Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | Jun. 26, 2019 | Sep. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | APPLIED BIOSCIENCES CORP. | ||
Entity Central Index Key | 0001607549 | ||
Document Type | 10-K | ||
Document Period End Date | Mar. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --03-31 | ||
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 | $ 10,259,104 | ||
Entity Common Stock, Shares Outstanding | 13,447,113 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Entity Emerging Growth Company | true | ||
Entity Small Business | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Current Assets | ||
Cash | $ 47,044 | $ 60,934 |
Accounts receivable, net | 163,405 | 12,386 |
Inventory | 78,737 | 29,074 |
Prepaids and other current assets | 65,273 | 124,455 |
Total Current Assets | 354,459 | 226,849 |
Property and equipment, net | 452,048 | 4,441 |
Equity investments | 898,292 | 468,537 |
Goodwill | 1,941,149 | |
Other asset | 5,500 | 5,500 |
TOTAL ASSETS | 3,651,448 | 705,327 |
Current Liabilities | ||
Accounts payable | 278,546 | 21,846 |
Note Payable | 25,000 | |
Accrued expenses | 70,720 | 14,039 |
Total Current Liabilities | 374,266 | 35,885 |
Commitments and Contingencies | ||
Stockholders' Equity | ||
Preferred stock; $0.00001 par value; 5,000,000 shares authorized; none issued and outstanding at March 31, 2019 and 2018 | ||
Common stock; $0.00001 par value; 200,000,000 shares authorized; 13,397,110 and 10,499,610 issued and outstanding at March 31, 2019 and 2018, respectively | 135 | 105 |
Additional paid in capital | 6,892,242 | 3,054,297 |
Common stock to be issued, 408,805 and 263,000 shares at March 31, 2019 and 2018, respectively | 773,807 | 526,000 |
Accumulated deficit | (5,531,260) | (2,901,933) |
Total Applied BioSciences Corp. Stockholders' Equity | 2,134,924 | 678,469 |
Non-controlling interest | 1,142,258 | (9,027) |
Total Stockholders' Equity | 3,277,182 | 669,442 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 3,651,448 | $ 705,327 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2019 | Mar. 31, 2018 |
Stockholders' Equity | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, authorized | 200,000,000 | 200,000,000 |
Common stock, issued | 13,397,110 | 10,499,610 |
Common stock, outstanding | 13,397,110 | 10,499,610 |
Common stock shares to be issued | 408,805 | 263,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
REVENUE, NET | ||
Products | $ 543,970 | $ 197,554 |
Services | 163,092 | |
Total revenues, net | 707,062 | 197,554 |
COST OF REVENUE | ||
Products | 498,993 | 155,549 |
Services | 22,781 | |
Total costs of revenue | 521,774 | 155,549 |
GROSS MARGIN | 185,288 | 42,005 |
EXPENSES | ||
Sales and marketing | 698,185 | 356,948 |
General and administrative | 2,092,775 | 953,484 |
Depreciation and Amortization | 40,627 | 224,770 |
Impairment of asset | 893,667 | |
TOTAL OPERATING EXPENSES | 2,831,587 | 2,428,869 |
OPERATING LOSS | (2,646,299) | (2,386,864) |
Other Income (Expense) | ||
Change in fair value of equity investments | 429,755 | |
Dividend received from equity investment | 186,397 | |
Interest Expense | (648,875) | |
Total other (expense), net | (32,723) | |
NET LOSS | (2,679,022) | (2,386,864) |
Less: Net loss (income) attributable to non controlling interest | 49,695 | 10,763 |
NET LOSS ATTRIBUTABLE TO APPLIED BIOSCIENCES CORP. | $ (2,629,327) | $ (2,376,101) |
LOSS PER COMMON SHARE | $ (0.22) | $ (0.16) |
WEIGHTED AVERAGE SHARES OUTSTANDING | ||
Basic and diluted | 11,914,525 | 15,071,417 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY - USD ($) | Common Stock $0.00001 Par | Common Stock to be Issued | Additional Paid-In Capital | Non-Controlling Interest | Accumulated Deficit | Total |
Beginning Balance, Shares at Mar. 31, 2017 | 15,247,600 | |||||
Beginning Balance, Amount at Mar. 31, 2017 | $ 152 | $ 426,000 | $ 1,742,472 | $ 1,736 | $ (525,832) | $ 1,644,528 |
Issuance of common stock previously committed but not issued, Shares | ||||||
Issuance of common stock previously committed but not issued, Amount | ||||||
Issuance of common stock for cash, Shares | 347,500 | |||||
Issuance of common stock for cash, Amount | $ 3 | 100,000 | 694,997 | 795,000 | ||
Shares repurchased for cash and cancelled, shares | (5,400,000) | |||||
Shares repurchased for cash and cancelled, amount | $ (54) | (99,946) | (100,000) | |||
Fair value of shares issued for services, shares | 154,510 | |||||
Fair value of shares issued for services, amount | $ 2 | 341,776 | 341,778 | |||
Shares issued to Company's CEO, shares | 150,000 | |||||
Shares issued to Company's CEO, amount | $ 2 | 374,998 | 375,000 | |||
Net income (loss) | (10,763) | (2,376,101) | (2,386,864) | |||
Ending Balance, Shares at Mar. 31, 2018 | 10,499,610 | |||||
Ending Balance, Amount at Mar. 31, 2018 | $ 105 | 526,000 | 3,054,297 | (9,027) | (2,901,933) | 669,442 |
Issuance of common stock previously committed but not issued, Shares | 50,000 | |||||
Issuance of common stock previously committed but not issued, Amount | $ 1 | (100,000) | 99,999 | |||
Issuance of common stock for cash, Shares | 12,500 | |||||
Issuance of common stock for cash, Amount | 50,000 | 25,000 | 75,000 | |||
Fair value of shares issued for services, shares | 160,000 | |||||
Fair value of shares issued for services, amount | $ 1 | 61,852 | 284,949 | 346,802 | ||
Fair value of shares issued to Company officers and directors, shares | 875,000 | |||||
Fair value of shares issued to Company officers and directors, amount | $ 9 | 1,058,741 | 1,058,750 | |||
Beneficial conversion feature associated with issuance of convertible notes | 500,274 | 500,274 | ||||
Shares issued for acquisition of Trace Analytics, Inc. shares | 250,000 | |||||
Shares issued for acquisition of Trace Analytics, Inc., amount | $ 3 | 181,000 | 318,997 | 500,000 | ||
Non-controlling interest recognized upon acquisition of Trace Analytics | 1,200,980 | 1,200,980 | ||||
Shares issued upon conversion of convertible notes, shares | 1,550,000 | |||||
Shares issued upon conversion of convertible notes, amount | $ 16 | 54,955 | 1,549,985 | 1,604,956 | ||
Net income (loss) | (49,695) | (2,629,327) | (2,679,022) | |||
Ending Balance, Shares at Mar. 31, 2019 | 13,397,110 | |||||
Ending Balance, Amount at Mar. 31, 2019 | $ 135 | $ 773,807 | $ 6,892,242 | $ 1,142,258 | $ (5,531,260) | $ 3,277,182 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (2,679,022) | $ (2,386,864) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of equity investments | (429,755) | |
Amortization of debt discount | 500,274 | |
Fair value of shares issued for services | 346,802 | 232,778 |
Fair value of shares issued to officers and directors | 1,058,750 | 375,000 |
Depreciation | 40,627 | 258 |
Amortization of intangible | 224,512 | |
Impairment of asset | 893,667 | |
Changes in operating assets and liabilities | ||
Accounts receivable | (23,022) | (6,709) |
Inventory | (49,663) | (6,375) |
Prepaid and other current assets | 294,072 | 1,465 |
Other asset | (5,500) | |
Accounts payable and accrued expenses | 35,886 | 4,301 |
Net cash used in operating activities | (905,051) | (673,467) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Cash paid for business acquisition, net of cash acquired | (711,739) | |
Acquisition of equity investments | (168,537) | |
Purchase of property and equipment | (1,555) | (4,699) |
Net cash used in investing activities | (713,294) | (173,236) |
CASH FLOW FROM FINANCING ACTIVITIES | ||
Repurchase of shares previously issued | (100,000) | |
Proceeds from issuance of convertible notes | 1,529,455 | |
Proceeds from issuance of common stock | 75,000 | 795,000 |
Net cash provided by financing activities | 1,604,455 | 695,000 |
NET CHANGE IN CASH | (13,890) | (151,703) |
CASH, BEGINNING OF PERIOD | 60,934 | 212,637 |
CASH, END OF PERIOD | 47,044 | 60,934 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Fair value of common stock issued upon conversion of convertible notes and accrued interest | 1,604,956 | |
Fair value of shares issued to consultants recorded as prepaid | 4,167 | $ 109,000 |
Fair value of common stock of $500,000 issued and $750,000 cash paid in acquisition allocated to: | ||
Current assets | 401,148 | |
Fixed assets | 486,679 | |
Costs in excess of net assets acquired | 1,941,149 | |
Current liabilities assumed | (352,996) | |
Notes payable assumed | (25,000) | |
