Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Nov. 30, 2020 | Jan. 11, 2021 | |
F&L Galaxy, Inc. [Member] | ||
Entity Registrant Name | WEWARDS, INC. | |
Entity Central Index Key | 0001616156 | |
Document Type | 10-Q | |
Document Period End Date | Nov. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --05-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 107,483,450 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Code | NV | |
Entity File Number | 000-55957 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Shell Company | false |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Nov. 30, 2020 | May 31, 2020 |
Current assets: | ||
Cash | $ 3,947,456 | $ 4,017,107 |
Prepaid expense | 2,349 | |
Total current assets | 3,949,805 | 4,017,107 |
Right of use asset | 369,519 | 443,014 |
Total assets | 4,319,324 | 4,460,121 |
Current liabilities: | ||
Accounts payable | 15,100 | 325 |
Accounts payable, related party | 17,620 | 15,006 |
Accrued interest, related parties | 1,682,686 | 1,419,467 |
Deferred revenues, related party | 30,835 | 5,834 |
Current maturities of operating lease obligation, related party | 156,079 | 149,979 |
Total current liabilities | 1,902,320 | 1,590,611 |
Long term liabilities: | ||
Operating lease obligation, related party | 213,440 | 293,035 |
Convertible notes payable, related party | 10,500,000 | 10,500,000 |
Total liabilities | 12,615,760 | 12,383,646 |
Commitments and contingencies | ||
Stockholders' equity (deficit): | ||
Preferred stock, $0.001 par value, 50,000,000 shares authorized, no shares issued and outstanding | ||
Common stock, $0.001 par value, 500,000,000 shares authorized, 107,483,450 issued and outstanding | 107,483 | 107,483 |
Additional paid in capital | 5,161,532 | 5,161,532 |
Accumulated deficit | (13,565,451) | (13,192,540) |
Total stockholders' equity (deficit) | (8,296,436) | (7,923,525) |
Total liabilities and stockholders' equity (deficit) | $ 4,319,324 | $ 4,460,121 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Nov. 30, 2020 | May 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, share issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 107,483,450 | 107,483,450 |
Common stock, shares outstanding | 107,483,450 | 107,483,450 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2020 | Nov. 30, 2019 | Nov. 30, 2020 | Nov. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenue, related party | $ 22,501 | $ 34,999 | ||
Operating expenses: | ||||
General and administrative | 585 | 918 | 4,493 | 2,946 |
Rent expense | 45,000 | 45,000 | 90,000 | 90,000 |
Professional fees | 24,639 | 27,400 | 64,384 | 217,075 |
Total operating expenses | 70,224 | 73,318 | 158,877 | 310,021 |
Operating loss | (47,723) | (73,318) | (123,878) | (310,021) |
Other income (expense): | ||||
Interest expense, related party | (130,890) | (133,288) | (263,219) | (268,015) |
Interest income | 6,361 | 20,091 | 14,186 | 41,845 |
Total other income (expense) | (124,529) | (113,197) | (249,033) | (226,170) |
Net loss | $ (172,252) | $ (186,515) | $ (372,911) | $ (536,191) |
Weighted average number of common shares outstanding - basic and fully diluted | 107,483,450 | 107,483,450 | 107,483,450 | 107,483,450 |
Net loss per share - basic and fully diluted | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED STATEMENTS OF CHANGES
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at May. 31, 2019 | $ 107,483 | $ 5,083,348 | $ (12,295,159) | $ (7,104,328) | |
Beginning balance, shares at May. 31, 2019 | 107,483,450 | ||||
Net loss | (536,191) | (536,191) | |||
Ending balance at Nov. 30, 2019 | $ 107,483 | 5,083,348 | (12,831,350) | (7,640,519) | |
Ending balance, shares at Nov. 30, 2019 | 107,483,450 | ||||
Beginning balance at Aug. 31, 2019 | $ 107,483 | 5,083,348 | (12,644,835) | (7,454,004) | |
Beginning balance, shares at Aug. 31, 2019 | 107,483,450 | ||||
Net loss | (186,515) | (186,515) | |||
Ending balance at Nov. 30, 2019 | $ 107,483 | 5,083,348 | (12,831,350) | (7,640,519) | |
Ending balance, shares at Nov. 30, 2019 | 107,483,450 | ||||
Beginning balance at May. 31, 2020 | $ 107,483 | 5,161,532 | (13,192,540) | $ (7,923,525) | |
Beginning balance, shares at May. 31, 2020 | 107,483,450 | 107,483,450 | |||
Net loss | (372,911) | $ (372,911) | |||
Ending balance at Nov. 30, 2020 | $ 107,483 | 5,161,532 | (13,565,451) | $ (8,296,436) | |
Ending balance, shares at Nov. 30, 2020 | 107,483,450 | 107,483,450 | |||
Beginning balance at Aug. 31, 2020 | $ 107,483 | 5,161,532 | (13,393,199) | $ (8,124,184) | |
Beginning balance, shares at Aug. 31, 2020 | 107,483,450 | ||||
Net loss | (172,252) | (172,252) | |||
Ending balance at Nov. 30, 2020 | $ 107,483 | $ 5,161,532 | $ (13,565,451) | $ (8,296,436) | |
Ending balance, shares at Nov. 30, 2020 | 107,483,450 | 107,483,450 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (372,911) | $ (536,191) |
Decrease (increase) in assets: | ||
Prepaid expenses | (2,349) | 25,000 |
Right-of-use asset | 73,495 | |
Increase (decrease) in liabilities: | ||
Accounts payable | 14,775 | (229) |
Accounts payable, related party | 2,614 | |
Accrued interest, related party | 263,219 | 268,015 |
Deferred revenue, related party | 25,001 | |
Operating lease obligation, related party | (73,495) | |
Net cash used in operating activities | (69,651) | (243,405) |
NET CHANGE IN CASH | (69,651) | (243,405) |
CASH AT BEGINNING OF PERIOD | 4,017,107 | 4,508,397 |
CASH AT END OF PERIOD | 3,947,456 | 4,264,992 |
SUPPLEMENTAL INFORMATION: | ||
Interest paid | ||
Income taxes paid |
ORGANIZATION, BASIS OF PRESENTA
ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Nov. 30, 2020 | |
Accounting Policies [Abstract] | |
ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Organization Wewards, Inc. (“Wewards” or “the Company”) was incorporated in the state of Nevada on September 10, 2013 as Betafox Corp., with the initial intent to manufacture and sell color candles. On April 26, 2015, Giorgos Kallides (the “Seller”), entered into an agreement with Future Continental Limited (“Purchaser”), pursuant to which, on May 11, 2015, the Seller sold to Purchaser six million (6,000,000) shares of common stock of the Company (the “Shares”) owned by the Seller, constituting approximately 73.8% of the Company’s 8,130,000 issued and outstanding common shares at such time, for $340,000. In October 2015, the Purchaser sold the 6,000,000 Shares to Mr. Lei Pei, an affiliate of the Purchaser, in consideration of Mr. Pei’s agreement to serve as our director and CEO. The Company has developed and is the owner of a web-based platform accessible by mobile apps (the “Platform”) that will enable consumers to purchase goods from merchants and earn rebates payable in the form of Bitcoin. The Platform provides an innovative Bitcoin rewards ecosystem. It is designed to transform traditional concepts of commerce into a cooperative society where both merchants and consumers are collaborating, utilizing Bitcoin to reward consumers. The ecosystem provides consumers with rewards each time they complete a challenge defined by a merchant. This is intended to make the ecommerce process beneficial to all market participants, and to help distribute commercial wealth among and between the merchants and consumers. The Company intends to generate revenue by licensing “white-label” versions of the Platform to third parties. However, to date, no such license agreement has been entered into, and the Company has not generated any revenues. Basis of Presentation The unaudited condensed financial statements of the Company and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the Condensed Financial Statements have been included. Such adjustments are of a normal, recurring nature. The Condensed Financial Statements, and the accompanying notes, are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and do not contain certain information included in the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2020. The interim Condensed Financial Statements should be read in conjunction with that Annual Report on Form 10-K. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Concentrations of Credit Risk The Company maintains our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 under current regulations. The Company had approximately $3,512,946 and $3,768,042 in excess of FDIC insured limits at November 30, 2020 and May 31, 2020, respectively. The Company has not experienced any losses in such accounts. Reclassifications In the current period, the Company separately classified professional fees from general and administrative expenses in the Condensed Statement of Operations. For comparative purposes, amounts in the prior period have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported results of operations. Fair Value of Financial Instruments Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, accounts payable and accrued expenses reported on the balance sheets are estimated by management to approximate fair value primarily due to the short-term nature of the instruments. The Company had no items that required fair value measurement on a recurring basis. Software Development Costs The Company expenses software development costs, including costs to develop software products or the software component of products to be sold, leased, or marketed to external users, before technological feasibility is reached. Technological feasibility is typically reached shortly before the release of such products. Software development costs also include costs to develop software to be used solely to meet internal needs and cloud-based applications used to deliver our services. The Company capitalizes development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed, and the software will be used to perform the function intended. Capitalization ends, and amortization begins when the product is available for general release to customers. Impairment of Intangible Assets The Company reviews intangible assets for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable. The Company measures recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows that the assets or the asset group are expected to generate. If the carrying value of the assets are not recoverable, the impairment recognized is measured as the amount by which the carrying value of the asset exceeds its fair value. Convertible Instruments The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. We analyzed the derivative financial instruments (the Convertible Notes), in accordance with ASC 815. The objective is to provide guidance for determining whether an equity-linked financial instrument is indexed to an entity’s own stock. This determination is needed for a scope exception which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non-derivative instrument that falls within the scope of ASC 815-40-05 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument is indexed to an entity’s own stock. A non-derivative instrument that is not indexed to an entity’s own stock cannot be classified as equity and must be accounted for as a liability. There is a two-step approach in determining whether an instrument or embedded feature is indexed to an entity’s own stock. First, the instrument's contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument's settlement provisions. The Company utilized multinomial lattice models that value the derivative liability within the notes based on a probability weighted discounted cash flow model. The Company utilized the fair value standard set forth by the Financial Accounting Standards Board, defined as the amount at which the assets (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale. Revenue Recognition Effective June 1, 2019, the Company adopted ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the licensing of our software by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. There was no impact on the Company’s financial statements from the adoption of ASC 606 for the six months ended November 30, 2020 or the year ended May 31, 2020. We derive revenue principally from licensing our intellectual property, including our game, and related extra content and services that can be utilized by players of our game. · identifying the contract(s) with the customer; · identifying the performance obligations in the contract; · determining the transaction price; · allocating the transaction price to performance obligations in the