Document and Entity Information
Document and Entity Information | 6 Months Ended |
Nov. 30, 2020 | |
Cover [Abstract] | |
Entity Registrant Name | SIMPLICITY ESPORTS & GAMING Co |
Entity Central Index Key | 0001708410 |
Document Type | S-1/A |
Amendment Flag | true |
Amendment Description | PRE-EFFECTIVE AMENDMENT NO. 4 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business Flag | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Nov. 30, 2020 | May 31, 2020 | May 31, 2019 |
Current Assets | |||
Cash and cash equivalents | $ 543,439 | $ 160,208 | $ 1,540,158 |
Accounts receivable, net | 131,321 | 127,653 | |
Inventory | 145,186 | 15,787 | |
Prepaid expenses | 114,537 | 5,588 | |
Total Current Assets | 934,483 | 309,236 | 1,540,158 |
Other Assets | |||
Goodwill | 5,180,141 | 5,155,141 | 4,456,250 |
Intangible assets, net | 1,955,559 | 2,141,374 | 1,528,441 |
Deferred brokerage fees | 123,339 | 149,223 | |
Property and equipment, net | 606,254 | 232,733 | 117,231 |
Right of use asset, operating leases, net | 1,320,846 | 490,984 | 100,146 |
Security deposits | 14,885 | 14,885 | 12,317 |
Due from franchisees' | 45,516 | ||
Deferred financing costs | 235,759 | 98,198 | |
Total Other Assets | 9,482,299 | 8,282,538 | 6,214,385 |
TOTAL ASSETS | 10,416,782 | 8,591,774 | 7,754,543 |
Current Liabilities | |||
Accounts payable | 237,311 | 126,716 | |
Accrued expenses | 932,547 | 1,421,842 | 691,940 |
Loan payable - related party | 93,761 | ||
Convertible note payable | 1,000,000 | 1,127,320 | 1,000,000 |
Notes payable, net of discount | 1,100,129 | 127,320 | |
Note payable - related party | 64,728 | ||
Operating lease obligation, current | 281,088 | 151,867 | 32,045 |
Current portion of deferred revenues | 3,795 | 3,795 | |
Stock payable | 50,000 | 75,000 | |
Total Current Liabilities | 3,604,870 | 2,971,268 | 1,817,746 |
Operating lease obligation, net of current portion | 1,042,256 | 339,116 | 68,876 |
Deferred revenues, less current portion | 302,439 | 365,718 | |
Total Liabilities | 4,949,565 | 3,676,102 | 1,886,622 |
Commitments and Contingencies - Note 6 | |||
Stockholders' Equity | |||
Preferred stock - $0.0001 par value, 1,000,000 shares authorized; no shares issued and outstanding | |||
Common stock - $0.0001 par value; 36,000,000 and 20,000,000 shares authorized; 1,217,376, 7,988,975 and 7,003,975 shares issued and outstanding as of November 30, 2020, May 31, 2020 and May 31, 2019, respectively | 122 | 799 | 700 |
Additional paid-in capital | 13,128,420 | 11,131,404 | 9,442,027 |
Accumulated deficit | (7,855,418) | (6,195,044) | (3,574,806) |
Total Simplicity Esports and Gaming Company Stockholders' Equity | 5,273,124 | 4,937,159 | 5,867,921 |
Non-Controlling Interest | 194,093 | (21,487) | |
Total Stockholders' Equity | 5,467,217 | 4,915,672 | 5,867,921 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 10,416,782 | $ 8,591,774 | $ 7,754,543 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Nov. 30, 2020 | Aug. 17, 2020 | May 31, 2020 | May 31, 2019 |
Statement of Financial Position [Abstract] | ||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Preferred stock, authorized | 1,000,000 | 1,000,000 | 1,000,000 | |
Preferred stock, issued | ||||
Preferred stock, outstanding | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Common stock, authorized | 36,000,000 | 20,000,000 | 20,000,000 | 20,000,000 |
Common stock, issued | 1,217,376 | 7,988,975 | 7,003,975 | |
Common stock, outstanding | 1,217,376 | 7,988,975 | 7,003,975 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Nov. 30, 2020 | Nov. 30, 2019 | Nov. 30, 2020 | Nov. 30, 2019 | May 31, 2020 | May 31, 2019 | |
Revenues | ||||||
Total Revenues | $ 296,546 | $ 245,498 | $ 497,147 | $ 319,991 | $ 861,410 | $ 37,995 |
Cost of Goods Sold | (67,657) | (108,168) | (422,539) | |||
Gross Margin | 228,889 | 245,498 | 388,979 | 319,991 | 438,871 | 37,995 |
Operating Expenses | ||||||
General and Administrative Expenses | (1,013,177) | (819,305) | (1,658,539) | (1,258,257) | (3,170,992) | (4,353,189) |
Loss from Operations | (784,288) | (573,807) | (1,269,560) | (938,266) | (2,732,121) | (4,315,194) |
Other Income / (Expense) | ||||||
Debt forgiveness Income | 15,250 | 8,523 | 3,115 | 93,761 | 93,761 | 369,206 |
Interest Expense | (244,660) | (6,675) | (398,788) | (13,350) | (32,472) | (23,268) |
Interest Income | 5 | 457 | 12 | 2,961 | 3,034 | 403,984 |
Rebate Income | 2,019 | |||||
Foreign exchange loss | (19,572) | |||||
Total Other Income / (Expense) | (229,405) | 2,305 | (415,233) | 83,372 | 66,342 | 749,922 |
Loss Before Provision for Income Taxes | (1,013,693) | (571,502) | (1,684,793) | (854,894) | (2,665,779) | (3,565,272) |
Provision for Income Taxes | ||||||
Net Loss | (1,013,693) | (571,502) | (1,684,793) | (854,894) | (2,665,779) | (3,565,272) |
Net loss attributable to noncontrolling interest | 8,533 | 8,172 | 24,419 | 8,172 | 45,541 | |
Net loss attributable to common shareholders | $ (1,005,160) | $ (563,330) | $ (1,660,374) | $ (846,722) | $ (2,620,238) | $ (3,565,272) |
Basic and diluted net loss per share | $ (0.84) | $ (0.57) | $ (1.42) | $ (.90) | $ (0.34) | $ (1) |
Basic and diluted weighted average number of common shares outstanding | 1,192,945 | 980,064 | 1,166,150 | 943,888 | 7,722,964 | 3,566,488 |
Franchise Royalties and License Fees [Member] | ||||||
Revenues | ||||||
Total Revenues | $ 36,877 | $ 200,274 | $ 117,695 | $ 247,012 | $ 478,023 | |
Franchise Termination Revenue [Member] | ||||||
Revenues | ||||||
Total Revenues | 54,916 | 45,224 | 61,381 | 44,984 | ||
Company-Owned Stores Sales [Member] | ||||||
Revenues | ||||||
Total Revenues | 167,791 | 244,729 | 49,643 | 174,042 | ||
Esports Revenue [Member] | ||||||
Revenues | ||||||
Total Revenues | $ 36,962 | $ 73,342 | $ 23,336 | $ 164,361 | $ 37,995 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Non-Controlling Interest [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at May. 31, 2018 | $ 225 | $ 5,009,310 | $ (9,534) | $ 5,000,001 | |
Beginning balance, shares at May. 31, 2018 | 2,252,743 | ||||
Common stock subject to redemption not redeemed | $ 11 | 11 | |||
Common stock subject to redemption not redeemed, shares | 112,497 | ||||
Common stock redemption | $ (45) | (6,635,207) | (6,635,252) | ||
Common stock redemption, shares | (451,563) | ||||
Shares issued for advisory services | $ 21 | 2,124,979 | 2,125,000 | ||
Shares issued for advisory services, shares | 208,000 | ||||
Common stock issued to Smaaash Founders | $ 200 | 200 | |||
Common stock issued to Smaaash Founders, shares | 2,000,000 | ||||
Cancellation of Smaaash Founders shares | $ (200) | 200 | |||
Cancellation of Smaaash Founders shares, shares | (2,000,000) | ||||
Rights shares | $ 54 | 383,161 | 383,215 | ||
Rights shares, shares | 546,150 | ||||
Common shares issued in private placement | $ 96 | 1,924,904 | 1,925,000 | ||
Common shares issued in private placement, shares | 962,500 | ||||
Common shares issuable from employment agreements | $ 18 | 18 | |||
Common shares issuable from employment agreements, shares | 180,000 | ||||
Vesting of Common Shares | 45,000 | 45,000 | |||
Shares issued in connection with conversion of note payable | $ 20 | 499,980 | 500,000 | ||
Shares issued in connection with conversion of note payable, shares | 193,648 | ||||
Shares issued in connection with franchise acquisition | $ 300 | 6,089,700 | 6,090,000 | ||
Shares issued in connection with franchise acquisition, shares | 3,000,000 | ||||
Net loss attributable to non-controlling interest | |||||
Net loss | (3,565,272) | (3,565,272) | |||
Ending balance at May. 31, 2019 | $ 700 | 9,442,027 | (3,574,806) | 5,867,921 | |
Ending balance, shares at May. 31, 2019 | 7,003,975 | ||||
Shares issued for PLAYlive Nation acquisition | $ 9 | 1,439,991 | 1,440,000 | ||
Shares issued for PLAYlive Nation acquisition, shares | 93,750 | ||||