Non controlling interest | $ (1,200,980) |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 12 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION | Description of the Company Applied BioSciences Corp. (formerly First Fixtures, Inc. and Stony Hill Corp. or the “Company”) was incorporated in the State of Nevada on February 21, 2014 and established a fiscal year end of March 31. The Company is a vertically integrated company focused on the development of science-driven cannabinoid therapeutics / biopharmaceuticals, and delivering high-quality CBD products as well as state-of-the-art testing and analytics capabilities. Effective October 24, 2016 the Company changed its name from First Fixtures Inc. to Stony Hill Corp and on March 6, 2018, the Company changed its name from Stony Hill Corp. to Applied BioSciences Corp. In January 2019, the Company closed on a purchase of 520,410 shares of common stock of Trace Analytics, Inc., a Washington corporation (“Trace Analytics”), for an aggregate purchase price of $1,250,000, of which $750,000 was paid in cash and $500,000 was paid in shares of common stock of the Company. Trace Analytics is a cannabis testing laboratory. Immediately following the purchase, the Company holds 51% of the issued and outstanding shares of common stock of Trace Analytics. Going concern These consolidated financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. As reflected in the consolidated financial statements, during the year ended March 31, 2019 the Company incurred a net loss of $2,679,022 and used $905,051 of cash in operating activities, and had a working capital deficiency of $19,807 as of March 31, 2019. These and other factors raise substantial doubt about the Company's ability to continue as a going concern within one year after the date the financial statements are issued. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to raise additional capital and to ultimately achieve sustainable revenues and income from operations. During the fiscal period ended March 31, 2019, the Company sold 37,500 shares of its common stock to accredited investors at a price of $2.00 per share for total proceeds of $75,000 and issued convertible notes for total proceeds of approximately $1,600,000 both in private placements to accredited investors. However, the Company will need and is currently working on obtaining additional funds to operate its business through and beyond the date of this Form 10-K filing. There is no assurance that such funds will be available or at terms acceptable to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions and covenants on its operations, in the case of debt financing or cause substantial dilution for its stockholders in the case of convertible debt and equity financing. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Applied Products LLC, VitaCBD LLC, an 80% owned entity, Trace Analytics, Inc., a 51% owned entity, all Washington limited liability companies, and SHL Management LLC, a 100% owned entity, a Nevada limited liability company. Intercompany transactions and balances have been eliminated in consolidation. Management evaluates its investments on an individual basis for purposes of determining whether or not consolidation is appropriate. Use of Estimates and Assumptions Preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Among other things, management estimates include the collectability of its accounts receivable, recoverability of inventory, estimates of fair value of equity investments, assumptions made in determining purchase price allocation, impairment of investments and intangible assets, accruals for potential liabilities, and realization of deferred tax assets. These estimates generally involve complex issues and require judgments, involve analysis of historical information and the prediction of future trends, and are subject to change from period to period. Actual amounts could differ significantly from these estimates. Fair Value of Financial Instruments The Company follows paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments and paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts of the Company’s financial assets and liabilities, such as accounts receivables and accounts payable approximate their fair values because of the short maturity of these instruments. The Company uses Level 3 inputs for its investments. The changes in carrying amounts of the equity investments the years ended March 31, 2019 and 2018 were as follows: 2019 2018 Beginning balance $ 468,537 $ 300,000 Acquisitions — 168,537 Dispositions — Net changes in valuation 429,755 — Ending balance $ 898,292 $ 468,537 Revenue Recognition The Company’s revenue is principally derived from its subsidiaries, Applied Products LLC, and Trace Analytics. • Applied Products LLC revenues are generated from sales of high-quality CBD products for consumer and pet health and wellness. Sales of these products were made to individual distributors and through online channels. Revenue from the sale of these products was $543,970 and $197,554 during the years ended March 31, 2019 and 2018, respectively • Trace Analytics generates revenue from services by offering state-of-the-art testing and analytics capabilities to CBD and hemp companies. Sales of these services are to marijuana producers and processors, dispensaries, and CBD and hemp companies. Revenue from the sale of these services was $163,092 during the years ended March 31, 2019. There were no such sales during the previous period. Prior to April 1, 2018, the Company recognized its revenue in accordance with Accounting Standards Codification (ASC) 605 Revenue Recognition Effective April 1, 2018 the Company adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers Shipping Cost The Company recognizes amounts billed to a customer in a sale transaction related to shipping as revenue. The costs incurred by the Company for shipping are classified as cost of revenue in the Consolidated Statements of Operations. Advertising The Company expenses advertising costs as incurred. Advertising expense for the fiscal periods ended March 31, 2019 and 2018 amounted to $541,873 and $160,295, respectively, and were included in "Sales and marketing expenses" in the Consolidated Statements of Operations. Inventories Inventories are stated at the lower of cost or market. Cost is determined principally on a first-in-first-out average cost basis. Inventories consist of finished goods held for sale. Management regularly reviews inventory quantities on-hand and records an inventory provision for excess or obsolete inventory based on the future expected demand for our products. Inventory write-downs are measured as the difference between the cost of the inventory and market value, based upon assumptions about future demand that are inherently difficult to assess. There was no provision for inventory obsolescence necessary as of March 31, 2019 and 2018. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts. The allowance for doubtful accounts is based on the Company’s assessment of the collectability of accounts. The Company regularly reviews the adequacy of the allowance for doubtful accounts by considering the age of each outstanding invoice and the collection history of each customer to determine whether a specific allowance is appropriate. Accounts receivable deemed uncollectible are charged against the allowance for doubtful accounts when identified. As of March 31, 2018, the allowance for doubtful accounts was $2,227. The Company did not deem it necessary to provide an allowance for doubtful accounts as of March 31, 2019. Property and Equipment Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The Company uses an estimated useful life of three years for employee-related computers and software, three years for other office equipment and computer hardware, and five years for machinery and furniture. Leasehold improvements are amortized over the shorter of the lease-term or the estimated useful life of the related asset. Management regularly reviews property and equipment and other long-lived assets for possible impairment. This review occurs annually or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. Based upon management’s annual assessment, there were no indicators of impairment of the Company’s property and equipment and other long-lived assets as of March 31, 2019. Earnings (Loss) per Share The basic earnings (loss) per share is calculated by dividing the Company’s net income (loss) available to common shareholders by the weighted average number of common shares during the period. Shares of common stock to be issued are included in weighted average shares calculation from the date of grant. The diluted earnings (loss) per share is calculated by dividing the Company’s net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted average number of shares adjusted for any potentially dilutive debt or equity. Diluted earnings (loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items. Investments Through March 31, 2018, the Company used either the equity method or the cost method of accounting. The Company used the equity method for unconsolidated equity investments in which the Company was considered to have significant influence over the operations of the investee. The Company used the cost method for all other investments. Under the cost method, there is no change to the cost basis unless there is an other-than-temporary decline in value or dividends are received. If the decline is determined to be other-than-temporary, the Company writes down the cost basis of the investment to a new cost basis that represents realizable value. On April 1, 2018, the Company adopted ASU 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 primarily affects equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. Among other things, this new guidance requires certain equity investments to be measured at fair value with changes in fair value recognized in net income. As such, the Company measures its equity investments at their fair value at end of each reporting period. Investments accounted for under the equity method or cost method of accounting above are included in the caption "Equity investments" on the Consolidated Balance Sheets. Intangible Asset Intangible assets are recorded when such assets are acquired and are amortized over the estimated useful life of the intangible asset. The Company regularly reviews intangible assets to determine if facts and circumstances indicate that the useful lives have changed from the original estimate or that the carrying amount of the assets may not be recoverable. If such facts and circumstances