contract; and · recognizing revenue as each performance obligation is satisfied through the transfer of a promised good or service to a customer (i.e., “transfer of control”). Online-Hosted Service Games. Licensing Revenue We utilize third-party licensees to distribute and host our games and content in accordance with license agreements, for which the licensees typically pay us a fixed minimum guarantee and/or sales-based royalties. These arrangements typically include multiple performance obligations, such as a time-based license of software and future update rights. We recognize as revenue a portion of the minimum guarantee when we transfer control of the license of software (generally upon commercial launch) and the remaining portion ratably over the contractual term in which we provide the licensee with future update rights. Any sales-based royalties are generally recognized as the related sales occur by the licensee. Significant Judgments around Revenue Arrangements Identifying performance obligations. Determining the transaction price. Allocating the transaction price. Determining the Estimated Offering Period. Stock-Based Compensation The Company accounts for equity instruments issued to employees in accordance with the provisions of ASC 718 Stock Compensation (ASC 718) and Equity-Based Payments to Non-employees pursuant to ASC 2018-07 (ASC 2018-07). All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier of the date on which the counterparty's performance is complete or the date at which a commitment for performance by the counterparty to earn the equity instruments is reached because of sufficiently large disincentives for nonperformance. Basic and Diluted Loss Per Share Basic earnings per share (“EPS”) are computed by dividing net income (the numerator) by the weighted average number of common shares outstanding for the period (the denominator). Diluted EPS is computed by dividing net income by the weighted average number of common shares and potential common shares outstanding (if dilutive) during each period. Potential common shares include stock options, warrants and restricted stock. The number of potential common shares outstanding relating to stock options, warrants and restricted stock is computed using the treasury stock method. For the periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share. Income Taxes 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 bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for significant deferred tax assets when it is more likely than not, that such asset will not be recovered through future operations. Uncertain Tax Positions In accordance with ASC 740, “Income Taxes” (“ASC 740”), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits of the position. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Various taxing authorities may periodically audit the Company’s income tax returns. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities. The assessment of the Company’s tax position relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions. Recently Adopted Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) No other new accounting pronouncements, issued or effective during the period ended November 30, 2020, have had or are expected to have a significant impact on the Company’s financial statements. |
RELATED PARTIES
RELATED PARTIES | 6 Months Ended |
Nov. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | NOTE 2 – RELATED PARTIES Accounts Payable, Related Party The Company owed United Power, Inc. (“United Power”) As disclosed in Note 6, below, prior to September 1, 2020, the Company subleased office space from United Power, an affiliate of the Company by reason of common ownership with Lei Pei, the Company’s sole officer and director and majority shareholder, at a base monthly rent of $15,000. The building is owned by Future Property Limited. As of November 30, 2020, the Company . (“Sandbx”), Revenues, Related Party We began generating revenues in the fourth quarter of our fiscal year ended May 31, 2020 from licensing Megopoly and related IP to Sandbx license agreement with Sandbx, we received a $50,000 initial setup fee, paid in five equal monthly installments from May 1, 2020 through September 1, 2020. In addition, we are entitled to receive a monthly royalty under the license agreement equal to the greater of 10% of net revenues from the sale of in-game assets by the licensee, or $5,000, commencing upon completion of the initial setup, which was October 1, 2020. The monthly royalty for October and November was the $5,000 minimum, and the Company received the December and January minimum royalty payments in advance, resulting in deferred revenue of $30,835 as of November 30, 2020. See also Notes 4 and 5, below, for additional related party transactions. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended |
Nov. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 3 – FAIR VALUE OF FINANCIAL INSTRUMENTS Under FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value. The Company has certain financial instruments that must be measured under the new fair value standard. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows: Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability. The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of November 30, 2020 and May 31, 2020, respectively: Fair Value Measurements at November 30, 2020 Level 1 Level 2 Level 3 Assets Cash $ 3,947,456 $ — $ — Total assets 3,947,456 — — Liabilities Convertible notes payable, related party — — 10,500,000 Total liabilities — — 10,500,000 $ 3,947,456 $ — $ (10,500,000 ) Fair Value Measurements at May 31, 2020 Level 1 Level 2 Level 3 Assets Cash $ 4,017,107 $ — $ — Total assets 4,017,107 — — Liabilities Convertible notes payable, related party — — 10,500,000 Total liabilities — — 10,500,000 $ 4,017,107 $ — $ (10,500,000 ) There were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the period ended November 30, 2020 or the year ended May 31, 2020. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Nov. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 4 – INTANGIBLE ASSETS On April 2, 2020, the Company purchased intellectual property rights (“IP”) from United Power, a Nevada corporation under common ownership with Lei Pei, the Company’s sole officer and director and majority shareholder, for cash consideration of $179,300, based o The IP consists of technology and related |