Vesting of Common Shares | 27,000 | 27,000 | |||
Net loss attributable to non-controlling interest | |||||
Net loss | (283,393) | (283,393) | |||
Ending balance at Aug. 31, 2019 | $ 97 | 10,909,630 | (3,858,199) | 7,051,528 | |
Ending balance, shares at Aug. 31, 2019 | 969,247 | ||||
Beginning balance at May. 31, 2019 | $ 700 | 9,442,027 | (3,574,806) | 5,867,921 | |
Beginning balance, shares at May. 31, 2019 | 7,003,975 | ||||
Net loss attributable to non-controlling interest | 8,172 | ||||
Net loss | (846,722) | ||||
Ending balance at Nov. 30, 2019 | $ 98 | 11,035,640 | 15,841 | (4,421,528) | 6,630,051 |
Ending balance, shares at Nov. 30, 2019 | 982,372 | ||||
Beginning balance at May. 31, 2019 | $ 700 | 9,442,027 | (3,574,806) | $ 5,867,921 | |
Beginning balance, shares at May. 31, 2019 | 7,003,975 | ||||
Shares issued for advisory services, shares | 5,899 | ||||
Shares issued for vesting of employment agreement awards | $ 11 | 153,000 | $ 153,011 | ||
Shares issued for vesting of employment agreement awards, shares | 105,000 | ||||
Shares issued for PLAYlive Nation acquisition | $ 75 | 1,439,925 | 1,440,000 | ||
Shares issued for PLAYlive Nation acquisition, shares | 750,000 | ||||
Shares issued for cash | $ 12 | 87,688 | 87,700 | ||
Shares issued for cash, shares | 125,000 | ||||
Shares issued in connection with notes payable | 2,865 | 2,865 | |||
Shares issued in connection with notes payable, shares | |||||
Shares issued to directors, officers and employees as compensation | $ 1 | 5,899 | 5,900 | ||
Shares issued to directors, officers and employees as compensation, shares | 5,000 | ||||
Non-controlling interest of original investment in subsidiaries | 24,054 | 24,054 | |||
Net loss attributable to non-controlling interest | (45,541) | 45,541 | |||
Net loss | (2,620,238) | (2,620,238) | |||
Ending balance at May. 31, 2020 | $ 799 | 11,131,404 | (21,487) | (6,195,044) | 4,915,672 |
Ending balance, shares at May. 31, 2020 | 7,988,975 | ||||
Beginning balance at Aug. 31, 2019 | $ 97 | 10,909,630 | (3,858,199) | 7,051,528 | |
Beginning balance, shares at Aug. 31, 2019 | 969,247 | ||||
Shares issued for vesting of employment agreement awards | $ 1 | 10 | 11 | ||
Shares issued for vesting of employment agreement awards, shares | 13,125 | ||||
Vesting of Common Shares | 36,000 | 36,000 | |||
Compensation to officer for shares issued for past services | 90,000 | 90,000 | |||
Non-controlling interest of original investment in subsidiaries | 24,013 | 24,013 | |||
Net loss attributable to non-controlling interest | (8,172) | 8,172 | |||
Net loss | (563,329) | (563,330) | |||
Ending balance at Nov. 30, 2019 | $ 98 | 11,035,640 | 15,841 | (4,421,528) | 6,630,051 |
Ending balance, shares at Nov. 30, 2019 | 982,372 | ||||
Beginning balance at May. 31, 2020 | $ 799 | 11,131,404 | (21,487) | (6,195,044) | 4,915,672 |
Beginning balance, shares at May. 31, 2020 | 7,988,975 | ||||
Shares issued for cash | 25,000 | 25,000 | |||
Shares issued for cash, shares | 2,976 | ||||
Shares issued in connection with conversion of note payable | $ 1 | 99,999 | 100,000 | ||
Shares issued in connection with conversion of note payable, shares | 10,738 | ||||
Shares issued in connection with notes payable | $ 1 | 102,216 | 102,217 | ||
Shares issued in connection with notes payable, shares | 12,292 | ||||
Shares issued in connection with settlement of accounts payable and accrued liabilities | 46,000 | 46,000 | |||
Shares issued in connection with settlement of accounts payable and accrued liabilities, shares | 3,125 | ||||
Shares issued in connection with franchise acquisition | $ 2 | 164,998 | 165,000 | ||
Shares issued in connection with franchise acquisition, shares | 18,750 | ||||
Shares issued in connection with consulting agreement | $ 1 | 22,777 | 22,778 | ||
Shares issued in connection with consulting agreement, shares | 3,472 | ||||
Shares issued to directors, officers and employees as compensation | $ 12 | 819,297 | 819,309 | ||
Shares issued to directors, officers and employees as compensation, shares | 116,175 | ||||
Non-controlling interest of original investment in subsidiaries | 240,000 | 240,000 | |||
Net loss attributable to non-controlling interest | (15,886) | (15,866) | |||
Net loss | (655,214) | (655,214) | |||
Ending balance at Aug. 31, 2020 | $ 117 | 12,412,390 | 202,647 | (6,850,258) | 5,764,896 |
Ending balance, shares at Aug. 31, 2020 | 1,166,150 | ||||
Beginning balance at May. 31, 2020 | $ 799 | 11,131,404 | (21,487) | (6,195,044) | 4,915,672 |
Beginning balance, shares at May. 31, 2020 | 7,988,975 | ||||
Shares issued for cash | $ 216,625 | ||||
Shares issued for cash, shares | 250,000 | ||||
Shares issued in connection with franchise acquisition, shares | 37,941 | ||||
Shares issued to directors, officers and employees as compensation, shares | 95,700 | ||||
Net loss attributable to non-controlling interest | $ 24,419 | ||||
Net loss | (1,660,374) | ||||
Ending balance at Nov. 30, 2020 | $ 122 | 13,128,420 | 194,093 | (7,855,418) | 5,467,217 |
Ending balance, shares at Nov. 30, 2020 | 1,217,376 | ||||
Beginning balance at Aug. 31, 2020 | $ 117 | 12,412,390 | 202,647 | (6,850,258) | 5,764,896 |
Beginning balance, shares at Aug. 31, 2020 | 1,166,150 | ||||
Warrants issued in connection with debt | 157,438 | 157,438 | |||
Shares issued in connection with franchise acquisition | $ 4 | 413,540 | 413,544 | ||
Shares issued in connection with franchise acquisition, shares | 37,941 | ||||
Shares issued in connection with consulting agreement | 25,420 | 25,420 | |||
Shares issued in connection with consulting agreement, shares | 2,813 | ||||
Shares issued to directors, officers and employees as compensation | $ 1 | 119,632 | 119,633 | ||
Shares issued to directors, officers and employees as compensation, shares | 9,844 | ||||
Rounding related to reverse stock split | |||||
Rounding related to reverse stock split, shares | 628 | ||||
Net loss attributable to non-controlling interest | (8,554) | 8,533 | |||
Net loss | (1,005,160) | (1,005,160) | |||
Ending balance at Nov. 30, 2020 | $ 122 | $ 13,128,420 | $ 194,093 | $ (7,855,418) | $ 5,467,217 |
Ending balance, shares at Nov. 30, 2020 | 1,217,376 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | 12 Months Ended | ||
Nov. 30, 2020 | Nov. 30, 2019 | May 31, 2020 | May 31, 2019 | |
Cash flows from operating activities: | ||||
Net loss | $ (1,684,793) | $ (854,894) | $ (2,665,779) | $ (3,565,272) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Interest earned on marketable securities held in trust account | (403,984) | |||
Non-cash interest expense | 241,557 | |||
Depreciation expense | 73,249 | 21,148 | 57,473 | 5,298 |
Amortization expense | 133,229 | 102,812 | 211,067 | 85,677 |
Impairment of cost method investment | 202,586 | 150,000 | ||
Debt forgiveness income | (3,115) | (93,761) | (93,761) | (369,206) |
Issuance of shares for services | 1,033,140 | 153,011 | 161,776 | 2,170,110 |
Changes in operating assets and liabilities: | ||||
Accounts receivable | (3,668) | (67,971) | (127,653) | |
Inventory | (20,676) | (18,984) | (15,787) | |
Prepaid expenses | (15,122) | (5,671) | (5,588) | 3,170 |
Security deposits | (2,568) | (2,568) | (12,318) | |
Deferred brokerage fees | 25,884 | 5,056 | (18,592) | |
Deferred revenues | (63,279) | 14,812 | 123,882 | |
Accounts payable | 110,595 | 13,658 | 123,142 | |
Deferred legal fees | (100,000) | |||
Accrued expenses | (194,222) | (89,101) | 729,902 | 641,270 |
Due from franchisees' | (45,516) | (13,342) | ||
Net cash used in operating activities | (207,037) | (835,796) | (1,522,486) | (1,395,255) |
Cash flows from investing activities: | ||||
Cash from acquisition | 26,180 | 26,180 | 75,930 | |
Lease liability net of lease asset | 2,499 | (776) | (776) | 775 |
Investment at cost | (150,000) | |||
Purchase of property and equipment | (1,949) | (156,319) | (163,472) | (122,529) |
