (10,000) |
Proceeds from convertible notes payable, net of financing costs | 857,746 | 665,000 |
Repayment of convertible notes payable | (605,000) | (3,000) |
Purchase of treasury stock | (63,844) | |
Net cash provided by financing activities | 103,778 | 1,007,274 |
Net (Decrease)/ Increase in Cash and Cash Equivalents | (28,281) | 190,356 |
Cash and Cash Equivalents - beginning | 217,598 | 27,248 |
Cash and Cash Equivalents - end | 189,317 | 217,598 |
Supplemental Disclosures of Cash Flow Information | ||
Cash paid for: Interest | 39,015 | 100,651 |
Noncash investing and financing activities: | ||
Conversion of debt to common stock and additional paid in capital | 122,596 | 62,760 |
Common stock issued for acquisition | 747,013 | |
Common stock and warrants issued for financing costs | 1,101,526 | 1,012,826 |
Payments of loans payable with proceeds of additional loans payable | $ 137,035 | |
Extinguishment of notes payable through issuance of convertible notes payable | $ 825,000 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations and Basis of Presentation Life On Earth, Inc. is an innovative brand accelerator, incubator and distribution platform focused on building and scaling concepts in the all-natural consumer products category. We focus on building brands within the alternative beverage and snack space. We are a dynamic and innovative all-natural consumer packaged goods company focused but not limited to the emerging beverage industry. We manufacture and distribute our brands through our distribution subsidiaries in New York and California. The accompanying consolidated financial statements include the financial statements of Life On Earth, Inc. (“LFER”) and its wholly owned subsidiaries, Energy Source Distributors Inc., (“ESD”), Victoria’s Kitchen, LLC (“VK”) and The Giant Beverage Company, Inc. (“GBC”) LFER was incorporated in Delaware in April 2013 and acquired ESD in July 2016, VK in October 2017, and GBC in April 2018. The Company currently markets and sell beverages, primarily in New York and California. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Revenue Recognition The Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. Provision for sales returns is estimated based on the Company's historical return experience. Revenue is presented net of returns. In March 2017, the Company discontinued an exclusive distribution agreement with a vendor. In accordance with the distribution agreement, the Company received a “Termination Payment”, as defined, in the amount of $97,731, which was recorded as other income during the year ended May 31, 2017. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated balance sheets and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Net Loss Per Common Share Basic loss per share is calculated by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted loss per share is calculated by dividing net loss by the weighted average number of common shares and dilutive common stock equivalents outstanding. During periods in which the Company incurs losses, common stock equivalents, if any, are not considered, as their effect would be anti -dilutive. As of May 31, 2018 and 2017, warrants and convertible notes payable could be converted into approximately 4,335,000 and 730,000 shares of common stock, respectively. Income Taxes The Company utilizes the accrual method of accounting for income taxes. Under the accrual method, deferred tax assets and liabilities are determined based on the differences between the financial reporting basis and the tax basis of the assets and liabilities, and are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. An allowance against deferred tax assets is recognized when it is more likely than not that such tax benefits will not be realized. The Company recognizes the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a “more-likely-than-not” threshold, the amount recognized in the consolidated financial statements is the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. The Company recognizes interest and penalties, if any, related to uncertain tax positions in income tax expense. The Company did not have any unrecognized tax benefits as of May 31, 2018, and does not expect this to change significantly over the next 12 months. Stock-Based Compensation The Company accounts for equity instruments issued to employees in accordance with ASC 718, Compensation - Stock Compensation. ASC 718 requires all share-based compensation payments to be recognized in the financial statements based on the fair value on the issuance date. Equity instruments granted to non-employees are accounted for in accordance with ASC 505, Equity. The final measurement date for the fair value of equity instruments with performance criteria is the date that each performance commitment for such equity instrument is satisfied or there is a significant disincentive for non-performance. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Accounts Receivable The Company extends credit to its customers in the normal course of business and performs ongoing credit evaluations of its customers, maintaining an allowance for potential credit losses. Uncollectible accounts are written off at the time they are deemed uncollectible. Accounts receivable is reported net of an allowance for doubtful accounts. The allowance is based on management's estimate of the uncollectible accounts receivable. Accounts receivable is reported net of an allowance for doubtful accounts. The allowance is based on management's estimate of the uncollectible accounts receivable. As of May 31, 2018 and 2017, the allowance for doubtful accounts was $14,000 and $0, respectively. Inventory Inventory consists of finished goods and raw materials which are stated at the lower of cost (first-in, first-out) and net realizable value. Equipment Equipment is stated at cost. The Company provides for depreciation based on the useful lives of the assets using straight-line methods. Expenditures for maintenance, repairs, and betterments that do not materially prolong the normal useful life of an asset have been charged to operations as incurred. Upon sale or other disposition of assets, the cost and related accumulated depreciation and amortization are removed from these accounts, and the resulting gain or loss, if any, is reflected in operations. Advertising Advertising and promotion costs are expensed as incurred. Advertising and promotion expense amounted to approximately $72,900 and $23,800 for the years ended May 31, 2018 and 2017, respectively. Shipping and Handling Shipping and handling costs are included in costs of goods sold. Business combination U.S. GAAP requires that all business combinations not involving entities or businesses under common control be accounted for under the acquisition method. The Company applies ASC 805, "Business combinations", the cost of an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of the (i) the total of cost of acquisition, fair value of the non-controlling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statements of operations and comprehensive income. The determination and allocation of fair values to the identifiable assets acquired and liabilities assumed is based on various assumptions and valuation methodologies requiring considerable management judgment. The most significant variables in these valuations are discount rates, terminal values, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. Management determines discount rates to be used based on the risk inherent in the related activity's current business model and industry comparisons. Terminal values are based on the expected life of products and forecasted life cycle and forecasted cash flows over that period. The Company's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Any changes to provisional amounts identified during the measurement period are recognized in the reporting period in which the adjustment amounts are determined. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, effective for fiscal years beginning after December 15, 2018, that attempts to establish a uniform basis for recording revenue to virtually all industries’ financial statements. The revenue standard’s core principle is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration expected to be received for those goods or services. Additionally, the new guidance requires enhanced disclosure to help financial statement users better understand the nature, amount, timing and uncertainty of the revenue recorded. Management does not believe that the adoption of this pronouncement will have a material impact on the company’s consolidated financial statements. In July 2015, FASB issued ASU 2015-11, “Inventory. Simplifying the Measurement of Inventory.” This amendment requires companies to measure inventory at the lower of cost or net realizable value. The Company adopted this amendment in the current fiscal year, and the implementation did not have a material impact on the Company’s consolidated financial statements. On February 25, 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-2, "Leases" (Topic 842), which is intended to improve financial reporting for lease transactions. This ASU will require organizations that lease assets, such as real estate and manufacturing equipment, to recognize assets and liabilities on their balance sheets for the rights to use those assets for the lease term and obligations to make lease payments created by those leases that have terms of greater than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. This ASU will also require disclosures to help investors and other financial statement users better understand the amount and timing of cash flows arising from leases. These disclosures will include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. This ASU will be effective for public entities beginning the first quarter 2019. We do not believe that this ASU will have a material impact on our financial statements. Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. |
RESTATEMENT
RESTATEMENT | 12 Months Ended |
May 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