CONVERTIBLE NOTES PAYABLE, RELA
CONVERTIBLE NOTES PAYABLE, RELATED PARTY | 6 Months Ended |
Nov. 30, 2020 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES PAYABLE, RELATED PARTY | NOTE 5 – CONVERTIBLE NOTES PAYABLE, RELATED PARTY Convertible notes payable, related party consists of the following at November 30, 2020 and May 31, 2020, respectively: November 30, May 31, 2020 2020 On February 26, 2017, Sky Rover Holdings, Ltd (“Sky Rover), which is owned and controlled by Mr. Pei, agreed to loan up $20,000,000 to the Company, of which $8,000,000 was loaned on February 28, 2017. Sky Rover was issued an unsecured, 5%, convertible promissory note which, as amended, is due on February 28, 2022, and is, in whole or in part, at the option of the holder, convertible into common shares at any time before the due date, at a conversion price of $0.08 per share (subject to adjustment in the event of stock splits, forward splits, recapitalizations, a merger, etc.). At the option of the Company, the interest may also be paid by issuing restricted shares of common stock, at the same conversion price per share. On June 26, 2018, the Company repaid $4,000,000 of principal of this loan. In addition, Sky Rover converted $1,500,000 of principal of this loan into common shares at the conversion price of $0.08 per share into a total of 18,750,000 shares. Sky Rover waived accrued and unpaid interest of $363,904, which was credited to additional paid in capital. As of November 30, 2020, there is $470,631 of accrued interest due on this loan. $ 2,500,000 $ 2,500,000 On November 20, 2017, Sky Rover loaned an additional $8,000,000 to the Company. Sky Rover was issued an unsecured, 5%, convertible promissory note which, as amended, is due on November 20, 2022, and is, in whole or in part, at the option of the holder, convertible into common shares at any time before the due date, at a conversion price of $0.08 per share (subject to adjustment in the event of stock splits, forward splits, recapitalizations, a merger, etc.). At the option of the Company, the interest may also be paid by issuing restricted shares of common stock, at the same conversion price per share. As of November 30, 2020, there is $1,212,055 of accrued interest on this loan. 8,000,000 8,000,000 Total convertible notes payable, related party 10,500,000 10,500,000 Less: current portion — — Convertible notes payable, related party, less current portion $ 10,500,000 $ 10,500,000 The Company recognized interest expense for the six months ended November 30, 2020 and 2019, respectively, as follows: November 30, November 30, 2020 2019 Interest on due to related parties $ — $ 4,796 Interest on convertible notes, related party 263,219 263,219 Total interest expense $ 263,219 $ 268,015 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - LEASE | 6 Months Ended |
Nov. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES - LEASE | NOTE 6 – COMMITMENTS AND CONTINGENCIES - LEASE On March 1, 2018, the Company began occupying its current corporate headquarters at 2960 West Sahara Avenue, Las Vegas, NV 89102, under a five-year sublease with United Power, an affiliate of the Company by reason of common ownership with Lei Pei. The sublease provided for base monthly rent of $15,000, plus increases of up to 3% each year based on increases, if any, of the Consumer Price Index. The building is owned by Future Property Limited. Future Property Limited entered into a lease with United Power, and the Company then sublet the space from United Power. The Company is occupying the space for executive and administrative offices. Rent expense for the six months ended was $90,000. The components of lease expense were as follows: For the Six Months Ended November 30, 2020 Operating lease cost: Amortization of assets $ 73,495 Interest on lease liabilities 16,505 Total operating lease cost $ 90,000 Supplemental balance sheet information related to leases was as follows: November 30, 2020 Operating lease: Operating lease assets $ 369,519 Current portion of operating lease obligation $ 156,079 Noncurrent operating lease obligation 213,440 Total operating lease obligation $ 369,519 Weighted average remaining lease term: Operating leases 2.25 years Weighted average discount rate: Operating lease 8.00 % For the Six Months Ended November 30, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 90,000 Future minimum annual lease payments required under the operating lease and the present value of the net minimum lease payments are as follows at November 30, 2020 : For the Fiscal Year Minimum Lease Ended May 31: Commitments 2021* $ 90,000 2022 180,000 2023 135,000 Total payments $ 405,000 Amount representing interest $ (35,481 ) Lease obligation, net 369,519 Less current portion (156,079 ) Lease obligation – long term $ 213,440 * Liability pertains to the remaining six-month period from December 1, 2020 through May 31, 2021. |
CHANGES IN STOCKHOLDERS' EQUITY
CHANGES IN STOCKHOLDERS' EQUITY | 6 Months Ended |
Nov. 30, 2020 | |
Equity [Abstract] | |
CHANGES IN STOCKHOLDERS' EQUITY | NOTE 7 – CHANGES IN STOCKHOLDERS’ EQUITY Preferred Stock The Company has authorized preferred stock of 50,000,000 shares, par value $0.001 per share. The voting powers, conversion features, if any, designations, preferences, limitations, restrictions and other rights of the preferred stock shall be prescribed by resolution of the Board of Directors at the time a specific series of preferred stock is designated. None of the preferred shares have been issued as of the date of this Report. Common Stock The Company has 500,000,000 authorized shares of $0.001 par value Common Stock, and had 107,483,450 shares issued and outstanding as of November 30, 2020. |
INCOME TAX
INCOME TAX | 6 Months Ended |