Net cash provided by (used in) investing activities | 550 | (130,915) | (138,068) | (195,824) |
Cash flows from financing activities: | ||||
Repayment of note payable | (319,477) | |||
Proceeds from note payable | 1,046,756 | |||
Proceeds from sale of Private Units | 87,700 | 1,925,000 | ||
Proceeds from note payable - related party, net | 192,048 | 12,143 | ||
Deferred financing costs | (137,561) | (98,198) | ||
Non-controlling interest of original investment in subsidiaries | 24,013 | 24,054 | ||
Private placement funds received | 25,000 | 50,000 | 75,000 | |
Settlement of redeemable common stock | (46,291,685) | |||
Cash held in trust account used to settle common stock redemption obligation | (7,620,432) | |||
Cash in trust | 54,648,148 | |||
Net cash provided by financing activities | 614,718 | 74,013 | 280,604 | 2,673,174 |
Net change in cash | 408,231 | (892,698) | (1,379,950) | 1,082,095 |
Cash - beginning of period | 160,208 | 1,540,158 | 1,540,158 | 458,063 |
Cash - end of period | 568,439 | 647,460 | 160,208 | 1,540,158 |
Supplemental Disclosures of Cash Flow Information: | ||||
Cash paid for interest | ||||
Cash paid for income taxes | ||||
Supplemental Non-Cash Investing and Financing Information | ||||
Common stock issued for consideration in an acquisition of assets | 728,544 | 1,440,000 | $ 1,440,000 | $ 6,090,000 |
Conversion of debt to common shares | 100,000 | |||
Increase in prepaid expenses and accrued expenses | 93,827 | |||
Warrants issued for debt discount | 102,217 | |||
Acquisition of PLAYlive and other Assets: | ||||
Goodwill | 2,226,166 | |||
Inventory | 110,310 | |||
Property and equipment | 443,234 | 9,503 | ||
Intangible Assets | 150,000 | |||
Goodwill | 25,000 | |||
Deferred brokerage fees | 805,975 | |||
Accounts payable | (3,574) | |||
Deferred revenue | $ (1,624,250) |
Organization and Description of
Organization and Description of Business | 6 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Organization and Description of Business | NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS Simplicity Esports and Gaming Company (the “Company,” “we,” or “our”), was organized as a blank check company organized under the laws of the State of Delaware on April 17, 2017. The Company was formed under the name I-AM Capital Acquisition Company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (“Business Combination”). On November 20, 2018, the Company changed its name from I-AM Capital Acquisition Company to Smaaash Entertainment Inc. On January 2, 2019, the Company changed its name from Smaaash Entertainment Inc. to Simplicity Esports and Gaming Company. Through our wholly owned subsidiary, Simplicity Esports, LLC, acquired on January 2, 2019, the Company has begun to implement a unique approach to ensure the ultimate fan friendly esports experience. Our intention is to have gamers involved at the grassroots level and feel a sense of unity as we compete with top class talent. Our management and players are known within the esports community and we plan to use their skills to create a seamless content creation plan helping gamers feel closer to our brand than any other in the industry. Simplicity is an established brand in the Esports industry with an engaged fan base competing in popular games across different genres, including League of Legends, PUBG, Gears of War, Smite, Guns of Boom, and multiple EA Sports titles. Additionally, the Simplicity stream team encompasses a unique group of casters, influencers, and personalities, all of whom connect to Simplicity’s dedicated fan base. Simplicity also has begun to open and operate esports gaming centers that will provide the public an opportunity to experience and enjoy gaming and Esports in a social setting, regardless of skill or experience. On April 2, 2019, Nasdaq filed a Notification of Removal from Listing and/or Registration under Section 12(b) of the Securities and Exchange Act of 1934 on Form 25 with the Securities and Exchange Commission relating to the Company’s common stock and warrants. As a result, the Company’s common stock and warrants were delisted from Nasdaq effective April 2, 2019. The Company’s common stock and warrants are quoted on the OTCQB under the symbols “WINR” and “WINRW,” respectively. The Company is currently list on the OTC Market under the symbol “WINR”. Through our wholly owned subsidiary, PLAYlive Nation, Inc. (“PLAYlive”), acquired on July 29, 2019, the Company has a network of franchised Gaming Centers. As November 30, 2020, approximately 40 locations were considered to be operational, in various states including Arizona, California, Idaho, Florida, Maryland, Michigan, Mississippi, Montana, Oregon, South Carolina, Texas, Utah and Washington. As of November 30, 2020, a number of these locations were unable to resume regular operations as the result of restrictions imposed by municipalities related to COVID-19 (Note 2). PLAYlive offers a video gaming lounge concept to qualified franchisees. PLAYlive currently offers single-unit location franchises, as well as agreements to develop multiple locations. This PLAYlive model is being interlaced with the esports gaming centers mentioned above to create the ultimate gaming center. On August 17, 2020, the Company filed a Certificate of Amendment to increase the authorized shares of common stock from 20,000,000 to 36,000,000. Accordingly, the Company’s authorized capital stock consists of (i) 36,000,000 shares of common stock, and (ii) 1,000,000 shares of preferred stock. On September 28, 2020, the Company’s board of directors approved the reverse stock split in a ratio of 1-for-6 and on September 29, 2020, the Company filed an amended and restated certificate of amendment to its Third Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), implementing the reverse stock split in a ratio of 1-for-6, effective October 13, 2020. On October 12, 2020, the Company filed a certificate of amendment to the Certificate of Incorporation changing the effective date of the foregoing reverse stock split to November 4, 2020. On November 17, 2020, the Company filed a certificate of amendment to the Certificate of Incorporation, changing the reverse stock split to a ratio of 1-for-8. The reverse stock split, in the ratio of 1-for-8, became effective on November 20, 2020. The reverse stock split is intended to allow the Company to meet the minimum share price requirement of the Nasdaq Capital Market. There is no assurance that our listing application will be approved by the Nasdaq Capital Market. All share and per share data in the accompanying condensed consolidated financial statements have been retroactively restated to reflect the effect of the reverse stock split. In connection with the new business initiatives, the Company has formed the following subsidiaries: ● Simplicity Esports, LLC, a limited liability company incorporated in Florida and a wholly owned subsidiary of the Company. ● PLAYlive Nation, Inc., company incorporated in Delaware and a wholly owned subsidiary of the Company. ● PLAYlive Nation Holdings, LLC, a limited liability company incorporated, and a wholly owned subsidiary of the Company. ● Simplicity One Brasil Ltd, a company incorporated under the laws of Brazil and a 76% owned subsidiary of the Company. ● Simplicity Happy Valley, LLC, a limited liability company incorporated in Oregon and a 79% owned subsidiary of the Company. ● Simplicity Redmond, LLC, a limited liability company incorporated in Washington and a 79% owned subsidiary of the Company. ● Simplicity El Paso, LLC, a limited liability company incorporated in Texas and is 51% owned by the Company (see Note 5). ● Simplicity Union Gap, LLC, a limited liability company incorporated in Washington and is wholly owned by the Company (see Note 5). ● Simplicity Kennewick, LLC, a limited