Document and Entity Information
Document and Entity Information - USD ($) | 11 Months Ended | ||
Mar. 31, 2021 | Jun. 04, 2021 | Oct. 31, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | SHARING SERVICES GLOBAL Corp | ||
Entity Central Index Key | 0001644488 | ||
Document Type | 10-KT | ||
Document Transition Report | true | ||
Document Period End Date | Mar. 31, 2021 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --03-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 21,547,200 | ||
Entity Common Stock, Shares Outstanding | 187,110,769 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Apr. 30, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 12,144,409 | $ 11,742,728 |
Trade accounts receivable, net | 1,514,359 | 4,076,851 |
Income taxes receivable | 107,097 | |
Notes receivable, net | 94,600 | 118,047 |
Inventory, net | 2,471,310 | 4,801,901 |
Other current assets | 2,403,634 | 1,034,979 |
Total Current Assets | 18,735,409 | 21,774,506 |
Property and equipment, net | 887,950 | 298,383 |
Right-of-use assets, net | 428,075 | 800,381 |
Deferred tax assets | 1,873,170 | 1,649,018 |
Intangible assets | 188,567 | |
Other assets | 219,142 | 55,070 |
TOTAL ASSETS | 22,332,313 | 24,577,358 |
Current Liabilities | ||
Accounts payable | 1,295,174 | 771,050 |
Accrued sales commission payable | 4,713,777 | 7,983,536 |
Deferred sales revenues | 1,449,359 | 3,495,571 |
Employee stock warrants liability | 3,132,161 | 661,684 |
Note payable | 1,040,400 | |
State and local taxes payable | 1,048,717 | 2,285,514 |
Accrued and other current liabilities | 2,473,412 | 3,769,611 |
Income taxes payable | 920,305 | |
Current portion of convertible notes payable, net of unamortized debt discount of $369 at March 31 and $9,843 in April 30 | 99,631 | 90,157 |
Total Current Liabilities | 15,252,631 | 19,977,428 |
Settlement liability, long term portion | 808,071 | 968,805 |
Lease liability, long-term | 77,810 | 343,948 |
Convertible notes payable, net of unamortized debt discount of $15,238 at March 31 and $24,412 at April 30 | 34,762 | 25,588 |
TOTAL LIABILITIES | 16,173,274 | 21,315,769 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Additional paid in capital | 43,757,768 | 38,871,057 |
Shares to be issued | 12,146 | 11,785 |
Stock subscriptions receivable | (114,405) | |
Treasury Stock | (1,532,355) | |
Accumulated deficit | (37,627,718) | (33,992,697) |
Total Stockholders' Equity | 6,159,039 | 3,261,589 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 22,332,313 | 24,577,358 |
Series A Convertible Preferred Stock [Member] | ||
Stockholders' Equity | ||
Preferred stock value | 510 | 3,248 |
Series B Convertible Preferred Stock [Member] | ||
Stockholders' Equity | ||
Preferred stock value | 1,000 | |
Series C Convertible Preferred Stock [Member] | ||
Stockholders' Equity | ||
Preferred stock value | 323 | 349 |
Class A Common Stock [Member] | ||
Stockholders' Equity | ||
Common stock value | 16,010 | 12,607 |
Class B Shares [Member] | ||
Stockholders' Equity | ||
Common stock value | $ 1,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2021 | Apr. 30, 2020 |
Unamortized debt discount, current | $ 369 | $ 9,843 |
Unamortized debt discount, non-current | $ 15,238 | $ 24,412 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 200,000,000 | 200,000,000 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 5,100,000 | 32,478,750 |
Preferred stock, shares outstanding | 5,100,000 | 32,478,750 |
Series B Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 10,000,000 |
Preferred stock, shares outstanding | 0 | 10,000,000 |
Series C Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 3,230,000 | 3,490,000 |
Preferred stock, shares outstanding | 3,230,000 | 3,490,000 |
Class A Common Stock [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 160,100,769 | 126,072,386 |
Common stock, shares outstanding | 160,100,769 | 126,072,386 |
Class B Shares [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 0 | 10,000,000 |
Common stock, shares outstanding | 0 | 10,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 11 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Apr. 30, 2020 | |
Income Statement [Abstract] | ||
Net sales | $ 64,811,151 | $ 131,389,906 |
Cost of goods sold | 18,264,494 | 37,875,616 |
Gross profit | 46,546,657 | 93,514,290 |
Operating expenses | ||
Selling and marketing expenses | 29,740,974 | 60,814,242 |
General and administrative expenses | 18,983,209 | 23,004,747 |
Total operating expenses | 48,724,183 | 83,818,989 |
Operating earnings (loss) | (2,177,526) | 9,695,301 |
Other income (expense) | ||
Interest expense, net | (47,613) | (430,854) |
Litigation settlements and other non-operating expenses | (134,726) | (5,990,841) |
Gain on employee warrants liability | 530,335 | |
Total other income (expense), net | 347,996 | (6,421,695) |
Earnings (loss) before income taxes | (1,829,530) | 3,273,606 |
Income tax provision (benefit) | (594,509) | 485,001 |
Net earnings (loss) | $ (1,235,021) | $ 2,788,605 |
Earnings (loss) per share: | ||
Basic | $ (0.01) | $ 0.02 |
Diluted | $ (0.01) | $ 0.01 |
Weighted average shares: | ||
Basic | 172,046,517 | 131,472,281 |
Diluted | 172,046,517 | 239,823,972 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) | 11 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Apr. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net earnings (loss) | $ (1,235,021) | $ 2,788,605 |
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization, including amortization of right-of-use assets of $585,490 in 2020 | 163,248 | 714,350 |
Stock-based compensation expense | 3,578,707 | 6,949,178 |
Estimated settlement liability | 2,620,931 | |
Deferred income tax benefit | (536,862) | (1,649,018) |
Litigation expenses recovered | (1,562,500) | |
Amortization of debt discount and other | 18,647 | 393,927 |
Loss on impairment of notes receivable | 360,197 | |
Loss (gain) on prepayment (modification) of convertible notes | (13,972) | |
Loss on impairment of investment and other | 114,599 | 228,637 |
Provision for obsolete inventory | 1,095,068 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,562,491 | 329,853 |
Inventory | 1,235,523 | (1,919,033) |
Other current assets | (1,348,655) | (107,039) |
Security deposits | (20,967) | 7,600 |
Accounts payable | 524,124 | (336,736) |
Income taxes payable | (714,692) | 920,305 |
Lease liability | 2,617 | (564,973) |
Accrued and other liabilities | (7,005,797) | 2,156,612 |
Net Cash Provided by (Used in) Operating Activities | (1,566,970) | 11,316,924 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Payments for property and equipment | (914,336) | (160,857) |
Payments for intangible assets | (190,151) | |
Payments for notes receivable | (204,879) | |
Collections of notes receivable | 113,727 | (58,047) |
Due to related parties and other | (10,242) | |
Net Cash Used in Investing Activities | (1,195,639) | (229,146) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock | 3,023,390 | 1,300 |
Repayments of convertible notes payable | (755,000) | |
Proceeds from issuance promissory notes payable | 1,040,400 | |
Repayments of promissory notes payable | (2,502,985) | |
Repurchase of stock | (899,500) | (500) |
Net Cash Provided by (Used in) Financing Activities | 3,164,290 | (3,257,185) |
Increase in cash and cash equivalents | 401,681 | 7,830,593 |
Cash and cash equivalents, beginning of period | 11,742,728 | 3,912,135 |
Cash and cash equivalents, end of period | 12,144,409 | 11,742,728 |
Supplemental cash flow information | ||
Cash paid for interest | 5,071 | 477,318 |
Cash paid for income taxes | 828,233 | 1,237,843 |
Supplemented disclosure of non-cash investing and financing activities: | ||
Settlement obligation satisfied with shares of common stock | 400,000 | |
Settlement of related party note receivable with common stock | 3,446,114 | |
Right-of-use assets recognized as lease liability | $ 1,385,871 |
Consolidated Statement of Cas_2
Consolidated Statement of Cash Flows (Parenthetical) | 12 Months Ended |
Apr. 30, 2020USD ($) | |
Statement of Cash Flows [Abstract] | |
Amortization of right-of-use assets | $ 585,490 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Series C Preferred Stock [Member] | Class A and Class B Common Stock [Member] | Additional Paid in Capital [Member] | Subscription Receivable [Member] | Shares to be Issued [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Total |
Balance at Apr. 30, 2019 | $ 4,288 | $ 1,000 | $ 352 | $ 11,408 | $ 31,870,020 | $ (114,405) | $ 21,000 | $ (33,111,921) | $ (1,318,258) | |
Balance, shares at Apr. 30, 2019 | 42,878,750 | 10,000,000 | 3,520,000 | 114,077,061 | ||||||
Common stock issued for cash | $ 3 | 7,497 | (7,500) | |||||||
Common stock issued for cash, shares | 30,000 | |||||||||
Preferred stock issued for cash | $ 2 | 4,998 | 5,000 | |||||||
Preferred stock issued for cash, shares | 20,000 | |||||||||
Common stock issued for professional services | $ 21 | 56,979 | (1,715) | 55,285 | ||||||
Common stock issued for professional services, shares | 215,325 | |||||||||
Conversions of preferred stock | $ (1,040) | $ (5) | $ 1,045 | |||||||
Conversions of preferred stock, shares | (10,400,000) | (50,000) | 10,450,000 | |||||||
Repurchase and retirement of common stock | $ 280 | 27,720 | 28,000 | |||||||
Repurchase and retirement of common stock, shares | 2,800,000 | |||||||||
Repurchase and retirement of common stock | $ (150) | (350) | (500) | |||||||
Repurchase and retirement of common stock, shares | (1,500,000) | |||||||||
Stock-based compensation expense | 6,904,193 | 6,904,193 | ||||||||
Stock warrants exercised | $ 1,000 | 1,000 | ||||||||
Stock warrants exercised, shares | 10,000,000 | |||||||||
Purchase of treasury stock | (1,532,355) | (1,532,355) | ||||||||
Deemed dividend | (3,669,381) | (3,669,381) | ||||||||
Net earnings (loss) | 2,788,605 | 2,788,605 | ||||||||
Balance at Apr. 30, 2020 | $ 3,248 | $ 1,000 | $ 349 | $ 13,607 | 38,871,057 | (114,405) | 11,785 | (1,532,355) | (33,992,697) | 3,261,589 |
Balance, shares at Apr. 30, 2020 | 32,478,750 | 10,000,000 | 3,490,000 | 136,072,386 | ||||||
Common stock issued for cash | $ 3,000 | 5,397,000 | (2,400,000) | 3,000,000 | ||||||
Common stock issued for cash, shares | 10,000,000 | 3,000,000 | ||||||||
Common stock issued upon settlement of litigation | $ 1,000 | 399,000 | 400,000 | |||||||
Common stock issued upon settlement of litigation, shares | 1,000,000 | |||||||||
Preferred stock retired | $ (563) | 563 | ||||||||
Preferred stock retired, shares | (5,628,750) | |||||||||
Conversions of preferred stock | $ (2,175) | $ (1,000) | $ (26) | $ 3,201 | ||||||
Conversions of preferred stock, shares | (21,750,000) | (10,000,000) | (260,000) | 32,010,000 | ||||||
Common stock redeemed upon settlement of stockholder litigation | $ (3,831) | (1,528,524) | 1,532,355 | |||||||
Common stock redeemed upon settlement of stockholder litigation, shares | (38,308,864) | |||||||||
Repurchase and retirement of common stock | $ (1,750) | (897,750) | (899,500) | |||||||
Repurchase and retirement of common stock, shares | (17,500,000) | |||||||||
Proceeds from common stock warrants exercised | 23,029 | 23,029 | ||||||||
Stock-based compensation expense | 2,201,004 | 2,201,004 | ||||||||
Stock warrants exercised | $ 783 | (570,177) | (23,029) | (592,423) | ||||||
Stock warrants exercised, shares | 7,827,247 | |||||||||
Subscription receivable impaired | (114,405) | 114,405 | ||||||||
Net earnings (loss) | (1,235,021) | (1,235,021) | ||||||||
Balance at Mar. 31, 2021 | $ 510 | $ 323 | $ 16,010 | $ 43,757,768 | $ 12,146 | $ (37,627,718) | $ 6,159,039 | |||
Balance, shares at Mar. 31, 2021 | 5,100,000 | 3,230,000 | 160,100,769 |
Description of Operations
Description of Operations | 11 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Operations | NOTE 1 – DESCRIPTION OF OPERATIONS Sharing Services Global Corporation and subsidiaries (“Sharing Services”, “we,” or the “Company”) is a publicly traded company that aims to build shareholder value by developing or acquiring businesses that augment the Company’s product and services portfolio, business competencies, and geographic reach. Currently, the Company markets and distributes its health and wellness and other products primarily in the United States, Canada and the Asia Pacific region. Through its subsidiaries, the Company currently markets its products and services primarily through an independent sales force, using a direct selling business model. The Company does not currently operate retail stores. www.elevacity.com www.thehappyco.com The Company is an emerging growth company and was incorporated in the State of Nevada in April 2015. The Company recently changed its fiscal year, from a fiscal year ending on April 30 to a fiscal year ending on March 31. Corporate Name Change Sharing Services Global Corporation was originally incorporated under the name Sharing Services, Inc. In January 2019, Sharing Services, Inc. changed its corporate name to Sharing Services Global Corporation to better reflect the Company’s strategic intent to grow its business globally. In connection with the name change, the Company adopted the trading symbol SHRG effective April 4, 2019. Prior to this the Company’s Common Stock traded under the symbol SHRV. Change of Fiscal Year In March 2021, the Company adopted a change in its fiscal year end from a fiscal year ending on April 30 to a fiscal year ending on March 31. The adoption of a new fiscal year end was pursuant to a prior authorization by the Company’s Board of Directors. The Company believes that adoption of a fiscal year ending on March 31 will enhance the usefulness and comparability of information reported about the Company’s financial position and results of operations by aligning such information more closely with that of other public reporting entities. The following table sets forth certain information about the Company’s results of operations for the eleven (11) months ended March 31, 2021 and 2020. The information for the eleven (11) months ended March 31, 2020, represents unaudited pro-forma information. 11 Months Ended March 31, 2021 2020 Net sales $ 64,811,151 $ 121,613,476 Gross Profit $ 46,546,657 $ 86,445,680 Income (loss) from continuing operations $ (1,829,530 ) $ 994,102 Earnings (loss) before income taxes $ (1,829,530 ) $ 994,102 Provision for (benefit from) income taxes (594,509 ) 444,058 Net earnings (loss) $ (1,235,021 ) $ 550,044 Basic earnings (loss) per share $ (0.01 ) $ 0.00 Diluted earnings (loss) per share $ (0.01 ) $ 0.00 |
Significant Accounting Policies
Significant Accounting Policies | 11 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of the Company and its consolidated subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Currently, all the Company’s consolidated subsidiaries are wholly owned and have a fiscal year consistent with the Company’s fiscal year. To date, foreign currency fluctuations are not material to the Company’s consolidated financial statements. Reclassifications Certain reclassifications have been made to the prior year data to conform with the current period’s presentation. Comprehensive Income For the fiscal periods covered by this Transition Report, the only material component of the Company’s comprehensive income (loss) is the Company’s net earnings (loss). Accordingly, the Company does not present a consolidated statement of comprehensive income. Correction of Errors In its fiscal quarter ended January 31, 2021, the Company identified two errors in amounts previously reported in its Quarterly Reports on Form 10-Q for the interim periods ended July 31, 2020 and October 31, 2020 concerning the method used to capitalize work-in-progress for projects and errors in its stock-based compensation expense related to employment contracts. Accordingly, the Company made the following corrections to previously reported amounts: Capitalization of Costs for Ongoing Projects and Development of a New Business Brand Stock-based Compensation Expense The impact on our previously reported Net Earnings for the affected periods is: For the Three Months Ended July 31, 2020 For the Three Months Ended October 31, 2020 For the Six Months Ended October 31, 2020 Net Earnings/(Loss) – As Reported $ (1,093,377 ) $ 1,851,356 $ 757,979 Adjustments (net of tax): Capitalized Projects 50,264 306,708 356,972 Warrant Benefit / (Expense) (5,587 ) 80,981 75,394 Total Adjustments 44,677 387,689 432,366 Net Earnings/(Loss) – As Corrected $ (1,048,700 ) $ 2,239,045 $ 1,190,345 The Company has identified the impacted internal controls for both errors and has implemented additional internal controls in order to identify and mitigate in the future. Use of Estimates and Assumptions The preparation of financial statements in accordance with GAAP requires the use of judgment and requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosures about contingent assets and liabilities, if any. Matters that require the use of estimates and assumptions include, among others: the recoverability of accounts receivable, the valuation of inventory, the useful lives of fixed assets, the assessment of long-lived assets for impairment, the nature and timing of satisfaction of multiple performance obligations resulting from contracts with customers, the allocation of the transaction price to multiple performance obligations in a sales transaction, the measurement and recognition of right-of-use assets and related lease liabilities, the valuation of share-based compensation awards, the provision for income taxes, the measurement and recognition of uncertain tax positions, and the valuation of loss contingencies, if any. Actual results may differ from these estimates in amounts that may be material to our consolidated financial statements. We believe that the estimates and assumptions used in the preparation of our consolidated financial statements are reasonable. Cash and cash equivalents Cash and cash equivalents include cash on hand, demand deposits in banking institutions, and cash equivalents, if any. As of March 31, 2021, and April 30, 2020, cash and cash equivalents also include $6.2 million and $11.1 million, respectively, of deposits with our merchant processors, consisting of proceeds from recent sales transactions, which are unrestricted and are not insured by any federal agency. Cash equivalents, if any, represent highly liquid short-term investments with an original maturity of 90 days or less and are stated at cost, which approximates fair value. Accounts Receivable and Allowance for Doubtful Accounts As of March 31, 2021 and April 30, 2020, accounts receivable consists primarily of amounts due from our merchant processors, including $1.5 million and $4.0 million, respectively, receivable from one merchant processor. We assess the adequacy of our allowance for doubtful accounts, if any, on the basis of our historical collection data and current information. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Inventory and Cost of Goods Sold Inventory consists of product held for sale in the normal course of our business. Inventory is stated at the lower of cost, determined using the first-in, first-out (“FIFO”) method, or net realizable value. Inventory cost reflects direct product costs and certain shipping and handling costs, such as in-bound freight. When estimating the net realizable value of inventory, we consider several factors including estimates of future demand for the product, historical turn-over rates, the age and sales history of the inventory, and historic and anticipated changes in our product offerings. Physical inventory counts are performed at all facilities at least annually. Upon completion of physical inventory counts, our consolidated financial statements are adjusted to reflect actual quantities on hand. Between physical counts, we estimate inventory shrinkage based on our historical experience. The Company periodically assesses its inventory levels when compared to current and anticipated sales levels. During the fiscal year ended March 31, 2021, the Company recognized a provision for excess (slow-moving) or obsolete inventory of $1.1 million in connection with health and wellness product that is damaged, expired or otherwise in excess of forecasted outputs, based on our current and anticipated sales levels. The Company reports its provisions for inventory losses in cost of goods sold in its consolidated statements of operations. Cost of goods sold includes actual product costs, vendor rebates and allowances, if any, inventory shrinkage and certain shipping and handling costs, such as in-bound freight, associated with product sold. All other shipping and handling costs, including the cost to ship product to customers, are included in selling and marketing expenses in our consolidated statements of operations when incurred. Property and Equipment Property and equipment are recorded at cost and reported net of accumulated depreciation. Depreciation expense is recognized over an asset’s estimated useful life using the straight-line method. Leasehold improvements are amortized over the lesser of the estimated useful lives of the assets or the term of the related lease, including lease renewals considered reasonably assured. The estimated useful lives of our property and equipment are as follows: ● Furniture and fixtures – 3 years ● Office equipment – 5 years ● Computer Equipment – 3 years ● Computer software – 3 years ● Leasehold improvements – 3 years The estimated useful lives are periodically reviewed and, when appropriate, changes are made prospectively. The recoverability of long-lived assets is assessed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable, by comparing the net carrying amount of each asset to the total estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its undiscounted future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. Revenue Recognition The Company recognizes revenue net of amounts due to taxing authorities (such as local and state sales tax). Our customers place sales orders online and through our “back-office” operations, which creates a contract and establishes the transaction price. The Company recognizes revenue when (or as) it transfers control of the promised goods and services to the customer. With respect to products sold, our performance obligation is satisfied upon receipt of the products by the customer. With respect to subscription-based revenue, including independent distributor membership fees, our performance obligation is satisfied over time (generally, up to one year). The timing of our revenue recognition may differ from the time when we invoice the customer and/or collect payment. The Company has elected to treat shipping and handling costs as an activity to fulfill its performance obligations, rather than a separate performance obligation. As of March 31, 2021, and April 30, 2020, deferred revenue associated with product invoiced but not received by customers at the balance sheet date was $1.2 million and $2.7 million, deferred revenue associated with unfulfilled performance obligations for services offered on a subscription basis was $153,216 and $433,386, and deferred sales revenue associated with unfulfilled performance obligations for customers’ right of return was $95,780 and $263,117, respectively. Our deferred sales revenue amounts are expected to be recognized over one year. During the fiscal year ended March 31, 2021 and April 30, 2020, no individual customer, or related group of customers, represents 10% or more of our consolidated net sales. During the fiscal year ended March 31, 2021, approximately 71% of our net sales were to customers (including 43% to recurring customers, which we refer to as “SmartShip” sales, and approximately 28% to new customers) and approximately 29% of our net sales were to our independent distributors. During the fiscal year ended April 30, 2020, approximately 73% of our consolidated net sales were to customers (including approximately 47% of our consolidated net sales were to recurring customers, which we refer to as “SmartShip” sales, and approximately 26% were to new customers) and approximately 27% were to our independent distributors. During the fiscal year ended March 31, 2021 and April 30, 2020, approximately 94% and 95%, respectively, of our consolidated net sales are to our customers and independent distributors located in the United States. During the fiscal year ended March 31, 2021, approximately 99% of our consolidated net sales are from our health and wellness products (including approximately 53% from the sale of Nutraceutical products, approximately 17% from the sale of coffee and coffee-related products, and approximately 31% from the sale of all other health and wellness products). During the fiscal year ended April 30, 2020, approximately 98% of our consolidated net sales are from our health and wellness products (including approximately 54% from the sale of Nutraceutical products, approximately 24% from the sales of coffee and coffee-related products, and approximately 22% from the sale of all other health and wellness products). During the fiscal year ended March 31, 2021, our ten top selling products represent approximately 54% of our consolidated net sales. During the fiscal year ended March 31, 2021, and April 30, 2020, product purchases from one supplier accounted for approximately 99% and 98%, respectively, of our total product purchases. Sales Commissions The Company recognizes sales commission expense when incurred. In the fiscal year ended March 31, 2021, and April 30, 2020, sales commission expense was $29.4 million and $59.0 million, respectively, and is included in selling and marketing expenses in our consolidated statements of operations. In the fiscal year ended March 31, 2021, the Company issued to members of its independent sales force who had been offered stock warrants under the 2019 Sales-Related Warrants program discussed below and met other qualifications (mainly related to remaining active distributors), fully vested warrants to purchase up to 4,013,000 shares its Common Stock with an estimated aggregate fair value of $1.5 million (the “2020 Sales-Related Warrants”). The 2020 Sales-Related Warrants are exercisable for a period of one year from the issuance date at the exercise price of $0.01 per share. At the time of issuance, the rights conferred by the 2020 Sales-Related Warrants were not subject to service conditions and all other conditions necessary to earn the award had been satisfied. The Company deems the fair value of the warrants granted to members of its independent contractor sales force to be an element of sales compensation expense and, as such, includes this expense in selling and marketing expenses in its consolidated statements of operations. The rights conferred by the 2020 Sales-Related Warrants program were contingent on the warrant holder releasing the Company form future obligation under the 2019 Sales-Related Warrants program, including in the case where the warrant holder had not formally accepted the 2019 Sales-Related Warrant. When the warrant holder had not accepted the 2019 Sales-Related Warrant, the Company recognized sales compensation expense ($1.5 million) in connection with stock warrants issued under the 2020 Sales-Related Warrants program to participants of the predecessor plan who accepted the new award. When the warrant holder had accepted the 2019 Sales-Related Warrant, the Company recognized incremental sales compensation expense of $140,911 in connection with unexercised equity-based awards under the 2019 Sales-Related Warrants program that were deemed modified, as defined by GAAP, by the new award. In the fiscal year ended April 30, 2019, the Company had offered to members of its independent sales force who had met certain sales targets, fully vested warrants to purchase up to 11,000,000 shares its Common Stock (the “2019 Sales-Related Warrants”). The warrants are exercisable for a period of two years from the issuance date at the exercise price of $0.25 per share. The rights conferred by the warrants were not subject to service conditions and all other conditions necessary to earn the award have been satisfied. In accordance with GAAP, in the fiscal year ended March 31, 2021, the Company derecognized sales compensation expense of $1.1 million in connection with stock warrants previously offered under the 2019 Sales-Related Warrants program that expired or were terminated or otherwise forfeited. As of March 31, 2021, and April 30, 2020, accrued sales commission payable was $4,713,777 and $7,983,536, respectively, including $0 and $1,290,477, respectively, in estimated sales compensation contingently payable with stock warrants under the 2019 Sales-Related Warrants program. Share-Based Payments The Company accounts for stock-based compensation awards to its directors, officers, and employees in accordance with Accounting Standards Codification (“ASC”) Topic 718, Compensation – Stock Compensation As stated above, some stock warrants issued in connection with these multi-year employment agreements are exercisable at a variable exercise price, a price equal to the discounted 10-day average stock price determined at the time of exercise. In general, the Company begins recognizing the compensatory nature of the warrants at the service inception date and ceases recognition at the vesting date. Due to the variable nature of the exercise price for some grants, however, the Company remeasures compensation expense associated with these awards after the service period ends and until the warrant is exercised or expires. As such, the Company’s stock-based compensation expense contains components associated with (i) awards that have a fixed exercise price whose fair value is measured at the grant date and (ii) awards with a variable exercise price whose value is measured at the balance sheet date, including fully vested awards. The Company recognizes the income/expense component associated with the subsequent measure of fully vested awards as non-operating income/expense. The Company accounts for stock-based compensation awards to non-employees, in accordance with ASC 718, as amended. In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-07, Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-based Payment Accounting Lease Accounting The Company accounts for its lease obligations in accordance with ASC Topic 842, Leases The Company leases space for its corporate headquarters, additional office and warehouse space, automobiles, and office and other equipment, under lease agreements classified as operating leases, under ASC 842. See Note 11 – “LEASES” below for more information about the Company’s lease obligations. Foreign Currency During the fiscal year ended March 31, 2021, and April 30, 2020, 94% and 95%, respectively, of our consolidated net sales are to customers and independent distributors located in the U.S. (based on the customer’s shipping address). As part of its growth initiatives, the Company is in the process of expanding operations outside the United States. The functional currency of each of our foreign operations is generally the respective local currency. Balance sheet accounts are translated into U.S. dollars (our reporting currency) at the rates of exchange in effect at the balance sheet date, while the results of operations and cash flows are generally translated using average exchange rates for the periods presented. Individually material transactions, if any, are translated using the actual rate of exchange on the transaction date. The resulting translation adjustments, if any, are recorded as a component of accumulated other comprehensive loss in our consolidated balance sheets. Income Taxes The Company uses the asset and liability method in accounting for income taxes. We recognize deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases (“temporary differences”). Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which temporary differences are anticipated to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in measuring results of operations in the period that includes the enactment date. Deferred tax assets are evaluated periodically, and a valuation allowance is recorded to reduce the carrying amounts of deferred tax assets to the amount expected to be realized unless it is more-likely-than-not that the assets will be realized in full. When assessing whether it is more-likely-than-not that the deferred tax assets will be realized, management considers multiple factors, including recent earnings history, expectations of future earnings, available carryforward periods, the availability of tax planning strategies, and other relevant quantitative and qualitative factors. In determining the provision for income taxes, an annual effective income tax rate is used based on annual income, permanent differences between book and tax income, and statutory income tax rates. Accounting for income taxes involves judgment and the use of estimates. The Company recognizes a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in its tax returns, unless the weight of available evidence indicates it is more-likely-than-not that the tax position will be sustained on audit, including resolution through available appeals processes. We measure the tax position as the largest amount which is more-likely-than-not of being realized. The Company considers many factors when evaluating and estimating the Company’s tax positions, which may require periodic adjustments when new facts and circumstances become known. See Note 12 – “Income Taxes” for more information about the Company’s accounting for income taxes. Recently Issued Accounting Standards - Adopted In November 2019, the FASB issued ASU No. 2019-08, Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements – Share-based Consideration Payable to a Customer Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-based Payment Accounting In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Fair Value Measurement Recently Issued Accounting Standards - Pending Adoption In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes |
Fair Value Measurements
Fair Value Measurements | 11 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 3 – FAIR VALUE MEASURMENTS Our financial instruments consist of cash equivalents, if any, accounts receivable, notes receivable, investments in unconsolidated entities, accounts payable, and notes payable, including convertible notes. The carrying amounts of cash equivalents, if any, accounts receivable, notes receivable, and accounts payable approximate their respective fair values due to the short-term nature of these financial instruments. We measure on a recurring basis and disclose the fair value of our financial instruments under the provisions of ASC 820, as amended. We define “fair value” as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level hierarchy for measuring fair value and requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There were no transfers between the levels of the fair value hierarchy during the periods covered by the accompanying consolidated financial statements. Consistent with the valuation hierarchy contained in ASC 820, we categorized certain of our financial assets and liabilities as follows: March 31, 2021 Total Level 1 Level 2 Level 3 Assets Notes receivable $ 94,600 $ - $ - $ 94,600 Investments in unconsolidated entities - - - - Total assets $ 94,600 $ - $ - $ 94,600 Liabilities Notes Payable $ 1,040,400 $ - $ - $ 1,040,400 Convertible notes payable 134,393 - - 134,393 Total liabilities $ 1,174,793 $ - $ - $ 1,174,793 April 30, 2020 Total Level 1 Level 2 Level 3 Assets Notes receivable $ 118,047 $ - $ - $ 118,047 Investments in unconsolidated entities 20,000 - - 20,000 Total assets $ 138,047 $ - $ - $ 138,047 Liabilities Convertible notes payable $ 115,745 $ - $ - $ 115,745 Notes payable - - - - Total liabilities $ 115,745 $ - $ - $ 115,745 The Company’s investments in unconsolidated entities are reported at cost in its consolidated financial statements. The investments are valued for purposes of this disclosure using unobservable inputs, since there are no observable market transactions for such investments. The fair value of notes receivable approximates the carrying value due to the short-term nature of the note. See Note 5 below for more information about our notes receivable. At March 31, 2021 and April 30, 2020, convertible notes payable (including current maturities) are reported in our consolidated financial statements at amortized cost of $150,000, less unamortized debt discount of $15,607 and $34,255, respectively. Our notes and convertible notes payable are valued for purposes of this disclosure using discounted cash flows and observable interest rates whenever available. There are no observable market transactions for our notes and convertible notes. See Notes 8 and 10 below for more information about our notes and convertible notes payable. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 11 Months Ended |
Mar. 31, 2021 | |
Earnings (loss) per share: | |
Earnings (Loss) Per Share | NOTE 4 – EARNINGS (LOSS) PER SHARE We calculate basic earnings (loss) per share by dividing net earnings (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share is calculated similarly but reflects the potential impact of shares issuable upon the conversion or exercise of our outstanding convertible Preferred Stock, convertible notes payable, stock warrants and other commitments to issue Common Stock, except where the impact would be anti-dilutive, as defined in GAAP. The calculation of diluted earnings per share also reflects an adjustment to net earnings for the potential reduction to a reporting period’s interest expense, net of applicable income tax, that would result if the Company’s convertible notes payable were converted at the beginning of such reporting period. The following table sets forth the computations of basic and diluted earnings (loss) per share for the periods indicated: Fiscal Year Ended March 31, 2021 April 30, 2020 Net earnings (loss) $ (1,235,021 ) $ 2,788,605 After-tax interest expense adjustment - 37,414 Net earnings (loss), if-converted basis $ (1,235,021 ) $ 2,826,019 Weighted average basic shares 172,046,517 131,472,281 Dilutive securities: Convertible Preferred Stock - 46,125,389 Convertible notes - 39,993,730 Stock warrants - 22,232,572 Weighted average diluted shares 172,046,517 239,823,972 Earnings (loss) per share: Basic $ (0.01 ) $ 0.02 Diluted $ (0.01 ) $ 0.01 The following potentially dilutive securities and instruments were outstanding as of March 31, 2021 but excluded from the table above because their impact would be anti-dilutive: Convertible Preferred Stock 20,879,530 Convertible notes payable 10,406,100 Stock warrants 34,128,212 Total potential incremental shares 65,413,842 |
Notes Receivable
Notes Receivable | 11 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Notes Receivable | NOTE 5 – NOTES RECEIVABLE In January 2021, the Company and 1044PRO, LLC (“1044 PRO”) entered into a Funding Agreement pursuant to which the Company agreed to provide to 1044 PRO a $250,000 revolving credit line and loaned $204,879 to 1044 PRO under the credit line. Borrowings under the credit line are payable in monthly installments in amounts determined by the amount of each cash advance. At March 31, 2021, loans of $94,600 are outstanding, net of an allowance for the impairment losses of $94,599. In connection with the loan, the Company acquired a 10% equity interest in 1044 PRO and a security interest in 1044 PRO’s cash receipts and in substantially all 1044 PRO’s assets. In the fiscal year ended April 30, 2020, the Company received a promissory note for $58,047 from a prior merchant payment processor in connection with amounts owed to the Company. At March 31, 2021, and April 30, 2020, $0 and $58,047, respectively, was outstanding. In the fiscal year 2019, the Company received a promissory note for $106,404 from a prior merchant payment processor in connection with amounts owed to the Company. At March 31, 2021, and April 30, 2020, the amounts of $0 and $60,000, respectively, is outstanding, net of an allowance for the impairment losses of $20,000 and $46,404, respectively. In the fiscal year ended March 31, 2021, and April 30, 2020, the Company recognized impairment losses of $114,599 and $46,404 in connection with the notes receivable discussed above. |
Other Current Assets
Other Current Assets | 11 Months Ended |
Mar. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | NOTE 6 – OTHER CURRENT ASSETS Other current assets consist of the following: March 31, 2021 April 30, 2020 Inventory-related deposits $ 1,845.722 $ - Employee advances 320,631 554,787 Prepaid freight and other expenses 210,665 404,089 Right to recover asset 26,616 76,103 $ 2,403,634 $ 1,034,979 Prepaid freight and other expenses consist of payments for goods and services (such as freight, trade show expenses and insurance premiums) which are expected to be realized in the next operating cycle. Right to recover asset is associated with our customers’ right of return and is expected to be realized in one year or less. As of March 31, 2021, and April 30, 2020, employee advances include $320,631 and $554,630 due from an employee in connection with payroll tax obligations associated with the exercise of compensatory stock warrants. |