Nov. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | NOTE 8 - INCOME TAX The Company accounts for income taxes under FASB ASC 740-10, which requires use of the liability method. FASB ASC 740-10-25 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences. For the six months ended November 30, 2020 and the year ended May 31, 2020, the Company incurred a net operating loss and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At November 30, 2020, the Company had approximately $5,900,000 of federal net operating losses. The net operating loss carry forwards, if not utilized, will begin to expire in 2034. Based on the available objective evidence, including the Company’s history of losses, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at both November 30, 2020 and May 31, 2020. In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Nov. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS On January 4, 2021, the Company entered into a Statement of Work with Sandbx Corp., a related party, as disclosed in Note 2, pursuant to which Sandbx has been engaged to provide software development and related services to further develop and improve Megopoly, the Company’s online MMO Game, at a rate of $50 per hour of service. Upon execution of the Statement of Work, the Company paid Sandbox $168,500 for services to be provided in January, 2021. |
ORGANIZATION, BASIS OF PRESEN_2
ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Nov. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed financial statements of the Company and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the Condensed Financial Statements have been included. Such adjustments are of a normal, recurring nature. The Condensed Financial Statements, and the accompanying notes, are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and do not contain certain information included in the Companys Annual Report on Form 10-K for the fiscal year ended May 31, 2020. The interim Condensed Financial Statements should be read in conjunction with that Annual Report on Form 10-K. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company maintains our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 under current regulations. The Company had approximately $3,512,946 and $3,768,042 in excess of FDIC insured limits at November 30, 2020 and May 31, 2020, respectively. The Company has not experienced any losses in such accounts. |
Reclassifications | Reclassifications In the current period, the Company separately classified professional fees from general and administrative expenses in the Condensed Statement of Operations. For comparative purposes, amounts in the prior period have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported results of operations. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Companys financial statements as reflected herein. The carrying amounts of cash, accounts payable and accrued expenses reported on the balance sheets are estimated by management to approximate fair value primarily due to the short-term nature of the instruments. The Company had no items that required fair value measurement on a recurring basis. |
Software Development costs | Software Development Costs The Company expenses software development costs, including costs to develop software products or the software component of products to be sold, leased, or marketed to external users, before technological feasibility is reached. Technological feasibility is typically reached shortly before the release of such products. Software development costs also include costs to develop software to be used solely to meet internal needs and cloud-based applications used to deliver our services. The Company capitalizes development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed, and the software will be used to perform the function intended. Capitalization ends, and amortization begins when the product is available for general release to customers. |
Impairment of Intangible Assets | Impairment of Intangible Assets The Company reviews intangible assets for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable. The Company measures recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows that the assets or the asset group are expected to generate. If the carrying value of the assets are not recoverable, the impairment recognized is measured as the amount by which the carrying value of the asset exceeds its fair value. |
Convertible Instruments | Convertible Instruments The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, Derivatives and Hedging. The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. We analyzed the derivative financial instruments (the Convertible Notes), in accordance with ASC 815. The objective is to provide guidance for determining whether an equity-linked financial instrument is indexed to an entitys own stock. This determination is needed for a scope exception which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non-derivative instrument that falls within the scope of ASC 815-40-05 Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Companys Own Stock also hinges on whether the instrument is indexed to an entitys own stock. A non-derivative instrument that is not indexed to an entitys own stock cannot be classified as equity and must be accounted for as a liability. There is a two-step approach in determining whether an instrument or embedded feature is indexed to an entitys own stock. First, the instrument's contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument's settlement provisions. The Company utilized multinomial lattice models that value the derivative liability within the notes based on a probability weighted discounted cash flow model. The Company utilized the fair value standard set forth by the Financial Accounting Standards Board, defined as the amount at which the assets (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale. |