liability company incorporated in Washington and is wholly owned by the Company (see Note 5). ● Simplicity Humble, LLC, a limited liability company incorporated in Texas and is wholly owned by the Company (see Note 5). ● Simplicity Frisco, LLC, a limited liability company incorporated in Texas and is wholly owned by the Company (see Note 5). ● Simplicity Billings, LLC. a limited liability company incorporated in Montana and is wholly owned by the Company (see Note 5). ● Simplicity Brea, LLC. a limited liability company incorporated in California and is wholly owned by the Company (see Note 5). ● Simplicity Santa Rosa, LLC, a limited liability company incorporated in California and is wholly owned by the Company (see Note 5). ● Simplicity St. Petersburg, LLC, a limited liability company incorporated in Florida and is wholly owned by the Company (see Note 5). | NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS Simplicity Esports and Gaming Company F/K/A Smaaash Entertainment Inc. (the “Company,” “we,” or “our”), was an organized as a blank check company organized under the laws of the State of Delaware on April 17, 2017. The Company was formed under the name I-AM Capital Acquisition Company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (“Business Combination”). On November 20, 2018, the Company changed its name from I-AM Capital Acquisition Company to Smaaash Entertainment Inc. On January 2, 2019, the Company changed its name from Smaaash Entertainment Inc. to Simplicity Esports and Gaming Company. Through our wholly subsidiary, Simplicity Esports, LLC, acquired on January 2, 2019 (see Note 6). The Company has begun to implement a unique approach to ensure the ultimate fan friendly esports experience. Our intention is to have gamers involved at the grassroots level and feel a sense of unity as we compete with top class talent. Our management and players are known within the esports community and we plan to use their skills to create a seamless content creation plan helping gamers feel closer to our brand than any other in the industry. Simplicity is an established brand in the Esports industry with an engaged fan base competing in popular games across different genres, including PUBG, Gears of War, Smite, Guns of Boom, and multiple EA Sports titles. Additionally, the Simplicity stream team encompasses a unique group of casters, influencers, and personalities all of whom connect to Simplicity’s dedicated fan base. Simplicity also has begun to open and operate esports gaming centers that will provide the public an opportunity to experience and enjoy gaming and Esports in a social setting, regardless of skill or experience. Through our wholly owned subsidiary, PLAYlive Nation, Inc. (“PLAYlive”), acquired on July 29, 2019 (see Note 6), the Company has a network of franchised Gaming Centers. As May 31, 2020, approximately 43 locations were open and operating, in various states including Arizona, California, Idaho, Florida, Maryland, Michigan, Mississippi, Montana, Oregon, South Carolina, Texas, Utah and Washington. PLAYlive offers a video gaming lounge concept to qualified franchisees. PLAYlive currently offers single-unit location franchises as well as agreements to develop multiple locations. This PLAYlive model is being interlaced with the esports gaming centers mentioned above to create the ultimate gaming center. The Company’s sponsor was I-AM Capital Partners LLC (the “Sponsor”). The Company selected May 31 as its fiscal year end. Initial Business Combination The Company’s management had broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering. On August 21, 2018, the Company deposited into the Trust Account an aggregate of $303,610 (including interest earned on the funds in the Trust Account available for withdrawal), representing $0.058 per public share. As a result of such payment, the Company extended the period of time it had to consummate a Business Combination by three months to November 21, 2018. On November 20, 2018, the parties consummated the initial Business Combination. Upon consummation of the Business Combination, the Company issued 208,000 restricted shares to Chardan Capital Markets in consideration for advisory services provided. These restricted shares are valued at $10.21 per share totaling $2,125,000 and are on the statement of operations included in general and administrative expenses. At the special meeting of stockholders held on November 9, 2018, holders of 4,448,260 shares of the Company’s common stock sold in its Initial Public Offering ( “ On the Closing Date, the Company entered into a master franchise agreement (“Master Franchise Agreement”) and a master license and distribution agreement (“Master Distribution Agreement”) with Smaaash. As of May 31, 2020, the Master Franchise Agreement and Master Distribution Agreement continue to be in effect. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in condensed consolidated financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the condensed consolidated financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended May 31, 2020, as filed with the SEC on August 31, 2020. The interim results for the six months ended November 30, 2020, are not necessarily indicative of the results to be expected for the year ending May 31, 2021 or for any future interim periods. Emerging Growth Company Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. Basis of Consolidation The condensed consolidated financial statements include the operations of the Company and its wholly-owned subsidiaries and majority-owned subsidiaries and all intercompany accounts and transactions have been eliminated in consolidation. Cash and cash equivalents The Company considers short-term interest-bearing investments with initial maturities of three months or less to be cash equivalents. The Company has no cash equivalents as of November 30, 2020 and May 31, 2020. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and accounts receivable. Cash and cash equivalents in a financial institution, which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts through November 30, 2020. Fair Value of Financial Instruments and Fair Value Measurements FASB ASC 820 - Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on November 30, 2020. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments. FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2—Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3—Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash, due from and to related parties, prepaid expenses, accounts payable and accrued liabilities approximate their fair market value based on the short-term maturity of these instruments. Foreign Currencies Revenue and expenses are translated at average rates of exchange prevailing during the year. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates during the six months ended November 30, 2020 and 2019 include estimates for allowance for doubtful accounts on accounts receivable, the estimates for obsolete or slow-moving inventory, the useful life of property and equipment, assumptions used in assessing impairment of long-term assets, the estimate of the fair value of the right of use asset and lease liability, the value of beneficial conversion features, and the fair value of non-cash equity transactions. Revenue Recognition The Company follows Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods and services. Our revenue is derived from the three sources listed below. Deferred Revenues Deferred revenues are classified as current and long-term based on when management estimates the revenues will be recognized. The Company receives payments from franchisees in advance of all performance obligations having been met, including but not limited to franchise locations being opened. As certain conditions agreed to in these franchise agreements are performed, revenues are recognized. Deferred costs include commissions paid to brokers related to the sale of specific new franchises which have not met revenue recognition criteria as of November 30, 2020. These costs are recognized in the same period as the initial franchise fee revenue is recognized. Accounts Receivable The Company estimates the allowance for doubtful accounts based on an analysis of specific customers (i.e. franchisees), taking into consideration the age of past due accounts and an assessment of the customer’s ability to pay. Accounts receivable are written off against the allowance when management determines it is probable the receivable is worthless. Customer account balances with invoices dated over 90 days old are considered delinquent and considered in the allowance assessment. The Company performs credit evaluations of its customers and, generally, requires no collateral. As of November 30, 2020, management has recorded an allowance for doubtful accounts of $139,867. Property and Equipment Property and equipment and leasehold improvements are recorded at its historical cost. The cost of property and equipment is depreciated over the estimated useful lives, when placed in service (ranging from 3 -5 years), of the related assets utilizing the straight-line method of depreciation. The cost of leasehold improvements is depreciated (amortized) over the lesser of the length of the related leases or the estimated useful lives of the assets. Ordinary repairs and maintenance are expensed when incurred and major repairs will be capitalized and expensed if they benefit future periods. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Intangible Assets and Impairment Intangible assets that are subject to amortization are reviewed for potential impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. Assets not subject to amortization are tested for impairment at least annually. These costs are included in intangible assets on our condensed consolidated balance sheet and amortized on a straight-line basis when placed into service over their estimated useful lives of the costs, which is 3 to 5 years. The Company periodically reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less that the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. Goodwill Goodwill is the excess of our purchase cost over the fair value of the net assets of acquired businesses. We do not amortize goodwill, but we assess our goodwill for impairment at least annually. We have assessed goodwill and qualitative considerations indicated no impairment. Stock-based Compensation The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation Equity-Based Payments to Non-Employees In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees. Related parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases On January 1, 2019, the Company adopted ASU No. 2016-02, applying the package of practical expedients to leases that commenced before the effective date whereby the Company elected to not reassess the following: (i) whether any expired or existing contracts contain leases; and (ii) initial direct costs for any existing leases. For contracts entered into on or after the effective date, at the inception of a contract the Company assessed whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. The Company will allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. The Company has elected not to recognize right-of-use (“ROU”) assets and lease liabilities for short-term leases that have a term of 12 months or less. Operating lease ROU assets represents the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company use an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in general and administrative expenses in the condensed consolidated statements of operations. Basic Loss Per Share The Company complies with accounting and disclosure requirements ASC Topic 260, “Earnings Per Share.” Basic loss per share is calculated by dividing the Company’s net loss by the weighted average number of common shares outstanding during the period. Diluted loss per share is calculated by dividing the Company’s net loss by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. When the Company records a loss from operations, all potentially dilutive shares are anti-dilutive and are consequently excluded from the calculation of diluted net loss per common share. The following potentially dilutive equity securities outstanding as of November 30, 2020 and 2019 were not included in the computation of dilutive loss per common share because the effect would have been anti-dilutive: November 30, 2020 2019 Stock warrants 820,055 803,001 Convertible notes 108,696 64,750 Total 928,751 867,751 Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, “ Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the consolidated financial statements recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. As of November 30, 2020 and May 31, 2020, the Company had no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. The Company recognizes interest and penalties related to uncertain income tax positions in other expense. However, no such interest and penalties were recorded as of November 30, 2020. Recently Issued and Recently Adopted Accounting Pronouncements Accounting standards promulgated by the FASB are subject to change. Changes in such standards may have an impact on the Company’s future financial statements. The following is summary of recent accounting developments. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of the standard on the condensed consolidated financial statements. The Company periodically reviews new accounting standards that are issued. Although some of these accounting standards may be applicable to the Company, the Company has not identified any other new standards that it believes merit further discussion, and the Company expects that none would have a significant impact on its financial statements. Going Concern, Liquidity and Management’s Plan The Company’s unaudited condensed consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the unaudited condensed consolidated financial statements, the Company has an accumulated deficit, working capital deficit of and a net loss of $7,855,418, $2,670,387 and $1.684.793, respectively, as of November 30, 2020. Management believes that these matters raise substantial doubt about the Company’s ability to continue as a going concern for twelve months from the issuance date of this report. The Company has commenced operations and has begun to generate revenue; however, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds by way of private and/or public offerings. While the Company believes in the viability of its strategy and its ability to generate sufficient revenue and to raise additional funds, there can be no assurances to that effect. Should the Company fail to raise additional capital, it may be compelled to reduce the scope of its planned future business activities. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan, to generate sufficient revenue and to raise additional funds by way of public and/or private offerings. The unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. In December 2019, a novel strain of coronavirus (COVID-19) emerged in Wuhan, Hubei Province, China. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, it has now spread to several other countries and infections have been reported globally. Because COVID-19 infections have been reported throughout the United States, certain federal, state and local governmental authorities have issued stay-at-home orders, proclamations and/or directives aimed at minimizing the spread of COVID-19. Additional, more restrictive proclamations and/or directives may be issued in the future. As a result, all of our corporate and franchised Simplicity Gaming Centers were closed effective April 1, 2020. We commenced reopening Simplicity Gaming Centers as of May 1, 2020 and have since reopened ten corporate and 11 franchised Simplicity Gaming Centers as of January 14, 2021, the majority of which are operating at restricted capacity based on local COVID-19 regulations. Although our franchise agreements with franchisees of Simplicity Gaming Centers require a minimum monthly royalty payment to us from the franchisees regardless of whether the franchised Simplicity Gaming Centers are operating, there is a potential risk that franchisees of Simplicity Gaming Centers will default in their obligations to pay their minimum monthly royalty payment to us resulting in either an increase in accounts receivables or a bad debt expense where account receivables are no longer collectible due to franchisee’s inability to pay the minimum monthly royalty payments owed by the franchisee. We have not written off as bad debt any accounts receivables attributable to franchisee minimum monthly royalty payments owed during the COVID-19 pandemic. Notwithstanding, it is unclear exactly how much of the increase in accounts receivables is attributable to the impact of COVID-19. For the months of July and August 2020, we have waived the minimum monthly royalty payment obligations for the months of July and August 2020 and are instead billing the franchisees a true-up of 6% of gross sales without a minimum. The ultimate impact of the COVID-19 pandemic on the Company’s operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption, reduced customer traffic and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time but is anticipated to have a material adverse impact on our business, financial condition and results of operations. The measures taken to date have negatively impacted the Company’s business during the six months ended November 30, 2020 and will potentially continue to impact the Company’s business. Management expects that all of its business segments, across all of its geographies, will be impacted to some degree, but the significance of the impact of the COVID-19 outbreak on the Company’s business and the duration for which it may have an impact cannot be determined at this time. | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Emerging Growth Company Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. Basis of Consolidation The consolidated financial statements include the operations of the Company and its wholly owned subsidiaries, Simplicity Esports, LLC, PLAYlive Nation, Inc., and PLAYlive Nation Holdings, LLC, its 90% owned subsidiary Simplicity One Brasil Ltd, and its 79% owned subsidiaries Simplicity Happy Valley, LLC and Simplicity Redmond, LLC. In November 2019, the Company organized Happy Valley, LLC and Redmond, LLC for the purpose of converting franchised stores into Company owned stores. All significant intercompany accounts and transactions have been eliminated in consolidation. Cash and cash equivalents The Company considers short-term interest-bearing investments with initial maturities of three months or less to be cash equivalents. The Company has no cash equivalents. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the consolidated balance sheet. Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition As of January 1, 2018, the Company adopted Revenue from Contracts with Customers (Topic 606) (“ASC 606”). The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The Company adopted the standard using the modified retrospective method and the adoption did not have a material impact on its financial statements. The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods and services. The following describes principal activities, separated by major product or service, from which the Company generates its revenues. Company-owned Stores Sales The Company-owned stores principally generate revenue from retail esports gaming centers. Revenues from Company-owned stores are recognized when the products are delivered, or the service is provided. Franchise Royalties and Fees Franchise royalties which are based on eight percent of franchise store sales after a minimum level of sales occur and are recognized as sales occur. Any royalty reductions, including waivers or those offered as part of a new store development incentive or as incentive for other behaviors are recognized at the same time as the related royalty as they are not separately distinguishable from the full royalty rate. Franchise royalties are billed on a monthly basis. The Company recognizes initial franchise license fee revenue, when the Company has performed substantially all the services required in the franchise agreement. Fees received that do not meet these criteria are recorded as deferred revenues until earned. The pre-opening services provided to franchisees do not contain separate and distinct performance obligations from the franchise right; thus, the fees collected will be amortized on a straight-line basis beginning at the store opening date through the term of the franchise agreement, which is typically 10 years. Franchise license renewal fees, which generally occur every 10 years, are billed before the renewal date. Fees received for future license renewal periods are amortized over the life of the renewal period. The Company offers various incentive programs for franchisees including royalty incentives, new store opening incentives (i.e. development incentives) and other support initiatives. Royalties and franchise fees sales are reduced to reflect any royalty incentives earned or granted under these programs that are in the form of discounts. Commissary sales are comprised of food and supplies sold to franchised stores and are recognized as revenue upon shipment or delivery of the related products to the franchisees. Payments are generally due within 30 days. Fees for information services, including software maintenance fees, marketing fees and website maintenance, graphic and promotion fees are recognized as revenue as such services are provided. Esports Revenue Esports revenue is a form of competition using video games. Most commonly, esports takes the form of organized, single player and multiplayer video game competitions, particularly between professional players, individually or as teams. Revenues from Esports revenue are recognized when the competition is completed, and prize money is awarded. Revenues earned from league sponsorships from the Company’s share of league revenues including domestic esports teams competing in games such as Overwatch, Apex Legends, PUBG and more are included here. Revenue from international esports teams including Flamengo esports are included here. League revenues are earned through sponsorship fees on a per tournament, or per season basis. As of March 22, 2020, the Company commenced weekly online esports tournaments promoted directly to its existing customer base. Revenue from these weekly tournaments, comprised of registration fees on a per player basis, is included here. Deferred Revenues Deferred revenues are classified as current or long-term based on when management estimates the revenues will be recognized. The Company receives payments from franchisees in advance of all performance obligations having been met, including but not limited to franchise locations being opened. As certain conditions agreed to in these franchise agreements are performed, revenues are recognized. Deferred costs include commissions paid to brokers related to the sale of specific new franchises which have not met revenue recognition criteria as of May 31, 2020. These costs are recognized in the same period as the initial franchise fee revenue is recognized. Accounts Receivable The Company estimates the allowance for doubtful accounts based on an analysis of