RESTATEMENT | Note 2 – RESTATEMENT Stockholders’ deficiency as of May 31, 2018 has been adjusted as follows: Total Stockholders' Deficiency As reported $ (991,416 ) Deferred financing costs related to issuance of convertible notes payable 538,335 Net financing cost associated with the issuance of convertible notes payable (663,798 ) Income tax benefit 136,890 Restated $ (979,989 ) During May 2019, the Company discovered that an error was made in the accounting for the extinguishment of debt on January 26, 2018. The correction of the error resulted in the Company recording a deferred financing costs in the amount of $538,335 and net financing costs of $663,798, during the year ended May 31, 2018. In addition, during May 2019, the Company discovered that an error was made in the accounting for goodwill for the GBC acquisition, which did not include a component for the related deferred tax liability. The correction of this error resulted in the Company recording an income tax benefit in the amount of $136,890, for the year ended May 31, 2018. The total impact of these corrections was to decrease the Company’s Stockholders’ Deficiency by $11,427 for the year ended May 31, 2018. The consolidated balance sheet includes an increase in goodwill of $136,890, an increase in convertible notes payable of $125,467, an increase in additional paid-in capital of $538,333, an increase in the accumulated deficit of $526,906, and a decrease in stockholders’ deficiency of $11,427. The consolidated statement of operations includes an increase in interest and financing costs of $663,796, an increase in income tax benefit of $136,890, an increase in net loss of $526,906, and an increase in the basic and diluted loss per share of $0.02. The consolidated statement of changes in stockholders’ deficiency includes an increase in deferred financings costs on convertible notes payable of $538,333, an increase in net loss of $526,906, and a decrease in stockholders’ deficiency of $11,427. The consolidated statement of cash flows includes an increase in net loss of $526,906, an increase in amortization of interest and financing costs of $390,016, an increase in income tax benefit of $136,890, and a decrease in stockholders’ deficiency of $11,427. |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended |
May 31, 2018 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | Note 3 - CONCENTRATIONS Concentration of Credit Risk The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and accounts receivable. The Company places its cash with high quality credit institutions. At times, balances may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit. Cash in banks is insured by the FDIC up to $250,000 per institution, per entity. The Company routinely assesses the financial strength of its customers and, as a consequence, believes that its account receivable credit risk exposure is limited. Sales and Accounts Receivable One customer accounted for approximately 11% of the Company’s accounts receivable and sales as of and for the year ended May 31, 2018. One customer accounted for approximately 30% of the Company’s accounts receivable at May 31, 2017. There were no concentrations of sales for the year ended May 31, 2017. |
GBC ACQUISITION
GBC ACQUISITION | 12 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
GBC ACQUISITION | Note 4 – GBC ACQUISITION To support the company’s strategic initiatives, the Company acquired GBC for its distribution capabilities in the New York metropolitan region. Effective April 26, 2018, the Company acquired all of the outstanding stock of GBC for total consideration of $730,092, of which, $108,079 was paid in cash and $622,013 was paid by the issuance of 1,455,000 shares of the Company’s common stock at $0.4275 per share. If, after 12 months from the date of the closing, the shares are trading below twenty ($0.20) cents per share, the Company shall issue 485,000 additional shares as additional stock consideration.The company has determined the value of these contingent shares to be di minimis. In conjunction with the closing, the stockholders of GBC are subject to the provisions of a non-competition/non-solicitation/non-disclosure agreement. One of the former stockholders of GBC has been appointed as the Company’s General Manager pursuant to a 2-year employment agreement. At April 26, 2018, the fair value of the assets acquired and liabilities assumed from GBC were as follows: Assets: Cash $ 118,941 Accounts receivable 36,365 Inventory 79,283 Equipment 65,925 Notes receivable 61,344 Goodwill 726,890 Customer list 507,000 $ 1,595,748 Liabilities: Accounts payable $ 402,700 Intercompany loans 116,071 Deferred tax liability 136,890 Line of credit 15,833 Loans payable 194,162 $ 865,656 Net Assets Acquired $ 730,092 The estimated useful life of the customer list is ten (10) years. Amortization expense of $8,467 was recorded during the year ended May 31, 2018. The estimated useful life of the equipment is Five (5) years. Depreciation expense of $3,987 was recorded during the year ended May 31, 2018. From the date of acquisition through May 31, 2018, GBC generated sales of approximately $325,000, cost of goods sold of approximately $269,000 and net losses of approximately $39,000. See Note 6 for the unaudited pro forma condensed consolidated statements of operations for the year ended May 31, 2018. |
VK ACQUISITION
VK ACQUISITION | 12 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
VK ACQUISITION | Note 5 – VK ACQUISITION To support the Company’s strategic initiatives, the Company acquired VK and the VK brands. Effective October 19, 2017, the Company acquired 100% of the outstanding membership interests of VK, for 312,500 restricted shares of the Company’s common stock at a price of $0.40 per share for a total stock consideration of $125,000. At October 19, 2017, the fair value of the assets acquired and liabilities assumed from VK were as follows: Cash $ 1,355 Accounts receivable 13,024 Inventory and work in process 40,564 Accounts payable (16,343 ) Notes payable (108,600 ) Goodwill 195,000 Net assets acquired $ 125,000 From the date of acquisition through May 31, 2018, VK generated sales of approximately $63,000, cost of goods sold of approximately $43,000 and net losses of approximately $2,000. The goodwill acquired will be amortized over fifteen (15) years for tax purposes. See Note 5 for the unaudited pro forma condensed consolidated statements of operations for the year ended May 31, 2018. |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION | 12 Months Ended |
May 31, 2018 | |
Business Combinations [Abstract] | |
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION | Note 6 – UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION Life On Earth, Inc. Unaudited ProForma Condensed Consolidated Financial Information For the year ended May 31, 2018 LFER VK GBC ProForma Adjustments Notes ProForma Combined Sales, net $ 2,867,857 $ 120,006 $ 3,117,117 $ 6,104,980 Cost of goods sold 2,217,067 81,845 2,782,880 5,081,791 Gross profit 650,790 38,161 334,237 1,023,188 Operating expenses 1,634,894 27,911 381,694 136,869 a 2,181,368 Net (Loss) income before other expenses (984,104 ) 10,250 (47,457 ) (136,869 ) (1,158,180 ) Other expenses (2,110,509 ) (28,933 ) (18,389 ) (2,157,831 ) Tax Benefit (136,890 ) (136,890 ) Net loss $ (3,094,613 ) $ (18,683 ) $ 71,044 $ (136,869 ) $ (3,179,121 ) See accompanying notes to the condensed consolidated unaudited proforma financial information. Life On Earth, Inc. Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information Proforma Note 1. — Basis of presentation The unaudited pro forma condensed consolidated financial statements are based on Life On Earth, Inc.’s(the “Company”, “LFER”) historical consolidated financial statements as adjusted to give effect to the acquisitions of VK and GBC. The unaudited pro forma statement of operations for the year ended May 31, 2018 gives effect to the VK and GBC acquisitions as if they had occurred on June 1, 2017. Proforma Note 2 —Purchase price allocation See Notes 4 and 5 for the purchase price allocations of GBC and VK, respectively. The unaudited pro forma condensed financial information includes various assumptions, including those related to the purchase price allocation of the assets acquired from VK and GBC based on management’s best estimates of fair value. Proforma Note 3 — Pro Forma adjustment The pro forma adjustments are based on our estimates and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma condensed consolidated financial information: (a) Reflects the depreciation related to the acquired property and equipment and the amortization of the intangible assets acquired. Proforma Note 4 — Commitments In connection with the acquisition of GBC, the Company assumed a lease for approximately 5,250 square feet of office and warehouse space located in Staten Island, New York at a base rent of $8,500 per month. The lease terminates on April 26, 2023, In addition, the Company entered into an employment agreement, beginning April 26, 2018, with a general manager for a period of two years at a cost of $75,000, per year. |
ESD ACQUISITION
ESD ACQUISITION | 12 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
ESD ACQUISITION | Note 7 – ESD ACQUISITION Effective July 7, 2016, the Company acquired all of the net assets of Energy Source Distributors, Inc. by purchasing all of the outstanding shares of common stock for $450,000. The following table presents the unaudited pro forma condensed consolidated statements of operations for the year ended May 31, 2017 Unaudited Pro Forma Condensed Consolidated Statements of Operations For the year ended May 31, 2017 Pro Forma Pro Forma LFER ESD Adjustments Combined Product sales, net $ 142,236 $ 2,661,919 $ — $ 2,804,156 Cost of goods sold 116,667 1,933,120 — 2,049,787 Gross income 25,569 728,799 — 754,368 Selling, general, and administrative expenses 1,533,419 871,106 — 2,405,525 Net (Loss) before other income and expenses (1,507,850 ) (142,307 ) — (1,650,157 ) Other income and (expenses) (1,250,937 ) (103,175 ) — (1,354,112 ) Provision for income taxes — — — — Net loss $ (2,758,787 ) $ (245,482 ) $ — $ (3,004,269 ) Basic and diluted loss per share $ — $ — $ — $ (0.19 ) Basic and diluted weighted average number of shares outstanding — — — 15,877,927 See accompanying notes to the Unaudited Pro Forma Condensed Consolidated Financial Information Unaudited Pro Forma Condensed Consolidated Statements of Operations Notes to the Unaudited Pro Forma Condensed Consolidated Statements of Operations Pro Forma Note 1. — Basis of presentation The unaudited pro forma condensed consolidated statements of operations for the year ended May 31, 2017 gives effect to the ESD acquisition as if it had occurred on June 1, 2016. Pro Forma Note 2 — Purchase price allocation Effective July 7, 2016, the Company acquired all of the outstanding stock of ESD and certain assets from ESD for total consideration of $450,000. The unaudited pro forma condensed consolidated financial information includes various assumptions, including those related to the purchase price allocation of the assets acquired from ESD based on management’s estimates. The following table shows the allocation of the purchase price to the acquired assets: Intangible assets $ 375,000 Equipment 75,000 Total purchase price $ 450,000 The estimated useful life of the intangible assets is ten (10) years. Amortization expense of $35,625 was recorded during the year ended May 31, 2017. The estimated useful life of the equipment is five (5) years. Depreciation expense of $14,508 was recorded during the year ended May 31, 2017. |