exist, the Company assesses the recoverability of identified intangible assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets and occur in the period in which the impairment determination was made. On February 23, 2017, the Company consummated an Asset Purchase Agreement (the “Agreement”) with mCig, Inc. for the purchase of the VitaCBD brand name. In connection with the Agreement, the Company recorded intangible assets of $1,138,135. During the fiscal year ended March 31, 2018, sales of the VitaCBD products did not meet management’s expectations and the Company was not able to achieve the expected operating results. As a result, the Company impaired the intangible asset related to the acquisition of the VitaCBD brand name and recorded an impairment charge of $893,667. Goodwill Goodwill represents the excess of the purchase consideration over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. During the year ended March 31, 2019, the Company recorded goodwill of $1,941,149 related to the purchase of Trace Analytics (see Note5). The Company evaluates goodwill for impairment on an annual basis or whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. The Company conducts its annual impairment analysis in the fourth quarter of each fiscal year. Impairment of goodwill is tested at the reporting unit level by comparing the reporting unit’s carrying amount, including goodwill, to the fair value of the reporting unit. Estimations and assumptions regarding the number of reporting units, future performances, results of the Company’s operations and comparability of its market capitalization and net book value will be used. If the carrying amount of the reporting unit exceeds its fair value, goodwill is considered impaired and an impairment loss is measured by the resulting amount. Because the Company has one reporting unit, as part of the Company’s qualitative assessment an entity-wide approach to assess goodwill for impairment is utilized. No impairment losses have been recorded in the fiscal years ended March 31, 2019 and 2018. Stock Based Compensation The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions, for services and for financing costs. The Company accounts for share-based payments under the guidance as set forth in the Share-Based Payment Topic of the FASB Accounting Standards Codification (“ASC”), which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, officers, directors, and consultants, including employee stock options, based on estimated fair values. The Company estimates the fair value of share-based payment awards to employees and directors on the date of grant using a Black-Scholes-Merton option-pricing model, and the value of the portion of the award that is ultimately expected to vest is recognized as expense over the required service period in the Company’s statements of operations. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) the date at which the necessary performance to earn the equity instruments is complete. Stock-based compensation is based on awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from those estimates. Business Combinations The Company accounts for its business combinations using the purchase method of accounting where the cost is allocated to the underlying net tangible and intangible assets acquired, based on their respective fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree are recognized and measured as of the acquisition date at fair value. Additionally, contingent consideration, if any. is recorded at fair value on the acquisition date and classified as a liability. Goodwill is recognized to the extent by which the aggregate of the acquisition-date fair value of the consideration transferred and any noncontrolling interest in the acquiree exceeds the recognized basis of the identifiable assets acquired, net of assumed liabilities. Determining the fair value of assets acquired, liabilities assumed and noncontrolling interests requires management’s judgment and often involves the use of significant estimates and assumptions. Income Taxes The Company follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances and tax loss carry-forwards. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment. Segments The Company operates in one segment for the distribution of products and services. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying consolidated financial statements Concentrations Revenues Accounts receivable Accounts payable. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260) and Derivatives and Hedging (Topic 815) - Accounting for Certain Financial Instruments with Down Round Features. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 3 - PROPERTY AND EQUIPMENT | March 31, 2019 March 31, 2018 Lab Equipment $ 569,484 $ - Office Furniture and Equipment 57,562 2,623 Leasehold Improvements 21,557 2,075 648,603 4,698 Less: Accumulated Depreciation (196,555 ) (257 ) $ 452,048 $ 4,441 |
EQUITY INVESTMENTS
EQUITY INVESTMENTS | 12 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 4 - EQUITY INVESTMENTS | As of March 31, 2018, the Company's equity investments represented investments of purchased shares of stock of four (4) entities with ownership percentages of less than 5%. Cost basis of these investments aggregated $468,537 as of March 31, 2018. On April 1, 2018, the Company adopted ASU 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, and as such, these investments were recorded at their market value as of March 31, 2019, with the change in fair value being reflected in the statement of operations. As of March 31, 2019, the fair value of these investments based on observable market evidence was determined to be $898,292, with an Change in fair value of investments of $429,755 for the period then ended. In addition, one of these investments, Bailey, issued a cash dividend of $186,397 during the period that was reflected as dividend income. Equity investments relate to purchases of stock in certain entities with ownership percentages of less than 5% and consist of the following: March 31, 2019 March 31, 2018 (A) GemmaCert $ 93,529 $ 68,237 (B) Hightimes Holdings Corp. 654,763 250,000 (C) Precision Cultivation Systems, LLC 50,000 50,000 (D) Bailey Venture Partners XII LLC 100,000 100,000 $ 898,292 $ 468,537 (A) In November 2016, the Company purchased 29,571 shares of Preferred A stock of Cannabi-Tech Ltd. (“Cannabi”), at a price of $1.69086 per share for total investment of $50,000. Cannabi is a private company incorporated in the State of Israel that provides lab-grade medical cannabis quality control testing systems used to test the quality of medical marijuana flowers. Cannabi subsequently changed its name to GemmaCert. In October 2017, the Company purchased an additional 7,309 shares of Preferred A-1 stock of GemmaCert at a price of $2.536 per share for total investment of $18,537. At March 31, 2019, the Company revalued all its shares of GemmaCert at $2.536 per share, the most recent purchase price. This resulted in an aggregate increase in value of $24,992, which was reflected as unrealized gain from the change in GemmaCert’s market value. As a private company, GemmaCert does not have a readily determinable fair value. Additionally, there have been no observable price changes from transactions for similar investments in GemmaCert during the fiscal year ended March 31, 2019. As such, the Company has measured the value of the investment at cost as of March 31, 2019, which we believe approximates market value. (B) In January 2017, the Company entered in to an agreement to purchase 59,524 shares of Class A common stock at a price of $4.20 per share for total investment of $250,000, which accounts for less than 5% investment in Hightimes Holdings Corp. (“Hightimes”). Hightimes owns High Times Magazine and hosts festivals, events and competitions including the High Times Cannabis Cup and multiple e-commerce properties, including HighTimes.com, CannabisCup.com and 420.com. During the fiscal year ended March 31, 2019, the Company was able to obtain observable evidence that the investment had a market value of $11.00 per share, or an aggregate value of $654,763. As such, the Company recorded an unrealized gain from the change in market value of $404,763 during the fiscal year ended March 31, 2019. (C) In June 2017, the Company entered in a Subscription Agreement to purchase 0.5% interest in Precision Cultivation Systems, LLC (“Precision”), a Delaware limited liability company, for a purchase price of $50,000. Precision is developing a growth system that capitalizes on a patent-pending cultivation method that utilizes proprietary irrigation and root zone conditioning. As part of the Subscription Agreement, $42,500 of the investment is subject to repayment on a pro-rata basis with other investors who have entered into similar Subscription Agreements. Amounts subject to repayment are solely at the discretion of Precision. As a private company, Precision does not have a readily determinable fair value. Additionally, there have been no observable price changes from transactions for similar investments in Precision during the fiscal year ended March 31, 2019. As such, the Company has measured the value of the investment at cost as of March 31, 2019, which we believe approximates market value. (D) In January 2018, the Company paid $100,000 for the purchase of a Membership Interest in Bailey Venture Partners XII LLC (“Bailey”) representing less than 5% interest in Bailey. Along with other funds received from third-party investors, Bailey plans to invest funds received in various strategic investments. In February 2019, the Company received a distribution of $186,397 from Bailey’s investment in JUUL Labs, Inc. As a private company, Bailey does not have a readily determinable fair value. Additionally, there have been no observable price changes from transactions for similar investments in Bailey during the fiscal year ended March 31, 2019. As such, the Company has measured the value of the investment at cost as of March 31, 2019, which we believe approximates market value. As the Company does not participate in the management of these companies nor has the ability to exercise significant influence over these companies, the Company recorded these investments at cost, and as of April 1, 2018, adjusted the cost basis to market at the end of each reporting period. Dividends, if any, are recognized when received. |