Property and Equipment
Property and Equipment | 11 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 7 - PROPERTY AND EQUIPMENT Property and equipment consist of the following: March 31, 2021 April 30, 2020 Computer software $ 734,510 $ 19,156 Furniture and fixtures 230,685 224,239 Computer equipment 165,767 136,337 Leasehold improvements 106,877 106,877 Office equipment 31,652 31,652 Total property and equipment 1,269,491 518,261 Accumulated depreciation and amortization (381,541 ) (219,878 ) Property and equipment, net $ 887,950 $ 298,383 Depreciation and amortization expense for the fiscal year ended March 31, 2021 and April 30, 2020 was $161,663 and $128,860, respectively. During the fiscal year ended March 31, 2021, the Company capitalized $715,354 in computer software in connection with upgrades to its information technology systems placed in service. In addition, during the fiscal year ended March 31, 2021, the Company incurred $163,106 in capitalizable costs primarily in connection with leasehold improvements for office facilities and ongoing upgrades to its information technology systems yet to be placed in service. These costs are reported in other assets in our consolidated balance sheets until the related assets are placed in service. |
Note Payable
Note Payable | 11 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Note Payable | NOTE 8 - NOTES PAYABLE In May 2020, the Company was granted a loan (the “PPP Loan”) by a commercial bank in the amount of $1,040,400, pursuant to the Paycheck Protection Program features of the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”) bears interest at an annual rate of 1.0%. The may be prepaid without penalty, at the option of the Company, at any time prior to maturity. Proceeds from loans granted under the CARES Act are intended to be used for payroll, costs to continue employee group health care benefits, rent, utilities, and certain other qualified costs (“qualifying expenses”). The Company used the loan proceeds for qualifying expenses. The Company’s borrowings under the are eligible for loan forgiveness, subject to certain limiting conditions, if used for qualifying expenses incurred during the “covered period,” as defined in the CARES Act. Under the terms of the PPP Loan, the Company’s indebtedness, after any such loan forgiveness, is payable in equal monthly installments, with all amounts due and payable by . At March 31, 2021, loan Note 18 – “Subsequent Events,” . |
Accrued and Other Current Liabi
Accrued and Other Current Liabilities | 11 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accrued and Other Current Liabilities | NOTE 9 - ACCRUED AND OTHER CURRENT LIABILITIES Accrued and other current liabilities consist of the following: March 31, 2021 April 30, 2020 Accrued severance expense $ 700,000 $ - Payroll and employee benefits 523,454 1,199,950 Settlement liability, current portion 376,921 1,652,126 Lease liability, current portion 373,398 476,950 Accrued interest payable 29,848 15,419 Other operational accruals 453,012 425,166 $ 2,473,412 $ 3,769,611 Lease liability, current portion, represent obligations due withing one year under operating leases for office space, automobiles, and office equipment. See Note 11 – “ Leases |
Convertible Notes Payable
Convertible Notes Payable | 11 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | NOTE 10 - CONVERTIBLE NOTES PAYABLE Convertible notes payable consists of the following: Conversion Price Issuance Date Maturity Date (per share) March 31, 2021 April 30, 2020 October 2017 October 2022 $ 0.15 $ 50,000 $ 50,000 April 2018 April 2021 $ 0.01 100,000 100,000 Total convertible notes payable 150,000 150,000 Less: unamortized debt discount and deferred financing fees 15,607 34,255 134,393 115,745 Less: current portion of convertible notes payable 99,631 90,157 Long-term convertible notes payable $ 34,762 $ 25,588 The Company’s convertible notes are convertible, at the option of the holder, into shares of the Company’s Common Stock at the conversion prices shown above. Borrowings on the October 2017 convertible note bears interest at the annual rate of 12%. The April 2018 convertible note is non-interest bearing. In October 2017, the Company issued a Convertible Promissory Note in the principal amount of $50,000 (the “Note”) to HWH International, Inc (“HWH” or the “Holder”). HWH is affiliated with Chan Heng Fai Ambrose, who in April 2020 became a Director of the Company. The Note is convertible into 333,333 shares of the Company’s Common Stock. Concurrent with issuance of the Note, the Company issued to HWH a detachable warrant to purchase up to an additional 333,333 shares of the Company’s Common Stock, at an exercise price of $0.15 per share. Under the terms of the Note and the detachable stock warrant, the Holder is entitled to certain financing rights. If the Company enters into more favorable transactions with a third-party investor, it must notify the Holder and may have to amend and restate the Note and the detachable stock warrant to be identical. HWH has informed the Company that it believes that during the term of the Note, the Company has granted more favorable financing terms to third-party lenders. As of the date of this Transition Report, the Company and HWH are engaged in negotiations aimed at addressing HWH’s concerns. Accordingly, and as a result of these negotiations, the conversion price shown on the table above and other terms of the note are subject to change. In the fiscal year ended April 30, 2020, the Company and the holder of the Company’s convertible note dated April 13, 2018 (the “April 2018 Note”) entered into an amendment to the underlying promissory note. Pursuant to the amendment, the parties extended the maturity date of the note to April 2021. In addition, after giving effect to the amendment, the April 2018 Note is non-interest bearing. All other terms of the April 2018 Note remain unchanged. The Company recognized a gain of $13,972 in connection with this modification of debt. In the fiscal year ended March 31, 2021, and April 30, 2020, interest expense associated with the Company’s convertible notes was $5,507 and $47,360, respectively, excluding amortization of debt discounts and deferred financing fees of $18,647 and $14,151. These amounts are included in interest expense, net, in our consolidated statements of operations. |
Leases
Leases | 11 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | NOTE 11 – LEASES The Company leases space for its corporate headquarters, additional office and warehouse space, automobiles, and office and other equipment, under lease agreements classified as operating leases. The Company’s real estate lease agreements have a remaining term of one year or less, offer the Company customary renewal options, and contain provisions for customary common area maintenance (CAM) assessments by the lessor. The Company’s leases for automobiles, and office and other equipment, have remaining terms of one to two years. See Note 2 – “SIGNIFICANT ACCOUNTING POLICIES – Lease Accounting” for more information. For the fiscal years ended March 31, 2021 and April 30, 2020, rent expense in connection with all our leases was $495,272 and $637,876, respectively. The following information pertains to the Company’s leases as of the balance sheet dates indicated: Assets Classification March 31, 2021 April 30, 2020 Operating leases Right-of-use assets, net $ 428,075 $ 800,381 Total lease assets $ 428,075 $ 800,381 Liabilities Operating leases Accrued and other current liabilities $ 373,398 $ 476,950 Operating leases Lease liability, long-term 77,810 343,948 Total lease liabilities $ 451,208 $ 820,898 For the fiscal years ended March 31, 2021 and April 30, 2020, expense pertaining to the Company’s leases is as follows: Lease cost Classification March 31, 2021 April 30, 2020 Operating lease cost General and administrative expenses $ 495,272 $ 637,876 Operating lease cost Depreciation and amortization - - Operating lease cost Interest expense, net - - Total lease cost $ 495,272 $ 637,876 The Company’s lease liabilities are payable as follows: Twelve months ending March 31, 2022 $ 373,398 2023 77,810 2024-2026 - Thereafter - Total lease liability $ 451,208 |
Income Taxes
Income Taxes | 11 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 12 – INCOME TAXES The Company is an emerging growth company and, prior to its fiscal quarter ended October 31, 2018, had not generated pre-tax earnings. Prior to its fiscal year ended April 30, 2020, the Company had not recognized a provision for (benefit from) income taxes. See Note 2 – “SIGNIFICANT ACCOUNTING POLICIES – Income Taxes” for more information. For the fiscal years ended March 31, 2021, and April 30, 2020, our consolidated provision for (benefit from) income taxes is as follows: March 31, 2021 April 30, 2020 Current: Federal $ (326,121 ) $ 2,020,305 State 268,473 113,714 Total current (57,648 ) 2,134,019 Deferred: Federal (536,861 ) (1,649,018 ) State - Total deferred (536,861 ) (1,649,018 ) Total consolidated income tax provision (benefit) $ (594,509 ) $ 485,001 For the fiscal years ended March 31, 2021 and April 30, 2020, our effective income tax rate reconciliation is as follows: March 31, 2021 April 30, 2020 Federal statutory rate 21.0 % 21.0 % State income taxes and franchise tax (11.6 ) 3.5 % Prior period adjustments 45.6 - Change in valuation allowance for NOL carry-forwards (5.3 ) - Effect of change in uncertain tax positions (49.4 ) - Stock warrant forfeitures and other items 32.2 (9.7 )% Effective income tax rate 32.5 % 14.8 % As of March 31, 2021, and April 30, 2020, our deferred tax asset (liability) is as follows: Deferred tax assets: March 31, 2021 April 30, 2020 Share-based compensation $ 873,970 $ 1,098,622 Accruals and reserves not currently deductible 247,347 550,396 Impairment of investments and inventory 674,112 - Other 77,741 - Total deferred tax assets 1,873,170 1,649,018 Total deferred tax liability - - Total consolidated deferred tax assets, net $ 1,873,170 $ 1,649,018 Deferred tax assets of $1,873,170, as of March 31, 2021, expire at various dates beginning in 2024. During the fiscal year ended March 31, 2021, the Company recognized, in the aggregate, $91,931 in deferred income tax benefits in connection with certain foreign start-up operation. In addition, the Company recognized a valuation allowance of $91,931 in connection with the associated deferred tax assets, since these star-up operations do not yet have a history of earnings and profits. As of March 31, 2021, and April 30, 2020, there were no other valuation allowances required in connection with our deferred tax assets. For the fiscal year ended March 31, 2021, the Company has adopted the comprehensive model for how an entity should recognize, measure, present, and disclose in its financial statements uncertain tax positions that it has taken or expects to take on a tax return, as codified in ASC Topic 740. Accordingly, the Company recognizes in its financial statements the impact of tax positions that meet a “more likely than not” threshold, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position that should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. As of March 31, 2021, the company recorded $570,311 in other current liabilities related to uncertain income tax positions. At March 31, 2021, the Company had unrecognized tax benefits of $570,311 that, if recognized, would impact the Company’s effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows for the years ended March 31, 2021 and April 30, 2020: Fiscal Year Ended March 31, 2021 April 30, 2020 Beginning Balance $ - $ - Additions for tax positions related to the current year - - Additions for tax positions of prior years 570,311 - Reductions of tax positions of prior years - - Settlement - - Ending Balance $ 570,311 $ - The company recognizes interest and/or penalties related to uncertain tax positions in current income tax expense. For the year ended March 31, 2021, the Company had accrued interest and penalties of $334,332 in the consolidated balance sheet, all of which was expensed in the consolidated statement of operations for March 31, 2021. Although it is not reasonably possible to estimate the amount by which unrecognized tax benefits may increase or decrease within the next twelve months due to uncertainties regarding timing of any examinations, the Company is evaluating alternatives that may impact the recognition of uncertain tax positions within the next twelve months. The Company files federal income tax returns in the United States and files income tax returns in various state and foreign jurisdictions. As of March 31, 2021, the Company’s income tax returns for the following tax years remained subject to examination by a major tax jurisdiction: Tax Jurisdiction Open Years United States 2016 - 2020 |
Related Party Transactions
Related Party Transactions | 11 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 13 - RELATED PARTY TRANSACTIONS Alchemist Holdings, LLC In February 2020, the Company, Alchemist Holdings, LLC (“Alchemist”), and a former Company officer entered into a Settlement Accommodation Agreement (the “Accommodation Agreement”) pursuant to which Alchemist and the former Company officer agreed to transfer to the Company 22,683,864 shares of the Company’s Common Stock held by Alchemist, in settlement of certain obligations to the Company. In addition, the Company, Alchemist, and the former Company officer entered into a Securities Escrow Agreement (the “Escrow Agreement”). Under the terms of the Escrow Agreement, the Company acquired control of the 22,683,864 shares of the Company’s Common Stock to be transferred to the Company. In connection with Accommodation Agreement and Escrow Agreement, the Company recognized a deemed dividend in the amount of $2.6 million for the difference between the fair value of the 22,683,864 shares of the Company’s Common Stock on the effective date of such agreements, and the accounts receivable settled. Under the terms of the Accommodation Agreement, Alchemist and the former Company officer also agreed to transfer to the Company 15,625,000 shares of the Company’s Common Stock held by Alchemist, to offset certain legal and other expenses incurred by the Company in connection with various related-party legal claims. Under the terms of the Escrow Agreement, the Company also acquired control of the 15,625,000 shares of the Company’s Common Stock to be transferred to the Company. The Company has recognized a deemed dividend in the amount of $937,500 for the difference between the fair value of the 15,625,000 shares of the Company’s Common Stock and the settlement amount. Pursuant to the underlying agreements, all the shares of the Company’s Common Stock discussed in the preceding paragraph were to be transferred to the Company at a time that the Company, in its sole discretion, would decide. The timing of the Company’s decision was contingent on the resolution of certain disputes between Alchemist and the former Company officer, on one part, and certain other parties, on the other, regarding control and operation of Alchemist. In the fiscal year ended March 31, 2021, after resolution of such disputes, the Company and Alchemist caused the transfer to the Company, in the aggregate, of 38,308,864 shares of the Company’s Common Stock then held by Alchemist, and the Company retired such redeemed shares. In connection with the transfer of control over the shares of stock in February 2020, as discussed in the preceding paragraph, the Company had recognized the acquisition of treasury stock in the amount of $1,532,355, the fair value of the underlying shares of stock at the time control was transferred. In addition, in June 2020, the Company and the former Company officer entered into a Settlement Accommodation Agreement and an Amended and Restated Founder Consulting Agreement pursuant to which the Company and the former officer agreed to settle all existing disputes between them, the former officer agreed to continue to provide certain consulting services to the Company, and the Company agreed to pay certain amounts to the former officer. The Company has recognized a settlement liability of $2.0 million in connection therewith. At March 31, 2021, the settlement liability balance is $1.2 million. Related Party Sublease The Company subleases warehouse and office space from Alchemist. During the fiscal years ended March 31, 2021, and April 30, 2020, rent expense associated with such sublease agreement was $84,918 and $91,980, respectively. Document Security Systems, Inc. In July 2020, the Company and Chan Heng Fai Ambrose, a Director of the Company, entered into a Stock Purchase and Share Subscription Agreement (the “SPA Agreement”) pursuant to which Mr. Chan invested $3.0 million in the Company in exchange for 30.0 million shares of the Company’s Class A Common Stock and a fully vested Stock Warrant to purchase up to 10.0 million shares of the Company’s Class A Common Stock at an exercise price of $0.20 per share. On the stock warrant issuance date, the closing price for the Company’s Common Stock was $0.177 per share and the Company recognized a deemed dividend of $2.4 million. Simultaneously with the SPA Agreement, Mr. Chan and Decentralized Sharing Systems, Inc. (“DSSI”), a subsidiary of Document Security Systems, Inc.