GOODWILL
GOODWILL | 12 Months Ended |
May 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | Note 8 - Goodwill represents the The changes in the carrying amount of goodwill for the years ended May 31, 2018 and 2017 were as follows: 2018 2017 Balance at beginning of the year $ — $ — Acquistion of GBC (Note 4) 726,890 — Acquistion of VK (Note 5) 195,000 — Balance at the end of the year $ 921,890 $ — Goodwill resulting from the business acquisitions completed in the year ended May 31, 2018 has been allocated to the financial records of the acquired entity. For the year ended May 31, 2018, the Company did not have goodwill impairment. As of May 31, 2018, there had not been any accumulated goodwill impairment provided. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
May 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | Note 9 – Intangible assets as of May 31, 2018 and 2017 were as follows: 2018 2017 Intangible assets: Intangible assets to be amortized: Business relationships and customer lists $ 882,000 $ 375,000 Less: accumulated amortization: Intangible assets to be amortized: Business relationships and customer lists 80,822 35,625 Net book value at the end of the year $ 801,178 $ 339,375 The Company’s intangible assets are tested for impairment if impairment indicators arise. The Company amortizes its intangible assets using the straight-line method over a period ranging from 5-10 years. Amortization expense for the years ended May 31, 2018 and 2017 was approximately $45,197 and $35,625, respectively. The annual estimated amortization expense for intangible assets for the five succeeding years is as follows: For the years ended May 31, 2019 $ 138,900 2020 $ 138,900 2021 $ 138,900 2022 $ 138,900 2023 $ 129,953 Thereafter $ 115,625 $ 801,178 |
LOANS PAYABLE - STOCKHOLDERS
LOANS PAYABLE - STOCKHOLDERS | 12 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
LOANS PAYABLE - STOCKHOLDERS | Note 10 - LOAN PAYABLE – STOCKHOLDER In April 2016, a stockholder and officer lent the Company $10,000. The loan bore interest at 18% per annum. The maturity date of the note was July 1, 2016. The loan was repaid on October 17, 2016. Interest expense on the note of $229 was recorded during the year ended May 31, 2017. In connection with the acquisition of GBC, the Company entered into a loan agreement with the former owners of GBC in the amount of $109,995. The former owners of GBC became stockholders of the Company when the acquisition of GBC was completed. The loan bears interest at 7% per annum, requires monthly payments of principal and interest totaling $4,925, and matures in April 2020, at which time all unpaid principal and interest is due. The loan is secured by all of the assets of GBC. At May 31, 2018 the outstanding balance of the loan was $109,995. As of May 31, 2018, future principal payments of the loan were approximately as follows: For the year ended May 31, 2019 $ 52,394 2020 57,601 $ 109,995 |
NOTES PAYABLE - RELATED PARTY
NOTES PAYABLE - RELATED PARTY | 12 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
NOTES PAYABLE - RELATED PARTY | Note 11 – NOTES PAYABLE – RELATED PARTY In June 2017, the Company issued a demand note in the amount of $20,000 to a related party. The note is unsecured, bears interest at 15% and matured October 2016. During October 2017, the Company repaid $18,000 of the note. During the year ended May 31, 2018, the Company recorded interest expense of $1,239. At May 31, 2018, the unpaid balance of the loan was $2,000. The unpaid balance continues to accrue interest at 15% and the lender has not demanded payment. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
May 31, 2018 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | Note 12 – NOTES PAYABLE In In July 2016, the Company entered into a Senior Secured Revolving Credit Facility Agreement (the “Credit Facility”) with TCA Global Credit Master Fund L.P. (“TCA”) for a total amount of $7.5 million. ESD is Corporate Guarantor to the Credit Facility. Under the terms of the Credit Facility, the Company paid advisory fees to TCA in the amount of $350,000, through the issuance of 374,332 shares of common stock. On July 5, 2016, the Company borrowed $650,000 from the Credit Facility and used the proceeds to acquire ESD for $450,000; payoff a note payable in the amount of $32,534; $74,466 was used to pay vendors for inventory purchases and $93,000 was paid to TCA for closing fees. The credit facility had a maturity date of December 27, 2017. The credit facility required fees and interest only payments at 12% during the first two months. Principal payments began in the third month. At the maturity date, all unpaid principal and interest was due. The advisory fees and closing fees totaling $443,000 were recognized as deferred financing costs. In June 2018, the Company and TCA mutually agreed to settle the debt for a total amount of $560,000, of which $410,000 is to be paid in cash in 6 equal monthly installments of $68,333 beginning in June 2018 and $150,000 to be paid with shares of the Company’s common stock. As of May 31, 2018 and 2017, the outstanding balance was $560,000 and $358,714, respectively. As of May 31, 2018, future principal payments of the note payable were approximately as follows: For the year ending May 31, 2019 $ 560,000 |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 12 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
CONVERTIBLE NOTES PAYABLE | Note 13 – CONVERTIBLE NOTES PAYABLE During the quarter ended November 30, 2016, the Company entered into Convertible Promissory Note Agreements (The “Convertible Notes”) with seven (7) individuals (“Holders”) pursuant to which they purchased the Company’s unsecured fixed price convertible promissory notes in the aggregate principal amount of $803,000. The Convertible Notes carry interest at the rate of 5% per annum and mature at various dates through November 7, 2017. The Convertible Notes were issued with a 10% original issue discount. As additional consideration for the purchase of the Convertible Notes, the Company has issued an aggregate of 1,790,000 shares of its common stock to the Holders, during March 2017. Pursuant to the Convertible Notes, the Company issued common stock purchase warrants (The “Warrants“). The Warrants allow the Holders to purchase up to an aggregate of 730,000 shares of the Company’s common stock at an exercise price of $0.85 per share until September 30, 2021. Also, under the terms of the Convertible Notes, the Company and the Holders entered into a registration rights agreement covering the 1,790,000 shares issued. Pursuant to the terms of the registration rights agreement, the Company has filed a registration statement with the U.S. Securities and Exchange Commission covering up to an aggregate of 6,033,131 shares of the Company’s common stock. The registration became effective on March 29, 2017. On September 20, 2017 and upon maturity, the Company repaid one Convertible Note Holder the principal amount of $440,000 and, accrued and unpaid interest in the amount of $21,156. In addition, the Company purchased 1,100,000 shares of treasury stock from the Holder for $63,844 and subsequently the shares were cancelled. In November 2017, the Company borrowed $20,000 from a related party. The note matured in May 2018,bears interest at 7% per annum and is convertible into common stock of the Company at a fixed price of $0.15 per share. As additional consideration for the issuance of the convertible note, the Company issued 40,000 shares of the Company’s common stock on March 1, 2018. As a result of this transaction the Company recorded a deferred finance cost of $20,000, all of which was amortized during the year ended May 31, 2018. As of May 31, the unpaid balance of the note was $20,000. On November 6, 2017 and upon maturity, the Company repaid two Convertible Note Holders the aggregate principal amount of $165,000 and, accrued and unpaid interest in the amount of $8,747. During November 2017, the Company and the remaining four Convertible Note Holders agreed to extend the maturity date of their respective Convertible Notes to September 30, 2018. As of May 31, 2018, the outstanding balance was $198,000. On September 25, 2017, the Company entered into a note purchase agreement (“NPA”), pursuant to which the Company issued a 7% secured promissory note (“SPN”) in the principal amount of $650,000 (the “650K Note”), which matures on March 25, 2019. As additional consideration for the issuance of the SPN, the Company issued 1,500,000 restricted shares of the Company’s common stock at $0.20 per share, which was recorded as a deferred finance cost. The deferred finance cost is being amortized over the life of the SPN. On November 3, 2017, the NPA was amended and an additional 7% SPN was issued to the purchaser in the principal amount of $175,000 (the “$175K Note”), which matures on May 3, 2019. As additional consideration for the issuance of the $175K Note, the Company issued 800,000 restricted shares of the Company’s common stock at $0.42 per share, which was recorded as a deferred finance cost. The deferred finance cost is being amortized over the life of the SPN. Both SPN’s are secured by a continuing security interest in substantially all assets of the Company. Under the terms of the NPA, the Company was required to pay a consulting fee of $65,000 to the purchaser. In November 2017, the purchaser agreed to and accepted from the Company, 433,333 shares of the Company’s common stock, which shares were issued at $0.40 per share, in lieu of payment of the consulting fee, which was recorded by the Company as a deferred finance cost. The deferred finance cost is being amortized over the life of the SPN’s. On January 26, 2018, the Company entered into a NPA, pursuant to which the Company issued a Note in the amount of $125,000 (the “Note Purchase”). The Note bears interest at 7% per annum and matures on January 26, 2019. In connection with the NPA, the Company and the Purchaser also entered into a Side Letter, pursuant to which, as additional consideration for the NPA, the Company agreed to (i) pay to the Purchaser, the first $125,000 in cash proceeds received by the Company in connection with a NPA from third parties unaffiliated with the Purchaser (the “Cash Payment”) shall be used to reduce the amount due to the Purchaser under the $175K Note , and (ii), with certain exceptions, not issue any shares of common stock or other securities convertible into shares of common stock unless and until the Cash Payment has been made in full. As of May 31, 2018, the outstanding balance was $125,000. As further consideration for the Note Purchase, the Company entered into an agreement to amend certain SPN’s (the “Note Amendment”), pursuant to which the $175K Note and the $650K Note (together, the “Old Notes”) were amended to provide the Purchaser with the ability to convert the principal amount of such Old Notes, together with accrued interest thereon, into shares of the Company’s common stock (the “Conversion Shares”). Pursuant to the Note Amendment, the conversion price shall be equal to $0.30, subject to adjustments as set forth in the Note Amendment, and the number of Conversion Shares issuable upon conversion of the Old Notes shall be equal to the outstanding principal amount and accrued but unpaid interest due under the terms of the Old Notes to be converted, divided by the Conversion Price. As of May 31, 2018, the outstanding balance was $825,000. The Note Amendment was treated as an extinguishment of the old notes and an issuance of new notes (the “New Notes”). As a result of this transaction the Company recorded deferred financing costs on the New Notes, and the $125,000 note purchase, of $538,335, of which $106,336 was amortized during the year ended May 31, 2018, and expensed the unamortized deferred financing costs of $557,462. Accrued and unpaid interest expense on the NPA of $42,485 was recorded by the Company during the year ended May 31, 2018, and is reported as accounts payable and accrued expenses. In connection with the acquisition of VK, the Company assumed a promissory note in the amount of $108,600. The note accrued interest at an annual rate of 6.5% and matured on March 31, 2018. During the year ended May 31, 2018, the Company recorded interest expense of $1,883. In December 2017, the Company made a principal payment of $5,000. On January 26, 2018, the Company entered into a Note Exchange Agreement (the “NEA”) with the owner of the promissory note assumed from VK, pursuant to which the owner agreed to cancel the promissory note in exchange for a new secured convertible promissory note (the “Note”) in the aggregate principal amount equal to $103,000, the outstanding balance. On February 14, 2018, the owner of the promissory note elected to convert the Note into 343,333 shares of the Company’s common stock. In February 2016, the company offered a note purchase agreement, in the aggregate amount of up to $700,000 (the “Note Offering”). Notes issued under the Note Offering shall mature one year from the date of issuance (the “Maturity Date”), shall accrue interest at the simple rate of 7.0% per annum, and are convertible, at the holder’s option, prior to the Maturity Date into that number of shares of the Company’s common stock, equal to the lower of (i) $0.30 per share of common stock, or (ii) that number of shares of common stock equal to the average closing price of the Company’s common stock as reported on the OTC Markets for the preceding 30 trading days prior to the date of conversion, multiplied by 0.65 (the “Conversion Price”); provided, however, in the event the Conversion Price is calculated based on (ii) above, the Conversion Price shall not be lower than $0.20 per share of common stock. All amounts due under the terms of the Notes shall be secured by a continuing security interest in substantially all of the assets of the Company. In March 2018, the Company issued secured convertible promissory notes to four (4) investors under the terms of the Note Offering in the aggregate amount of $220,000. As a result of these transactions the Company recorded deferred finance costs in the aggregate amount of $76,117, of which $16,674 was amortized during the year ended May 31, 2018. As of May 31, 2018, the outstanding balance was $220,000. In May 2018, the Company offered a NPA, in the aggregate amount of up to $500,000 (the “2nd Note Offering”) and issued secured convertible promissory notes to two (2) investors under the terms of the 2nd Note Offering in the aggregate amount of $60,000. As result of this transaction, the Company recorded deferred finance costs in the aggregate amount of $18,558, of which $539 was amortized during the year ended May 31, 2018. As of May 31, 2018, the outstanding balance was $60,000. As of May 31, 2018, future principal payments of the convertible notes payable were approximately as follows: For the twelve months ending May 31, 2019 $ 1,448,000 |
LOANS PAYABLE
LOANS PAYABLE | 12 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
LOANS PAYABLE | Note 14 – LOANS PAYABLE In July 2016, the Company entered into an agreement (“Future Sales Proceeds Purchase Agreement”) with Merchant Cash and Capital, LLC d/b/a Bizfi (the “Buyer”). Under the terms of the agreement, the Company received $167,450 of cash proceeds from the Buyer in exchange for a loan payable in the amount of $214,200 secured by future sales proceeds. In January 2017, the Company entered into a second Future Sales Proceeds Purchase Agreement with the Buyer. Under the terms of the second agreement, the Future Sales Proceeds Purchase Agreement entered into in July 2016 was paid in full and the Company received $128,920 of cash proceeds from the Buyer in exchange for a loan payable in the amount of $281,400 secured by future sales proceeds. The difference between the aggregate of the Future Sales Proceeds Purchase Agreement pay-off and the cash received and the cash to be paid from both future sales proceeds of $131,400 has been recognized as financing costs which was capitalized and is being amortized over the repayment period. As of May 31, 2018, capitalized financing costs related to this loan were fully amortized and the Future Sales Proceeds Purchase Agreement has been repaid in full. Also in July 2016, the Company entered into an agreement (“Purchase and Sale Agreement”) with ESBF California LLC (“ESBF”). Under the terms of the agreement, the Company received $197,370 of cash proceeds from ESBF and agreed to repay the amount of $266,000 secured by future sales proceeds. In March 2017, the Company entered into a second Purchase and Sale Agreement with ESBF. Under the terms of the second agreement, the Purchase and Sale Agreement entered into in July 2016 was paid in full and the Company received $131,370 of cash proceeds from ESBF in exchange for a loan payable in the amount of $266,000 secured by future sales proceeds. In January 2018, the Company entered into a third Purchase and Sale Agreement with ESBF. Under the terms of the third agreement, the Purchase and Sale Agreement entered into in March 2017 was paid in full in the amount of $24,180 and the Company received approximately $170,000 of cash proceeds from the Buyer in exchange for a loan payable in the amount of $272,000 secured by future sales proceeds. In addition, the Company paid a management fee of $6,000 to complete this transaction. The difference between the aggregate of the Purchase and Sale Agreement pay-off, the management fee and the cash received and the cash to be paid from future sales proceeds of $272,000 was recognized as financing costs which has been capitalized and is being amortized over the repayment period. This amount has been reflected as a direct reduction of the loan payable in the accompanying consolidated balance sheets. During the year ended May 31, 2018, the Company made payments aggregating $120,026. The Company is obligated to make payments equal to 15% of future receipts estimated to be approximately 129 payments of $1,177 to ESBF each business day until the full amount of the future sales proceeds is repaid. The Company recognized amortization expense of $86,515 and $92,591 for the years ending May 31, 2018 and 2017, respectively. As of May 31, 2018, the outstanding balance was $151,974. In April 2018, the Company entered into an agreement (“Purchase and Sale Agreement”) with Premium Business Services LLC (“PBS”). Under the terms of the agreement, the Company received $60,000 of cash proceeds from PBS in exchange for a loan payable in the amount of $81,000 secured by future sales proceeds. The difference between the aggregate of the Purchase and Sale Agreement pay-off and the cash to be paid from future sales proceeds of $81,000 was recognized as capitalized financing costs and is being amortized over the repayment period. This amount has been reflected as a direct reduction of the loan payable in the accompanying consolidated balance sheets. During the year ended May 31, 2018, the Company has made payments aggregating $10,714. The Company is obligated to make approximately 164 payments of $429 to PBS each business day until the full amount of the future sales proceeds is repaid. The Company recognized amortization expense of $4,074 for the year ending May 31, 2018. As of May 31, 2018, the outstanding balance was $70,286. In connection with the acquisition of GBC, the Company acquired a loan payable with the US Small Business Administration in the amount of $135,812. The loan bears interest at prime plus 2.75% per annum, matures on December 31, 2020, and is guaranteed by both of the former owners of GBC. Minimum monthly payments of principal and interest amount to $4,383. The loan balance at May 31, 2018 and 2017 was $68,560 and $0, respectively. Auto Loan In connection with the acquisition of GBC, the Company acquired a bank loan with a balance due of $12,182 for a delivery vehicle. The loan matures in April 2020 and bears interest at 7% per annum. The monthly payments are $578. As of May 31, 2018, the outstanding balance of the auto loan is $12,182. As of May 31, 2018, future principal payments of loans payable were approximately as follows: For the year ending May 31, 2019 $ 253,523 2020 32,820 2021 16,659 $ 303,002 |
LINES OF CREDIT
LINES OF CREDIT | 12 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
