| Description of Business and Summary of Significant Accounting Policies | Organization Xplosion
Incorporated (the Company) was incorporated under the laws of the State of Nevada on October 6, 2015. The Company
is in the business of marketing, distribution of innovative lifestyle and enhancement products and complimentary goods. On December
7, 2015 the Company entered into an Exclusive Global Rights Agreement with Interactive Holdings Limited (Interactive)
for a global distribution license for the SayberX line of self-stimulation devices for men and couples. Interim
Period Financial Statements The
accompanying unaudited interim condensed financial statements have been prepared in accordance with generally accepted accounting
principles in the United States (GAAP) for interim financial information and with the Securities and Exchange Commissions
instructions. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements.
The results of operations reflect interim adjustments, all of which are of a normal recurring nature and, in the opinion of management,
are necessary for a fair presentation of the results for such interim period. The results reported in these interim financial
statements should not be regarded as necessarily indicative of results that may be expected for the entire year. Certain information
and note disclosure normally included in financial statements prepared in accordance with GAAP have been condensed or omitted
pursuant to the Securities and Exchange Commissions rules and regulations. These unaudited interim condensed financial
statements should be read in conjunction with the Companys audited financial statements for the year ended October 31,
2017, filed April 27, 2018. Going
Concern The
Companys financial statements have been prepared in conformity with accounting principles generally accepted in the United
States applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal
course of business. At January 31, 2018 and October 31, 2017, the Company had $57,346 and $1,562 in cash, respectively, and working
capital deficiency of $70,919 and $60,047, respectively, as at January 31, 2018 and October 31, 2017. For the three months ended
January 31, 2018 and 2017 the Company had net losses of $67,872 and $89,585, respectively. Continued losses may adversely affect
the liquidity of the Company in the future. Therefore, the factors noted raise substantial doubt about our ability to continue
as a going concern. The recoverability of a major portion of the recorded assets amounts shown in the accompanying is dependent
upon continued operations of the Company, which in turn is dependent on the Companys ability to raise additional capital,
obtain financing and to succeed in its future operations. The financial statements do not include any adjustments relating to
the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern. The Companys existence is dependent upon managements
ability to develop profitable operations and resolve its liquidity problems. Cash Cash
equivalents with maturity dates less than 90 days from the date of origination are considered to be cash equivalents for all financial
reporting purposes. The Company currently has no cash equivalents. Functional
Currency The
financial statements are presented in United States dollars, which is the Companys functional currency. Fair
Value Measurements Fair
value is defined as the exchange price that will be received for an asset or paid to transfer a liability (an exit price) in the
principal. Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of
unobservable inputs. To measure fair value, the Company uses the following fair value hierarchy based on three levels of inputs,
of which the first two are considered to be observable and the third unobservable: Level
1 Quoted prices in active markets for identical assets or liabilities. Level
2 Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets
or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable
market data for substantially the full term of the assets or liabilities. Level
3 Unobservable inputs are supported by little or no market activity and are significant to the fair value of the assets
or liabilities. Revenue
Recognition The
Company acquires full ownership of all products under its Exclusive Global Distribution Agreement directly from the technology
holder and in turn re-sells the products through by wholesale through sub-distributors and also directly to end users via e-commerce.
The Company has determined that it is the primary obligator as it i) is responsible for fulfillment; ii) assumes full inventory
risk; iii) has no right of return of unsold product; iv) has the sole right to establish selling prices; v) has physical loss
inventory risk and vi) has credit risk. The Company recognizes revenue, at the gross amount invoiced, when it is realized or realizable
and earned. The Company considers revenue realized or realizable and earned when the following criteria are met: persuasive evidence
of an arrangement exists, delivery has occurred or services have been rendered, price is fixed and determinable, and collectability
is reasonably assured. During
the three months ended January 31, 2018 $2,908 or 100% of the Companys revenue was concentrated in the hands of one major
customer. Accounts
Receivable Accounts
receivable result from sale of SayberX units and are recorded at their principal amounts. Receivables are generally
unsecured. The
Company does not have off-balance sheet credit exposure related to its customers. As of January 31, 2018 one customer accounted
for 100% of the accounts receivable balance. Inventory Inventory
consisting of SayberX units is stated at the lower of cost (first in, first out method) or net realizable value. Advertising
Expenses Advertising
costs are expensed as incurred. During the three months ended January 31, 2018 and 2017 the Company incurred advertising costs
of $nil and $nil, respectively. Income
Taxes Deferred
income tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets
and liabilities, operating loss, and tax credit carryforwards, and are measured using the enacted income tax rates and laws that
will be in effect when the differences are expected to be recovered or settled. Realization of certain deferred income tax assets
is dependent upon generating sufficient taxable income in the appropriate jurisdiction. The Company records a valuation allowance
to reduce deferred income tax assets to amounts that are more likely than not to be realized. The initial recording and any subsequent
changes to valuation allowances are based on a number of factors (positive and negative evidence). The Company considers its actual
historical results to have a stronger weight than other, more subjective, indicators when considering whether to establish or
reduce a valuation allowance. The
Company continually evaluates its uncertain income tax positions and may record a liability for any unrecognized tax benefits
resulting from uncertain income tax positions taken or expected to be taken in an income tax return. Estimated interest and penalties
are recorded as a component of interest expense and other expense, respectively. Because