Revenue Recognition | Revenue Recognition Effective June 1, 2019, the Company adopted ASC 606 Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the licensing of our software by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. There was no impact on the Companys financial statements from the adoption of ASC 606 for the six months ended November 30, 2020 or the year ended May 31, 2020. We derive revenue principally from licensing our intellectual property, including our game, and related extra content and services that can be utilized by players of our game. We evaluate and recognize revenue by: · identifying the contract(s) with the customer; · identifying the performance obligations in the contract; · determining the transaction price; · allocating the transaction price to performance obligations in the contract; and · recognizing revenue as each performance obligation is satisfied through the transfer of a promised good or service to a customer (i.e., transfer of control). Online-Hosted Service Games. Sales of our Online-Hosted Service Games are determined to have one distinct performance obligation: the online hosting. We recognize revenue from these arrangements as the service is provided Licensing Revenue We utilize third-party licensees to distribute and host our games and content in accordance with license agreements, for which the licensees typically pay us a fixed minimum guarantee and/or sales-based royalties. These arrangements typically include multiple performance obligations, such as a time-based license of software and future update rights. We recognize as revenue a portion of the minimum guarantee when we transfer control of the license of software (generally upon commercial launch) and the remaining portion ratably over the contractual term in which we provide the licensee with future update rights. Any sales-based royalties are generally recognized as the related sales occur by the licensee. Significant Judgments around Revenue Arrangements Identifying performance obligations. Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct, (i.e., the customer can benefit from the goods or services either on its own or together with other resources that are readily available), and are distinct in the context of the contract (i.e., it is separately identifiable from other goods or services in the contract). To the extent a contract includes multiple promises, we must apply judgment to determine whether those promises are separate and distinct performance obligations. If these criteria are not met, the promises are accounted for as a combined performance obligation. Determining the transaction price. The transaction price is determined based on the consideration that we will be entitled to receive in exchange for transferring our goods and services to the customer. Determining the transaction price often requires judgment, based on an assessment of contractual terms and business practices. It further includes review of variable consideration such as discounts, sales returns, price protection, and rebates, which is estimated at the time of the transaction. In addition, the transaction price does not include an estimate of the variable consideration related to sales-based royalties. Sales-based royalties are recognized as the sales occur. Allocating the transaction price. Allocating the transaction price requires that we determine an estimate of the relative stand-alone selling price for each distinct performance obligation. Determining the relative stand-alone selling price is inherently subjective, especially in situations where we do not sell the performance obligation on a stand-alone basis (which occurs in the majority of our transactions). In those situations, we determine the relative stand-alone selling price based on various observable inputs using all information that is reasonably available. Examples of observable inputs and information include: historical internal pricing data, cost plus margin analyses, third-party external pricing of similar or same products and services such as software licenses and maintenance support within the enterprise software industry. The results of our analysis resulted in a specific percentage of the transaction price being allocated to each performance obligation. Determining the Estimated Offering Period. The offering period is the period in which we offer to provide the future update rights and/or online hosting for the game. Because the offering period is not an explicitly defined period, we must make an estimate of the offering period for the service-related performance obligations (i.e., future update rights and online hosting). Determining the Estimated Offering Period is inherently subjective and is subject to regular revision. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for equity instruments issued to employees in accordance with the provisions of ASC 718 Stock Compensation (ASC 718) and Equity-Based Payments to Non-employees pursuant to ASC 2018-07 (ASC 2018-07). All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier of the date on which the counterparty's performance is complete or the date at which a commitment for performance by the counterparty to earn the equity instruments is reached because of sufficiently large disincentives for nonperformance. |
Basic and Diluted Loss Per Share | Basic and Diluted Loss Per Share Basic earnings per share (EPS) are computed by dividing net income (the numerator) by the weighted average number of common shares outstanding for the period (the denominator). Diluted EPS is computed by dividing net income by the weighted average number of common shares and potential common shares outstanding (if dilutive) during each period. Potential common shares include stock options, warrants and restricted stock. The number of potential common shares outstanding relating to stock options, warrants and restricted stock is computed using the treasury stock method. For the periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share. |
Income Taxes | Income Taxes 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 bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for significant deferred tax assets when it is more likely than not, that such asset will not be recovered through future operations. |