(“DSS”), and, together with DSS, a major shareholder of the Company, entered into an Assignment and Assumption Agreement pursuant to which Mr. Chan assigned to DSS all interests in the SPA Agreement. In July 2020, the Company issued 30.0 million shares of its Class A Common Stock to DSS, an “accredited investor” as defined in the Securities Act, pursuant to the SPA Agreement. Under the terms of the SPA Agreement, the shares of Class A Common Stock issued to DSS are subject to a one (1) year restriction. The Stock Warrant issued pursuant to the SPA Agreement expires on the third anniversary from the issuance date, unless exercised earlier. In March 2021, the Company and DSS executed a Binding Letter of Intent pursuant to which DSS agreed to loan to the Company, directly or through its subsidiaries, the aggregate principal amount of $30.0 million, subject to the parties entering into a definitive loan agreement. In connection therewith, on April 5, 2021, the Company and DSSI entered into a Securities Purchase Agreement, pursuant to which the Company issued: (a) a Convertible Promissory Note in the principal amount of $30.0 million (the “Note”) in favor of DSSI, and (b) a detachable Warrant to purchase up to 150,000,000 shares of the Company’s Class A Common Stock, at $0.22 per share, and DSSI loaned to the Company $30.0 million. Under the terms of the loan, the Company agreed to pay to DSSI a loan Origination Fee of $3.0 million, payable in shares of the Company’s Class A Common Stock, at the rate of $0.20 per share. The Note bears interest at the annual rate of 8% and matures on April 5, 2024, subject to certain acceleration provisions upon the occurrence of an Event of Default, as defined in the Note. At any time during the term of the Note, all or part of the Note, including principal, less unamortized prepaid interest, if any, plus any accrued interest and other fees can be converted into shares of the Company’s Class A Common Stock at the rate of $0.20 per share, at the option of the holder. Interest on the Note is pre-payable annually in cash or in shares of the Company’s Class A Common Stock, at the option of the Company, except that interest for the first year is pre-payable in shares of the Company’s Class A Common Stock, at the rate of $0.20 per share. Accordingly, in April 2021, the Company issued to DSSI 27,000,000 shares of its Class A Common Stock, including 15,000,000 shares in payment of the loan Origination Fee discussed above and 12,000,000 shares in prepayment of interest for the first year. As of March 31, 2021, DSS and its affiliates owned 64.2 million shares of the Company’s Class A Common Stock, excluding 160.0 million shares issuable upon the exercise of warrants held by DSS, including the detachable Warrant issued on April 5, 2021, and 150.0 million shares issuable upon conversion of the Note discussed in the preceding paragraph. Shareholder approval will be required to increase the number of shares of the Company’s Common Stock authorized to allow for the potential conversion of 100% of the Note. Under the terms of the SPA Agreement, the Company has agreed to seek such shareholder approval on or before July 30, 2021. Chan Heng Fai Ambrose, Frank D. Heuszel, and John (“JT”) Thatch, each a Director of the Company, also serve on the Board of Directors of DSS. Mr. Thatch also serves as President, CEO and Interim Chairman of the Board of Directors of the Company. HWH International, Inc. In October 2017, the Company issued a Convertible Promissory Note in the principal amount of $50,000 (the “Note”) to HWH International, Inc (“HWH” or the “Holder”). HWH is affiliated with Chan Heng Fai Ambrose, who in April 2020 became a Director of the Company. The Note is convertible into 333,333 shares of the Company’s Common Stock. Concurrent with issuance of the Note, the Company issued to HWH a detachable stock warrant to purchase up to an additional 333,333 shares of the Company’s Common Stock, at an exercise price of $0.15 per share. Under the terms of the Note and the detachable stock warrant, the Holder is entitled to certain financing rights. If the Company enters into more favorable transactions with a third-party investor, it must notify the Holder and may have to amend and restate the Note and the detachable stock warrant to be identical. HWH has informed the Company that it believes that during the term of the Note, the Company has granted more favorable financing terms to third-party lenders. As of the date of this Transition Report, the Company and HWH are engaged in negotiations aimed at addressing HWH’s concerns. HWH World, Inc. A subsidiary of the Company operating in South Korea subleases office space from HWH World, Inc., a company affiliated with Chan Heng Fai Ambrose, a Director of the Company. K Beauty Research Lab. Co., Ltd In January 2021, the Company issued a purchase order to acquire skin care products manufactured by K Beauty Research Lab. Co., Ltd (“K Beauty”), a Korean-based supplier of skin care products that is affiliated with Chan Heng Fai Ambrose, a Director of the Company. In addition, in January 2021 and April 2021, the Company deposited $0.4 million and $2.2 million, respectively, for product to be purchased from K Beauty. The Company’s affiliates operating in Asia intend to distribute skin care and other products in South Korea and other countries, including skin care products procured from K Beauty, as part of the Company’s previously announced strategic growth plans. Bear Bull Market Dividends, Inc. In July 2020, the Company, Bear Bull Market Dividends, Inc. (“BBMD”), a purported shareholder of the Company, Kenyatto Montez Jones (“Jones”), and MLM Mafia, Inc. (“MLM”) entered into a Settlement Accommodation Agreement [Including Stock Disposition And Release Provisions] (the “SAA”) pursuant to which the relevant parties agreed to settle all prior disputes between the Company, on the one part, and BBMD and Jones, on the other, concerning the status of BBMD as a valid shareholder of the Company, and the ownership, operation, management and control of the Company, all of which has been the subject of various pending lawsuits. In addition, the parties agreed to dismiss such pending lawsuits and exchanged customary mutual releases. In August 2020, as provided under the SAA, the Disputed Stock, as defined in the SAA, was converted into 25.0 million shares of the Company’s Class A Common Stock (the “Converted Stock”). In addition, under the terms of the SAA and the related Securities Escrow And Disposition Agreement, in August 2020, MLM purchased from BBMD 20.0 million shares of the Converted Stock at the purchase price of $0.0525 per share (or $1,050,000). Further, as provided under the SAA and the related Securities Escrow And Disposition Agreement, the Company repurchased from MLM 17.5 million shares of the Converted Stock at the repurchase price of $0.0514 per share (or $899,500) in cash, and the Company retired the shares repurchased. After giving effect to these transactions, BBMD remained the holder of 5.0 million shares of the Company’s Class A Common Stock and MLM remained the holder of 2.5 million shares of the Company’s Class A Common Stock. |
Stockholders' Equity - Capital
Stockholders' Equity - Capital Stock | 11 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity - Capital Stock | NOTE 14 - STOCKHOLDERS’ EQUITY – CAPITAL STOCK Preferred Stock The Company’s Board of Directors (the “Board”) has authorized the issuance of up to 200,000,000 shares of Preferred Stock, par value of $0.0001 per share. The Board may divide this authorization into one or more series, each with distinct powers, designations, preferences, and rights. Series A Convertible Preferred Stock The Board has authorized the issuance of up to 100,000,000 shares of Series A Convertible and In the fiscal year ended April 30, 2020, the Company and 212 Technologies, LLC (“212 Technologies”) entered into a Release and Settlement Agreement pursuant to which the parties, among other things rescinded a certain “Stakeholder & Investment Agreement” dated May 21, 2017 and 212 Technologies returned 5,628,750 shares of the Company’s Series A Preferred Stock. In July 2020, the Company retired these shares. During the fiscal year ended March 31, 2021 and April 30, 2020, stockholders converted an aggregate of 21,750,000 shares and 10,400,000 shares, respectively, of the Company’s Series A Preferred Stock into an equal number of shares of the Company’s Common Stock. As of March 31, 2021, 5,100,000 shares of the Company’s Series A Preferred Stock remain outstanding. As disclosed in the notes to our consolidated financial statements for the fiscal year ended April 30, 2020, in the fiscal year 2019, the Company filed suit against Research & Referral BZ and two other parties concerning breach of contract, fraud, and statutory fraud in a stock transaction, violations of state securities laws and alter ego relating to a stock exchange/transfer transaction, involving the Company’s stock. In April 2020, the court issued a Final Default Judgment in favor of the Company finding Research and Referral, BZ liable for the Company’s claims of fraud in the inducement and statutory fraud in a stock transaction. Further, the court ordered that the stock transaction be rescinded, and the Company’s stock be returned to the Company, and the matter has been dismissed with prejudice. The shares of the Company’s Series A Preferred Stock reported in the Company’s financial statements as of March 31, 2021 include 4,900,00 shares purportedly owned by Research & Referral BZ, pending cancellation of the stock certificate when presented by Research & Referral BZ in the future. Series B Convertible Preferred Stock The Board has authorized the issuance of up to 10,000,000 shares of Series B Convertible Series C Convertible Preferred Stock The Board has authorized the issuance of up to 10,000,000 shares of Series C Convertible Preferred Stock (the Series C Preferred Stock”). Shares of our Series C Preferred Stock are junior in rank to the Series A and Series B Preferred Stock. The affirmative vote of the holders of 86% of the issued and outstanding shares of our Series C Preferred Stock is required for the Board: (i) to declare dividends upon shares of our Common Stock unless, with respect to cash dividends, the shares of our Series C Preferred Stock are to receive the same dividend as the common shares, on an as converted basis; (ii) to redeem the shares of Series C Preferred Stock at a redemption price of $0.001 per share; (iii) to authorize or issue additional or other capital stock that is junior or equal in rank to our Series C Preferred Stock with respect to the preferences as to distributions and payments upon the liquidation, dissolution, or winding up of the Company; and (iv) to amend, alter, change, or repeal any of the powers, designations, preferences, and rights of the Series C Preferred Stock. Upon the dissolution, liquidation, or winding up of the Company, whether voluntary or involuntary, the holders of the Series C Preferred Stock are entitled to receive out of the assets of the Company the sum of $0.001 per share before any payment or distribution shall be made on our shares of Common Stock, or any other class of capital stock of the Company ranking junior to the Series C Preferred Stock. For a period of 10 years from the date of issuance, the holders of the Series C Preferred Stock may elect to convert each share of Series C Preferred Stock into one share of the Company’s Common Stock. Each share of our Series C Preferred Stock is entitled to one vote when voting as a class or together with shares of our Common Stock. During the fiscal year ended March 31, 2021 and April 30, 2020, holders of 260,000 shares and 50,000 shares, respectively, of the Company’s Series C Preferred Stock converted their holdings into an equal number of shares of the Company’s Common Stock. Series C Common Stock The Board has authorized the issuance of up to 500,000,000 shares of Class A Common Stock and up to 10,000,000 shares of Class B Common Stock, each with a par value of $0.0001 per share. Holders of our Common Stock are entitled to dividends, subject to the rights of the holders of other classes of capital stock outstanding having priority rights with respect to dividends. At the time of this report, no shares of the Company’s Class B Common Stock remain outstanding. References to our “Common Stock” throughout this report include our Class A Common Stock and Class B Common Stock, unless otherwise indicated or the context otherwise requires. During the fiscal year ended March 31, 2021 During the fiscal year ended March 31, 2021, the holders of 10,000,000 shares of the Company’s Series B Preferred Stock and 10,000,000 shares of the Company’s Class B Common Stock converted their holdings into an aggregate of 20,000,000 shares of the Company’s Class A Common Stock. In addition, during the fiscal year ended March 31, 2021: (a) as discussed above, BBMD, then the purported holder of 20,000,000 shares of the Company’s Series A Preferred Stock, converted such holdings into 20,000,000 shares of the Company’s Class A Common Stock, (b) holders of 1,750,000 shares of the Company’s Series A Preferred Stock converted such holdings into an equal number of shares of the Company’s Class A Common Stock, and (c) holders of 260,000 shares of the Company’s Series C Preferred Stock converted such holdings into an equal number of shares of the Company’s Class A Common Stock. As discussed in Note 13 above, during the fiscal year ended March 31, 2021, the Company repurchased 17,500,000 shares of the Converted Stock for cash and retired such repurchased shares, and the Company and Alchemist caused the transfer to the Company, in the aggregate, of 38,308,864 shares of the Company’s Common Stock, and the Company retired such redeemed shares. During the fiscal year ended April 30, 2020, the Company issued 30,000 shares of its Class A Common Stock for cash in the amount of $7,500 . In addition, in the Company issued Class A Common Stock of the Company’s Series A Preferred Stock, and an equal number of shares of the Company’s Common Stock In the fiscal year ended April 30, 2020, the Company issued 10,000,000 shares of its Class A Common Stock to an officer and director, at an exercise price of $0.0001 per share, upon the exercise of derivative instruments granted in conjunction with an employment agreement disclosed previously. In addition, in the fiscal year ended April 30, 2020, the Company repurchased in private transactions (and retired) 1,500,000 shares of its Class A Common Stock. As of March 31, 2021, and April 30, 2020 |
Stock-Based Compensation
Stock-Based Compensation | 11 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | NOTE 15 – STOCK-BASED COMPENSATION In the fiscal year ended March 31, 2021, and April 30, 2020, the Company awarded compensatory stock warrants to its officers and employees (see Note 2 – “SIGNIFICANT ACCOUNTING POLICIES - Share-Based Payments” for more details). In addition, in the fiscal years 2019 and 2021, the company issued stock warrants to its independent sales force. Further, the Company from time to time, awards stock warrants to its consultants in exchange for services. Stock Warrants Stock Warrants Issued to Directors, Officers and Employees In the fiscal year ended March 31, 2021, and April 30, 2020, the Company issued to Company directors, officers and employees stock warrants to purchase, in the aggregate, up to 29,200,000 shares and 32,000,000 shares, respectively, of its Common Stock. In the fiscal year ended March 31, 2021, and April 30, 2020, the Company recognized expense of $3.6 million and $7.4 million, respectively, in connection with those equity-based awards. Some of these stock warrants are exercisable at a variable exercise price (see Note 2 – “SIGNIFICANT ACCOUNTING POLICIES - Share-Based Payments” for more details) pursuant to the related employment agreements. As discussed in Note 13, in July 2020, the Company and Chan Heng Fai Ambrose, a Director of the Company, entered into a Stock Purchase and Share Subscription Agreement (the “SPA Agreement”) pursuant to which Mr. Chan agreed to invest $3.0 million in the Company in exchange for 30.0 million shares of the Company’s Class A Common Stock and a fully vested Stock Warrant to purchase up to 10.0 million shares of the Company’s Class A Common Stock at an exercise price of $0.20 per share. In July 2020, Mr. Chan assigned to DSS all interests in the SPA Agreement and the transactions contemplated in the SPA Agreement were completed. Mr. Chan is a Director of DSS. In October 2017, the Company issued a convertible note in the principal amount of $50,000 to HWH International, Inc (“HWH”) and a detachable stock warrant to purchase up to 333,333 shares of the Company’s Common Stock, at an exercise price of $0.15 per share. The Note is convertible into 333,333 shares of the Company’s Common Stock and expires in October 2022. HWH is affiliated with Chan Heng Fai Ambrose, who in April 2020 became a Director of the Company. The following table summarizes the activity relating to the Company’s vested and unvested stock warrants held by Directors, Officers and Employees: Number of Weighted Average Exercise Price Weighted Average Remaining Term Outstanding at April 30, 2019 333,333 $0.15 3.5 Granted 32,000,000 0.0001 - Exercised (10,000,000 ) 0.0001 - Expired or forfeited - - - Outstanding at April 30, 2020 22,333,333 $ 0.002 4.2 Granted 39,200,000 0.13 - Exercised (9,000,000 ) 0.0001 - Expired or forfeited (18,125,000 ) 0.0001 - Outstanding at March 31, 2021 34,408,333 $ 0.15 3.5 Less: unvested at March 31, 2021 11,625,000 $ 0.15 3.0 Vested at March 31, 2021 22,783,333 0.15 3.0 Stock Warrants Issued to Our Independent Sales Force In the fiscal year ended March 31, 2021 and April 30, 2020, the Company issued fully vested warrants to purchase up to 4,013,000 shares and 628,800 shares, respectively, of its Common Stock to members of its independent sales force, with a fair value of $1.5 million and $95,445, respectively. The warrants are exercisable for a period ranging from one to two years from the issuance date, at the exercise price ranging from $0.01 per share to $0.25 per share. In the fiscal year ended March 31, 2021, warrants to purchase up to 2,066,600 shares of the Company’s Common Stock under the 2019 Sales-Related Warrants program expired or were otherwise terminated or forfeited. See Note 2 – “SIGNIFICANT ACCOUNTING POLICIES - Sales Commissions” for more details. The following table summarizes the activity relating to the Company’s stock warrants held by members of the Company’s independent sales force: Number of Weighted Average Exercise Price Weighted Average Remaining Term Outstanding at April 30, 2019 3,761,800 $ 0.04 3.6 Granted 628,800 0.25 - Exercised - - - Expired or forfeited - - - Outstanding at April 30, 2020 4,390,600 $ 0.04 2.5 Granted 4,013,000 0.01 - Exercised (2,339,000 ) 0.01 - Expired or forfeited (2,066,600 ) 0.25 - Outstanding at March 31, 2021 3,998,000 $ 0.04 1.4 Stock Warrants Held by Our Consultants From time to time, the Company has granted fully vested warrants to purchase shares of its Common Stock to its consultants in exchange for services. The following table summarizes the activity relating to the Company’s stock warrants held by Company consultants: Number of Weighted Average Exercise Price Weighted Average Remaining Term Outstanding at April 30, 2019 160,000 $ 1.97 3.8 Granted - - - Exercised - - - Expired or forfeited - - - Outstanding at April 30, 2020 160,000 $ 1.97 2.8 Granted - - - Exercised - - - Expired or forfeited (60,000 ) 0.25 - Outstanding at March 31, 2021 100.000 $ 3.00 1.0 The following table summarizes additional information relating to all stock warrants outstanding and warrants exercisable as of March 31, 2021: All Warrants Outstanding All Warrants Exercisable Weighted Weighted Weighted Number of Contractual Exercise Number of Exercise 3,000,000 6.4 $ 0.0001 3,000,000 $ 0.0001 21,075,000 3.7 $ 0.15 9,450,000 $ 0.14 10,000,000 2.3 $ 0.20 10,000,000 $ 0.20 2,180,000 2.2 $ 0.14 2,180,000 $ 0.14 1,674,000 .5 $ 0.01 1,674,000 $ 0.01 333,333 1.5 $ 0.15 333,333 $ 0.15 144,000 0.2 $ 0.25 144,000 $ 0.25 100,000 1.0 $ 3.00 100,000 $ 3.00 38,506,333 26,881,333 |
Commitments and Contingencies
Commitments and Contingencies | 11 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 16 - COMMITMENTS AND CONTINGENCIES Contingencies Acquisition-related Contingencies In the fiscal year ended April 30, 2020, the Company and 212 Technologies, LLC (“212 Technologies”) entered into a Release and Settlement Agreement (the “Settlement Agreement”) pursuant to which, among other things, the parties rescinded a certain “Stakeholder & Investment Agreement” dated May 21, 2017, and 212 Technologies returned to the Company 5,628,750 shares of the Company’s Series A Preferred Stock. In addition, in connection with the Settlement Agreement, the Company paid to 212 Technologies the amount of $425,000 and dismissed with prejudice certain lawsuit it had previously filed, and the parties resolved all issues between their respective companies. The Company recognized a loss of $425,000 in connection with the Settlement Agreement. In October 2017, the Company entered into a Share Exchange Agreement pursuant to which it acquired a 40% interest in 561 LLC in exchange for 5,000,000 shares of its Series A Preferred Stock. Under the terms of the , the sellers Preferred Stock one year has passed from and In October 2017, the Company entered into a Share Exchange Agreement pursuant to which it acquired a 40% interest in America Approved Commercial LLC (“AAC”). Under the terms of the , the sellers one year has passed from and Legal Proceedings – Related-Party Matters and Settlement Liability In the fiscal year ended April 30, 2020, the Company and the relevant subsidiaries; Jordan Brock (“Brock”), a Co-Founder of the Company; Robert Oblon, a Co-Founder of the Company; certain officers and directors of the Company; and certain other corporate parties entered into a Multi-Party Settlement Agreement pursuant to which the foregoing parties agreed to settle all prior disputes among them. In addition, the Company, Alchemist and Brock entered into a Settlement Accommodation Agreement and an amendment to a previous founder’s agreement pursuant to which the Company agreed to pay to Brock the sum of $1.4 million over time, and the Company recognized a settlement liability for that amount. See Note 15 – “Related Party Transactions” above for more information. As of March 31, 2021, and April 30, 2020, the Company has a remaining settlement liability of $1.2 million and $2.6 million in connection with all matters discussed in this paragraph. Legal Proceedings – Other Matters The Company from time to time is involved in various claims and lawsuits incidental to the conduct of its business in the ordinary course. We do not believe that the ultimate resolution of these matters will have a material adverse impact on our consolidated financial position, results of operations or cash flows. (a) Cause No. 429-04618-2020; Kevin Young v. Elepreneurs Holdings, LLC, Elepreneurs U.S., LLC, Elevacity Holdings, LLC, Elevacity U.S., LLC, and Sharing Services Global Corporation f/k/a Sharing Services, Inc. th (b) Case No. 4:20-cv-00946; Dennis Burback, Ken Eddy and Mark Andersen v. Robert Oblon, Jordan Brock, Jeff Bollinger, John Thatch, Four Oceans Global, LLC, Four Oceans Holdings, Inc., Alchemist Holdings, LLC, Elepreneurs U.S., LLC, Elevacity U.S., LLC, Sharing Services Global Corporation, Custom Travel Holdings, Inc., and Does 1-5, (c) Case No. 4:20-cv-961; Crispina Meily v. Sharing Services Global Corporation f/k/a Sharing Services, Inc. (d) AAA Ref. No. 01-20-0019-3907; Sharing Services Global Corporation, Elevacity Holdings, LLC, Elevacity U.S., LLC, Elepreneurs Holdings, LLC and Elepreneurs U.S., LLC v. Robert Oblon, (e) Case No. 4:20-cv-00989; Sharing Services Global Corporation, Elevacity Holdings, LLC, Elevacity U.S., LLC, Elepreneurs Holdings, LLC and Elepreneurs U.S., LLC v. Robert Oblon, (f) Case No. 4:21-cv-00026; Elepreneurs Holdings, LLC d/b/a Elepreneur, LLC, Elepreneurs U.S., LLC d/b/a Elepreneurs, LLC, and SHRG IP Holdings, LLC v. Lori Ann Benson, Andrea Althaus and Lindsey Buboltz, th (g) Case No. 4:21-cv-00183; Sharing Services Global Corporation f/k/a Sharing Services, Inc., Elepreneurs Holdings, LLC n/k/a Elevacity Holdings, LLC, Elepreneurs U.S., LLC n/k/a Elevacity U.S., LLC and SHRG IP Holdings, LLC v. AmplifeiIntl, LLC d/b/a HAPInss and HAPInssBrands, LLC (h) On December 4, 2019, Entrepreneur Media, Inc. filed a Notice of Opposition in response to the “Elepreneurs” trademark application filed by SHRG IP Holdings, LLC, a wholly owned subsidiary of the Company. This opposition proceeding is now pending before the Trademark Trial and Appeal Board of the United States Patent and Trademark Office. On April 13, 2020, SHRG IP Holdings, LLC filed an answer to the Notice of Opposition. A scheduling order has been entered and the parties have exchanged initial disclosures. This matter remains pending as of March 31, 2021. (i) The Company engaged in preliminary discussions with various independent contractor distributors of its subsidiaries regarding a previously reported dispute concerning the issuance of stock warrants based on the satisfaction of certain individual sales production metrics. This matter remains pending as of March 31, 2021. See Note 2 - “SIGNIFICANT ACCOUNTING POLICIES - Sales Commissions” for more information about the stock warrants liability associated with this matter. (j) The Company engaged in preliminary discussions with an independent contractor distributor of its Subsidiary regarding a previously reported dispute concerning an investment in ventures alleged to be related to the Company, and its Subsidiary operations. This matter remains pending as of March 31, 2021. See Note 2 - “SIGNIFICANT ACCOUNTING POLICIES - Sales Commissions” for more information about the stock warrants liability associated with this matter. |
