| SIGNIFICANT ACCOUNTING POLICIES | NOTE
3 – SIGNIFICANT ACCOUNTING POLICIES Basis
of Presentation The
unaudited condensed consolidated interim financial statements included herein have been prepared in accordance with GAAP and pursuant
to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain note disclosures normally included
in annual financial statements prepared in accordance with GAAP have been condensed or omitted as permitted pursuant to the rules and
regulations of the SEC, although we believe that the disclosures made are adequate to make the information not misleading. These condensed
consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included
in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024. Unless so stated, the disclosures in the
accompanying condensed consolidated financial statements do not repeal the disclosures in our consolidated financial statements for year
ended March 31, 2024. The
accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.
All significant intercompany accounts and transactions have been eliminated in consolidation. Certain prior period financial information
has been reclassified to conform with the current year’s presentation. 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 trade accounts
and notes 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, the valuation of long-term debt covenants, 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 The
Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and
cash equivalents include recent customer remittances deposited with our merchant processors at the balance sheet date, which
generally settle within 24 to 72 hours. As of June 30, 2024, and March 31, 2024, cash and cash equivalents included cash held by our
merchant processors of approximately $ 0.04 0.05 0.3 0.4 Trade
Accounts Receivable and Allowance for Credit Losses The
Company maintains an allowance for credit losses in accordance with Financial Accounting Standards Board (FASB) Accounting Standards
Codification (ASC) ASC 326 and records the allowance for credit losses as an offset to assets such as accounts receivable. The expected
credit losses are classified as general and administrative expenses in the consolidated statements of operations and comprehensive loss.
The Company assesses collectability by reviewing receivables on a collective basis where similar characteristics exist, primarily based
on the size and nature of specific receivables. In determining the amount of the allowance for credit losses, the Company considers historical
collectability based on past due status, the age of the receivable balances, credit quality of the counter party, and current and future
economic conditions. On a quarterly basis, management determines if the allowance for credit losses is adequate, and adjusts the allowance,
when necessary. Delinquent account balances are written-off against the allowance for credit losses after all means of collection have
been exhausted and that the likelihood of collection is not probable. Inventory Inventory
consists of finished goods and promotional materials and is stated at the lower of cost determined using the first-in, first-out (“FIFO”)
method, or net realizable value. It includes direct product costs and certain shipping and handling costs, such as in-bound freight.
When estimating the net realizable value of inventory, the Company considers several factors including estimates of future demand for
the product, historical sales, the age and sales history of the inventory, and historic and anticipated changes in our product offerings. The
Company periodically assesses the realizability of its inventory based on evaluation of its inventory levels against historical and anticipated
sales. Physical inventory counts are performed at all facilities on a quarterly basis. As of June 30, 2024 and March 31, 2024, the allowance
for slowing moving or obsolete inventory were $ 1.6 1.6 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 products to customers, are included
in selling and marketing expenses in our consolidated statements of operations when incurred. Other
Receivable and Loan Payable In
July 2023, the Company, through its out-sourced payroll services provider (“Paychex”), submitted a claim to the Internal
Revenue Services (“IRS”) for the Employee Retention Tax Credit (“ERTC credit”) based on its payroll records and
other pertinent information. Refunds will be distributed based on IRS processing times and the total ERTC credit will be approximately
$ 1.8 Through
the introduction of Paychex, the Company successfully applied for an ERTC loan (“bridge loan”) in August 2023. The bridge
loan that was approved came to $ 1.2 12 2 24,000 1.18 Other
Assets Other
assets include a multi-user license and code of a back-office platform that was acquired for $ 1 Capitalization on Internal-Use Software Costs Foreign
Currency Translation 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. Individual material transactions, if
any, are translated using the actual rate of exchange on the transaction date. The resulting translation adjustments are reported in
accumulated other comprehensive loss in our condensed consolidated balance sheets. In September 2021, the Company, through its wholly
owned subsidiary, commenced operations in the Republic of Korea (South Korea). SCHEDULE
OF FOREIGN EXCHANGE CURRENCY TRANSLATION
South
Korean Won per 1 USD
2024 2023
Exchange rate as of June 30th 1,381.47 1,318.86
Average exchange rate for the three months ended 1,371.74 1,315.28 Comprehensive
Loss For
the three months ended June 30, 2024 and 2023, the Company’s comprehensive loss comprised of currency translation adjustments and
net loss. Revenue
Recognition The
Company recognizes revenue in accordance with ASC Topic 606 when (or as) it transfers control of the promised goods and services to the
customer in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services. Revenue
is recognized net of amounts due to taxing authorities (such as local and state sales tax). The Company’s customers place sales
orders online and through the Company’s “back-office” operations, which creates a contract and establishes the transaction
price. With respect to products sold, the Company’s performance obligation is satisfied upon receipt of the products by the customer.
With respect to subscription-based revenue, including independent distributor membership fees, the Company’s performance obligation
is satisfied over time (generally, up to one year). With respect to customer loyalty points awarded, the Company’s performance
obligation is satisfied at the earliest of (a) the redemption or expiration date, or (b) when it is no longer probable the points will
be redeemed. The Company assesses the probability an awards of customer loyalty points will be redeemed, based on its historic breakage
rates. The timing of revenue recognition may differ from the time when the Company invoices the customer and/or collects 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 June 30, 2024 and March 31, 2024, deferred revenue associated with
● product
invoiced but not received by customers at the balance sheet date was $ 71,964 80,404
● unfulfilled
performance obligations for services offered on a subscription basis was $ 33,294 37,774
● unfulfilled
performance obligations for customers’ right of return was $ 24,397 24,703
● customer
loyalty points outstanding was $ 19,326 19,326 During
the three months ended June 30, 2024 and 2023, approximately 100 95 Sales
Commissions The
Company recognizes sales commission expenses, when incurred, in accordance with GAAP. During the three months ended June 30, 2024 and
2023, sales commission expense, which is included in selling and marketing expenses in our condensed consolidated statements of operations
and comprehensive loss, was approximately $ 0.6 1.0 Segment Reporting The Company follows ASC Topic 280, Segment Reporting 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 |