ACQUISITION OF TRACE ANALYTICS,
ACQUISITION OF TRACE ANALYTICS, INC. | 12 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 5 - ACQUISITION OF TRACE ANALYTICS, INC | On January 7, 2019, the Company closed on a purchase of 520,410 shares of common stock of Trace Analytics, Inc., a Washington corporation (“Trace Analytics”). Pursuant to a Common Stock Purchase Agreement, the Company purchased Trace Analytics at a purchase price of $2.40 per share, for an aggregate purchase price of $1,250,000, of which $750,000 was paid in cash and $500,000 was paid through the issuance of shares of the Company’s common stock. Trace Analytics is a cannabis testing laboratory acquired to enable the Company to position itself as the leading provider of testing solutions for CBD products for both compliance requirements and consumer safety as these products continue to increase in popularity. Immediately following the purchase, the Company holds 51% of the issued and outstanding shares of common stock of Trace Analytics. The Common Stock Purchase Agreement included the option for Trace to repurchase 205,410 shares of Common Stock based on the occurrence of certain Repurchase Triggering Events. Based on a review of the Repurchase Triggering Events, it is considered unlikely that any of the events will occur. Additionally, the Company entered into a Voting Agreement with Trace concurrent with the Common Stock Purchase Agreement. The Voting Agreement provided for the designation of three out of five positions on the Trace Analytics Board of Directors by the Company. The Voting Agreement also detailed certain transactions that require two-thirds approval by the Board of Directors. The Voting Agreement is not considered to impact the ability of the Company to control the operations and assets of Trace Analytics. The Company accounted for the transaction as a business combination in accordance with ASC 805 “Business Combinations”. The Company is in the process of performing an allocation of the purchase price paid for the assets acquired and the liabilities assumed. The fair values of the assets acquired, as set forth below, are considered provisional and subject to adjustment as additional information is obtained through the purchase price measurement period (a period of up to one year from the closing date). The provisional allocation of the purchase price is based on management’s preliminary estimates. Once management completes its analysis to finalize the purchase price allocation, it is reasonably possible that there could be changes to the preliminary values. The primary areas of the purchase price allocation that are not yet finalized relate to identifiable intangible assets and goodwill. The following table summarizes the provisional amounts of identified assets acquired and liabilities assumed at the acquisition date: Amount Cash $ 38,261 Accounts receivable 127,997 Prepaid expense 34,890 Due from purchaser 200,000 Office and lab equipment 486,679 Total assets acquired 887,827 Accounts payable (347,517 ) Note payable (25,000 ) Accrued expenses (5,479 ) Total liabilities assumed (377,996 ) Net identifiable assets acquired 509,831 Less the fair value of non-controlling interest (1,200,980 ) Goodwill 1,941,149 Total purchase consideration $ 1,250,000 Based on management’s analysis of the acquisition transaction pursuant to the provisions of ASC 805, the Company determined that any customer lists or business licenses held by Trace Analytics are immaterial in relation to the overall value of Trace; additionally, Trace Analytics does not hold any patents or proprietary technology, and does not have long-term contractual arrangements with customers. As such, there are no separately identifiable intangible assets meeting the criteria of ASC 805. Concurrently, the Company preliminarily allocated the $1,941,149 excess of the purchase price over the identifiable net assets of $509,831 to goodwill. The following unaudited pro forma information presents the combined results of operations as if the business combination with Trace Analytics had been completed on April 1, 2017, the beginning of the comparable prior annual reporting period. These unaudited pro forma results are presented for informational purpose only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations: For the Fiscal Years Ended March 31, 2019 March 31, 2018 (unaudited) (unaudited) Revenue $ 1,332,470 $ 1,252,367 Operating loss (2,699,611 ) (2,149,768 ) Net loss (2,757,326 ) (2,149,768 ) Net loss per share (0.23 ) (0.14 ) |
CONVERTIBLE NOTES
CONVERTIBLE NOTES | 12 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 6 - CONVERTIBLE NOTES | During the fiscal year ended March 31, 2019, the Company issued separate Convertible Promissory Notes (“Notes”) having a total principal amount of $1,529,455 to certain accredited holders. Interest ranged from 1% to 8% per month, and the note holders, at their sole discretion and election, were allowed to convert any part or all of the then outstanding principal and/or interest on these Notes into shares of common stock of the Company at a fixed price per share of $1.00. As of March 31, 2019, all holders of the Notes converted the principal portion of their Notes to 1,529,455 shares of the Company’s common stock and accrued interest of $75,501, of which 54,995 shares with fair value of $54,995 had not been issued as of March 31, 2019 and were reflected in “Common stock to be issued” in the consolidated statement of stockholders’ equity. A portion of the Notes were issued when the market price of the Company’s common stock was in excess of the $1.00 per share conversion price creating a beneficial conversion feature associated with these Notes with an aggregate amount of $500,274 upon issuance dates. As such, the Company recorded $500,274 in additional paid-in capital and debt discount representing the intrinsic value of the beneficial conversion feature at the date of the borrowing against the Notes. The value of the beneficial conversion feature was fully amortized as interest expense upon conversion of all of the outstanding Notes and reflected as interest expense for the fiscal year ended March 31, 2019. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 7 - NOTES PAYABLE | Upon the acquisition of Trace Analytics, the Company assumed a promissory note in the amount of $25,000 to National Silver-Lead Mining Company. The interest rate on the note is 8% per annum and is due and payable in July 2019. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 8 - RELATED PARTY TRANSACTIONS | In view of the Company’s limited operations and resources, none of the Company’s directors and/or officers received any cash compensation from the Company during the fiscal year ended March 31, 2019 and 2018. See Note 9 for shares issued to officers and directors for services provided. During the period SBS Management LLC, a company controlled by Mr. Scott Stevens, who was appointed to the Company's board of directors on April 15, 2019 made advances to the Company to cover certain operating expenses. These advances are unsecured, non-interest bearing, with no formal terms of repayment. As of March 31, 2019, the amounts due SBS were $42,034 and are included in accounts payable on the accompanying balance sheet. During the year ended March 31, 2019, the Company paid SBS Management LLC $112,500 for management services. In addition, the Company reimbursed SBS Management LLC $63,000 for rent expense which amount has been included in general and administrative expense for the period. There were no such amounts invoiced during the year ended March 31, 2018. |
EQUITY