Business Segment and Geographic
Business Segment and Geographic Area Information | 11 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Business Segment and Geographic Area Information | NOTE 17 - BUSINESS SEGMENT AND GEOGRAPHIC AREA INFORMATION Business Segments As of March 31, 2021, the Company, through its subsidiaries, markets and sells its products and services to consumers, through its independent sales force and proprietary websites, and to its independent distributors. During the fiscal year March 31, 2021, and April 30, 2020, approximately 99% and 98%, respectively, of our consolidated net sales are from our health and wellness products. The Company has determined its reportable segments are: (a) the sale of health and wellness products, and (b) the sale of other products and services. The Company’s determination of its reportable segments is based on how its chief operating decision maker manages the business. The Company’s segment information is as follows: Fiscal Year Ended March 31, 2021 April 30, 2020 Net sales Health and wellness products $ 64,046,966 $ 129,024,888 Other 764,185 2,365,018 Total net sales $ 64,811,151 $ 131,389,906 Operating earnings (loss): Segment gross profit: Health and wellness products $ 45,997,828 $ 91,831,033 Other 548,829 1,683,257 Total segment gross profit 46,546,657 93,514,290 Selling and marketing expenses 29,740,974 60,814,242 General and administrative expenses 18, 983,209 23,004,747 Consolidated operating earnings (loss) $ (2,177,526 ) $ 9,695,301 Total Assets: Health and wellness $ 21,829,627 $ 23,347,464 Corporate 442,686 1,229,894 Consolidated total assets $ 22,272,313 $ 24,577,358 Payments for property and equipment: Health and wellness $ 907,891 $ 152,814 Corporate 6,445 8,043 Consolidated payments for property and equipment $ 914,336 $ 160,857 Depreciation and amortization: Health and wellness $ 155,085 $ 122,417 Corporate 8,163 6,443 Consolidated depreciation and amortization $ 163,248 $ 128,860 Geographic Area Information During the fiscal year ended March 31, 2021, and April 30, 2020, 94% and 95%, respectively, of our consolidated net sales are to customers and independent distributors located in the U.S. (based on the customer’s shipping address). The Company expects its sales to customers and independent distributors located outside the U.S. to increase in the near future and plans to provide disclosure about its sales by geographic area. Substantially all the Company’s assets are located in the U.S. |
Subsequent Events
Subsequent Events | 11 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 18 - SUBSEQUENT EVENTS As more fully discussed in Note 13 above, on April 5, 2021, the Company and DSSI entered into a Securities Purchase Agreement (the “SPA Agreement”), pursuant to which the Company issued: (a) a Convertible Promissory Note in the principal amount of $30.0 million (the “Note”) in favor of DSSI, and (b) a detachable Warrant to purchase up to 150,000,000 shares of the Company’s Class A Common Stock, at $0.22 per share. Under the terms of the loan, the Company agreed to pay to DSSI a loan Origination Fee of $3.0 million, payable in shares of the Company’s Class A Common Stock, at the rate of $0.20 per share. Interest on the Note is pre-payable annually in cash or in shares of the Company’s Class A Common Stock, at the option of the Company, except that interest for the first year is pre-payable in shares of the Company’s Class A Common Stock, at the rate of $0.20 per share. Accordingly, in April 2021, the Company issued to DSSI 27,000,000 shares of its Class A Common Stock, including 15,000,000 shares in payment of the loan Origination Fee and 12,000,000 shares in prepayment of interest for the first year. Shareholder approval will be required to increase the number of shares of the Company’s Common Stock authorized to allow for the potential conversion of 100% of the Note. Under the terms of the SPA Agreement, the Company has agreed to seek such shareholder approval on or before July 30, 2021. As more fully discussed in Note 8 above, the Company’s borrowings under the are eligible for loan forgiveness, subject to certain conditions, pursuant to the Coronavirus Aid, Relief, and Economic Security Act of 2020. |
Supplementary Financial Informa
Supplementary Financial Information | 11 Months Ended |
Mar. 31, 2021 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Abstract] | |
Supplementary Financial Information | NOTE 19 – SUPPLEMENTARY FINANCIAL INFORMATION We are a Smaller Reporting Company, as defined in Rule 12b-2 of the Exchange Act, and, accordingly, are not required to provide the supplementary financial information otherwise required by Item 302, as amended. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 11 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of the Company and its consolidated subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Currently, all the Company’s consolidated subsidiaries are wholly owned and have a fiscal year consistent with the Company’s fiscal year. To date, foreign currency fluctuations are not material to the Company’s consolidated financial statements. |
Reclassifications | Reclassifications Certain reclassifications have been made to the prior year data to conform with the current period’s presentation. |
Comprehensive Income | Comprehensive Income For the fiscal periods covered by this Transition Report, the only material component of the Company’s comprehensive income (loss) is the Company’s net earnings (loss). Accordingly, the Company does not present a consolidated statement of comprehensive income. |
Correction of Errors | Correction of Errors In its fiscal quarter ended January 31, 2021, the Company identified two errors in amounts previously reported in its Quarterly Reports on Form 10-Q for the interim periods ended July 31, 2020 and October 31, 2020 concerning the method used to capitalize work-in-progress for projects and errors in its stock-based compensation expense related to employment contracts. Accordingly, the Company made the following corrections to previously reported amounts: Capitalization of Costs for Ongoing Projects and Development of a New Business Brand Stock-based Compensation Expense The impact on our previously reported Net Earnings for the affected periods is: For the Three Months Ended July 31, 2020 For the Three Months Ended October 31, 2020 For the Six Months Ended October 31, 2020 Net Earnings/(Loss) – As Reported $ (1,093,377 ) $ 1,851,356 $ 757,979 Adjustments (net of tax): Capitalized Projects 50,264 306,708 356,972 Warrant Benefit / (Expense) (5,587 ) 80,981 75,394 Total Adjustments 44,677 387,689 432,366 Net Earnings/(Loss) – As Corrected $ (1,048,700 ) $ 2,239,045 $ 1,190,345 The Company has identified the impacted internal controls for both errors and has implemented additional internal controls in order to identify and mitigate in the future. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements in accordance with GAAP requires the use of judgment and requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosures about contingent assets and liabilities, if any. Matters that require the use of estimates and assumptions include, among others: the recoverability of accounts receivable, the valuation of inventory, the useful lives of fixed assets, the assessment of long-lived assets for impairment, the nature and timing of satisfaction of multiple performance obligations resulting from contracts with customers, the allocation of the transaction price to multiple performance obligations in a sales transaction, the measurement and recognition of right-of-use assets and related lease liabilities, the valuation of share-based compensation awards, the provision for income taxes, the measurement and recognition of uncertain tax positions, and the valuation of loss contingencies, if any. Actual results may differ from these estimates in amounts that may be material to our consolidated financial statements. We believe that the estimates and assumptions used in the preparation of our consolidated financial statements are reasonable. |
Cash and Cash Equivalents | Cash and cash equivalents Cash and cash equivalents include cash on hand, demand deposits in banking institutions, and cash equivalents, if any. As of March 31, 2021, and April 30, 2020, cash and cash equivalents also include $6.2 million and $11.1 million, respectively, of deposits with our merchant processors, consisting of proceeds from recent sales transactions, which are unrestricted and are not insured by any federal agency. Cash equivalents, if any, represent highly liquid short-term investments with an original maturity of 90 days or less and are stated at cost, which approximates fair value. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts As of March 31, 2021 and April 30, 2020, accounts receivable consists primarily of amounts due from our merchant processors, including $1.5 million and $4.0 million, respectively, receivable from one merchant processor. We assess the adequacy of our allowance for doubtful accounts, if any, on the basis of our historical collection data and current information. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. |
Inventory and Cost of Goods Sold | Inventory and Cost of Goods Sold Inventory consists of product held for sale in the normal course of our business. Inventory is stated at the lower of cost, determined using the first-in, first-out (“FIFO”) method, or net realizable value. Inventory cost reflects direct product costs and certain shipping and handling costs, such as in-bound freight. When estimating the net realizable value of inventory, we consider several factors including estimates of future demand for the product, historical turn-over rates, the age and sales history of the inventory, and historic and anticipated changes in our product offerings. Physical inventory counts are performed at all facilities at least annually. Upon completion of physical inventory counts, our consolidated financial statements are adjusted to reflect actual quantities on hand. Between physical counts, we estimate inventory shrinkage based on our historical experience. The Company periodically assesses its inventory levels when compared to current and anticipated sales levels. During the fiscal year ended March 31, 2021, the Company recognized a provision for excess (slow-moving) or obsolete inventory of $1.1 million in connection with health and wellness product that is damaged, expired or otherwise in excess of forecasted outputs, based on our current and anticipated sales levels. The Company reports its provisions for inventory losses in cost of goods sold in its consolidated statements of operations. Cost of goods sold includes actual product costs, vendor rebates and allowances, if any, inventory shrinkage and certain shipping and handling costs, such as in-bound freight, associated with product sold. All other shipping and handling costs, including the cost to ship product to customers, are included in selling and marketing expenses in our consolidated statements of operations when incurred. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and reported net of accumulated depreciation. Depreciation expense is recognized over an asset’s estimated useful life using the straight-line method. Leasehold improvements are amortized over the lesser of the estimated useful lives of the assets or the term of the related lease, including lease renewals considered reasonably assured. The estimated useful lives of our property and equipment are as follows: ● Furniture and fixtures – 3 years ● Office equipment – 5 years ● Computer Equipment – 3 years ● Computer software – 3 years ● Leasehold improvements – 3 years The estimated useful lives are periodically reviewed and, when appropriate, changes are made prospectively. The recoverability of long-lived assets is assessed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable, by comparing the net carrying amount of each asset to the total estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its undiscounted future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue net of amounts due to taxing authorities (such as local and state sales tax). Our customers place sales orders online and through our “back-office” operations, which creates a contract and establishes the transaction price. The Company recognizes revenue when (or as) it transfers control of the promised goods and services to the customer. With respect to products sold, our performance obligation is satisfied upon receipt of the products by the customer. With respect to subscription-based revenue, including independent distributor membership fees, our performance obligation is satisfied over time (generally, up to one year). The timing of our revenue recognition may differ from the time when we invoice the customer and/or collect payment. The Company has elected to treat shipping and handling costs as an activity to fulfill its performance obligations, rather than a separate performance obligation. As of March 31, 2021, and April 30, 2020, deferred revenue associated with product invoiced but not received by customers at the balance sheet date was $1.2 million and $2.7 million, deferred revenue associated with unfulfilled performance obligations for services offered on a subscription basis was $153,216 and $433,386, and deferred sales revenue associated with unfulfilled performance obligations for customers’ right of return was $95,780 and $263,117, respectively. Our deferred sales revenue amounts are expected to be recognized over one year. During the fiscal year ended March 31, 2021 and April 30, 2020, no individual customer, or related group of customers, represents 10% or more of our consolidated net sales. During the fiscal year ended March 31, 2021, approximately 71% of our net sales were to customers (including 43% to recurring customers, which we refer to as “SmartShip” sales, and approximately 28% to new customers) and approximately 29% of our net sales were to our independent distributors. During the fiscal year ended April 30, 2020, approximately 73% of our consolidated net sales were to customers (including approximately 47% of our consolidated net sales were to recurring customers, which we refer to as “SmartShip” sales, and approximately 26% were to new customers) and approximately 27% were to our independent distributors. During the fiscal year ended March 31, 2021 and April 30, 2020, approximately 94% and 95%, respectively, of our consolidated net sales are to our customers and independent distributors located in the United States. During the fiscal year ended March 31, 2021, approximately 99% of our consolidated net sales are from our health and wellness products (including approximately 53% from the sale of Nutraceutical products, approximately 17% from the sale of coffee and coffee-related products, and approximately 31% from the sale of all other health and wellness products). During the fiscal year ended April 30, 2020, approximately 98% of our consolidated net sales are from our health and wellness products (including approximately 54% from the sale of Nutraceutical products, approximately 24% from the sales of coffee and coffee-related products, and approximately 22% from the sale of all other health and wellness products). During the fiscal year ended March 31, 2021, our ten top selling products represent approximately 54% of our consolidated net sales. During the fiscal year ended March 31, 2021, and April 30, 2020, product purchases from one supplier accounted for approximately 99% and 98%, respectively, of our total product purchases. |
Sales Commissions | Sales Commissions The Company recognizes sales commission expense when incurred. In the fiscal year ended March 31, 2021, and April 30, 2020, sales commission expense was $29.4 million and $59.0 million, respectively, and is included in selling and marketing expenses in our consolidated statements of operations. In the fiscal year ended March 31, 2021, the Company issued to members of its independent sales force who had been offered stock warrants under the 2019 Sales-Related Warrants program discussed below and met other qualifications (mainly related to remaining active distributors), fully vested warrants to purchase up to 4,013,000 shares its Common Stock with an estimated aggregate fair value of $1.5 million (the “2020 Sales-Related Warrants”). The 2020 Sales-Related Warrants are exercisable for a period of one year from the issuance date at the exercise price of $0.01 per share. At the time of issuance, the rights conferred by the 2020 Sales-Related Warrants were not subject to service conditions and all other conditions necessary to earn the award had been satisfied. The Company deems the fair value of the warrants granted to members of its independent contractor sales force to be an element of sales compensation expense and, as such, includes this expense in selling and marketing expenses in its consolidated statements of operations. The rights conferred by the 2020 Sales-Related Warrants program were contingent on the warrant holder releasing the Company form future obligation under the 2019 Sales-Related Warrants program, including in the case where the warrant holder had not formally accepted the 2019 Sales-Related Warrant. When the warrant holder had not accepted the 2019 Sales-Related Warrant, the Company recognized sales compensation expense ($1.5 million) in connection with stock warrants issued under the 2020 Sales-Related Warrants program to participants of the predecessor plan who accepted the new award. When the warrant holder had accepted the 2019 Sales-Related Warrant, the Company recognized incremental sales compensation expense of $140,911 in connection with unexercised equity-based awards under the 2019 Sales-Related Warrants program that were deemed modified, as defined by GAAP, by the new award. In the fiscal year ended April 30, 2019, the Company had offered to members of its independent sales force who had met certain sales targets, fully vested warrants to purchase up to 11,000,000 shares its Common Stock (the “2019 Sales-Related Warrants”). The warrants are exercisable for a period of two years from the issuance date at the exercise price of $0.25 per share. The rights conferred by the warrants were not subject to service conditions and all other conditions necessary to earn the award have been satisfied. In accordance with GAAP, in the fiscal year ended March 31, 2021, the Company derecognized sales compensation expense of $1.1 million in connection with stock warrants previously offered under the 2019 Sales-Related Warrants program that expired or were terminated or otherwise forfeited. As of March 31, 2021, and April 30, 2020, accrued sales commission payable was $4,713,777 and $7,983,536, respectively, including $0 and $1,290,477, respectively, in estimated sales compensation contingently payable with stock warrants under the 2019 Sales-Related Warrants program. |