LINES OF CREDIT | Note 15– LINES OF CREDIT In connection with the acquisition of GBC, the Company acquired a $15,833 credit line with a small business lender which has no expiration date and bears interest at 10.25%. The facility is guaranteed by one of the former stockholders of GBC. At May 31, 2018, the outstanding balance was $16,044. In April 2017, the Company entered into a credit line with a small business lender that allows the Company to borrow up to $35,000 and bears interest at 94% per annum. The facility requires weekly payments of principal and interest. At May 31, 2018, the outstanding balance was $22,854. In July 2017, the Company entered into a credit line with a small business lender. The facility required weekly payments of principal and interest. The principal amount was based on the outstanding balance and the weekly interest amount was 1.1% of the outstanding balance. During the year ended May 31, 2018, the Company borrowed and repaid an aggregate amount of approximately $26,000. At May 31, 2018, the outstanding balance was $0. On September 26, 2017, the Company entered into a revolving credit note (the “Revolver”), providing for borrowings of up to $750,000 at an annual interest rate of 7%. Amounts due under the terms of the Revolver are convertible, at the option of the holder, into shares of the Company’s common stock equal to the principal and accrued interest due on the date of conversion divided by $1.50. As of May 31, 2018, the Company has not made any borrowings from the Revolver. As of May 31, 2018, the future principal payments of our lines of credit were as follows: For the year ending May 31, 2019 $ 38,898 |
CAPITAL STOCK
CAPITAL STOCK | 12 Months Ended |
May 31, 2018 | |
Equity [Abstract] | |
CAPITAL STOCK | Note 16 – CAPITAL STOCK As of May 31, 2018, the authorized common stock of the Company was 100,000,000 shares of common stock, $0.001 par value per share, and 10,000,000 shares of preferred stock, $0.001 par value per share. At May 31, 2018 and 2017, respectively, there were 23,581,586 and 18,717,922 shares of common stock outstanding and 1,200,000 shares of preferred stock outstanding. Preferred Stock The Preferred Stock has the following rights and privileges: Voting – One share of preferred stock has the equivalent voting rights as 50 shares of common stock. Other rights and preferences may be determined from time to time by the Board of Directors of the Company. Common Stock Shares of common stock have the following rights and privileges: Voting – The holder of each share of common stock is entitled to one vote per share held. The holders of common stock are entitled to elect members of the Board of Directors. Dividends – Common stockholders are entitled to receive dividends, if and when declared by the Board of Directors. The Company has not declared dividends since inception. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
May 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Note 17 - COMMITMENTS AND CONTINGENCIES In connection with the acquisition of ESD, the Company assumed a lease for approximately 13,000 square feet of warehouse space located in Gilroy, California at a base rent of $5,248 per month. The lease terminates on June 30, 2021. In addition, the Company entered into an employment agreement with a general manager, for a period of one year at a cost of $58,000. The employment agreement expired in July 2017. In connection with the acquisition of GBC, the Company assumed a lease for approximately 5,250 square feet of office and warehouse space located in Staten Island, New York at a base rent of $8,500 per month. The lease provides for annual increases of 2.5% over a period of six years and terminates on April 26, 2023. In addition, the Company entered into an employment agreement with a Stockholder, beginning April 26, 2018, for a period of two years at a cost of $75,000, per year. Rent expense for the years ended May 31, 2018 and 2017 totaled $77,182 and $67,799, respectively. The company’s future lease commitments is approximately as follows: For the years ended May 31, 2019 $ 168,000 2020 $ 170,000 2021 $ 141,000 2022 $ 113,000 2023 $ 38,000 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
May 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | Note 18 - INCOME TAXES The deferred tax asset consists of the following: May 31, 2018 May 31, 2017 Net operating loss carryforward $ 1,374,000 $ 629,000 Stock based compensation 449,000 394,000 Intangible assets (136,890 ) — Valuation allowance (1,686,110 ) (1,023,000 ) Deferred tax asset, net $ $ — For the years ended May 31, 2018 and 2017, the valuation allowance increased by approximately $660,000 and $160,000, respectively. On December 22, 2017, the enactment date, the Tax Cuts and Jobs Act ("Act") was signed into law. The Act enduringly reduces the top corporate tax rate from 35 percent to a flat 21 percent beginning January 1, 2018 and eliminates the corporate Alternative Minimum Tax. The Company has adjusted its deferred tax calculations to reflect this reduction in its tax rate. The deferred tax asset differs from the amount computed by applying the statutory federal and state income tax rates to the loss before income taxes. The sources and tax effects of the differences are as follows: Effective Income Tax Rate Reconciliation 2018 2017 Federal Rate 21 % 21 % State Rate 6 % 6 % Valuation Allowance (27 )% (27 )% Effective income tax rate 0 % 0 % As of May 31, 2018, the Company has net operating loss carryforwards of approximately $6,800,000 to reduce future federal and state taxable income. The Company currently has no federal or state tax examinations in progress, nor has it had any federal or state examinations since its inception. All of the Company's tax years are subject to federal and state tax examinations. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
May 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Note 19 - RELATED PARTY TRANSACTIONS During the year ended May 31, 2017 the Company paid product development consulting fees to a supplier in the amount of $7,000. The Chief Executive Officer and chairman of the Company is the supplier's President. In addition, the Chief Operating Officer and Director of the Company has a minority interest in the supplier. The Company had leased its office on a month to month basis from the Company's Chief Operating Officer and stockholder for $750 per month. The lease terminated in March 2018. |
BASIS OF REPORTING AND GOING CO
BASIS OF REPORTING AND GOING CONCERN | 12 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
BASIS OF REPORTING AND GOING CONCERN | Note 20- BASIS OF REPORTING The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses from inception of approximately $6,800,000, has a working capital deficiency of approximately $2,780,000 and a net capital deficiency of approximately $980,000, which, among other factors, raises substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon management's plans to raise additional capital from the sale of stock and receive additional loans from related parties. The accompanying consolidated financial statements do not include any adjustments that might be required should the Company be unable to continue as a going concern. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
May 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 21 - SUBSEQUENT EVENTS Subsequent to May 31, 2018, the Company issued 2,983,134 shares of its common stock for financing, acquisitions, debt conversions and services. On August 6, 2018, the Company acquired 100% of the outstanding common stock of the Chill Group, Inc. (“JGC”) and their flagship brand “Just Chill ” in exchange for 1,636,363 shares of the Company’s common stock at $0.42 per share, 850,000 warrants at $0.85 per share, and the assumption of certain liabilities. The Company is in the process of determining the allocation of the purchase price of JGC but the final determination has not been completed as of the filing date of this annual report. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation Life On Earth, Inc. is an innovative brand accelerator, incubator and distribution platform focused on building and scaling concepts in the all-natural consumer products category. We focus on building brands within the alternative beverage and snack space. We are a dynamic and innovative all-natural consumer packaged goods company focused but not limited to the emerging beverage industry. We manufacture and distribute our brands through our distribution subsidiaries in New York and California. The accompanying consolidated financial statements include the financial statements of Life On Earth, Inc. (“LFER”) and its wholly owned subsidiaries, Energy Source Distributors Inc., (“ESD”), Victoria’s Kitchen, LLC (“VK”) and The Giant Beverage Company, Inc. (“GBC”) LFER was incorporated in Delaware in April 2013 and acquired ESD in July 2016, VK in October 2017, and GBC in April 2018. The Company currently markets and sell beverages, primarily in New York and California. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). |
Revenue Recognition | Revenue Recognition The Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. Provision for sales returns is estimated based on the Company's historical return experience. Revenue is presented net of returns. In March 2017, the Company discontinued an exclusive distribution agreement with a vendor. In accordance with the distribution agreement, the Company received a “Termination Payment”, as defined, in the amount of $97,731, which was recorded as other income during the year ended May 31, 2017. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated balance sheets and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Net Loss Per Common Share | Net Loss Per Common Share Basic loss per share is calculated by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted loss per share is calculated by dividing net loss by the weighted average number of common shares and dilutive common stock equivalents outstanding. During periods in which the Company incurs losses, common stock equivalents, if any, are not considered, as their effect would be anti -dilutive. As of May 31, 2018 and 2017, warrants and convertible notes payable could be converted into approximately 4,335,000 and 730,000 shares of common stock, respectively. |