EQUITY | 12 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 9 - EQUITY | Preferred Stock The Company has authorized 5,000,000 shares of $0.00001 par value, undesignated Preferred Stock. As of March 31, 2019, the Company has not issued any shares of Preferred Stock nor has the Company designated any class of Preferred Stock. Stock Subscriptions During the fiscal years ended March 31, 2019 and 2018, the Company sold 37,500 and 397,500 shares of common stock, respectively, of which 25,000 and 50,000 had not been issued as of March 31, 2019 and 2018, respectively and was reflected in Common Stock to be Issued in the Consolidated Balance Sheets. The shares were issued at a price of $2.00 per share for total proceeds of $75,000 and $795,000, respectively, pursuant to a private placement Subscription Agreement with accredited investors. The Subscription Agreement offered up to one million shares of the Company’s common stock at a price per share of $2.00 per share. The Company made this offering solely to accredited investors, as defined under Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended. Shares Issued for Services During the fiscal years ended March 31, 2019 and 2018, the Company granted an aggregate of 164,815 and 154,510 shares of its common stock, respectively, to consultants and other service providers as payment for services rendered to the Company and recorded expense of $346,802 and $341,778, respectively, based on the fair value of the Company’s common stock at grant dates. Of the shares granted, 37,000 shares valued at $61,852 had not been issued as of March 31, 2019 and were reflected in “Common stock to be issued” in the condensed consolidated statement of stockholders’ equity during the period then ended. Shares Issued to officers and directors During the fiscal years ended March 31, 2019 and 2018, the Company granted an aggregate of 875,000 and 150,000 shares, respectively, of its common stock to officers and directors of the Company as payment for services rendered to the Company and recorded expense of $1,058,750 and $375,000, respectively, based on the fair value of the Company’s common stock at grant dates. Repurchase of Shares During the fiscal year ended March 31, 2018, the Company repurchased and cancelled 5,400,000 shares, or approximately 40.4% of the then issued and outstanding common stock of the Company, for $100,000. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 10 - INCOME TAXES | The Company has no tax provision for any period presented due to its history of operating losses. As of March 31, 2019, the Company had net operating loss carry forwards of approximately $4.6 million that may be available to reduce future years' taxable income through 2039. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as management has determined that their realization of the Company’s net deferred tax assets of approximately $1,312,000 was not likely to occur and accordingly, the Company has recorded a full valuation allowance for the deferred tax asset relating to tax loss carry-forward. Components of deferred tax assets in the balance sheets are as follows: March 31, 2019 March 31, 2018 Net deferred tax assets – non-current: Expected income tax benefit from NOL carry-forwards $ 1,312,000 $ 780,000 Less valuation allowance (1,312,000 ) (780,000 ) Deferred tax assets, net of valuation allowance $ - $ - Income Tax Provision in the Statements of Operations A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income tax provision is as follows: For the fiscal year ended March 31, 2019 For the reporting period ended March 31, 2018 Federal statutory income tax rate 21 % 34.0 % Change in valuation allowance on net operating loss carry-forwards (21 )% (34.0 ) Effective income tax rate 0.0 % 0.0 % The Company adopted accounting rules which address the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under these rules, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. These accounting rules also provide guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of March 31, 2019, no liability for unrealized tax benefits was required to be recorded. |
BUSINESS SEGMENT AND GEOGRAPHIC
BUSINESS SEGMENT AND GEOGRAPHIC REPORTING | 12 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 11 - BUSINESS SEGMENT AND GEOGRAPHIC REPORTING | The Company determined its operating segments in accordance with ASC 280, “Segment Reporting” (“ASC 280”). Management has determined that the Company has one operating segment. The Company’s reporting segment reflects the manner in which its chief operating decision maker reviews results and allocates resources. The Company’s reporting segment meets the definition of an operating segment and does not include the aggregation of multiple operating segments. Customers The Company derives its revenues from services and products within the cannabinoid therapeutics / biopharmaceuticals CBD industry with no one external customer accounting for more than 10% of its revenue. Total revenues from these products and services were $707,062 and $197,554 for the fiscal year ended March 31, 2019 and 2018, respectively. Geographic Information All material revenues of the Company are derived from the United States. All long-lived assets of the Company are located in the United States. |
COMMITMENT AND CONTINGENCIES
COMMITMENT AND CONTINGENCIES | 12 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 12 - COMMITMENT AND CONTINGENCIES | Leases On October 1, 2017, the Company entered into a two-year Commercial Lease Agreement (“Lease”) whereby the Company’s subsidiary, Vita Products LLC, leased 2,100 square feet of office space. The lease commenced on October 1, 2017 and requires the Company to pay $2,750 per month (“Base Rent”) or $33,000 per year for a total remaining commitment of $16,500. Beginning at the end of the first year of the Lease and annually thereafter, the Base Rent shall be increased by the same percentage as any increase in the Consumer Price Index (“CPI”) as published by the U.S. Department of Labor for the most recent preceding 12 month period. In addition to the Base Rent, the Company is required to pay, on a pro rata basis, any common area expenses. The Lease required a security deposit of $5,500, which the Company paid in September 2017. At the end of the Lease the Company, at its sole discretion, has the right to extend the Lease term for one additional 12 month period at a rental rate commensurate with the then current market conditions for a similar space in the same area. Upon the purchase of Trace Analytics the Company assumed a lease for 3,734 square feet of office space. The lease commenced on October 1, 2014 and requires the Company to pay $5,081 per month (“Base Rent”) or $60,972 per year for a total remaining commitment of $30,486 through the lease expiration September 30, 2019. At the end of the lease the Company, at its sole discretion, has the right to extend the Lease term for five year period at a rental rate increase of twelve and a half percent (12.5%). Legal Proceedings From time to time, the Company may be involved in general commercial disputes arising in the ordinary course of our business. The Company is not currently involved in legal proceedings that could reasonably be expected to have material adverse effect on its business, prospects, financial condition or results of operations. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 13 - SUBSEQUENT EVENTS | Employment Agreement On May 28, 2019, the board of directors of the Company, announced that it had appointed Raymond Urbanski, M.D., Ph.D. age 59, as Chief Executive Officer and a director of the Company. The board of directors of the Company is now comprised of four persons: Chris Bridges, John Brady, Scott Stevens and Raymond Urbanski. In connection with Mr. Urbanski’s appointment as Chief Executive Officer and a director of the Company, on May 17, 2019, the board of directors approved an Executive Employment Agreement (the “Employment Agreement”), dated May 1, 2019, by and between the Company and Dr. Urbanski. Under the terms of this agreement, the Company agreed to pay Dr. Urbanski and annual base salary of $275,000. The Employment Agreement also provide that the Company shall grant Dr. Urbanski a non-qualified stock option (the “First Option”) to purchase an aggregate of 1,000,000 shares of the Company’s common stock, at an exercise price equal to the “fair market value of the shares at the start of trading” on the date of the Agreement, which is May 1, 2019. The opening price per share of the Company’s common stock on the OTCQB on May 1, 2019 was $1.23 per share. One-third (1/3) of the Option vests on each of the following dates: (i) May 31, 2019, (ii) April 1, 2020, and (iii) April 1, 2021. The Employment Agreement also provides that the Company shall grant Dr. Urbanski a non-qualified stock option (the “Second Option”) an additional 3% of “the Company’s fully diluted common stock,” at an exercise price equal to the “fair market value of the shares at the start of trading” on the date of the Agreement, which is May 1, 2019. The opening price per share of the Company’s common stock on the OTCQB on May 1, 2019 was $1.23 per share. One-third (1/3) of the Option vests upon the occurrence of each of the following events: (i) the Company “raised a combined $3,000,000”, (ii) “opening of the first IND with the FDA, or equivalent ex-US”, and (iii) the “Company being listed on a National Exchange.” Stock Option Plan On May 17, 2019, the board of directors of the Company approved and adopted the terms and provisions of a 2019 Stock Option Plan (the “Plan”) for the Company. No stockholder approval has been obtained approving the Plan. An aggregate of 2,000,000 shares of the Company’s common stock are initially reserved for issuance upon exercise of nonqualified and/or incentive stock options which may be granted under Plan. No options have yet been issued under the Plan. Convertible Debt From April 2019 to date of the filing of this Form 10-K, the Company issued two separate Convertible Promissory Notes (“Notes”) having a total principal amount of $225,954 to two separate accredited holders. Interest ranges from 0% to 1% per month and the note holders, at their sole discretion and election, are allowed to convert any part or all of the then outstanding principal and/or interest on these Notes into shares of common stock of the Company at a fixed price per share of $1.00. Common Stock On April 1, 2019, the Company issued 50,000 shares of common stock which remained to be issued upon conversion of outstanding principal and interest of Notes payable on March 31, 2019. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Mar. 31, 2019 | |