Share-Based Payments | Share-Based Payments The Company accounts for stock-based compensation awards to its directors, officers, and employees in accordance with Accounting Standards Codification (“ASC”) Topic 718, Compensation – Stock Compensation As stated above, some stock warrants issued in connection with these multi-year employment agreements are exercisable at a variable exercise price, a price equal to the discounted 10-day average stock price determined at the time of exercise. In general, the Company begins recognizing the compensatory nature of the warrants at the service inception date and ceases recognition at the vesting date. Due to the variable nature of the exercise price for some grants, however, the Company remeasures compensation expense associated with these awards after the service period ends and until the warrant is exercised or expires. As such, the Company’s stock-based compensation expense contains components associated with (i) awards that have a fixed exercise price whose fair value is measured at the grant date and (ii) awards with a variable exercise price whose value is measured at the balance sheet date, including fully vested awards. The Company recognizes the income/expense component associated with the subsequent measure of fully vested awards as non-operating income/expense. The Company accounts for stock-based compensation awards to non-employees, in accordance with ASC 718, as amended. In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-07, Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-based Payment Accounting |
Lease Accounting | Lease Accounting The Company accounts for its lease obligations in accordance with ASC Topic 842, Leases The Company leases space for its corporate headquarters, additional office and warehouse space, automobiles, and office and other equipment, under lease agreements classified as operating leases, under ASC 842. See Note 11 – “LEASES” below for more information about the Company’s lease obligations. |
Foreign Currency | Foreign Currency During the fiscal year ended March 31, 2021, and April 30, 2020, 94% and 95%, respectively, of our consolidated net sales are to customers and independent distributors located in the U.S. (based on the customer’s shipping address). As part of its growth initiatives, the Company is in the process of expanding operations outside the United States. The functional currency of each of our foreign operations is generally the respective local currency. Balance sheet accounts are translated into U.S. dollars (our reporting currency) at the rates of exchange in effect at the balance sheet date, while the results of operations and cash flows are generally translated using average exchange rates for the periods presented. Individually material transactions, if any, are translated using the actual rate of exchange on the transaction date. The resulting translation adjustments, if any, are recorded as a component of accumulated other comprehensive loss in our consolidated balance sheets. |
Income Taxes | Income Taxes The Company uses the asset and liability method in accounting for income taxes. We recognize deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases (“temporary differences”). Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which temporary differences are anticipated to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in measuring results of operations in the period that includes the enactment date. Deferred tax assets are evaluated periodically, and a valuation allowance is recorded to reduce the carrying amounts of deferred tax assets to the amount expected to be realized unless it is more-likely-than-not that the assets will be realized in full. When assessing whether it is more-likely-than-not that the deferred tax assets will be realized, management considers multiple factors, including recent earnings history, expectations of future earnings, available carryforward periods, the availability of tax planning strategies, and other relevant quantitative and qualitative factors. In determining the provision for income taxes, an annual effective income tax rate is used based on annual income, permanent differences between book and tax income, and statutory income tax rates. Accounting for income taxes involves judgment and the use of estimates. The Company recognizes a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in its tax returns, unless the weight of available evidence indicates it is more-likely-than-not that the tax position will be sustained on audit, including resolution through available appeals processes. We measure the tax position as the largest amount which is more-likely-than-not of being realized. The Company considers many factors when evaluating and estimating the Company’s tax positions, which may require periodic adjustments when new facts and circumstances become known. See Note 12 – “Income Taxes” for more information about the Company’s accounting for income taxes. |
Recently Issued Accounting Standards - Adopted | Recently Issued Accounting Standards - Adopted In November 2019, the FASB issued ASU No. 2019-08, Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements – Share-based Consideration Payable to a Customer Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-based Payment Accounting In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Fair Value Measurement |
Recently Issued Accounting Standards - Pending Adoption | Recently Issued Accounting Standards - Pending Adoption In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes |
Description of Operations (Tabl
Description of Operations (Tables) | 11 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Unaudited Pro-forma Information | The information for the eleven (11) months ended March 31, 2020, represents unaudited pro-forma information. 11 Months Ended March 31, 2021 2020 Net sales $ 64,811,151 $ 121,613,476 Gross Profit $ 46,546,657 $ 86,445,680 Income (loss) from continuing operations $ (1,829,530 ) $ 994,102 Earnings (loss) before income taxes $ (1,829,530 ) $ 994,102 Provision for (benefit from) income taxes (594,509 ) 444,058 Net earnings (loss) $ (1,235,021 ) $ 550,044 Basic earnings (loss) per share $ (0.01 ) $ 0.00 Diluted earnings (loss) per share $ (0.01 ) $ 0.00 |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 11 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Previously Reported Net Earnings | The impact on our previously reported Net Earnings for the affected periods is: For the Three Months Ended July 31, 2020 For the Three Months Ended October 31, 2020 For the Six Months Ended October 31, 2020 Net Earnings/(Loss) – As Reported $ (1,093,377 ) $ 1,851,356 $ 757,979 Adjustments (net of tax): Capitalized Projects 50,264 306,708 356,972 Warrant Benefit / (Expense) (5,587 ) 80,981 75,394 Total Adjustments 44,677 387,689 432,366 Net Earnings/(Loss) – As Corrected $ (1,048,700 ) $ 2,239,045 $ 1,190,345 |
Schedule of Estimated Useful Life of Assets | The estimated useful lives of our property and equipment are as follows: ● Furniture and fixtures – 3 years ● Office equipment – 5 years ● Computer Equipment – 3 years ● Computer software – 3 years ● Leasehold improvements – 3 years |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 11 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets and Liabilities | Consistent with the valuation hierarchy contained in ASC 820, we categorized certain of our financial assets and liabilities as follows: March 31, 2021 Total Level 1 Level 2 Level 3 Assets Notes receivable $ 94,600 $ - $ - $ 94,600 Investments in unconsolidated entities - - - - Total assets $ 94,600 $ - $ - $ 94,600 Liabilities Notes Payable $ 1,040,400 $ - $ - $ 1,040,400 Convertible notes payable 134,393 - - 134,393 Total liabilities $ 1,174,793 $ - $ - $ 1,174,793 April 30, 2020 Total Level 1 Level 2 Level 3 Assets Notes receivable $ 118,047 $ - $ - $ 118,047 Investments in unconsolidated entities 20,000 - - 20,000 Total assets $ 138,047 $ - $ - $ 138,047 Liabilities Convertible notes payable $ 115,745 $ - $ - $ 115,745 Notes payable - - - - Total liabilities $ 115,745 $ - $ - $ 115,745 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 11 Months Ended |
Mar. 31, 2021 | |
Earnings (loss) per share: | |
Schedule of Computations of Basic and Diluted Earnings Per Share | The following table sets forth the computations of basic and diluted earnings (loss) per share for the periods indicated: Fiscal Year Ended March 31, 2021 April 30, 2020 Net earnings (loss) $ (1,235,021 ) $ 2,788,605 After-tax interest expense adjustment - 37,414 Net earnings (loss), if-converted basis $ (1,235,021 ) $ 2,826,019 Weighted average basic shares 172,046,517 131,472,281 Dilutive securities: Convertible Preferred Stock - 46,125,389 Convertible notes - 39,993,730 Stock warrants - 22,232,572 Weighted average diluted shares 172,046,517 239,823,972 Earnings (loss) per share: Basic $ (0.01 ) $ 0.02 Diluted $ (0.01 ) $ 0.01 |
Summary of Potentially Dilutive Instruments Outstanding | The following potentially dilutive securities and instruments were outstanding as of March 31, 2021 but excluded from the table above because their impact would be anti-dilutive: Convertible Preferred Stock 20,879,530 Convertible notes payable 10,406,100 Stock warrants 34,128,212 Total potential incremental shares 65,413,842 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 11 Months Ended |
Mar. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | Other current assets consist of the following: March 31, 2021 April 30, 2020 Inventory-related deposits $ 1,845.722 $ - Employee advances 320,631 554,787 Prepaid freight and other expenses 210,665 404,089 Right to recover asset 26,616 76,103 $ 2,403,634 $ 1,034,979 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 11 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment consist of the following: March 31, 2021 April 30, 2020 Computer software $ 734,510 $ 19,156 Furniture and fixtures 230,685 224,239 Computer equipment 165,767 136,337 Leasehold improvements 106,877 106,877 Office equipment 31,652 31,652 Total property and equipment 1,269,491 518,261 Accumulated depreciation and amortization (381,541 ) (219,878 ) Property and equipment, net $ 887,950 $ 298,383 |
Accrued and Other Current Lia_2
Accrued and Other Current Liabilities (Tables) | 11 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Summary of Accrued and Other Current Liabilities | Accrued and other current liabilities consist of the following: March 31, 2021 April 30, 2020 Accrued severance expense $ 700,000 $ - Payroll and employee benefits 523,454 1,199,950 Settlement liability, current portion 376,921 1,652,126 Lease liability, current portion 373,398 476,950 Accrued interest payable 29,848 15,419 Other operational accruals 453,012 425,166 $ 2,473,412 $ 3,769,611 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 11 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes Payable | Convertible notes payable consists of the following: Conversion Price Issuance Date Maturity Date (per share) March 31, 2021 April 30, 2020 October 2017 October 2022 $ 0.15 $ 50,000 $ 50,000 April 2018 April 2021 $ 0.01 100,000 100,000 Total convertible notes payable 150,000 150,000 Less: unamortized debt discount and deferred financing fees 15,607 34,255 134,393 115,745 Less: current portion of convertible notes payable 99,631 90,157 Long-term convertible notes payable $ 34,762 $ 25,588 |
Leases (Tables)
Leases (Tables) | 11 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Schedule of Operating Lease Assets and Liabilities | The following information pertains to the Company’s leases as of the balance sheet dates indicated: Assets Classification March 31, 2021 April 30, 2020 Operating leases Right-of-use assets, net $ 428,075 $ 800,381 Total lease assets $ 428,075 $ 800,381 Liabilities Operating leases Accrued and other current liabilities $ 373,398 $ 476,950 Operating leases Lease liability, long-term 77,810 343,948 Total lease liabilities $ 451,208 $ 820,898 |
Schedule of Operating Lease Costs | For the fiscal years ended March 31, 2021 and April 30, 2020, expense pertaining to the Company’s leases is as follows: Lease cost Classification March 31, 2021 April 30, 2020 Operating lease cost General and administrative expenses $ 495,272 $ 637,876 Operating lease cost Depreciation and amortization - - Operating lease cost Interest expense, net - - Total lease cost $ 495,272 $ 637,876 |
Schedule of Operating Lease Liability Payable | The Company’s lease liabilities are payable as follows: Twelve months ending March 31, 2022 $ 373,398 2023 77,810 2024-2026 - Thereafter - Total lease liability $ 451,208 |
Income Taxes (Tables)
Income Taxes (Tables) | 11 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | For the fiscal years ended March 31, 2021, and April 30, 2020, our consolidated provision for (benefit from) income taxes is as follows: March 31, 2021 April 30, 2020 Current: Federal $ (326,121 ) $ 2,020,305 State 268,473 113,714 Total current (57,648 ) 2,134,019 Deferred: Federal (536,861 ) (1,649,018 ) State - Total deferred (536,861 ) (1,649,018 ) Total consolidated income tax provision (benefit) $ (594,509 ) $ 485,001 |
Schedule of Income Tax Rate Reconciliation Rate | For the fiscal years ended March 31, 2021 and April 30, 2020, our effective income tax rate reconciliation is as follows: March 31, 2021 April 30, 2020 Federal statutory rate 21.0 % 21.0 % State income taxes and franchise tax (11.6 ) 3.5 % Prior period adjustments 45.6 - Change in valuation allowance for NOL carry-forwards (5.3 ) - Effect of change in uncertain tax positions (49.4 ) - Stock warrant forfeitures and other items 32.2 (9.7 )% Effective income tax rate 32.5 % 14.8 % |
Schedule of Deferred Tax Asset Liability | As of March 31, 2021, and April 30, 2020, our deferred tax asset (liability) is as follows: Deferred tax assets: March 31, 2021 April 30, 2020 Share-based compensation $ 873,970 $ 1,098,622 Accruals and reserves not currently deductible 247,347 550,396 Impairment of investments and inventory 674,112 - Other 77,741 - Total deferred tax assets 1,873,170 1,649,018 Total deferred tax liability - - Total consolidated deferred tax assets, net $ 1,873,170 $ 1,649,018 |
Schedule of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows for the years ended March 31, 2021 and April 30, 2020: Fiscal Year Ended March 31, 2021 April 30, 2020 Beginning Balance $ - $ - Additions for tax positions related to the current year - - Additions for tax positions of prior years 570,311 - Reductions of tax positions of prior years - - Settlement - - Ending Balance $ 570,311 $ - |
Summary of Income Tax Returns Subject to Examination | As of March 31, 2021, the Company’s income tax returns for the following tax years remained subject to examination by a major tax jurisdiction: Tax Jurisdiction Open Years United States 2016 - 2020 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 11 Months Ended |
Mar. 31, 2021 | |
Summary of Warrant Outstanding and Exercisable Warrants | The following table summarizes additional information relating to all stock warrants outstanding and warrants exercisable as of March 31, 2021: All Warrants Outstanding All Warrants Exercisable Weighted Weighted Weighted Number of Contractual Exercise Number of Exercise 3,000,000 6.4 $ 0.0001 3,000,000 $ 0.0001 21,075,000 3.7 $ 0.15 9,450,000 $ 0.14 10,000,000 2.3 $ 0.20 10,000,000 $ 0.20 2,180,000 2.2 $ 0.14 2,180,000 $ 0.14 1,674,000 .5 $ 0.01 1,674,000 $ 0.01 333,333 1.5 $ 0.15 333,333 $ 0.15 144,000 0.2 $ 0.25 144,000 $ 0.25 100,000 1.0 $ 3.00 100,000 $ 3.00 38,506,333 26,881,333 |
Directors, Officers and Employees [Member] | |
Schedule of Warrant Activity | The following table summarizes the activity relating to the Company’s vested and unvested stock warrants held by Directors, Officers and Employees: Number of Weighted Average Exercise Price Weighted Average Remaining Term Outstanding at April 30, 2019 333,333 $0.15 3.5 Granted 32,000,000 0.0001 - Exercised (10,000,000 ) 0.0001 - Expired or forfeited - - - Outstanding at April 30, 2020 22,333,333 $ 0.002 4.2 Granted 39,200,000 0.13 - Exercised (9,000,000 ) 0.0001 - Expired or forfeited (18,125,000 ) 0.0001 - Outstanding at March 31, 2021 34,408,333 $ 0.15 3.5 Less: unvested at March 31, 2021 11,625,000 $ 0.15 3.0 Vested at March 31, 2021 22,783,333 0.15 3.0 |
Members of Independent Sales Force [Member] | |
Schedule of Warrant Activity | The following table summarizes the activity relating to the Company’s stock warrants held by members of the Company’s independent sales force: Number of Weighted Average Exercise Price Weighted Average Remaining Term Outstanding at April 30, 2019 3,761,800 $ 0.04 3.6 Granted 628,800 0.25 - Exercised - - - Expired or forfeited - - - Outstanding at April 30, 2020 4,390,600 $ 0.04 2.5 Granted 4,013,000 0.01 - Exercised (2,339,000 ) 0.01 - Expired or forfeited (2,066,600 ) 0.25 - Outstanding at March 31, 2021 3,998,000 $ 0.04 1.4 |
Consultants [Member] | |
Schedule of Warrant Activity | The following table summarizes the activity relating to the Company’s stock warrants held by Company consultants: Number of Weighted Average Exercise Price Weighted Average Remaining Term Outstanding at April 30, 2019 160,000 $ 1.97 3.8 Granted - - - Exercised - - - Expired or forfeited - - - Outstanding at April 30, 2020 160,000 $ 1.97 2.8 Granted - - - Exercised - - - Expired or forfeited (60,000 ) 0.25 - Outstanding at March 31, 2021 100.000 $ 3.00 1.0 |
Business Segment and Geograph_2
Business Segment and Geographic Area Information (Tables) | 11 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The Company’s segment information is as follows: Fiscal Year Ended March 31, 2021 April 30, 2020 Net sales Health and wellness products $ 64,046,966 $ 129,024,888 Other 764,185 2,365,018 Total net sales $ 64,811,151 $ 131,389,906 Operating earnings (loss): Segment gross profit: Health and wellness products $ 45,997,828 $ 91,831,033 Other 548,829 1,683,257 Total segment gross profit 46,546,657 93,514,290 Selling and marketing expenses 29,740,974 60,814,242 General and administrative expenses 18, 983,209 23,004,747 Consolidated operating earnings (loss) $ (2,177,526 ) $ 9,695,301 Total Assets: Health and wellness $ 21,829,627 $ 23,347,464 Corporate 442,686 1,229,894 Consolidated total assets $ 22,272,313 $ 24,577,358 Payments for property and equipment: Health and wellness $ 907,891 $ 152,814 Corporate 6,445 8,043 Consolidated payments for property and equipment $ 914,336 $ 160,857 Depreciation and amortization: Health and wellness $ 155,085 $ 122,417 Corporate 8,163 6,443 Consolidated depreciation and amortization $ 163,248 $ 128,860 |
Description of Operations - Sum
Description of Operations - Summary of Unaudited Pro-forma Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 11 Months Ended | 12 Months Ended | ||
Oct. 31, 2020 | Jul. 31, 2020 | Oct. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Apr. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Net sales | $ 64,811,151 | $ 121,613,476 | $ 131,389,906 | |||
Gross Profit | 46,546,657 | 86,445,680 | 93,514,290 | |||
Income (loss) from continuing operations | (1,829,530) | 994,102 | ||||
Earnings (loss) before income taxes | (1,829,530) | 994,102 | 3,273,606 | |||
Provision for (benefit from) income taxes | (594,509) | 444,058 | 485,001 | |||
Net earnings (loss) | $ 2,239,045 | $ (1,048,700) | $ 1,190,345 | $ (1,235,021) | $ 550,044 | $ 2,788,605 |