Income Taxes | Income Taxes The Company utilizes the accrual method of accounting for income taxes. Under the accrual method, deferred tax assets and liabilities are determined based on the differences between the financial reporting basis and the tax basis of the assets and liabilities, and are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. An allowance against deferred tax assets is recognized when it is more likely than not that such tax benefits will not be realized. The Company recognizes the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a “more-likely-than-not” threshold, the amount recognized in the consolidated financial statements is the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. The Company recognizes interest and penalties, if any, related to uncertain tax positions in income tax expense. The Company did not have any unrecognized tax benefits as of May 31, 2018, and does not expect this to change significantly over the next 12 months. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for equity instruments issued to employees in accordance with ASC 718, Compensation - Stock Compensation. ASC 718 requires all share-based compensation payments to be recognized in the financial statements based on the fair value on the issuance date. Equity instruments granted to non-employees are accounted for in accordance with ASC 505, Equity. The final measurement date for the fair value of equity instruments with performance criteria is the date that each performance commitment for such equity instrument is satisfied or there is a significant disincentive for non-performance. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Accounts Receivable | Accounts Receivable The Company extends credit to its customers in the normal course of business and performs ongoing credit evaluations of its customers, maintaining an allowance for potential credit losses. Uncollectible accounts are written off at the time they are deemed uncollectible. Accounts receivable is reported net of an allowance for doubtful accounts. The allowance is based on management's estimate of the uncollectible accounts receivable. Accounts receivable is reported net of an allowance for doubtful accounts. The allowance is based on management's estimate of the uncollectible accounts receivable. As of May 31, 2018 and 2017, the allowance for doubtful accounts was $14,000 and $0, respectively. |
Inventory | Inventory Inventory consists of finished goods and raw materials which are stated at the lower of cost (first-in, first-out) and net realizable value. |
Equipment | Equipment Equipment is stated at cost. The Company provides for depreciation based on the useful lives of the assets using straight-line methods. Expenditures for maintenance, repairs, and betterments that do not materially prolong the normal useful life of an asset have been charged to operations as incurred. Upon sale or other disposition of assets, the cost and related accumulated depreciation and amortization are removed from these accounts, and the resulting gain or loss, if any, is reflected in operations. |
Advertising | Advertising Advertising and promotion costs are expensed as incurred. Advertising and promotion expense amounted to approximately $72,900 and $23,800 for the years ended May 31, 2018 and 2017, respectively. |
Shipping and Handling | Shipping and Handling Shipping and handling costs are included in costs of goods sold. |
Business Combination | Business combination U.S. GAAP requires that all business combinations not involving entities or businesses under common control be accounted for under the acquisition method. The Company applies ASC 805, "Business combinations", the cost of an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of the (i) the total of cost of acquisition, fair value of the non-controlling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statements of operations and comprehensive income. The determination and allocation of fair values to the identifiable assets acquired and liabilities assumed is based on various assumptions and valuation methodologies requiring considerable management judgment. The most significant variables in these valuations are discount rates, terminal values, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. Management determines discount rates to be used based on the risk inherent in the related activity's current business model and industry comparisons. Terminal values are based on the expected life of products and forecasted life cycle and forecasted cash flows over that period. The Company's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Any changes to provisional amounts identified during the measurement period are recognized in the reporting period in which the adjustment amounts are determined. |
Recent Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, effective for fiscal years beginning after December 15, 2018, that attempts to establish a uniform basis for recording revenue to virtually all industries’ financial statements. The revenue standard’s core principle is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration expected to be received for those goods or services. Additionally, the new guidance requires enhanced disclosure to help financial statement users better understand the nature, amount, timing and uncertainty of the revenue recorded. Management does not believe that the adoption of this pronouncement will have a material impact on the company’s consolidated financial statements. In July 2015, FASB issued ASU 2015-11, “Inventory. Simplifying the Measurement of Inventory.” This amendment requires companies to measure inventory at the lower of cost or net realizable value. The Company adopted this amendment in the current fiscal year, and the implementation did not have a material impact on the Company’s consolidated financial statements. On February 25, 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-2, "Leases" (Topic 842), which is intended to improve financial reporting for lease transactions. This ASU will require organizations that lease assets, such as real estate and manufacturing equipment, to recognize assets and liabilities on their balance sheets for the rights to use those assets for the lease term and obligations to make lease payments created by those leases that have terms of greater than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. This ASU will also require disclosures to help investors and other financial statement users better understand the amount and timing of cash flows arising from leases. These disclosures will include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. This ASU will be effective for public entities beginning the first quarter 2019. We do not believe that this ASU will have a material impact on our financial statements. Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. |
RESTATEMENT (Tables)
RESTATEMENT (Tables) | 12 Months Ended |
May 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Prior Period Adjustment | Total Stockholders' Deficiency As reported $ (991,416 ) Deferred financing costs related to issuance of convertible notes payable 538,335 Net financing cost associated with the issuance of convertible notes payable (663,798 ) Income tax benefit 136,890 Restated $ (979,989 ) |
GBC ACQUISITION (Tables)
GBC ACQUISITION (Tables) | 12 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
GBC Acquisition | Assets: Cash $ 118,941 Accounts receivable 36,365 Inventory 79,283 Equipment 65,925 Notes receivable 61,344 Goodwill 726,890 Customer list 507,000 $ 1,595,748 Liabilities: Accounts payable $ 402,700 Intercompany loans 116,071 Deferred tax liability 136,890 Line of credit 15,833 Loans payable 194,162 $ 865,656 Net Assets Acquired $ 730,092 |
VK ACQUISITIONS (Tables)
VK ACQUISITIONS (Tables) | 12 Months Ended |
May 31, 2018 | |
Vk Acquisitions | |
Fair value of assets acquired and liabilities assumed from VK | Cash $ 1,355 Accounts receivable 13,024 Inventory and work in process 40,564 Accounts payable (16,343 ) Notes payable (108,600 ) Goodwill 195,000 Net assets acquired $ 125,000 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION (Tables) | 12 Months Ended |
May 31, 2018 | |
Business Combinations [Abstract] | |
Proforma Acquisition | Life On Earth, Inc. Unaudited ProForma Condensed Consolidated Financial Information For the year ended May 31, 2018 LFER VK GBC ProForma Adjustments Notes ProForma Combined Sales, net $ 2,867,857 $ 120,006 $ 3,117,117 $ 6,104,980 Cost of goods sold 2,217,067 81,845 2,782,880 5,081,791 Gross profit 650,790 38,161 334,237 1,023,188 Operating expenses 1,634,894 27,911 381,694 136,869 a 2,181,368 Net (Loss) income before other expenses (984,104 ) 10,250 (47,457 ) (136,869 ) (1,158,180 ) Other expenses (2,110,509 ) (28,933 ) (18,389 ) (2,157,831 ) Tax Benefit (136,890 ) (136,890 ) Net loss $ (3,094,613 ) $ (18,683 ) $ 71,044 $ (136,869 ) $ (3,179,121 ) See accompanying notes to the condensed consolidated unaudited proforma financial information. |
Preliminary allocation of the purchase price | Intangible assets $ 375,000 Equipment 75,000 Total purchase price $ 450,000 |
ESD ACQUISITION (Tables)
ESD ACQUISITION (Tables) | 12 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
ESD ACQUISITION | Unaudited Pro Forma Condensed Consolidated Statements of Operations For the year ended May 31, 2017 Pro Forma Pro Forma LFER ESD Adjustments Combined Product sales, net $ 142,236 $ 2,661,919 $ — $ 2,804,156 Cost of goods sold 116,667 1,933,120 — 2,049,787 Gross income 25,570 728,799 — 754,369 Selling general and administrative expenses 1,533,419 871,106 — 2,405,525 Net(Loss) before other income and expenses (1,507,849 ) (142,307 ) — (1,50,156 ) Other income and (expenses) (1,250,937 ) (103,175 ) — (1,354,112 ) Provision for income taxes — — — — Net loss $ (2,758,786 ) $ (245,482 ) $ — $ (3,004,268 ) Basic and diluted loss per share — — — $ (0.19 ) Basic and diluted weighted average number of shares outstanding — — — 15,877,927 See accompanying notes to the Unaudited Pro Forma Condensed Consolidated Financial Information |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
May 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 2018 2017 Balance at beginning of the year $ — $ — Acquistion of GBC (Note 4) 726,890 — Acquistion of VK (Note 5) 195,000 — Balance at the end of the year $ 921,890 $ — |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
May 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 2018 2017 Intangible assets: Intangible assets to be amortized: Business relationships and customer lists $ 882,000 $ 375,000 Less: accumulated amortization: Intangible assets to be amortized: Business relationships and customer lists 80,822 35,625 Net book value at the end of the year $ 801,178 $ 339,375 |
Amortization expense for intangible assets | For the year ended May 31, 2019 $ 138,900 2020 $ 138,900 2021 $ 138,900 2022 $ 138,900 2023 $ 129,953 Thereafter $ 115,625 $ 801,178 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
May 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | For the years ended May 31, 2019 $ 168,000 2020 $ 170,000 2021 $ 141,000 2022 $ 113,000 2023 $ 38,000 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