Uncertain Tax Positions | Uncertain Tax Positions In accordance with ASC 740, Income Taxes (ASC 740), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits of the position. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Various taxing authorities may periodically audit the Companys income tax returns. These audits include questions regarding the Companys tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities. The assessment of the Companys tax position relies on the judgment of management to estimate the exposures associated with the Companys various filing positions. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) No other new accounting pronouncements, issued or effective during the period ended November 30, 2020, have had or are expected to have a significant impact on the Companys financial statements. |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Nov. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Valuation of Financial Instruments | The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of November 30, 2020 and May 31, 2020, respectively: Fair Value Measurements at November 30, 2020 Level 1 Level 2 Level 3 Assets Cash $ 3,947,456 $ — $ — Total assets 3,947,456 — — Liabilities Convertible notes payable, related party — — 10,500,000 Total liabilities — — 10,500,000 $ 3,947,456 $ — $ (10,500,000 ) Fair Value Measurements at May 31, 2020 Level 1 Level 2 Level 3 Assets Cash $ 4,017,107 $ — $ — Total assets 4,017,107 — — Liabilities Convertible notes payable, related party — — 10,500,000 Total liabilities — — 10,500,000 $ 4,017,107 $ — $ (10,500,000 ) |
CONVERTIBLE NOTES PAYABLE, RE_2
CONVERTIBLE NOTES PAYABLE, RELATED PARTY (Tables) | 6 Months Ended |
Nov. 30, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable, Related Party | Convertible notes payable, related party consists of the following at November 30, 2020 and May 31, 2020, respectively: November 30, May 31, 2020 2020 On February 26, 2017, Sky Rover Holdings, Ltd (“Sky Rover), which is owned and controlled by Mr. Pei, agreed to loan up $20,000,000 to the Company, of which $8,000,000 was loaned on February 28, 2017. Sky Rover was issued an unsecured, 5%, convertible promissory note which, as amended, is due on February 28, 2022, and is, in whole or in part, at the option of the holder, convertible into common shares at any time before the due date, at a conversion price of $0.08 per share (subject to adjustment in the event of stock splits, forward splits, recapitalizations, a merger, etc.). At the option of the Company, the interest may also be paid by issuing restricted shares of common stock, at the same conversion price per share. On June 26, 2018, the Company repaid $4,000,000 of principal of this loan. In addition, Sky Rover converted $1,500,000 of principal of this loan into common shares at the conversion price of $0.08 per share into a total of 18,750,000 shares. Sky Rover waived accrued and unpaid interest of $363,904, which was credited to additional paid in capital. As of November 30, 2020, there is $470,631 of accrued interest due on this loan. $ 2,500,000 $ 2,500,000 On November 20, 2017, Sky Rover loaned an additional $8,000,000 to the Company. Sky Rover was issued an unsecured, 5%, convertible promissory note which, as amended, is due on November 20, 2022, and is, in whole or in part, at the option of the holder, convertible into common shares at any time before the due date, at a conversion price of $0.08 per share (subject to adjustment in the event of stock splits, forward splits, recapitalizations, a merger, etc.). At the option of the Company, the interest may also be paid by issuing restricted shares of common stock, at the same conversion price per share. As of November 30, 2020, there is $1,212,055 of accrued interest on this loan. 8,000,000 8,000,000 Total convertible notes payable, related party 10,500,000 10,500,000 Less: current portion — — Convertible notes payable, related party, less current portion $ 10,500,000 $ 10,500,000 |
Interest expense | The Company recognized interest expense for the six months ended November 30, 2020 and 2019, respectively, as follows: November 30, November 30, 2020 2019 Interest on due to related parties $ — $ 4,796 Interest on convertible notes, related party 263,219 263,219 Total interest expense $ 263,219 $ 268,015 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - LEASE (Tables) | 6 Months Ended |
Nov. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Components of lease expense | The components of lease expense were as follows: For the Six Months Ended November 30, 2020 Operating lease cost: Amortization of assets $ 73,495 Interest on lease liabilities 16,505 Total operating lease cost $ 90,000 |
Supplemental balance sheet information | Supplemental balance sheet information related to leases was as follows: November 30, 2020 Operating lease: Operating lease assets $ 369,519 Current portion of operating lease obligation $ 156,079 Noncurrent operating lease obligation 213,440 Total operating lease obligation $ 369,519 Weighted average remaining lease term: Operating leases 2.25 years Weighted average discount rate: Operating lease 8.00 % |
Supplemental cash flow and other information related to operating leases | Supplemental cash flow and other information related to operating leases was as follows: For the Six Months Ended November 30, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 90,000 |
Future minimum annual lease payments | Future minimum annual lease payments required under the operating lease and the present value of the net minimum lease payments are as follows at November 30, 2020 : For the Fiscal Year Minimum Lease Ended May 31: Commitments 2021* $ 90,000 2022 180,000 2023 135,000 Total payments $ 405,000 Amount representing interest $ (35,481 ) Lease obligation, net 369,519 Less current portion (156,079 ) Lease obligation – long term $ 213,440 * Liability pertains to the remaining six-month period from December 1, 2020 through May 31, 2021. |
ORGANIZATION, BASIS OF PRESEN_3
ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2015 | May 31, 2020 | Nov. 30, 2020 | Apr. 26, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Number of common shares sold through stock purchase agreement | 6,000,000 | |||
Percentage of issued and outstanding stock sold through stock purchase agreement | 73.80% | |||
Common stock, shares issued | 107,483,450 | 107,483,450 | 8,130,000 | |
Common stock, shares outstanding | 107,483,450 | 107,483,450 | 8,130,000 | |
Proceeds from issuance of common stock | $ 340,000 | |||
Purchase of software, related party | $ 179,300 | |||