Basic earnings (loss) per share | $ (0.01) | $ 0 | $ 0.02 | |||
Diluted earnings (loss) per share | $ (0.01) | $ 0 | $ 0.01 |
Significant Accounting Polici_4
Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 11 Months Ended | 12 Months Ended | |||
Jan. 31, 2021 | Oct. 31, 2020 | Jul. 31, 2020 | Mar. 31, 2021 | Apr. 30, 2020 | Apr. 30, 2019 | |
Stock-based compensation expense | $ 80,981 | $ 5,587 | $ 3,578,707 | $ 6,949,178 | ||
Cash and cash equivalents | 12,144,409 | 11,742,728 | ||||
Provision for obsolete inventory | 1,095,068 | |||||
Deferred sales revenue | 1,200,000 | 2,700,000 | ||||
Sales commission expense | 29,400,000 | 59,000,000 | ||||
Sales commission payable | 4,713,777 | 7,983,536 | ||||
Operating lease, right-of-use asset | 428,075 | 800,381 | ||||
ASC 842 [Member] | ||||||
Operating lease, liability | 1,400,000 | |||||
Operating lease, right-of-use asset | 1,400,000 | |||||
2020 Sales-Related Warrants [Member] | ||||||
Sales commission expense | $ 1,500,000 | |||||
Warrants to purchase | 4,013,000 | |||||
Fair value of warrants | $ 1,500,000 | |||||
Warrants exercise price | $ 0.01 | |||||
2019 Sales-Related Warrants [Member] | ||||||
Sales commission expense | $ 558,629 | 20,216 | ||||
Warrants to purchase | 11,000,000 | |||||
Warrants exercise price | $ 0.25 | |||||
Incremental sales compensation expense | 140,911 | |||||
Derecognized sales compensation expense | $ 1,100,000 | |||||
Sales commission payable | $ 0 | $ 1,290,477 | ||||
Sales Revenue, Net [Member] | ||||||
Concentration risk, percentage | 99.00% | 98.00% | ||||
Sales Revenue, Net [Member] | Nutraceutical Products [Member] | ||||||
Concentration risk, percentage | 53.00% | 54.00% | ||||
Sales Revenue, Net [Member] | Coffee and Coffee Related Products [Member] | ||||||
Concentration risk, percentage | 17.00% | 24.00% | ||||
Sales Revenue, Net [Member] | Other Health and Wellness Products [Member] | ||||||
Concentration risk, percentage | 31.00% | 22.00% | ||||
Sales Revenue, Net [Member] | Top 10 Selling Products [Member] | ||||||
Concentration risk, percentage | 54.00% | |||||
Sales Revenue, Net [Member] | United States [Member] | ||||||
Concentration risk, percentage | 94.00% | 95.00% | ||||
Sales Revenue, Net [Member] | No Individual Customer [Member] | ||||||
Concentration risk, percentage | 10.00% | 10.00% | ||||
Sales Revenue, Net [Member] | Customers [Member] | ||||||
Concentration risk, percentage | 71.00% | 73.00% | ||||
Sales Revenue, Net [Member] | Recurring Customers [Member] | ||||||
Concentration risk, percentage | 43.00% | 47.00% | ||||
Sales Revenue, Net [Member] | New Customer [Member] | ||||||
Concentration risk, percentage | 28.00% | 26.00% | ||||
Sales Revenue, Net [Member] | Independent Distributors [Member] | ||||||
Concentration risk, percentage | 29.00% | 27.00% | ||||
Sales Revenue, Net [Member] | Customer and/or Independent Distributors [Member] | United States [Member] | ||||||
Concentration risk, percentage | 94.00% | 95.00% | ||||
Sales Revenue, Net [Member] | Elevate Product Line [Member] | ||||||
Concentration risk, percentage | 99.00% | 98.00% | ||||
Purchases [Member] | One Supplier [Member] | ||||||
Concentration risk, percentage | 99.00% | 98.00% | ||||
Services Offered on Subscription Basis [Member] | ||||||
Deferred sales revenue | $ 153,216 | $ 433,386 | ||||
Customers Right of Return [Member] | ||||||
Deferred sales revenue | 95,780 | 263,117 | ||||
Merchant Processors [Member] | ||||||
Cash and cash equivalents | $ 6,200,000 | 11,100,000 | ||||
Accounts receivable, related parties | 1,500,000 | $ 4,000,000 | ||||
The Happy Co [Member] | ||||||
Capitalized costs | $ 816,116 | $ 469,219 | $ 58,038 | $ 715,354 |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule of Previously Reported Net Earnings (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 11 Months Ended | 12 Months Ended | ||
Oct. 31, 2020 | Jul. 31, 2020 | Oct. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Apr. 30, 2020 | |
Net Earnings/(Loss) - As Reported | $ 2,239,045 | $ (1,048,700) | $ 1,190,345 | $ (1,235,021) | $ 550,044 | $ 2,788,605 |
Capitalized Projects | 306,708 | 50,264 | 356,972 | |||
Warrant Benefit / (Expense) | 80,981 | (5,587) | 75,394 | |||
Total Adjustments | 387,689 | 44,677 | 432,366 | |||
As Reported [Member] | ||||||
Net Earnings/(Loss) - As Reported | $ 1,851,356 | $ (1,093,377) | $ 757,979 |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Estimated Useful Life of Assets (Details) | 11 Months Ended |
Mar. 31, 2021 | |
Furniture and Fixtures [Member] | |
Estimated useful lives of property and equipment | 3 years |
Office Equipment [Member] | |
Estimated useful lives of property and equipment | 5 years |
Computer Equipment [Member] | |
Estimated useful lives of property and equipment | 3 years |
Computer Software [Member] | |
Estimated useful lives of property and equipment | 3 years |
Leasehold Improvements [Member] | |
Estimated useful lives of property and equipment | 3 years |
Fair Value Measurements (Detail
Fair Value Measurements (Details Narrative) - Convertible Notes [Member] - USD ($) | Mar. 31, 2021 | Apr. 30, 2020 |
Amortized cost | $ 150,000 | $ 150,000 |
Unamortized debt discount | $ 15,607 | $ 34,255 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets and Liabilities (Details) - USD ($) | Mar. 31, 2021 | Apr. 30, 2020 |
Notes receivable | $ 94,600 | $ 118,047 |
Investments in unconsolidated entities | 20,000 | |
Total assets | 94,600 | 138,047 |
Notes Payable | 1,040,400 | |
Convertible notes payable | 134,393 | 115,745 |
Total liabilities | 1,174,793 | 115,745 |
Level 1 [Member] | ||
Notes receivable | ||
Investments in unconsolidated entities | ||
Total assets | ||
Notes Payable | ||
Convertible notes payable | ||
Total liabilities | ||
Level 2 [Member] | ||
Notes receivable | ||
Investments in unconsolidated entities | ||
Total assets | ||
Notes Payable | ||
Convertible notes payable | ||
Total liabilities | ||
Level 3 [Member] | ||
Notes receivable | 94,600 | 118,047 |
Investments in unconsolidated entities | 20,000 | |
Total assets | 94,600 | 138,047 |
Notes Payable | 1,040,400 | |
Convertible notes payable | 134,393 | 115,745 |
Total liabilities | $ 1,174,793 | $ 115,745 |
Earnings (Loss) Per Share - Sch
Earnings (Loss) Per Share - Schedule of Computations of Basic and Diluted Earnings Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 11 Months Ended | 12 Months Ended | ||
Oct. 31, 2020 | Jul. 31, 2020 | Oct. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Apr. 30, 2020 | |
Net earnings (loss) | $ 2,239,045 | $ (1,048,700) | $ 1,190,345 | $ (1,235,021) | $ 550,044 | $ 2,788,605 |
After-tax interest expense adjustment | 37,414 | |||||
Net earnings (loss), if-converted basis | $ (1,235,021) | $ 2,826,019 | ||||
Weighted average basic shares | 172,046,517 | 131,472,281 | ||||
Weighted average diluted shares | 172,046,517 | 239,823,972 | ||||
Earnings per (loss) share: Basic | $ (0.01) | $ 0 | $ 0.02 | |||
Earnings per (loss) share: Diluted | $ (0.01) | $ 0 | $ 0.01 | |||
Convertible Preferred Stock [Member] | ||||||
Weighted average diluted shares | 46,125,389 | |||||
Convertible Notes [Member] | ||||||
Weighted average diluted shares | 39,993,730 | |||||
Stock Warrants [Member] | ||||||
Weighted average diluted shares | 22,232,572 |
Earnings (Loss) Per Share - Sum
Earnings (Loss) Per Share - Summary of Potentially Dilutive Instruments Outstanding (Details) | 11 Months Ended |
Mar. 31, 2021shares | |
Total potential incremental shares | 65,413,842 |
Convertible Preferred Stock [Member] | |
Total potential incremental shares | 20,879,530 |
Convertible Notes Payable [Member] | |
Total potential incremental shares | 10,406,100 |
Stock Warrants [Member] | |
Total potential incremental shares | 34,128,212 |
Notes Receivable (Details Narra
Notes Receivable (Details Narrative) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2021 | Mar. 31, 2021 | Apr. 30, 2020 | Apr. 30, 2019 | |
Notes receivable current | $ 94,600 | $ 118,047 | ||
Impairment loss on loan | 114,599 | 46,404 | ||
Promissory Note One [Member] | ||||
Principal of notes receivable | 0 | 58,047 | ||
Promissory Note Two [Member] | ||||
Impairment loss on loan | 20,000 | 46,404 | ||
Principal of notes receivable | 0 | 60,000 | ||
Merchant Processors [Member] | ||||
Proceeds from notes receivable | $ 58,047 | $ 106,404 | ||
1044PRO, LLC [Member] | ||||
Line of credit amount | $ 250,000 | |||
Payments made for notes receivable | $ 204,879 | |||
Notes receivable current | 94,600 | |||
Impairment loss on loan | $ 94,599 | |||
Rate of interest on notes receivable | 10.00% |
Other Current Assets (Details N
Other Current Assets (Details Narrative) - USD ($) | Mar. 31, 2021 | Apr. 30, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Due from employees | $ 320,631 | $ 554,630 |
Other Current Assets - Schedule
Other Current Assets - Schedule of Other Current Assets (Details) - USD ($) | Mar. 31, 2021 | Apr. 30, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Inventory-related deposits | $ 1,845,722 | |
Employee advances | 320,631 | 554,787 |
Prepaid freight and other expenses | 210,665 | 404,089 |
Right to recover asset | 26,616 | 76,103 |
Other current assets | $ 2,403,634 | $ 1,034,979 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 11 Months Ended | 12 Months Ended | ||
Jan. 31, 2021 | Oct. 31, 2020 | Jul. 31, 2020 | Mar. 31, 2021 | Apr. 30, 2020 | |
Depreciation and amortization expense | $ 163,248 | $ 714,350 | |||
Leasehold Improvements [Member] | |||||
Capitalized costs | 163,106 | ||||
The Happy Co [Member] | |||||
Capitalized costs | $ 816,116 | $ 469,219 | $ 58,038 | $ 715,354 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) | Mar. 31, 2021 | Apr. 30, 2020 |
Property, Plant and Equipment [Abstract] | ||
Computer software | $ 734,510 | $ 19,156 |
Furniture and fixtures | 230,685 | 224,239 |
Computer equipment | 165,767 | 136,337 |
Leasehold improvements | 106,877 | 106,877 |
Office equipment | 31,652 | 31,652 |
Total property and equipment | 1,269,491 | 518,261 |
Accumulated depreciation and amortization | (381,541) | (219,878) |
Property and equipment, net | $ 887,950 | $ 298,383 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 1 Months Ended | |
May 31, 2020 | Mar. 31, 2021 | |
Note payable principal amount | $ 1,040,400 | |
Accrued unpaid interest | $ 8,922 | |
Commercial Bank [Member] | PPP Loan [Member] | ||
Proceeds from loan | $ 1,040,400 | |
Debt instrument, maturity date | May 13, 2022 | |
Debt instrument, interest rate | 1.00% |
Accrued and Other Current Lia_3
Accrued and Other Current Liabilities - Summary of Accrued and Other Current Liabilities (Details) - USD ($) | Mar. 31, 2021 | Apr. 30, 2020 |
Payables and Accruals [Abstract] | ||
Accrued severance expense | $ 700,000 | |
Payroll and employee benefits | 523,454 | 1,199,950 |
Settlement liability, current portion | 376,921 | 1,652,126 |
Lease liability, current portion | 373,398 | 476,950 |
Accrued interest payable | 29,848 | 15,419 |
Other operational accruals | 453,012 | 425,166 |
Accrued and other current liabilities | $ 2,473,412 | $ 3,769,611 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Oct. 31, 2017 | Mar. 31, 2021 | Apr. 30, 2020 | |
Interest expense | $ 47,613 | $ 430,854 | ||
Amortization of debt discount | 18,647 | 393,927 | ||
HWH International, Inc [Member] | ||||
Principal amount | $ 50,000 | |||
Warrant exercise price | $ 0.15 | |||
Maturity date description | Expires in October 2022 | |||
Convertible Notes [Member] | ||||
Convertible notes, annual interest rate | 12.00% | |||
Interest expense | 5,507 | 47,360 | ||
Amortization of debt discount | $ 18,647 | 14,151 | ||
Convertible Notes [Member] | HWH International, Inc [Member] | ||||
Principal amount | $ 50,000 | |||
Debt conversion shares | 333,333 | |||
Number of warrant to purchase shares | 333,333 | |||
Warrant exercise price | $ 0.15 | |||
April 2018 Note [Member] | ||||
Maturity date description | Extended the maturity date of the note to April 2021. | |||
Modification of debt | $ 13,972 |
Convertible Notes Payable - Sch
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) - USD ($) | 11 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Apr. 30, 2020 | |
Total convertible notes payable | $ 150,000 | $ 150,000 |
Less: unamortized debt discount and deferred financing fees | 15,607 | 34,255 |
Convertible notes payable, net | 134,393 | 115,745 |
Less: current portion of convertible notes payable | 99,631 | 90,157 |
Long-term convertible notes payable | $ 34,762 | $ 25,588 |
Maturity One [Member] | ||
Issuance Date | October 2017 | October 2017 |
Maturity Date | October 2022 | October 2022 |
Conversion Price (per share) | $ 0.15 | $ 0.15 |
Total convertible notes payable | $ 50,000 | $ 50,000 |
Maturity Two [Member] | ||
Issuance Date | April 2018 | April 2018 |
Maturity Date | April 2021 | April 2021 |
Conversion Price (per share) | $ 0.01 | $ 0.01 |
Total convertible notes payable | $ 100,000 | $ 100,000 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 11 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Apr. 30, 2020 | |
Lease term | 1 year | |
Rent expenses | $ 495,272 | $ 637,876 |
Automobiles, Office and Other Equipment [Member] | Minimum [Member] | ||
Lease remaining term | 1 year | |
Automobiles, Office and Other Equipment [Member] | Maximum [Member] | ||
Lease remaining term | 2 years |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Assets and Liabilities (Details) - USD ($) | Mar. 31, 2021 | Apr. 30, 2020 |
Operating leases, Right-of-use assets, net | $ 428,075 | $ 800,381 |
Operating leases, Lease liability, long-term | 77,810 | 343,948 |
Lease Liability [Member] | ||
Operating leases, Right-of-use assets, net | 428,075 | 800,381 |
Total leased assets | 428,075 | 800,381 |
Operating leases, Accrued and other current liabilities | 373,398 | 476,950 |
Operating leases, Lease liability, long-term | 77,810 | 343,948 |
Total lease liability | $ 451,208 | $ 820,898 |
Leases - Schedule of Operatin_2
Leases - Schedule of Operating Lease Costs (Details) - USD ($) | 11 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Apr. 30, 2020 | |
Total lease cost | $ 495,272 | $ 637,876 |
General and Administrative Expenses [Member] | ||
Total lease cost | 495,272 | 637,876 |
Depreciation and Amortization [Member] | ||
Total lease cost | ||
Interest Expense, Net [Member] | ||
Total lease cost |
Leases - Schedule of Operatin_3
Leases - Schedule of Operating Lease Liability Payable (Details) | Mar. 31, 2021USD ($) |
Leases [Abstract] | |
2022 | $ 373,398 |
2023 | 77,810 |
2024-2026 | |
Thereafter | |
Total lease liability | $ 451,208 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 11 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Apr. 30, 2020 | Apr. 30, 2019 | |
Deferred tax assets | $ 1,873,170 | ||
Income tax expiration date description | Expire at various dates beginning in 2024 | ||
Deferred income tax provision | $ (536,862) | $ (1,649,018) | |
Deferred tax asset valuation allowances | |||
Other current liabilities | 570,311 | ||
Unrecognized tax benefits | 570,311 | ||
Accrued interest and penalties | 334,332 | ||
Foreign Start-Up Operation [Member] | |||
Deferred income tax provision | 91,931 | ||
Deferred tax asset valuation allowances | $ 91,931 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) | 11 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Apr. 30, 2020 | |
Income Tax Disclosure [Abstract] | |||
Current, Federal | $ (326,121) | $ 2,020,305 | |
Current, State | 268,473 | 113,714 | |
Total current | (57,648) | 2,134,019 | |
Deferred, Federal | (536,861) | (1,649,018) | |
Deferred, State | |||
Total deferred | (536,862) | (1,649,018) | |
Total consolidated income tax provision (benefit) | $ (594,509) | $ 444,058 | $ 485,001 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income tax Rate Reconciliation Rate (Details) | 11 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Apr. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 21.00% | 21.00% |
State income taxes and franchise tax | (11.60%) | 3.50% |
Prior period adjustments | 45.60% | 0.00% |
Change in valuation allowance for NOL carry-forwards | (5.30%) | 0.00% |
Effect of change in uncertain tax positions | (49.40%) | 0.00% |
Stock warrant forfeitures and other items | 32.20% | (9.70%) |
Effective income tax rate | 32.50% | 14.80% |
Income Taxes - Schedule of Def
Income Taxes - Schedule of Deferred Tax Asset Liability (Details) - USD ($) | Mar. 31, 2021 | Apr. 30, 2020 |
Income Tax Disclosure [Abstract] | ||
Share-based compensation | $ 873,970 | $ 1,098,622 |
Accruals and reserves not currently deductible | 247,347 | 550,396 |
Impairment of investments and inventory | 674,112 | |
Other | 77,741 | |
Total deferred tax assets | 1,873,170 | 1,649,018 |
Total deferred tax liability | ||
Total consolidated deferred tax assets, net | $ 1,873,170 | $ 1,649,018 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) | 11 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Apr. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||
Beginning Balance | ||
Additions for tax positions related to the current year | ||
Additions for tax positions of prior years | 570,311 | |
Reductions of tax positions of prior years | ||
Settlement | ||
Ending Balance | $ 570,311 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Returns Subject to Examination (Details) | 11 Months Ended |
Mar. 31, 2021 | |
United States [Member] | |
Open Years | 2016 2020 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Apr. 05, 2021 | Apr. 30, 2021 | Aug. 31, 2020 | Jul. 31, 2020 | Feb. 29, 2020 | Oct. 31, 2017 | Mar. 31, 2021 | Apr. 30, 2020 | Jan. 31, 2021 | Jun. 30, 2020 |
Number of shares issued | 15,625,000 | |||||||||
Deemed dividend | $ 937,500 | |||||||||
Settlement liability | $ 376,921 | $ 1,652,126 | ||||||||
Rent expenses | 495,272 | 637,876 | ||||||||
Number of shares issued values | $ 3,000,000 | |||||||||
Number of shares purchased, amount | $ 28,000 | |||||||||
Decentralized Sharing Systems, Inc [Member] | Subsequent Event [Member] | ||||||||||
Debt instrument, face amount | $ 30,000,000 | |||||||||
HWH International, Inc [Member] | ||||||||||
Warrants to purchase common stock | 333,333 | |||||||||
Exercise price of warrants | $ 0.15 | |||||||||
Debt instrument, face amount | $ 50,000 | |||||||||
Conversion of common stock shares converted | 333,333 | |||||||||
K Beauty Research Lab. Co., Ltd [Member] | ||||||||||
Deposits | $ 2,200,000 | $ 400,000 | ||||||||
Bear Bull Market Dividends, Inc. [Member] | ||||||||||
Conversion of common stock shares converted | 20,000,000 | |||||||||
Conversion purchase price per share | $ 0.0525 | |||||||||
Conversion of shares, amount | $ 1,050,000 | |||||||||
MLM Mafia, Inc [Member] | ||||||||||
Conversion purchase price per share | $ 0.0514 | |||||||||
Number of shares purchased | 17,500,000 | |||||||||
Number of shares purchased, amount | $ 899,500 | |||||||||
Class A Common Stock [Member] | ||||||||||
Number of shares issued | 30,000,000 | |||||||||
Class A Common Stock [Member] | Maximum [Member] | ||||||||||
Common stock, par value | $ 0.0001 | |||||||||
Class A Common Stock [Member] | Subsequent Event [Member] | ||||||||||
Common stock, par value | $ 0.20 | |||||||||
Class A Common Stock [Member] | Decentralized Sharing Systems, Inc [Member] | ||||||||||
Number of shares issued values | $ 64,200,000 | |||||||||
Exercise of warrants | 160,000,000 | |||||||||
Warrants maturity date | Apr. 5, 2021 | |||||||||
Conversion of common stock shares converted | 150,000,000 | |||||||||
Common stock percentage | 100.00% | |||||||||
Class A Common Stock [Member] | Decentralized Sharing Systems, Inc [Member] | Subsequent Event [Member] | ||||||||||
Number of shares issued | 27,000,000 | |||||||||
Loan noncurrent | $ 3,000,000 | |||||||||
Common stock, par value | $ 0.20 | |||||||||
Debt interest rate | 8.00% | |||||||||
Debt maturity date | Apr. 5, 2024 | |||||||||
Payment of loan origination fee shares | 15,000,000 | |||||||||
Prepayment of interest shares | 12,000,000 | |||||||||
Class A Common Stock [Member] | Bear Bull Market Dividends, Inc. [Member] | ||||||||||
Number of shares issued | 20,000,000 | |||||||||
Class A Common Stock [Member] | ||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||||||||
Class A Common Stock [Member] | Bear Bull Market Dividends, Inc. [Member] | ||||||||||
Remaining shares of converted shares | 5,000,000 | |||||||||
Class A Common Stock [Member] | Bear Bull Market Dividends, Inc. [Member] | Stock Disposition and Release Provisions [Member] | ||||||||||