May 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Deferred Tax Asset | May 31, 2018 May 31, 2017 Net operating loss carryforward $ 1,374,000 $ 629,000 Stock based compensation 449,000 394,000 Intangible assets (136,890 ) — Valuation allowance (1,686,110 ) (1,023,000 ) Deferred tax asset, net $ $ — |
Statutory Rate | Effective Income Tax Rate Reconciliation 2018 2017 Federal Rate 21 % 21 % State Rate 6 % 6 % Valuation Allowance (27 %) (27 %) Effective income tax rate 0 % 0 % |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Accounting Policies [Abstract] | ||
Other income | $ 97,731 | |
Common stock equivalents, outstanding | 4,335,000 | 730,000 |
Allowance for doubtful accounts | $ 0 | $ 14,000 |
Advertising and promotion expense | $ 72,900 | $ 23,800 |
RESTATEMENT - Prior Period Adju
RESTATEMENT - Prior Period Adjustment (Details) - USD ($) | 12 Months Ended | ||||
May 31, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | May 31, 2017 | Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Stockholders' equity (deficiency), as reported | $ (991,416) | ||||
Discount on extinguishment of convertible debt | 538,335 | ||||
Financings costs associated with the extinguishment of debt | (663,798) | ||||
Income tax benefit | 136,890 | ||||
Stockholders' equity (deficiency) | $ (979,989) | $ (979,989) | $ (719,541) | $ (719,541) | $ (78,896) |
CONCENTRATIONS (Details)
CONCENTRATIONS (Details) - USD ($) | 12 Months Ended | |
May 31, 2017 | May 31, 2018 | |
Concentrations | ||
FDIC Insured amount | $ 250,000 | |
Concentration risk | 30.00% |
GBC ACQUISITION (Details Narrat
GBC ACQUISITION (Details Narrative) - GBC Acquisition [Member] | May 31, 2018USD ($) |
Business Combination, Separately Recognized Transactions [Line Items] | |
Cash | $ 118,941 |
Accounts receivable | 36,365 |
Inventory | 79,283 |
Euqipment | 65,925 |
Notes Receivable | 61,344 |
Goodwill | 726,890 |
Customer list | 507,000 |
Total Assets | 1,595,748 |
Accounts payable | 402,700 |
Intercompany loans | 116,071 |
Deferred tax liability | 136,890 |
Line of credit | 15,833 |
Loans payable | 194,162 |
Total Liabilities | 865,656 |
Total Net Assets Acquired | $ 730,092 |
GBC ACQUISITION - GBC Acquisiti
GBC ACQUISITION - GBC Acquisition (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | May 31, 2018 | May 31, 2017 | |
Business Combination, Separately Recognized Transactions [Line Items] | |||
Shares issued for acquisition, amount | $ 747,013 | ||
Depreciation Expense | $ 59,837 | $ 50,133 | |
GBC Acquisition [Member] | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Purchase price | 730,092 | ||
Cash paid for purchase | 108,079 | ||
Shares issued for acquisition, amount | $ 622,013 | ||
Shares issued for acquisition, shares | 1,455,000 | ||
Price per share | $ 0.4275 | ||
Terms | If, after 12 months from the date of the Closing, the shares are trading below twenty ($0.20) cents per share, then the Company shall issue 485,000 additional shares | ||
Addtional shares for acquisition | 485,000 | ||
Useful life | 10 years | ||
Amortization Expense | $ 8,467 | ||
Useful life | 5 years | ||
Depreciation Expense | $ 3,987 |
ACQUISITION OF VK (Details)
ACQUISITION OF VK (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | May 31, 2018 | |
Business Combination, Separately Recognized Transactions [Line Items] | ||
Shares issued for acquisition, amount | $ 747,013 | |
VK [Member] | ||
Business Combination, Separately Recognized Transactions [Line Items] | ||
Ownership | 100.00% | |
Net Liabilties assumed | $ 70,000 | |
Shares issued for acquisition, shares | 625,000 | |
Price per share | $ 0.20 | |
Shares issued for acquisition, amount | $ 125,000 | |
Useful life | 10 years | |
Amortization expense | $ 8,938 | |
Cash | 1,355 | |
Accounts receivable | 13,024 | |
Inventory and work in process | 40,564 | |
Accounts payable | (16,343) | |
Notes payable | (108,600) | |
Goodwill | 195,000 | |
Net assets acquired | $ 125,000 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION (Details) | 12 Months Ended |
May 31, 2018USD ($) | |
Tax Benefit | $ 136,890 |
LFER [Member] | |
Product sales, net | 2,867,857 |
Cost of goods sold | 2,217,067 |
Gross income | 650,790 |
Operating expenses | 1,634,894 |
Net Loss before other expenses | (984,104) |
Other expenses, net | (2,110,509) |
Net (loss) | (3,094,613) |
VK [Member] | |
Product sales, net | 120,006 |
Cost of goods sold | 81,845 |
Gross income | 38,161 |
Operating expenses | 27,911 |
Net Loss before other expenses | 10,250 |
Other expenses, net | (28,933) |
Net (loss) | (18,683) |
GBC [Member] | |
Product sales, net | 3,117,117 |
Cost of goods sold | 2,782,880 |
Gross income | 334,237 |
Operating expenses | 381,694 |
Net Loss before other expenses | (47,457) |
Other expenses, net | (18,389) |
Tax Benefit | (136,890) |
Net (loss) | 71,044 |
Proforma Adjustments [Member] | |
Operating expenses | 136,869 |
Net Loss before other expenses | (136,869) |
Net (loss) | (136,869) |
Proforma Combined [Member] | |
Product sales, net | 6,104,980 |
Cost of goods sold | 5,081,791 |
Gross income | 1,023,189 |
Operating expenses | 2,181,368 |
Net Loss before other expenses | (1,158,180) |
Other expenses, net | (2,157,831) |
Tax Benefit | (136,890) |
Net (loss) | $ (3,179,121) |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL (Details Narrative) | 12 Months Ended |
May 31, 2018USD ($) | |
Notes to Financial Statements | |
Employment Agreement | $ 75,000 |
ACQUISITION OF ESD - Proforma A
ACQUISITION OF ESD - Proforma Acquisition (Details) | 12 Months Ended |
May 31, 2018USD ($)$ / shares | |
HISP [Member] | |
Product sales, net | $ 142,236 |
Cost of goods sold | 116,667 |
Gross income | 25,569 |
Selling general and administrative expenses | 1,533,419 |
Net Income/(loss) before other income and expenses | (1,507,850) |
Other (expenses) | (1,250,937) |
Provision for taxes | |
Net (loss) | $ (2,758,787) |
Basic and diluted loss per share | $ / shares | |
ESD [Member] | |
Product sales, net | $ 2,661,919 |
Cost of goods sold | 1,933,120 |
Gross income | 728,799 |
Selling general and administrative expenses | 871,106 |
Net Income/(loss) before other income and expenses | (142,307) |
Other (expenses) | (103,175) |
Provision for taxes | |
Net (loss) | $ (245,482) |
Basic and diluted loss per share | $ / shares | |
Proforma Adjustments [Member] | |
Product sales, net | |
Cost of goods sold | |
Gross income | |
Selling general and administrative expenses | |
Net Income/(loss) before other income and expenses | |
Other (expenses) | |
Provision for taxes | |
Net (loss) | |
Basic and diluted loss per share | $ / shares | |
Proforma Combined [Member] | |
Product sales, net | $ 2,804,156 |
Cost of goods sold | 2,049,787 |
Gross income | 754,368 |
Selling general and administrative expenses | 2,405,525 |
Net Income/(loss) before other income and expenses | (1,650,157) |
Other (expenses) | (1,354,112) |
Provision for taxes | |
Net (loss) | $ (3,004,269) |
Basic and diluted loss per share | $ / shares | $ (0.19) |
ACQUISITION OF ESD (Details Nar
ACQUISITION OF ESD (Details Narrative) - ESD [Member] | 12 Months Ended |
May 31, 2018USD ($) | |
Business Acquisition [Line Items] | |
Total purchase price | $ 450,000 |
Equipment | 75,000 |
Liabilities assumed | |
Intangible asset | 375,000 |
Amortization expense | $ 35,625 |
Useful life | 10 years |
Depreciation expense | $ 14,508 |
Useful life | 5 years |
GOODWILL (Details)
GOODWILL (Details) - USD ($) | May 31, 2018 | May 31, 2017 |
Indefinite-lived Intangible Assets [Line Items] | ||
Goodwill | $ 921,890 | |
Acquisition GBC [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Goodwill | 726,890 | |
Acquisition VK [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Goodwill | $ 195,000 |
INTANGIBLE ASSETS - Intangible
INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) | May 31, 2018 | May 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Business relationships and customer lists | $ 882,000 | $ 375,000 |
Accumulated Amortization | 80,822 | 35,625 |
Customer lists, net of accumulated amortization of $80,822 and $35,625 as of May 31, 2018 and 2017, respectively | $ 801,178 | $ 339,375 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization Expense | $ 45,197 | $ 35,625 |
INTANGIBLE ASSETS - Amortizatio
INTANGIBLE ASSETS - Amortization expense for intangible assets (Details) | May 31, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2019 | $ 138,900 |
2020 | 138,900 |
2021 | 138,900 |
2022 | 138,900 |
2023 | 129,953 |
Thereafter | $ 115,625 |
LOANS PAYABLE - STOCKHOLDER (De
LOANS PAYABLE - STOCKHOLDER (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Apr. 30, 2016 | May 31, 2018 | May 31, 2017 | |
Proceeds from notes payable | $ 645,784 | ||
Loans payable - stockholder | 52,394 | ||
Loan Payable Stockholder [Member] | |||
Proceeds from notes payable | $ 10,000 | ||
Maturity date of loan | Oct. 17, 2016 | ||
Interest payment on loans | $ 229 | ||
GBC Stockholder Loan [Member] | |||
Proceeds from notes payable | $ 134,995 | ||
Interest rate | 18.00% | ||
Interest payment on loans | $ 25,000 | ||
Loans payable - stockholder | $ 109,995 |
LOANS PAYABLE - GBC STOCKHOLDER
LOANS PAYABLE - GBC STOCKHOLDER (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Proceeds from notes payable | $ 645,784 | |
GBC Stockholder Loan [Member] | ||
Proceeds from notes payable | $ 134,995 | |
Interest rate | 18.00% | |
Payment on loans | $ 25,000 | |
Stockholder Loan [Member] | ||
Loan balance | $ 109,995 |
NOTES PAYABLE - RELATED PARTY (
NOTES PAYABLE - RELATED PARTY (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Debt Instrument [Line Items] | ||
Proceeds from notes payable | $ 645,784 | |
Amortization of financing costs | $ 195,865 | |
Note Related Party [Member] | ||
Debt Instrument [Line Items] | ||
Issue date | Jun. 1, 2017 | |
Maturity date of loan | May 31, 2018 | |
Proceeds from notes payable | $ 20,000 | |
Interest rate | 15.00% | |
Principal payment on loans | $ 18,000 | |
Accrued and unpaid interest | 1,239 | |
Loan balance | $ 2,000 | |
Related Party [Member] | ||
Debt Instrument [Line Items] | ||
Issue date | Nov. 1, 2017 | |
Maturity date of loan | May 31, 2018 | |
Proceeds from notes payable | $ 20,000 | |
Interest rate | 7.00% | |
Conversion rate per share | $ .15 | |
Issuance of common stock for debt, shares | 40,000 | |
Amortization of financing costs | $ 20,000 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) | May 31, 2018USD ($) |
NotesPayableMember | |
2019 | $ 560,000 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jul. 31, 2016 | Jul. 05, 2016 | |
Credit Line [Member] | ||||
Credit line available | $ 7,500,000 | |||
