| 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. In connection with the Company reverse stock split that took place in September
2024, certain prior period financial information
has been adjusted 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, 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. Management of the Company believes
that the estimates and assumptions used in the preparation of the unaudited condensed 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 September 30, 2024, and March 31, 2024, cash and cash equivalents included cash held by our merchant processors
of approximately $ 50,000 0.2 0.4 Trade
Accounts Receivable and Allowance for Expected 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 expected 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. There was no change in the Company’s allowance for expected credit losses from March 31, 2024 to September
30, 2024. 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 September 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”) 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 applied for an ERTC term loan (“Term Loan”) in August 2023 which objective is
to serve as a bridge funding until the ERTC is collected. The Term Loan that was approved came to $ 1.2 12 2 24,000 1.18 th 63,445.32 2 In
September 2024, the Company and the Lender entered into an agreement (the “Agreement”) whereby the
Lender agreed to lend $ 500,000 635,000 using the Company’s assets as collateral . The Company
has the option to paydown the borrowing early and recorded the $ 500,000 9,769.23 each
over a 15-month period to the Lender should the Company choose to repay the borrowing over the 15-month period. In September 2024, the Company received net proceeds of $ 489,000 500,000 11,000 19,538.46
of which $ 15,000 were
recorded as a reduction of Other Borrowings and the balance as interest expenses. 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 September 30th 1,312.45 1,352.92
Average exchange rate for the six months ended 1,363.21 1,314.49 Comprehensive
Loss For
the six months ended September 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 September 30, 2024 and March 31, 2024, deferred revenue associated with
● product
invoiced but not received by customers at the balance sheet date was $ 93,119 80,404
● unfulfilled
performance obligations for services offered on a subscription basis was $ 31,579 37,774
● unfulfilled
performance obligations for customers’ right of return was $ 24,783 24,703
● customer
loyalty points outstanding was $ 19,326 19,326 During
the six months ended September 30, 2024 and 2023, substantially all the Company’s consolidated net sales were from its sale of
health and wellness products. Sales
Commissions The
Company recognizes sales commission expenses, when incurred, in accordance with GAAP. During the six months ended September 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 $ 1.2 1.8 Segment
Reporting The
Company follows ASC Topic 280, Segment Reporting Reverse
Stock Split On September 12, 2024, the Company received notice from the Financial Industry Regulatory Authority (“FINRA”)
that it had announced the effectiveness of our 1,400-to-1 reverse stock split of the issued and outstanding shares of common
stock (the “Reverse Split”), on FINRA’s daily list. The Reverse Split became effective at the open of market on September
13, 2024. As a result of the Reverse Split, every one thousand four hundred (1,400) shares of the issued and outstanding common stock
of the Company were converted into one (1) share of common stock. All fractional shares created by the Reverse Split have been rounded
up to the nearest whole share. Each shareholder received at least one share. The Reverse Split does not affect the total number of shares of capital stock, including the Common Stock, that the
Company is authorized to issue, or the par value of the Common Stock, which shall remain as set forth in the Articles of Incorporation.
Certain of the Company’s outstanding securities, pursuant to which shares of Common Stock are issuable, will be adjusted as a result
of the Reverse Split, as required by the terms of such securities. In connection with the Reverse Split, the Company’s CUSIP has also changed to 81953103. Immediately prior to
the Reverse Split, the Company had 376,328,885 309,652 40,438 The Reverse Split was approved by the Company’s Board of Directors on September 26, 2023, and was approved
by the Company’s majority stockholders holding approximately 53.5% of the issued and outstanding common stock on October 30, 2023.
On September 5, 2024, the Company filed with the Secretary of State of the State of Nevada a Certificate of Amendment to our Articles
of Incorporation to reflect the Reverse Split. Recently
Issued Accounting Standards In
December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures requiring enhancements and
further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective
for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. The Company does
not believe the adoption of this standard would have a material impact on disclosures within its consolidated financial statements. The
Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material
effect on its unaudited condensed consolidated financial statements. |