Summary Of Significant Accounting Policies | |
Principles of Consolidation | The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Applied Products LLC, VitaCBD LLC, an 80% owned entity, Trace Analytics, Inc., a 51% owned entity, all Washington limited liability companies, and SHL Management LLC, a 100% owned entity, a Nevada limited liability company. Intercompany transactions and balances have been eliminated in consolidation. Management evaluates its investments on an individual basis for purposes of determining whether or not consolidation is appropriate. |
Use of Estimates and Assumptions | Preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Among other things, management estimates include the collectability of its accounts receivable, recoverability of inventory, estimates of fair value of equity investments, assumptions made in determining purchase price allocation, impairment of investments and intangible assets, accruals for potential liabilities, and realization of deferred tax assets. These estimates generally involve complex issues and require judgments, involve analysis of historical information and the prediction of future trends, and are subject to change from period to period. Actual amounts could differ significantly from these estimates. |
Fair Value of Financial Instruments | The Company follows paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments and paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts of the Company’s financial assets and liabilities, such as accounts receivables and accounts payable approximate their fair values because of the short maturity of these instruments. The Company uses Level 3 inputs for its investments. The changes in carrying amounts of the equity investments the years ended March 31, 2019 and 2018 were as follows: 2019 2018 Beginning balance $ 468,537 $ 300,000 Acquisitions — 168,537 Dispositions — Net changes in valuation 429,755 — Ending balance $ 898,292 $ 468,537 |
Revenue Recognition | The Company’s revenue is principally derived from its subsidiaries, Applied Products LLC, and Trace Analytics. • Applied Products LLC revenues are generated from sales of high-quality CBD products for consumer and pet health and wellness. Sales of these products were made to individual distributors and through online channels. Revenue from the sale of these products was $543,970 and $197,554 during the years ended March 31, 2019 and 2018, respectively • Trace Analytics generates revenue from services by offering state-of-the-art testing and analytics capabilities to CBD and hemp companies. Sales of these services are to marijuana producers and processors, dispensaries, and CBD and hemp companies. Revenue from the sale of these services was $163,092 during the years ended March 31, 2019. There were no such sales during the previous period. Prior to April 1, 2018, the Company recognized its revenue in accordance with Accounting Standards Codification (ASC) 605 Revenue Recognition Effective April 1, 2018 the Company adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers |
Shipping Cost | The Company recognizes amounts billed to a customer in a sale transaction related to shipping as revenue. The costs incurred by the Company for shipping are classified as cost of revenue in the Consolidated Statements of Operations. |
Advertising | The Company expenses advertising costs as incurred. Advertising expense for the fiscal periods ended March 31, 2019 and 2018 amounted to $541,873 and $160,295, respectively, and were included in "Sales and marketing expenses" in the Consolidated Statements of Operations. |
Inventories | Inventories are stated at the lower of cost or market. Cost is determined principally on a first-in-first-out average cost basis. Inventories consist of finished goods held for sale. Management regularly reviews inventory quantities on-hand and records an inventory provision for excess or obsolete inventory based on the future expected demand for our products. Inventory write-downs are measured as the difference between the cost of the inventory and market value, based upon assumptions about future demand that are inherently difficult to assess. There was no provision for inventory obsolescence necessary as of March 31, 2019 and 2018. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts. The allowance for doubtful accounts is based on the Company’s assessment of the collectability of accounts. The Company regularly reviews the adequacy of the allowance for doubtful accounts by considering the age of each outstanding invoice and the collection history of each customer to determine whether a specific allowance is appropriate. Accounts receivable deemed uncollectible are charged against the allowance for doubtful accounts when identified. As of March 31, 2018, the allowance for doubtful accounts was $2,227. The Company did not deem it necessary to provide an allowance for doubtful accounts as of March 31, 2019. |
Property and Equipment | Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The Company uses an estimated useful life of three years for employee-related computers and software, three years for other office equipment and computer hardware, and five years for machinery and furniture. Leasehold improvements are amortized over the shorter of the lease-term or the estimated useful life of the related asset. Management regularly reviews property and equipment and other long-lived assets for possible impairment. This review occurs annually or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. Based upon management’s annual assessment, there were no indicators of impairment of the Company’s property and equipment and other long-lived assets as of March 31, 2019. |
Earnings (Loss) per Share | The basic earnings (loss) per share is calculated by dividing the Company’s net income (loss) available to common shareholders by the weighted average number of common shares during the period. Shares of common stock to be issued are included in weighted average shares calculation from the date of grant. The diluted earnings (loss) per share is calculated by dividing the Company’s net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted average number of shares adjusted for any potentially dilutive debt or equity. Diluted earnings (loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items. |
Investments | Through March 31, 2018, the Company used either the equity method or the cost method of accounting. The Company used the equity method for unconsolidated equity investments in which the Company was considered to have significant influence over the operations of the investee. The Company used the cost method for all other investments. Under the cost method, there is no change to the cost basis unless there is an other-than-temporary decline in value or dividends are received. If the decline is determined to be other-than-temporary, the Company writes down the cost basis of the investment to a new cost basis that represents realizable value. On April 1, 2018, the Company adopted ASU 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 primarily affects equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. Among other things, this new guidance requires certain equity investments to be measured at fair value with changes in fair value recognized in net income. As such, the Company measures its equity investments at their fair value at end of each reporting period. Investments accounted for under the equity method or cost method of accounting above are included in the caption "Equity investments" on the Consolidated Balance Sheets. |
Intangible Asset | Intangible assets are recorded when such assets are acquired and are amortized over the estimated useful life of the intangible asset. The Company regularly reviews intangible assets to determine if facts and circumstances indicate that the useful lives have changed from the original estimate or that the carrying amount of the assets may not be recoverable. If such facts and circumstances exist, the Company assesses the recoverability of identified intangible assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets and occur in the period in which the impairment determination was made. On February 23, 2017, the Company consummated an Asset Purchase Agreement (the “Agreement”) with mCig, Inc. for the purchase of the VitaCBD brand name. In connection with the Agreement, the Company recorded intangible assets of $1,138,135. During the fiscal year ended March 31, 2018, sales of the VitaCBD products did not meet management’s expectations and the Company was not able to achieve the expected operating results. As a result, the Company impaired the intangible asset related to the acquisition of the VitaCBD brand name and recorded an impairment charge of $893,667. |