Credit line allocated for use | $ 1,600,000 | $ 650,000 | ||
Advisory Fee | $ 443,000 | |||
Interest rate | 12.00% | |||
Debt amount satisfied | $ 560,000 | $ 358,714 | ||
Debt Payments | 410,000 | |||
Monthly payments | 83,333 | |||
Shares issued for debt, amount | $ 150,000 | |||
ESD [Member] | ||||
Credit line allocated for use | 450,000 | |||
GHS Secured Loan [Member] | ||||
Credit line allocated for use | 32,534 | |||
Vendors [Member] | ||||
Credit line allocated for use | 74,466 | |||
TCA Closing Fees [Member] | ||||
Credit line allocated for use | $ 93,000 |
CONVERTIBLE NOTES PAYABLE (Deta
CONVERTIBLE NOTES PAYABLE (Details) | May 31, 2018USD ($) |
Notes Payable[Member] | |
2019 | $ 1,428,000 |
NotesPayableMember | |
2019 | $ 560,000 |
CONVERTIBLE NOTES PAYABLE (De_2
CONVERTIBLE NOTES PAYABLE (Details Narrative 1) - USD ($) | 12 Months Ended | |||
May 31, 2018 | Jun. 30, 2017 | May 31, 2017 | Jan. 31, 2018 | |
Debt Instrument [Line Items] | ||||
Proceeds from notes payable | $ 645,784 | |||
Issuance of common stock for debt, amount | $ 102,934 | |||
Amortization of financing costs | $ 195,865 | |||
Convertible Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Issue date | Nov. 30, 2016 | |||
Maturity date of loan | Nov. 7, 2017 | |||
Convertible debt | $ 803,000 | |||
Interest rate | 5.00% | |||
Original issue discount, percentage | 10.00% | |||
Issuance of common stock for debt, shares | 1,790,000 | |||
Conversion rate per share | $ .65 | |||
Warrants | 730,000 | |||
Warrant price per share | $ 0.85 | |||
Shares authorized | 6,033,131 | |||
Notes Payable[Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date of loan | Sep. 20, 2017 | |||
Principal payment on loans | $ 440,000 | |||
Interest payment on loans | 21,156 | |||
Issuance of common stock for debt, amount | $ 63,844 | |||
Stock repurchased and cancelled | 1,100,000 | |||
Two Convertible Note Holders [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date of loan | Nov. 6, 2017 | |||
Principal payment on loans | $ 165,000 | |||
Accrued and unpaid interest | $ 8,747 | |||
NPA[Member] | ||||
Debt Instrument [Line Items] | ||||
Issue date | Sep. 25, 2017 | |||
Maturity date of loan | Mar. 25, 2019 | |||
Convertible debt | $ 650,000 | |||
Interest rate | 7.00% | |||
Issuance of common stock for debt, shares | 1,500,000 | |||
Share Price | $ 0.20 | |||
NPA Amended [Member] | ||||
Debt Instrument [Line Items] | ||||
Issue date | Nov. 1, 2017 | |||
Maturity date of loan | Mar. 25, 2019 | |||
Convertible debt | $ 175,000 | |||
Interest rate | 7.00% | |||
Issuance of common stock for debt, shares | 800,000 | |||
Share Price | $ 0.42 | |||
NPA Consulting Fees [Member] | ||||
Debt Instrument [Line Items] | ||||
Share Price | $ 0.40 | |||
Consulting fee | $ 65,000 | |||
Issuance of common stock for consulting fees, shares | 433,333 | |||
NPA #2 [Member] | ||||
Debt Instrument [Line Items] | ||||
Issue date | Jan. 26, 2018 | |||
Convertible debt | $ 125,000 | |||
Interest rate | 7.00% | |||
Note Amendment [Member] | ||||
Debt Instrument [Line Items] | ||||
Deferred financing costs | $ 538,333 | $ 794,780 | ||
Interest payment on loans | 106,336 | |||
Accrued and unpaid interest | $ 42,485 | |||
Secured Convertible Promissory NoteMember] | ||||
Debt Instrument [Line Items] | ||||
Issue date | Mar. 1, 2018 | |||
Convertible debt | $ 220,000 | |||
Deferred financing costs | 76,117 | |||
Amortization of financing costs | $ 16,674 | |||
Note Purchasing Agreement 2nd Offering [Member] | ||||
Debt Instrument [Line Items] | ||||
Issue date | May 1, 2018 | |||
Proceeds from notes payable | $ 500,000 | |||
Deferred financing costs | 18,558 | |||
Amortization of financing costs | $ 539 |
CONVERTIBLE NOTES PAYABLE - VK
CONVERTIBLE NOTES PAYABLE - VK Acqusition (Details Narrative 2) - USD ($) | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | May 31, 2018 | Jun. 30, 2017 | |
Issuance of common stock for debt, amount | $ 102,934 | ||
Victoria Kitchen, LLC [Member] | |||
Note payable assumed | $ 108,600 | ||
Interest rate | 6.50% | ||
Interest payment on loans | $ 1,883 | ||
Principal payment on loans | $ 5,000 | ||
Terms | (i) $0.30 per share of Common Stock, or (ii) that number of shares of Common Stock equal to the average closing price of the Company’s Common Stock as reported on the OTC Markets for the preceding 30 trading days prior to the date of conversion, multiplied by 0.65 (the “<i>Conversion Price</i>”); <i>provided, however</i>, in the event the Conversion Price is calculated based on (ii) above, the Conversion Price shall not be lower than $0.20 per share of Common Stock. | ||
Conversion rate per share | $ 0.30 | ||
Note payable | $ 103,000 | ||
Issuance of common stock for debt, amount | $ 700,000 | ||
Issuance of common stock for debt, shares | 343,333 |
LOANS PAYABLE (Details)
LOANS PAYABLE (Details) | May 31, 2018USD ($) |
Debt, Current [Abstract] | |
2019 | $ 219,207 |
2020 | 83,795 |
Future principal payments of loans payable | $ 303,002 |
LOANS PAYABLE (Details Narrativ
LOANS PAYABLE (Details Narrative) - USD ($) | 12 Months Ended | ||
May 31, 2018 | Jun. 30, 2017 | May 31, 2017 | |
Debt Instrument [Line Items] | |||
Proceeds from notes payable | $ 645,784 | ||
Issuance of common stock for debt, amount | $ 102,934 | ||
Future Sales Proceeds Purchase Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Issue date | Jul. 15, 2016 | ||
Proceeds from notes payable | $ 167,450 | ||
Convertible debt | 214,200 | ||
Deferred financing costs | $ 131,400 | ||
Second Future Sales Proceeds Purchase Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Issue date | Jul. 15, 2016 | ||
Proceeds from notes payable | $ 128,920 | ||
Convertible debt | $ 281,400 | ||
Purchase Rights Purchase and Sale Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Issue date | Jul. 15, 2016 | ||
Proceeds from notes payable | $ 197,370 | ||
Convertible debt | 266,000 | ||
Deferred financing costs | 272,000 | ||
Unamortized financing costs | 49,058 | ||
Periodic loan payment | 120,026 | ||
Interest payment on loans | $ 1,177 | ||
Number of payments | 129 | ||
Third Purchase Rights Purchase and Sale Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Issue date | Jan. 31, 2018 | ||
Proceeds from notes payable | $ 170,000 | ||
Convertible debt | 272,000 | ||
Principal payment on loans | 24,180 | ||
Loan costs | $ 6,000 | ||
Purchase and Sale Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Issue date | Apr. 1, 2018 | ||
Proceeds from notes payable | $ 60,000 | ||
Deferred financing costs | 81,000 | ||
Unamortized financing costs | 18,776 | ||
Principal payment on loans | 10,714 | ||
Interest payment on loans | $ 429 | ||
Number of payments | 164 | ||
Issuance of common stock for debt, amount | $ 81,000 |
LINE OF CREDIT (Details)
LINE OF CREDIT (Details) | May 31, 2018USD ($) |
Line of Credit [Member] | |
Future principal payments - 2019 | $ 38,898 |
LINE OF CREDIT (Details Narrati
LINE OF CREDIT (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Line of credit | $ 38,898 | $ 11,413 |
GBC Line of Credit[Member] | ||
Credit Line facility | $ 30,833 | |
Interest rate | 10.25% | |
Line of credit | $ 16,044 | |
Line of Credit [Member] | ||
Credit Line facility capacity | 35,000 | |
Line of credit | 22,854 | |
Future principal payments | $ 38,898 | |
Line of Credit [Member] | ||
Issue date | Jul. 1, 2017 | |
Credit Line facility | $ 26,000 | |
Interest rate | 9.40% | |
Revolver [Member] | ||
Issue date | Sep. 26, 2017 | |
Credit Line facility | $ 750,000 | |
Interest rate | 7.00% | |
Terms | Amounts due and owing under the terms of the Revolver are convertible, at the option of the holder, into that number of shares of the Company’s Common Stock equal to the principal and accrued interest due under the terms of the Revolver on the date of conversion divided by $1.50 |
SBA LOAN (Details Narrative)
SBA LOAN (Details Narrative) - SBA Loan [Member] - USD ($) | 12 Months Ended | ||
May 31, 2018 | May 31, 2020 | May 31, 2019 | |
Interest payment on loans | $ 135,812 | ||
Interest rate | 2.75% | ||
Principal payment on loans | $ 4,383 | ||
Loan balance | $ 68,650 | ||
Future principal payments | $ 10,745 | $ 49,815 |
CAPITAL STOCK (Details Narrativ
CAPITAL STOCK (Details Narrative) - $ / shares | May 31, 2018 | May 31, 2017 |
Equity [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, Authorized | 100,000,000 | 100,000,000 |
Common stock, Issued | 23,581,586 | 18,717,922 |
Common stock, outstanding | 23,581,586 | 18,717,922 |
Preferred stock, outstanding shares | 1,200,000 | 1,200,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative 1) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Rent expense. paid | $ 77,182 | $ 67,799 |
ESD [Member] | ||
Rental Obligation | 5,248 | |
Employment agreement | 58,000 | |
Rent Expense, monthly | 8,500 | |
GBC [Member] | ||
Rental Obligation | 75,000 | |
Rent Expense, monthly | $ 8,500 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details) | May 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 168,000 |
2020 | 170,000 |
2021 | 141,000 |
2022 | 113,000 |
2023 | $ 38,000 |
INCOME TAXES - Tax Benefit (Det
INCOME TAXES - Tax Benefit (Details) - USD ($) | May 31, 2018 | May 31, 2017 |
Deferred tax asset | ||
Net operating loss carryforward | $ 1,374,000 | $ 629,000 |
Stock based compensation | 449,000 | 394,000 |
Intangible assets | (136,890) | |
Valuation Allowance | (1,686,110) | (1,023,000) |
Deferred tax asset, net |
INCOME TAXES - Statutory Rate (
INCOME TAXES - Statutory Rate (Details) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Effective Income Tax Rate Reconciliation | ||
Federal Rate | 21.00% | 21.00% |
State Rate | 6.00% | 6.00% |
Valuation allowance | (27.00%) | (27.00%) |
Effect on operating losses | 0.00% | |
Effective income tax rate | 0.00% | 0.00% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forward | $ 6,800,000 | |
Valuation allowance | $ 660,000 | $ 160,000 |
Expiration date | May 31, 2037 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Consulting fees | $ 7,000 | |
Leases rent, per month | $ 77,182 | $ 67,799 |
Chief Operating Officer and stockholder [Member] | ||
Leases rent, per month | $ 750 | |
Lease terminated | Mar. 31, 2018 |
BASIS OF REPORTING AND GOING _2
BASIS OF REPORTING AND GOING CONCERN (Details Narrative) | 12 Months Ended |
May 31, 2018USD ($) | |
Accounting Policies [Abstract] | |
Net loss | $ 6,800,000 |
Working capital deficiency | 2,780,000 |
Net capital deficiency | $ 980,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | 4 Months Ended |
Aug. 28, 2018shares | |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Issuance of common shares for services, shares | 2,983,134 |