Conversion of common stock shares converted | 25,000,000 | |||||||||
Class A Common Stock [Member] | MLM Mafia, Inc [Member] | ||||||||||
Remaining shares of converted shares | 2,500,000 | |||||||||
Escrow Agreement [Member] | ||||||||||
Number of shares issued | 22,683,864 | |||||||||
Accommodation Agreement and Escrow Agreement [Member] | ||||||||||
Number of shares issued | 22,683,864 | |||||||||
Settlement Accomodation Agreement and an Amended and Restated Founder Consulting Agreement [Member] | Officers [Member] | ||||||||||
Settlement liability | $ 1,200,000 | $ 2,000,000 | ||||||||
Sublease Agreement [Member] | ||||||||||
Rent expenses | 84,918 | $ 91,980 | ||||||||
Stock Purchase and Share Subscription Agreement [Member] | Decentralized Sharing Systems, Inc [Member] | Subsequent Event [Member] | ||||||||||
Debt instrument, face amount | $ 30,000,000 | |||||||||
Stock Purchase and Share Subscription Agreement [Member] | Class A Common Stock [Member] | ||||||||||
Number of shares issued | 30,000,000 | |||||||||
Stock Purchase and Share Subscription Agreement [Member] | Class A Common Stock [Member] | Decentralized Sharing Systems, Inc [Member] | Subsequent Event [Member] | ||||||||||
Exercise price of warrants | $ 0.22 | |||||||||
Loan noncurrent | $ 30,000,000 | |||||||||
Stock Purchase and Share Subscription Agreement [Member] | Class A Common Stock [Member] | Decentralized Sharing Systems, Inc [Member] | Subsequent Event [Member] | Maximum [Member] | ||||||||||
Warrants to purchase common stock | 150,000,000 | |||||||||
Stock Purchase and Share Subscription Agreement [Member] | Mr. Chan [Member] | ||||||||||
Investment amount | $ 3,000,000 | |||||||||
Stock Purchase and Share Subscription Agreement [Member] | Mr. Chan [Member] | Decentralized Sharing Systems, Inc [Member] | ||||||||||
Debt instrument, face amount | $ 30,000,000 | |||||||||
Stock Purchase and Share Subscription Agreement [Member] | Mr. Chan [Member] | Class A Common Stock [Member] | ||||||||||
Deemed dividend | $ 2,400,000 | |||||||||
Number of common stock exchanged | 30,000,000 | |||||||||
Warrants to purchase common stock | 10,000,000 | |||||||||
Exercise price of warrants | $ 0.20 | |||||||||
Share price per share | $ 0.177 | |||||||||
Alchemist Holding, LLC [Member] | ||||||||||
Number of shares issued | 22,683,864 | 38,308,864 | ||||||||
Deemed dividend | $ 2,600,000 | |||||||||
Acquisition of treasury stock | $ 1,532,355 | |||||||||
Alchemist Holding, LLC [Member] | Related-Party Legal Claims [Member] | ||||||||||
Number of shares issued | 15,625,000 | |||||||||
Alchemist Holding, LLC [Member] | Escrow Agreement [Member] | ||||||||||
Number of shares issued | 15,625,000 |
Stockholders' Equity - Capita_2
Stockholders' Equity - Capital Stock (Details Narrative) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Aug. 31, 2020 | Feb. 29, 2020 | Mar. 31, 2021 | Apr. 30, 2020 | |
Preferred stock, shares authorized | 200,000,000 | 200,000,000 | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||
Number of shares issued | 15,625,000 | ||||
Number of shares issued, value | $ 3,000,000 | ||||
Number of shares issued for services, value | $ 55,285 | ||||
Holder [Member] | Convertible Promissory Notes [Member] | |||||
Number of shares converted | 2,800,000 | ||||
Number of shares converted, value | $ 28,000 | ||||
Series A Convertible Preferred Stock [Member] | |||||
Preferred stock, shares authorized | 100,000,000 | 100,000,000 | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||
Preferred stock, voting rights percentage | 86.00% | ||||
Preferred stock, redemption price per share | $ 0.001 | ||||
Number of shares converted | 21,750,000 | 10,400,000 | |||
Preferred stock, shares outstanding | 5,100,000 | 32,478,750 | |||
Series A Preferred Stock [Member] | |||||
Number of shares issued, value | |||||
Number of shares issued for services, value | |||||
Series A Preferred Stock [Member] | Holder [Member] | |||||
Number of shares issued | 10,400,000 | ||||
Series A Preferred Stock [Member] | Research & Referral BZ [Member] | |||||
Number of cancelled shares | 490,000 | ||||
Series A Preferred Stock [Member] | Bear Bull Market Dividends, Inc. [Member] | |||||
Number of shares converted | 1,750,000 | ||||
Number of shares issued | 20,000,000 | ||||
Series A Preferred Stock [Member] | Stakeholder and Investment Agreement [Member] | 212 Technologies [Member] | |||||
Number of shares issued during period, shares | 5,628,750 | ||||
Series B Convertible Preferred Stock [Member] | |||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||
Preferred stock, shares outstanding | 0 | 10,000,000 | |||
Series B Preferred Stock [Member] | |||||
Number of shares issued | 10,000,000 | ||||
Number of shares issued, value | |||||
Number of shares issued for services, value | |||||
Series B Preferred Stock [Member] | Bear Bull Market Dividends, Inc. [Member] | |||||
Number of shares converted | 7,500,000 | 2,500,000 | |||
Class A Common Stock [Member] | |||||
Number of shares converted | 20,000,000 | ||||
Number of shares issued | 30,000,000 | ||||
Number of shares repurchased and retired | 1,500,000 | ||||
Common stock, shares issued | 160,100,769 | 160,100,769 | |||
Common stock, shares outstanding | 126,072,386 | 126,072,386 | |||
Class A Common Stock [Member] | Officers and Directors [Member] | |||||
Number of shares issued | 10,000,000 | ||||
Stock price | $ 0.0001 | ||||
Class A Common Stock [Member] | Bear Bull Market Dividends, Inc. [Member] | |||||
Number of shares converted | 7,500,000 | 2,500,000 | |||
Number of shares issued | 20,000,000 | ||||
Class A Common Stock [Member] | Decentralized Sharing Systems, Inc [Member] | |||||
Number of shares issued, value | $ 64,200,000 | ||||
Cash | $ 3,000,000 | ||||
Class A Common Stock [Member] | Multi-Party Settlement Agreement [Member] | Robert Oblon [Member] | |||||
Number of shares issued | 10,000,000 | ||||
Class A Common Stock [Member] | Multi-Party Settlement Agreement [Member] | Employees [Member] | |||||
Number of shares issued | 5,488,247 | ||||
Class A Common Stock [Member] | Multi-Party Settlement Agreement [Member] | Independent Distributors [Member] | |||||
Number of shares issued | 2,339,000 | ||||
Class A Common Stock [Member] | Subscription Agreement [Member] | |||||
Number of shares issued | 30,000 | ||||
Number of shares issued, value | $ 7,500 | ||||
Number of shares issued for services | 215,325 | ||||
Number of shares issued for services, value | $ 57,000 | ||||
Series C Convertible Preferred Stock [Member] | |||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||
Preferred stock, voting rights percentage | 86.00% | ||||
Preferred stock, redemption price per share | $ 0.001 | ||||
Preferred stock, shares outstanding | 3,230,000 | 3,490,000 | |||
Series C Preferred Stock [Member] | |||||
Number of shares converted | 260,000 | 50,000 | |||
Preferred stock, shares outstanding | 3,230,000 | ||||
Number of shares issued, value | |||||
Number of shares issued for services, value | |||||
Series C Preferred Stock [Member] | Holder [Member] | |||||
Number of shares issued | 50,000 | ||||
Series C Preferred Stock [Member] | Bear Bull Market Dividends, Inc. [Member] | |||||
Number of shares converted | 260,000 | ||||
Series C Preferred Stock [Member] | Stock Subscription Agreements [Member] | |||||
Number of shares issued | 20,000 | ||||
Number of shares issued, value | $ 5,000 | ||||
Class B Common Stock [Member] | |||||
Number of shares issued | 10,000,000 | ||||
Common stock, shares outstanding | 10,000,000 | ||||
Maximum [Member] | Class A Common Stock [Member] | |||||
Common stock, shares authorized | 500,000,000 | ||||
Common stock, par value | $ 0.0001 | ||||
Maximum [Member] | Class B Common Stock [Member] | |||||
Common stock, shares authorized | 10,000,000 | ||||
Common stock, par value | $ 0.0001 | ||||
Preferred Stock [Member] | |||||
Preferred stock, par value | $ 0.0001 | ||||
Preferred Stock [Member] | Maximum [Member] | |||||
Preferred stock, shares authorized | 200,000,000 | ||||
Warrants [Member] | Class A Common Stock [Member] | |||||
Warrants exercise price | $ 0.20 | ||||
Warrants [Member] | Maximum [Member] | Class A Common Stock [Member] | |||||
Warrants to purchase common stock | 10,000,000 | ||||
Common Stock [Member] | |||||
Number of shares repurchased and retired | 17,500,000 | ||||
Common Stock [Member] | Alchemist [Member] | |||||
Number of shares repurchased and retired | 38,308,864 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jul. 31, 2020 | Oct. 31, 2017 | Mar. 31, 2021 | Apr. 30, 2020 | |
Independent Sales Force [Member] | ||||
Warrants to purchase common stock | 4,013,000 | 628,800 | ||
Fair value of warrants | $ 1,500,000 | $ 95,445 | ||
Independent Sales Force [Member] | Minimum [Member] | ||||
Exercise price of warrants | $ 0.01 | |||
Warrant term | 1 year | |||
Independent Sales Force [Member] | Maximum [Member] | ||||
Exercise price of warrants | $ 0.25 | |||
Warrant term | 2 years | |||
HWH International, Inc [Member] | ||||
Warrants to purchase common stock | 333,333 | |||
Exercise price of warrants | $ 0.15 | |||
Debt instrument, face amount | $ 50,000 | |||
Conversion of common stock shares converted | 333,333 | |||
Maturity date, description | Expires in October 2022 | |||
2020 Sales-Related Warrants [Member] | ||||
Fair value of warrants | $ 1,500,000 | |||
Exercise price of warrants | $ 0.01 | |||
2020 Sales-Related Warrants [Member] | Maximum [Member] | ||||
Warrants to purchase common stock | 2,066,600 | |||
Directors, Officers and Employees [Member] | ||||
Warrants to purchase common stock | 29,200,000 | 32,000,000 | ||
Directors, Officers and Employees [Member] | Common Stock [Member] | ||||
Fair value of warrants | $ 3,600,000 | $ 7,400,000 | ||
Mr. Chan [Member] | Stock Purchase and Share Subscription Agreement [Member] | ||||
Investment amount | $ 3,000,000 | |||
Mr. Chan [Member] | Stock Purchase and Share Subscription Agreement [Member] | Class A Common Stock [Member] | ||||
Warrants to purchase common stock | 10,000,000 | |||
Number of common stock exchanged | 30,000,000 | |||
Exercise price of warrants | $ 0.20 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Warrant Activity (Details) - Warrants [Member] - $ / shares | 11 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Apr. 30, 2020 | |
Directors, Officers and Employees [Member] | ||
Number of warrants, outstanding, beginning | 22,333,333 | 333,333 |
Number of warrants, granted | 39,200,000 | 32,000,000 |
Number of warrants, exercised | (9,000,000) | (10,000,000) |
Number of warrants, expired or forfeited | (18,125,000) | |
Number of warrants, outstanding, end | 34,408,333 | 22,333,333 |
Number of warrants, unvested | 11,625,000 | |
Number of warrants, vested | 22,783,333 | |
Weighted average exercise price, outstanding, beginning | $ 0.002 | $ 0.15 |
Weighted average exercise price, granted | 0.13 | 0.0001 |
Weighted average exercise price, exercised | 0.0001 | 0.0001 |
Weighted average exercise price, expired or forfeited | 0.0001 | |
Weighted average exercise price, outstanding, end | 0.15 | $ 0.002 |
Weighted average exercise price, unvested | 0.15 | |
Weighted average exercise price, vested | $ 0.15 | |
Weighted average remaining term, beginning | 4 years 2 months 12 days | 3 years 6 months |
Weighted average remaining term, end | 3 years 6 months | 4 years 2 months 12 days |
Weighted average remaining term, unvested | 3 years | |
Weighted average remaining term, vested | 3 years | |
Members of Independent Sales Force [Member] | ||
Number of warrants, outstanding, beginning | 4,390,600 | 3,761,800 |
Number of warrants, granted | 4,013,000 | 628,800 |
Number of warrants, exercised | (2,339,000) | |
Number of warrants, expired or forfeited | (2,066,600) | |
Number of warrants, outstanding, end | 3,998,000 | 4,390,600 |
Weighted average exercise price, outstanding, beginning | $ 0.04 | $ 0.04 |
Weighted average exercise price, granted | 0.01 | 0.25 |
Weighted average exercise price, exercised | 0.01 | |
Weighted average exercise price, expired or forfeited | 0.25 | |
Weighted average exercise price, outstanding, end | $ 0.04 | $ 0.04 |
Weighted average remaining term, beginning | 2 years 6 months | 3 years 7 months 6 days |
Weighted average remaining term, end | 1 year 4 months 24 days | 2 years 6 months |
Consultants [Member] | ||
Number of warrants, outstanding, beginning | 160,000 | 160,000 |
Number of warrants, granted | ||
Number of warrants, exercised | ||
Number of warrants, expired or forfeited | (60,000) | |
Number of warrants, outstanding, end | 100,000 | 160,000 |
Weighted average exercise price, outstanding, beginning | $ 1.97 | $ 1.97 |
Weighted average exercise price, granted | ||
Weighted average exercise price, exercised | ||
Weighted average exercise price, expired or forfeited | 0.25 | |
Weighted average exercise price, outstanding, end | $ 3 | $ 1.97 |
Weighted average remaining term, beginning | 2 years 9 months 18 days | 3 years 9 months 18 days |
Weighted average remaining term, end | 1 year | 2 years 9 months 18 days |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Warrant Outstanding and Exercisable Warrants (Details) | 11 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Warrant One [Member] | |
Number of shares, Warrants Outstanding | 3,000,000 |
Weighted Average Remaining Contractual life (in years), Warrants Outstanding | 6 years 4 months 24 days |
Weighted Average Exercise Price, Warrants Outstanding | $ / shares | $ 0.0001 |
Number of shares, Warrants Exercisable | 3,000,000 |
Weighted Average Exercise Price, Warrants Exercisable | $ / shares | $ 0.0001 |
Warrant Two [Member] | |
Number of shares, Warrants Outstanding | 21,075,000 |
Weighted Average Remaining Contractual life (in years), Warrants Outstanding | 3 years 8 months 12 days |
Weighted Average Exercise Price, Warrants Outstanding | $ / shares | $ 0.15 |
Number of shares, Warrants Exercisable | 9,450,000 |
Weighted Average Exercise Price, Warrants Exercisable | $ / shares | $ 0.14 |
Warrant Three [Member] | |
Number of shares, Warrants Outstanding | 10,000,000 |
Weighted Average Remaining Contractual life (in years), Warrants Outstanding | 2 years 3 months 19 days |
Weighted Average Exercise Price, Warrants Outstanding | $ / shares | $ 0.20 |
Number of shares, Warrants Exercisable | 10,000,000 |
Weighted Average Exercise Price, Warrants Exercisable | $ / shares | $ 0.20 |
Warrant Four [Member] | |
Number of shares, Warrants Outstanding | 2,180,000 |
Weighted Average Remaining Contractual life (in years), Warrants Outstanding | 2 years 2 months 12 days |
Weighted Average Exercise Price, Warrants Outstanding | $ / shares | $ 0.14 |
Number of shares, Warrants Exercisable | 2,180,000 |
Weighted Average Exercise Price, Warrants Exercisable | $ / shares | $ 0.14 |
Warrant Five [Member] | |
Number of shares, Warrants Outstanding | 1,674,000 |
Weighted Average Remaining Contractual life (in years), Warrants Outstanding | 6 months |
Weighted Average Exercise Price, Warrants Outstanding | $ / shares | $ 0.01 |
Number of shares, Warrants Exercisable | 1,674,000 |
Weighted Average Exercise Price, Warrants Exercisable | $ / shares | $ 0.01 |
Warrant Six [Member] | |
Number of shares, Warrants Outstanding | 333,333 |
Weighted Average Remaining Contractual life (in years), Warrants Outstanding | 1 year 6 months |
Weighted Average Exercise Price, Warrants Outstanding | $ / shares | $ 0.15 |
Number of shares, Warrants Exercisable | 333,333 |
Weighted Average Exercise Price, Warrants Exercisable | $ / shares | $ 0.15 |
Warrant Seven [Member] | |
Number of shares, Warrants Outstanding | 144,000 |
Weighted Average Remaining Contractual life (in years), Warrants Outstanding | 2 months 12 days |
Weighted Average Exercise Price, Warrants Outstanding | $ / shares | $ 0.25 |
Number of shares, Warrants Exercisable | 144,000 |
Weighted Average Exercise Price, Warrants Exercisable | $ / shares | $ 0.25 |
Warrant Eight [Member] | |
Number of shares, Warrants Outstanding | 100,000 |
Weighted Average Remaining Contractual life (in years), Warrants Outstanding | 1 year |
Weighted Average Exercise Price, Warrants Outstanding | $ / shares | $ 3 |
Number of shares, Warrants Exercisable | 100,000 |
Weighted Average Exercise Price, Warrants Exercisable | $ / shares | $ 3 |
Warrants [Member] | |
Number of shares, Warrants Outstanding | 38,506,333 |
Number of shares, Warrants Exercisable | 26,881,333 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Oct. 31, 2017 | Mar. 31, 2021 | Apr. 30, 2020 | |
Settlement liability | $ 376,921 | $ 1,652,126 | |
Series A Preferred Stock [Member] | |||
Number of shares converted into preferred stock | (21,750,000) | (10,400,000) | |
Stakeholder and Investment Agreement [Member] | 212 Technologies [Member] | Series A Preferred Stock [Member] | |||
Number of shares issued during period, shares | 5,628,750 | ||
Settlement Agreement [Member] | 212 Technologies [Member] | |||
Number of shares issued during period, values | $ 425,000 | ||
Settlement Agreement [Member] | 212 Technologies [Member] | Series A Preferred Stock [Member] | |||
Number of shares issued during period, values | 425,000 | ||
Share Exchange Agreement [Member] | 561 LLC [Member] | Series A Preferred Stock [Member] | |||
Number of shares issued during period, shares | 5,000,000 | ||
Equity interest rate percentage | 40.00% | ||
Number of shares converted into preferred stock | 2,500,000 | ||
Stock closing bid price per share | $ 5 | ||
Share Exchange Agreement [Member] | America Approved Commercial [Member] | Series A Preferred Stock [Member] | |||
Equity interest rate percentage | 40.00% | ||
Number of shares converted into preferred stock | 2,500,000 | ||
Stock closing bid price per share | $ 5 | ||
Settlement Accomodation Agreement [Member] | |||
Damages sought value | 1,400,000 | ||
Settlement liability | $ 2,600,000 | $ 1,200,000 |
Business Segment and Geograph_3
Business Segment and Geographic Area Information (Details Narrative) - Sales Revenue, Net [Member] | 11 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Apr. 30, 2020 | |
Concentration risk, percentage | 99.00% | 98.00% |
United States [Member] | ||
Concentration risk, percentage | 94.00% | 95.00% |
Business Segment and Geograph_4
Business Segment and Geographic Area Information - Schedule of Segment Information (Details) - USD ($) | 11 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Apr. 30, 2020 | |
Total net sales | $ 64,811,151 | $ 121,613,476 | $ 131,389,906 |
Total segment gross profit | 46,546,657 | $ 86,445,680 | 93,514,290 |
Selling and marketing expenses | 29,740,974 | 60,814,242 | |
General and administrative expenses | 18,983,209 | 23,004,747 | |
Consolidated operating earnings (loss) | (2,177,526) | 9,695,301 | |
Consolidated total assets | 22,332,313 | 24,577,358 | |
Consolidated payments for property and equipment | 914,336 | 160,857 | |
Consolidated depreciation and amortization | 163,248 | 714,350 | |
Corporate [Member] | |||
Consolidated total assets | 442,686 | 1,229,894 | |
Consolidated payments for property and equipment | 6,445 | 8,043 | |
Consolidated depreciation and amortization | 8,163 | 6,443 | |
Health and Wellness Products [Member] | |||
Total net sales | 64,046,966 | 129,024,888 | |
Total segment gross profit | 45,997,828 | 91,831,033 | |
Consolidated total assets | 21,829,627 | 23,347,464 | |
Consolidated payments for property and equipment | 907,891 | 152,814 | |
Consolidated depreciation and amortization | 155,085 | 122,417 | |
Other [Member] | |||
Total net sales | 764,185 | 2,365,018 | |
Total segment gross profit | $ 548,829 | $ 1,683,257 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Apr. 05, 2021USD ($)shares | Apr. 30, 2021shares | Feb. 29, 2020shares | Mar. 31, 2021shares |
Number of shares issued | 15,625,000 | |||
Class A Common Stock [Member] | ||||
Number of shares issued | 30,000,000 | |||
Subsequent Event [Member] | Decentralized Sharing Systems, Inc [Member] | ||||
Debt loan amount | $ | $ 30,000,000 | |||
Debt convertible rate | 0.20 | |||
Subsequent Event [Member] | Decentralized Sharing Systems, Inc [Member] | Class A Common Stock [Member] | ||||
Number of shares issued | 27,000,000 | |||
Payment of loan origination fee shares | 15,000,000 | |||
Prepayment of interest shares | 12,000,000 | |||
Origination fee rate | 100.00% | |||
Subsequent Event [Member] | Decentralized Sharing Systems, Inc [Member] | Warrants [Member] | ||||
Warrants to purchase common stock | 150,000,000 | |||
Loan Origination Fee | $ | $ 3,000,000 |