Goodwill | Goodwill represents the excess of the purchase consideration over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. During the year ended March 31, 2019, the Company recorded goodwill of $1,941,149 related to the purchase of Trace Analytics (see Note5). The Company evaluates goodwill for impairment on an annual basis or whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. The Company conducts its annual impairment analysis in the fourth quarter of each fiscal year. Impairment of goodwill is tested at the reporting unit level by comparing the reporting unit’s carrying amount, including goodwill, to the fair value of the reporting unit. Estimations and assumptions regarding the number of reporting units, future performances, results of the Company’s operations and comparability of its market capitalization and net book value will be used. If the carrying amount of the reporting unit exceeds its fair value, goodwill is considered impaired and an impairment loss is measured by the resulting amount. Because the Company has one reporting unit, as part of the Company’s qualitative assessment an entity-wide approach to assess goodwill for impairment is utilized. No impairment losses have been recorded in the fiscal years ended March 31, 2019 and 2018. |
Stock Based Compensation | The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions, for services and for financing costs. The Company accounts for share-based payments under the guidance as set forth in the Share-Based Payment Topic of the FASB Accounting Standards Codification (“ASC”), which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, officers, directors, and consultants, including employee stock options, based on estimated fair values. The Company estimates the fair value of share-based payment awards to employees and directors on the date of grant using a Black-Scholes-Merton option-pricing model, and the value of the portion of the award that is ultimately expected to vest is recognized as expense over the required service period in the Company’s statements of operations. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) the date at which the necessary performance to earn the equity instruments is complete. Stock-based compensation is based on awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from those estimates. |
Business Combinations | The Company accounts for its business combinations using the purchase method of accounting where the cost is allocated to the underlying net tangible and intangible assets acquired, based on their respective fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree are recognized and measured as of the acquisition date at fair value. Additionally, contingent consideration, if any. is recorded at fair value on the acquisition date and classified as a liability. Goodwill is recognized to the extent by which the aggregate of the acquisition-date fair value of the consideration transferred and any noncontrolling interest in the acquiree exceeds the recognized basis of the identifiable assets acquired, net of assumed liabilities. Determining the fair value of assets acquired, liabilities assumed and noncontrolling interests requires management’s judgment and often involves the use of significant estimates and assumptions. |
Income Taxes | The Company follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances and tax loss carry-forwards. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment. |
Segments | The Company operates in one segment for the distribution of products and services. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying consolidated financial statements. |
Concentrations | Revenues Accounts receivable Accounts payable. |
Recent Accounting Pronouncements | In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260) and Derivatives and Hedging (Topic 815) - Accounting for Certain Financial Instruments with Down Round Features. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Summary Of Significant Accounting Policies Tables Abstract | |
Schedule of changes in carrying amounts of the equity investments | 2019 2018 Beginning balance $ 468,537 $ 300,000 Acquisitions — 168,537 Dispositions — Net changes in valuation 429,755 — Ending balance $ 898,292 $ 468,537 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Property And Equipment | |
Schedule of property and equipment | March 31, 2019 March 31, 2018 Lab Equipment $ 569,484 $ - Office Furniture and Equipment 57,562 2,623 Leasehold Improvements 21,557 2,075 648,603 4,698 Less: Accumulated Depreciation (196,555 ) (257 ) $ 452,048 $ 4,441 |
EQUITY INVESTMENTS (Tables)
EQUITY INVESTMENTS (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Equity Investments | |
Equity investments | March 31, 2019 March 31, 2018 (A) GemmaCert $ 93,529 $ 68,237 (B) Hightimes Holdings Corp. 654,763 250,000 (C) Precision Cultivation Systems, LLC 50,000 50,000 (D) Bailey Venture Partners XII LLC 100,000 100,000 $ 898,292 $ 468,537 |
ACQUISITION OF TRACE ANALYTIC_2
ACQUISITION OF TRACE ANALYTICS, INC. (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Acquisition Of Trace Analytics Inc. | |
Schedule of provisional amounts of identified assets acquired and liabilities | Amount Cash $ 38,261 Accounts receivable 127,997 Prepaid expense 34,890 Due from purchaser 200,000 Office and lab equipment 486,679 Total assets acquired 887,827 Accounts payable (347,517 ) Note payable (25,000 ) Accrued expenses (5,479 ) Total liabilities assumed (377,996 ) Net identifiable assets acquired 509,831 Less the fair value of non-controlling interest (1,200,980 ) Goodwill 1,941,149 Total purchase consideration $ 1,250,000 |
Schedule of combined results of operations | For the Fiscal Years Ended March 31, 2019 March 31, 2018 (unaudited) (unaudited) Revenue $ 1,332,470 $ 1,252,367 Operating loss (2,699,611 ) (2,149,768 ) Net loss (2,757,326 ) (2,149,768 ) Net loss per share (0.23 ) (0.14 ) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Income Taxes Tables Abstract | |
Schedule of components of deferred tax assets | March 31, 2019 March 31, 2018 Net deferred tax assets – non-current: Expected income tax benefit from NOL carry-forwards $ 1,312,000 $ 780,000 Less valuation allowance (1,312,000 ) (780,000 ) Deferred tax assets, net of valuation allowance $ - $ - |
Schedule of reconciliation of the federal statutory income tax rate and the effective income tax rate | For the fiscal year ended March 31, 2019 For the reporting period ended March 31, 2018 Federal statutory income tax rate 21 % 34.0 % Change in valuation allowance on net operating loss carry-forwards (21 )% (34.0 ) Effective income tax rate 0.0 % 0.0 % |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | |
State of incorporation | Nevada | ||
Date of incorporation | Feb. 21, 2014 | ||
Issuance of common stock for cash | $ 75,000 | $ 795,000 | |
Net loss | (2,679,022) | (2,386,864) | |
Net cash used in operating activities | (905,051) | (673,467) | |
Working capital deficit | $ (19,807) | ||
Shares issued | 37,500 | ||
Shares issued price per share | $ 2 | ||
Proceeds from issuance of common stock | $ 75,000 | 795,000 | |
Proceeds from issuance of convertible notes | 1,529,455 | ||
Trace Analytics [Member] | |||
Common stock purchase agreement, description | The Company closed on a purchase of 520,410 shares of common stock of Trace Analytics, Inc., a Washington corporation (“Trace Analytics”), for an aggregate purchase price of $1,250,000, of which $750,000 was paid in cash and $500,000 was paid in shares of common stock of the Company. Trace Analytics is a cannabis testing laboratory. Immediately following the purchase, the Company holds 51% of the issued and outstanding shares of common stock of Trace Analytics. | ||
Issuance of common stock for cash, shares | 520,410 | ||
Issuance of common stock for cash | $ 1,250,000 | ||
Private Placements [Member] | Accredited Investors [Member] | |||
Proceeds from issuance of convertible notes | $ 1,600,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Summary Of Significant Accounting Policies Details Abstract | ||
Beginning balance | $ 468,537 | $ 300,000 |
Acquisitions | 168,537 | |
Dispositions | ||
Net changes in valuation | 429,755 | |
Ending balance | $ 898,292 | $ 468,537 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Jan. 07, 2019 | Feb. 23, 2017 | |
Products | $ 543,970 | $ 197,554 | ||
Services | 163,092 | |||
Advertising expenses | 541,873 | 160,295 | ||
Allowance for doubtful accounts | 2,227 | |||
Impairment of asset | 893,667 | |||
Goodwill | $ 1,941,149 | $ 1,941,149 | ||
Computers and Software [Member] | ||||
Estimated useful life of the related asset | 3 years | |||
Office Equipment and Computer Hardware [Member] | ||||
Estimated useful life of the related asset | 3 years | |||
Machinery And Furniture [Member] | ||||
Estimated useful life of the related asset | 5 years | |||
Trace Analytics, Inc [Member] | ||||
Owned interest entity | 51.00% | |||
SHL Management LLC [Member] | ||||
Owned interest entity | 100.00% | |||
Applied Products LLC [Member] | VitaCBD LLC [Member] | ||||
Owned interest entity | 80.00% | |||
Asset Purchase Agreement [Member] | MCig, Inc. [Member] | ||||
Intangible asset, net | $ 1,138,135 | |||
Vendor [Member] | Accounts Payable [Member] | ||||
Concentration Risk, Percentage | 52.00% | 10.00% | ||
Customer One [Member] | Accounts Receivable [Member] | ||||
Concentration Risk, Percentage | 49.00% | 81.00% | ||
Customer One [Member] | Revenue [Member] | ||||
Concentration Risk, Percentage | 48.00% | 15.00% | ||
Customer Two [Member] | Revenue [Member] | ||||
Concentration Risk, Percentage | 18.00% | 11.00% | ||
Customer Three [Member] | Revenue [Member] | ||||
Concentration Risk, Percentage | 10.00% |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Property and equipment | $ 648,603 | $ 4,698 |
Less: Accumulated Depreciation | (196,555) | (257) |
Property and equipment | 452,048 | 4,441 |
Lab Equipment [Member] | ||
Property and equipment | 569,484 | |
Office Furniture and Equipment [Member] | ||