tax laws are complex and subject to different interpretations, significant judgment is required. As a result, the Company makes
certain estimates and assumptions in: (1) calculating its income tax expense, deferred tax assets, and deferred tax liabilities;
(2) determining any valuation allowance recorded against deferred tax assets; and (3) evaluating the amount of unrecognized tax
benefits, as well as the interest and penalties related to such uncertain tax positions. The Companys estimates and assumptions
may differ significantly from tax benefits ultimately realized. Net
Loss Per Share Basic
net loss per share is calculated by dividing the net loss attributable to common shareholders by the weighted average number of
common shares outstanding in the period. Diluted loss per share takes into consideration common shares outstanding (computed under
basic loss per share) and potentially dilutive securities. For the three months ended January 31, 2018, there are no outstanding
stock options and warrants. Common shares issuable are considered outstanding as of the original approval date for purposes of
earnings per share computations. Use
of Estimates The
preparation of financial statements in conformity with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the fiscal
year. The Company bases its estimates on historical experience, current conditions and on other assumptions that it believes to
be reasonable under the circumstances. Actual results could differ from those estimates and assumptions. Financial
Instruments The
Company has the following financial instruments: cash, accounts receivable, inventory, deposits and prepaid expenses, accounts
payable and loan payable. The carrying value of these financial instruments approximates their fair value due to their liquidity
or their short-term nature. Share
Issuances for Services, Debt Instruments and Interest The
Company issues instruments to non-employees for the receipt of goods and services, and, in certain circumstances the settlement
of short-term loan arrangements. The applicable GAAP establishes that share-based payment transactions with nonemployees shall
be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more
reliably measurable. In
these transactions, the Company issues unregistered and restricted equity instruments. Additionally, the Company currently has
no shares of freely-tradeable stock with a quoted market price (a Level 1input within the GAAP hierarchy). When
unregistered common shares are issued for the settlement of short-term financing arrangements (that are not initially convertible),
the reacquisition price of the extinguished financing arrangement is determined by the value of the debt which is more clearly
evident, and no additional inducement expense is recognized. In
situations in which the Company issues unregistered restricted common shares in exchange for goods and services, and the value
of the goods and services are not the most reliably measurable, the Company recognizes the fair value of the unregistered restricted
equity instruments based on the value of similar instruments issued in private placements in exchange for cash in the most recent
transactions (a Level 2 input within the GAAP hierarchy). The Company has determined this methodology reflects the risk adjusted
fair value of its unregistered restricted equity instruments using a commercially reasonable valuation technique. Emerging
Growth We
are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act),
and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies
that are not emerging growth companies including, but not limited to, not being required to comply with the auditor
attestation requirements of section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation
in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive
compensation and shareholder approval of any golden parachute payments not previously approved We
have irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to
Section 107(b) of the Act. Recent
Accounting Pronouncements In
May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU)
2014-09 Revenue From Contracts with Customers, which will supersede nearly all existing revenue recognition guidance under
U.S. GAAP. The core principal of this ASU is that an entity should recognize revenue when it transfers promised goods or services
to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods
or services. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash
flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs
incurred to obtain or fulfill a contract. The
original effective date for ASU 2014-09 would have required the Company to adopt beginning in its first quarter 2017. In July
2015, the FASB voted to amend ASU 2014-09 by approving a one year deferral of the effective date as well as providing the option
to early adopt the standard on the original effective date. Accordingly, the Company may adopt the standard in either its first
quarter of 2017 or 2018. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively
with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the timing of its adoption
and the impact of adopting the new revenue standard on its financial statements. In
June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-10, which eliminated certain financial
reporting requirements of companies previously identified as "Development Stage Entities" (Topic 915). The amendments
in this ASU simplify accounting guidance by removing all incremental financial reporting requirements for development stage entities.
The amendments also reduce data maintenance and, for those entities subject to audit, audit costs by eliminating the requirement
for development stage entities to present inception-to-date information in the statements of income, cash flows, and shareholder
equity. Early application of each of the amendments is permitted for any annual reporting period or interim period
for which the entity's financial statements have not yet been issued (public business entities) or made available for issuance
(other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915. The
Company has adopted this standard. In
April 2015, the FASB issued ASU2015-03, Imputation of Interest, requiring entities to present debt issuance costs related to a
debt liability as a reduction of the carrying amount of the liability. In August 2015, the FASB issued ASU 2015-15 to provide
additional guidance related to debt issuance costs related to line-of-credit arrangements. The guidance is effective for annual
and interim periods beginning after December 15, 2015, and early adoption is permitted. The Company has adopted this standard. In
February 2016, the FASB issued ASU2016-02, Leases (Topic 842), requiring entities to a right-of-use asset and a lease liability
for virtually all of their leases. This standard is effective for annual and interim periods beginning after December 15, 2018,
and early adoption is permitted. The Company is currently evaluating the timing of its adoption and the impact of adopting the
new standard on its financial statements. |