excess of FDIC insured limits | $ 3,768,042 | $ 3,512,946 |
RELATED PARTIES (Details)
RELATED PARTIES (Details) - USD ($) | 1 Months Ended | 5 Months Ended | ||
Nov. 30, 2020 | Oct. 31, 2020 | Sep. 30, 2020 | May 31, 2020 | |
Related Party Transactions [Abstract] | ||||
Monthly rent | $ 15,000 | $ 15,000 | ||
Accounts payable, related party | 17,620 | 15,006 | ||
Initial setup fee from license agreement with related party | $ 50,000 | |||
Monthly royalty from license agreement | 5,000 | $ 5,000 | ||
Deferred revenues, related party | $ 30,835 | $ 5,834 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) | Nov. 30, 2020 | May 31, 2020 |
Level 1 [Member] | ||
Cash | $ 3,947,456 | $ 4,017,107 |
Total assets | 3,947,456 | 4,017,107 |
Convertible notes payable, related party | ||
Total liabilities | ||
Total | 3,947,456 | 4,017,107 |
Level 2 [Member] | ||
Cash | ||
Total assets | ||
Convertible notes payable, related party | ||
Total liabilities | ||
Total | ||
Level 3 [Member] | ||
Cash | ||
Total assets | ||
Convertible notes payable, related party | 10,500,000 | 10,500,000 |
Total liabilities | 10,500,000 | 10,500,000 |
Total | $ (10,500,000) | $ (10,500,000) |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) | 12 Months Ended |
May 31, 2020USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Purchase of software, related party | $ 179,300 |
CONVERTIBLE NOTES PAYABLE, RE_3
CONVERTIBLE NOTES PAYABLE, RELATED PARTY (Details) - USD ($) | Jun. 26, 2018 | Nov. 20, 2017 | Feb. 28, 2017 | Nov. 30, 2020 | Nov. 30, 2019 | Nov. 30, 2020 | Nov. 30, 2019 | May 31, 2020 | Feb. 26, 2017 |
Related Party Transaction [Line Items] | |||||||||
Convertible Notes Payable - Related Party | $ 10,500,000 | $ 10,500,000 | $ 10,500,000 | ||||||
Accrued interest | 1,682,686 | 1,682,686 | 1,419,467 | ||||||
Interest on due to related parties | $ 4,796 | ||||||||
Interest on convertible notes, related party | 263,219 | 263,219 | |||||||
Interest expense | 130,890 | $ 133,288 | 263,219 | $ 268,015 | |||||
Current maturities of convertible notes payable, related party | |||||||||
Convertible notes payable, related party | 10,500,000 | 10,500,000 | 10,500,000 | ||||||
Sky Rover Holdings, Ltd. [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Convertible Notes Payable - Related Party | 2,500,000 | 2,500,000 | 2,500,000 | ||||||
Accrued interest | 470,631 | 470,631 | |||||||
Accrued and upaid interest waived | $ 363,904 | ||||||||
Shares issued in conversion | 18,750,000 | ||||||||
Sky Rover Holdings, Ltd. [Member] | Convertible promissory note [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Stock issued for conversion of debt | $ 1,500,000 | ||||||||
Repayment of related party loan | $ 4,000,000 | ||||||||
CEO [Member] | Sky Rover Holdings, Ltd. [Member] | Maximum [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Loan commitment | $ 20,000,000 | ||||||||
CEO [Member] | Sky Rover Holdings, Ltd. [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Proceeds from a related party | $ 8,000,000 | ||||||||
Interest rate | 5.00% | ||||||||
Maturity date | Feb. 28, 2022 | ||||||||
Conversion price | $ 0.08 | ||||||||
CEO [Member] | Sky Rover Holdings, Ltd. [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Proceeds from a related party | $ 8,000,000 | ||||||||
Convertible Notes Payable - Related Party | $ 8,000,000 | $ 8,000,000 | $ 8,000,000 | ||||||
Interest rate | 5.00% | ||||||||
Maturity date | Nov. 20, 2022 | ||||||||
Conversion price | $ 0.08 | $ 0.08 | $ 0.08 | ||||||
Accrued interest | $ 1,212,055 | $ 1,212,055 | |||||||
Shares of restricted stock issued if convertible debt is converted | 131,250,000 | 131,250,000 | |||||||
Current number of shares owned | 101,353,450 | 101,353,450 | |||||||
Number of shares owned if debt converted | 232,603,450 | 232,603,450 | |||||||
Number of shares outstanding if debt converted | 238,733,450 | 238,733,450 | |||||||
Percentage of shares owned if debt converted | 97.40% | 97.40% |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - LEASE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Nov. 30, 2020 | Nov. 30, 2019 | Nov. 30, 2020 | Nov. 30, 2019 | May 31, 2020 | ||
Commitments and Contingencies Disclosure [Abstract] | ||||||
Monthly base rent | $ 15,000 | $ 15,000 | $ 15,000 | |||
Maximum possible rent increase per year, percentage | 3.00% | 3.00% | ||||
Rent expense | $ 45,000 | $ 45,000 | $ 90,000 | $ 90,000 | ||
Amortization of assets | 73,495 | |||||
Interest on lease liabilities | 16,505 | |||||
Total operating lease cost | 90,000 | |||||
Operating lease assets | $ 369,519 | $ 369,519 | 443,014 | |||
Weighted average remaining lease term | 2 years 2 months 31 days | 2 years 2 months 31 days | ||||
Discount rate | 8.00% | 8.00% | ||||
Operating cash flows used for operating leases | $ 45,000 | |||||
2021 | [1] | $ 90,000 | 90,000 | |||
2022 | 180,000 | 180,000 | ||||
2023 | 135,000 | 135,000 | ||||
Total | 405,000 | 405,000 | ||||
Amount representing interest | (35,481) | (35,481) | ||||
Lease obligation, net | 369,519 | 369,519 | ||||
Less current portion | (156,079) | (156,079) | (149,979) | |||
Lease obligation - long term | $ 213,440 | 213,440 | $ 293,035 | |||
Cash paid under operating lease | $ 45,000 | |||||
[1] | Liability pertains to the remaining six-month period from December 1, 2020 through May 31, 2021. |
CHANGES IN STOCKHOLDERS' EQUI_2
CHANGES IN STOCKHOLDERS' EQUITY (Details) - $ / shares | Nov. 30, 2020 | May 31, 2020 | Apr. 26, 2015 |
Equity [Abstract] | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | |
Preferred stock, share issued | 0 | 0 | |
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 500,000,000 | 500,000,000 | |
Common stock, shares issued | 107,483,450 | 107,483,450 | 8,130,000 |
Common stock, shares outstanding | 107,483,450 | 107,483,450 | 8,130,000 |
INCOME TAX (Details)
INCOME TAX (Details) | 6 Months Ended |
Nov. 30, 2020USD ($) | |
Income Tax Disclosure [Abstract] | |
federal net operating losses | $ 5,900,000 |
Expiration | Dec. 31, 2034 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] | Jan. 04, 2021USD ($) |
Hourly rate for software development | 50 |
Fee paid for services to be provided in January 2021 | $ 168,500 |