Property and equipment | 57,562 | 2,623 |
Leasehold Improvements [Member] | ||
Property and equipment | $ 21,557 | $ 2,075 |
EQUITY INVESTMENTS (Details)
EQUITY INVESTMENTS (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Equity investments | $ 898,292 | $ 468,537 |
Gemma Cert [Member] | ||
Equity investments | 93,529 | 68,237 |
Hightimes Holdings Corp [Member] | ||
Equity investments | 654,763 | 250,000 |
Precision Cultivation Systems, LLC [Member] | ||
Equity investments | 50,000 | 50,000 |
Bailey Venture Partners XII LLC [Member] | ||
Equity investments | $ 100,000 | $ 100,000 |
EQUITY INVESTMENTS (Details Nar
EQUITY INVESTMENTS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Jan. 31, 2018 | Oct. 31, 2017 | Jun. 30, 2017 | Jan. 31, 2017 | Nov. 30, 2016 | Mar. 31, 2019 | Mar. 31, 2018 | Feb. 28, 2019 | |
Equity investments | $ 898,292 | $ 468,537 | ||||||
Ownership percentages description | ownership percentages of less than 5% | |||||||
Change in fair value of equity investments | $ 429,755 | |||||||
Dividend received from equity investment | 186,397 | |||||||
Unrealized gain in investment | $ 404,763 | |||||||
Series A preferred stock [Member] | ||||||||
Purchase of stock | 7,309 | 29,571 | ||||||
Stock price per share | $ 2.536 | $ 1.69086 | ||||||
Total investment | $ 18,537 | $ 50,000 | ||||||
Common stock A [Member] | ||||||||
Purchase of stock | 59,524 | |||||||
Stock price per share | $ 4.20 | |||||||
Total investment | $ 250,000 | |||||||
Precision Cultivation Systems, LLC [Member] | ||||||||
Purchase of stock | 50,000 | |||||||
Interest rate | 0.50% | |||||||
Repayment of investment, pro-rata basis | $ 42,500 | |||||||
Bailey Venture Partners XII LLC [Member] | ||||||||
Purchase of stock | 100,000 | |||||||
Ownership percentages description | representing less than 5% interest in Bailey. | |||||||
Gemma Cert [Member] | ||||||||
Stock price per share | $ 2.536 | |||||||
Equity investments | $ 93,529 | 68,237 | ||||||
Unrealized gain in investment | 24,992 | |||||||
Hightimes Holdings Corp [Member] | ||||||||
Equity investments | $ 654,763 | $ 250,000 | ||||||
Ownership percentages description | which accounts for less than 5% investment in Hightimes Holdings Corp. | |||||||
Market value per share | $ 11 | |||||||
JUUL Labs, Inc. [Member] | ||||||||
Cash distributions | $ 186,397 |
ACQUISITION OF TRACE ANALYTIC_3
ACQUISITION OF TRACE ANALYTICS, INC. (Details) - USD ($) | Mar. 31, 2019 | Jan. 07, 2019 | Mar. 31, 2018 |
Acquisition Of Trace Analytics Inc.Details Abstract | |||
Cash | $ 38,261 | ||
Accounts receivable | 127,997 | ||
Prepaid expense | 34,890 | ||
Due from purchaser | 200,000 | ||
Office and lab equipment | 486,679 | ||
Total assets acquired | 887,827 | ||
Accounts payable | (347,517) | ||
Note payable | $ 25,000 | (25,000) | |
Accrued expenses | (5,479) | ||
Total liabilities assumed | (377,996) | ||
Net identifiable assets acquired | 509,831 | 509,831 | |
Less the fair value of non-controlling interest | (1,200,980) | ||
Goodwill | $ 1,941,149 | 1,941,149 | |
Total purchase consideration | $ 1,250,000 |
ACQUISITION OF TRACE ANALYTIC_4
ACQUISITION OF TRACE ANALYTICS, INC. (Details 1) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Acquisition Of Trace Analytics Inc.Details 1Abstract | ||
Revenue | $ 1,332,470 | $ 1,252,367 |
Operating loss | (2,699,611) | (2,149,768) |
Net loss | $ (2,757,326) | $ (2,149,768) |
Net loss per share | $ (0.23) | $ (0.14) |
ACQUISITION OF TRACE ANALYTIC_5
ACQUISITION OF TRACE ANALYTICS, INC. (Details Narrative) - USD ($) | Jan. 07, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Issuance of common stock for cash | $ 75,000 | $ 795,000 | |
Common stock, issued | 13,397,110 | 10,499,610 | |
Costs in excess of net assets acquired | $ 1,941,149 | ||
Net identifiable assets acquired | $ 509,831 | $ 509,831 | |
Trace Analytics [Member] | Common Stock Purchase Agreement [Member] | |||
Common stock purchase agreement, description | On January 7, 2019, the Company closed on a purchase of 520,410 shares of common stock of Trace Analytics, Inc., a Washington corporation (“Trace Analytics”). Pursuant to a Common Stock Purchase Agreement, the Company purchased Trace Analytics at a purchase price of $2.40 per share, for an aggregate purchase price of $1,250,000, of which $750,000 was paid in cash and $500,000 was paid through the issuance of shares of the Company’s common stock. | ||
Issuance of common stock for cash, shares | 520,410 | ||
Issuance of common stock for cash | $ 1,250,000 | ||
purchase price per share | $ 2.40 | ||
Common stock repurchased, Shares | 205,410 |
CONVERTIBLE NOTES (Details Narr
CONVERTIBLE NOTES (Details Narrative) - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Jan. 07, 2019 | |
Issuance of convertible note | $ 1,529,455 | ||
Debt discount | 500,274 | ||
Fair value of beneficial conversion feature related to issuance of convertible notes | 500,274 | ||
Accrued interest | $ (5,479) | ||
Convertible Promissory Notes [Member] | |||
Principal amount | $ 1,529,455 | ||
Interest rate description | Interest ranged from 1% to 8% per month | ||
Fixed price per share | $ 1 | ||
Conversion price | $ 1 | ||
Common stock shares reserved for future issuance | 54,995 | ||
Fair value | $ 54,995 | ||
Accrued interest | $ 75,501 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | Mar. 31, 2019 | Jan. 07, 2019 | Mar. 31, 2018 |
Note Payable | $ 25,000 | $ (25,000) | |
National Silver-Lead Mining Company [Member] | |||
Note Payable | $ 25,000 | ||
Interest rate | 8.00% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Accounts payable | $ 278,546 | $ 21,846 |
Officers and sole director [Member] | ||
Rent expense | 63,000 | |
Management services | 112,500 | |
SBS Management LLC [Member] | ||
Accounts payable | $ 42,034 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Issuance of common stock for cash | $ 75,000 | $ 795,000 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Private Placement [Member] | ||
Common stock shares sold | 37,500 | 397,500 |
Common stock shares reserved for future issuance | 25,000 | 50,000 |
Sale of common stock, price per share | $ 2 | $ 2 |
Issuance of common stock for cash | $ 75,000 | $ 795,000 |
Officers and directors [Member] | ||
Shares granted for services, Shares | 875,000 | 150,000 |
Fair value of common stock | $ 1,058,750 | $ 375,000 |
Consultant [Member] | ||
Common stock shares reserved for future issuance | 37,000 | |
Common stock shares reserved for future issuance, value | $ 61,852 | |
Shares granted for services, Shares | 164,815 | 154,510 |
Fair value of common stock | $ 346,802 | $ 341,778 |
Stock Repurchase Agreement [Member] | ||
Cancelation of shares | 5,400,000 | |
Terms of stock repurchase agreement transfer shares description | Company repurchased and cancelled 5,400,000 shares, or approximately 40.4% of the then issued and outstanding common stock of the Company, for $100,000. |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Net deferred tax assets - non-current: | ||
Expected income tax benefit from NOL carry-forwards | $ 1,312,000 | $ 780,000 |
Less valuation allowance | (1,312,000) | (780,000) |
Deferred tax assets, net of valuation allowance |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Taxes Details 1Abstract | ||
Federal statutory income tax rate | 21.00% | 34.00% |
Change in valuation allowance on net operating loss carry-forwards | (21.00%) | (34.00%) |
Effective income tax rate | 0.00% | 0.00% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 12 Months Ended |
Mar. 31, 2019USD ($) | |
Income Taxes Details Narrative Abstract | |
Net operating loss carry forwards | $ (4,600,000) |
Net operating loss carry forwards expiration year | through 2039 |
Net deferred tax assets | $ 1,312,000 |
BUSINESS SEGMENT AND GEOGRAPH_2
BUSINESS SEGMENT AND GEOGRAPHIC REPORTING (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Business Segment And Geographic Reporting | ||
Total revenues, net | $ 707,062 | $ 197,554 |
Revenue percentage description | The Company derives its revenues from services and products within the cannabinoid therapeutics / biopharmaceuticals CBD industry with no one external customer accounting for more than 10% of its revenue. |
COMMITMENT AND CONTINGENCIES (D
COMMITMENT AND CONTINGENCIES (Details Narrative) - Commercial Lease Agreement [Member] - USD ($) | 1 Months Ended | ||
Oct. 01, 2017 | Oct. 01, 2014 | Sep. 30, 2017 | |
Lease rent expense per month | $ 5,081 | ||
Lease commitment | $ 30,486 | ||
Lease description | At the end of the lease the Company, at its sole discretion, has the right to extend the Lease term for five year period at a rental rate increase of twelve and a half percent (12.5%). | ||
Vita Products LLC [Member] | |||
Lease agreement term | 2 years | ||
Lease rent expense per month | $ 2,750 | ||
Lease commitment | $ 16,500 | ||
Security deposit | $ 5,500 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($) | Apr. 01, 2019 | May 17, 2019 | Apr. 30, 2019 |
Convertible debt principal amount | $ 225,954 | ||
Convertible debt interest rate description | Interest ranges from 0% to 1% per month | ||
Conversion price per share | $ 1 | ||
Common stock shares issued | 50,000 | ||
Dr. Urbanski [Member] | |||
Annual base salary | $ 275,000 | ||
2019 Stock Option Plan [Member] | |||
Common stock shares reserved for future issuance | 2,000,000 | ||
Employment Agreement [Member] | Dr. Urbanski [Member] | |||
Shares granted for services, Shares | 1,000,000 | ||
Opening price per share | $ 1.23 |