specific customers (i.e. franchisees), taking into consideration the age of past due accounts and an assessment of the customer’s ability to pay. Accounts receivable are written off against the allowance when management determines it is probable the receivable is worthless. Customer account balances with invoices dated over 90 days old are considered delinquent and considered in the allowance assessment. The Company performs credit evaluations of its customers and, generally, requires no collateral. Management has assessed accounts receivable as of May 31, 2020, and an allowance for doubtful accounts of approximately $52,400 has been recorded Property and equipment Property and equipment and leasehold improvements are recorded at its historical cost. The cost of property and equipment is depreciated over the estimated useful lives, when placed in service, (ranging from 3 -5 years) of the related assets utilizing the straight-line method of depreciation. The cost of leasehold improvements is depreciated (amortized) over the lesser of the length of the related leases or the estimated useful lives of the assets. Ordinary repairs and maintenance are expensed when incurred and major repairs will be capitalized and expensed if it benefits future periods. Intangible Assets and impairment Intangible assets that are subject to amortization are reviewed for potential impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. Assets not subject to amortization are tested for impairment at least annually. These costs were included in intangible assets on our balance sheet and amortized on a straight-line basis when placed into service over the estimated useful lives of the costs, which is 3 to 5 years. The Company periodically reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less that the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. Goodwill Goodwill is the excess of our purchase cost over the fair value of the net assets of acquired businesses. We do not amortize goodwill, but we assess our goodwill for impairment at least annually. Our assessment date was May 31, 2020, and quantitative and qualitative considerations indicated no impairment. Franchise Locations Through PLAYlive, the Company’s wholly owned subsidiary, the Company has entered into franchise agreements with third parties. As May 31, 2020, approximately 43 locations were open and operating, in various states including Arizona, California, Idaho, Florida, Maryland, Michigan, Mississippi, Montana, Oregon, South Carolina, Texas, Utah and Washington. Stock-based compensation The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation Equity-Based Payments to Non-Employees Amendments to Forward Purchase Agreements and Warrants On December 20, 2018, the Company, Polar, K2 and the Escrow Agent, entered into an Amendment (the “Amendment”), pursuant to which, among other things, the stock purchase agreements with Polar and K2 were amended to (x) reduce the purchase price per share payable by the Company at the closing of the Stock Sales from $11.23 per share to (1) first $6.00 per share up to 20% of the original number of Shares (as defined in the respective Purchase Agreement), (2) then $5.00 per remaining share up to 20% of the original number of Shares, (3) then $4.00 per remaining share up to 20% of the original number of Shares, (4) then $3.00 per remaining Share up to 20% of the original number of Shares, and (5) then $2.00 per remaining Share up to 20% of the original number of Shares, (y) to extend the outside date of the closing of the Stock Sales until January 18, 2019, and (z) to authorize the issuance of $3,542,700 and $1,590,600 from the Escrow Account to Polar and K2, respectively, as partial payment for the Shares prior to the final closing of the Stock Sales. Investments Investments in non-consolidated entities are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company’s ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company’s proportionate share of the investees’ net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company’s share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. Investments in equity securities that do not have readily determinable fair values and do not qualify for consolidation or the equity method are carried at cost. Dividends received from those companies are included in other income. Dividends received in excess of the Company’s proportionate share of accumulated earnings are applied as a reduction of the cost of the investment. Other than temporary impairments to fair value are charged against current period income. Our investments in privately held entities are accounted for under the cost method. During the quarter ended February 28, 2019 the Company recognized $150,000 of impairment expense related to the Smaaash acquisition. Leases In February of 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02-Leases (Topic 842), which significantly amends the way companies are required to account for leases. Under the updated leasing guidance, some leases that did not have to be reported previously are now required to be presented as an asset and liability on the balance sheet. In addition, for certain leases, what was previously classified as an operating expense must now be allocated between amortization expense and interest expense. The Company adopted this update as of January l, 2019 using the modified retrospective transition method and prior periods have not been restated. Upon implementation, the Company recognized initial operating lease right-of-use assets of $110,003 and operating lease liabilities of $107,678. Due to the simplistic nature of the Company’s leases, no retained earnings adjustment was required. See Note 9 for further details. Deferred Financing Costs The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (SAB) Topic 5A — “Expenses of Offering”. Offering costs of $98,198 consisting principally of legal and professional fees have been recorded as an asset as of May 31, 2020, these amounts will be charged to additional paid in capital upon the completion of the Company’s ongoing Public Offering. Basic Income (Loss) per share The Company complies with accounting and disclosure requirements ASC Topic 260, “Earnings Per Share.” Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. Diluted earnings or loss per common share is calculated by dividing net income or loss available to common stockholders by the diluted weighted-average number of common shares outstanding, which includes the effect of potentially dilutive securities. Potentially dilutive securities for this calculation consist primarily of warrants, outstanding options, and shares into which the convertible notes are convertible. When the Company records a loss from operations, all potentially dilutive shares are anti-dilutive and are consequently excluded from the calculation of diluted net loss per common share. Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, “ Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. On December 22, 2017, the U.S. Tax Cuts and Jobs Act of 2017 (“Tax Reform”) was signed into law. As a result of Tax Reform, the U.S. statutory tax rate was lowered from 35% to 21% effective January 1, 2018, among other changes. ASC Topic 740 requires companies to recognize the effect of tax law changes in the period of enactment; therefore, the Company was required to revalue its deferred tax assets and liabilities at the new rate. The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain tax effects of Tax Reform. The ultimate impact may differ from this provisional amount, possibly materially, as a result of additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of Tax Reform. Recent Accounting Pronouncements Accounting standards promulgated by the FASB are subject to change. Changes in such standards may have an impact on the Company’s future financial statements. The following are a summary of recent accounting developments. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees. The Company periodically reviews new accounting standards that are issued. Although some of these accounting standards may be applicable to the Company, the Company has not identified any other new standards that it believes merit further discussion, and the Company expects that none would have a significant impact on its financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), followed by other related ASUs that provided targeted improvements and additional practical expedient options (collectively “ASC 842”). ASC 842 requires lessees to recognize right-of-use (“ROU”) assets and lease payment liabilities on the balance sheet for leases representing the Company’s right to use the underlying assets over the lease term. Each lease that is recognized on the balance sheet is classified as either finance or operating, with such classification affecting the pattern and classification of expense recognition in the Statements of Operations Statements of Cash Flows The Company adopted ASC 842 on January 1, 2019 using the modified retrospective method. The Company elected as part of its adoption to also use the optional transition methodology whereby previously reported periods continue to be reported in accordance with historical accounting guidance for leases that were in effect for those prior periods. Policy elections and practical expedients that the Company has implemented as part of adopting ASC 842 include (a) excluding from the balance sheet leases with terms that are less than or equal to one year, (b) for all existing asset classes that contain both lease and non-lease components, combining these components together and accounting for them as a single lease component, (c) the package of practical expedients, which among other things, allows the Company to avoid reassessing contracts that commenced prior to adoption that were properly evaluated under legacy GAAP, and (d) excluding land easements, which were not accounted for under the previous leasing guidance, that existed or expired before adoption of ASC 842. The scope of ASC 842 does not apply to leases used in the exploration for minerals or use thereof, including oil, natural gas and natural gas liquids. The Company’s adoption of ASC 842 resulted in an increase in other assets, accounts payable and accrued liabilities, and other liabilities line items on the accompanying Consolidated Balance Sheets Going Concern, Liquidity and Management’s Plan The Company’s consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the consolidated financial statements, the Company has an accumulated deficit as of May 31, 2020, a net loss and net cash used in operating activities for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the of the date that the financial statements are issued. The Company’s cash position may not be sufficient to support the Company’s daily operations. Management plans to raise additional funds by way of a private or ongoing public offering. While the Company believes in the viability of its strategy and its ability to generate sufficient revenue and to raise additional funds, there can be no assurances to that effect. Should the Company fail to raise additional capital, it may be compelled to reduce the scope of its planned future business activities. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan, to generate sufficient revenue and to raise additional funds by way of public and/or private offerings. The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. In December 2019, a novel strain of coronavirus (COVID-19) emerged in Wuhan, Hubei Province, China. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, it has now spread to several other countries and infections have been reported globally. Because COVID-19 infections have been reported throughout the United States, certain federal, state and local governmental authorities have issued stay-at-home orders, proclamations and/or directives aimed at minimizing the spread of COVID-19. Additional, more restrictive proclamations and/or directives may be issued in the future. As a result, all of our corporate and franchised Simplicity Gaming Centers had been closed effective April 1, 2020. Although our franchise agreements with franchisees of Simplicity Gaming Centers require a minimum monthly royalty payment to us from the franchisees regardless of whether the franchised Simplicity Gaming Centers are operating, there is a potential risk that franchisees of Simplicity Gaming Centers will default in their obligations to pay their minimum monthly royalty payment to us. As of May 31, 2020, some of our franchised gaming centers have begun to re-open. The ultimate impact of the COVID-19 pandemic on the Company’s operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption, reduced customer traffic and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time but is anticipated to have a material adverse impact on our business, financial condition and results of operations. The measures taken to date impacted the Company’s business for the fiscal fourth quarter and potentially beyond. Management expects that all of its business segments, across all of its geographies, will be impacted to some degree, but the significance of the impact of the COVID-19 outbreak on the Company’s business and the duration for which it may have an impact cannot be determined at this time. |
Initial Public Offering and Pri
Initial Public Offering and Private Placement | 12 Months Ended |
May 31, 2020 | |
Equity [Abstract] | |
Initial Public Offering and Private Placement | NOTE 3 — INITIAL PUBLIC OFFERING AND PRIVATE PLACEMENT Initial Public Offering On August 22, 2017, the Company sold 5,000,000 Public Units at a purchase price of $10.00 per Public Unit in the Initial Public Offering, generating gross proceeds of $50.0 million. The Company incurred offering costs of approximately $3.7 million, inclusive of approximately $3.2 million of underwriting fees. The Company paid $1 million of underwriting fees upon the closing of the Initial Public Offering, issued 50,000 shares of common stock for underwriting fees, and deferred $1.82 million of underwriting fees until the consummation of the initial Business Combination. Each Unit consisted of one share of the Company’s common stock, one right to receive one-tenth of one share of the Company’s common stock upon consummation of the Company’s initial Business Combination (“Right”), and one redeemable warrant (“Warrant”). Each Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50 per share, subject to adjustment. No fractional shares will be issued upon exercise of the Warrants. The Warrants became exercisable 30 days after the completion of the initial Business Combination and will expire five years after the completion of the initial Business Combination or earlier upon redemption or liquidation. The Company may redeem the Warrants, in whole and not in part, at a price of $0.01 per Warrant upon 30 days’ notice (“30-day redemption period”), only in the event that the last sale price of the common stock equals or exceeds $21.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which notice of redemption is given, provided there is an effective registration statement with respect to the shares of common stock underlying such Warrants and a current prospectus relating to those shares of common stock is available throughout the 30-day redemption period. If the Company calls the Warrants for redemption as described above, the Company’s management will have the option to require all holders that wish to exercise Warrants to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,” management will consider, among other factors, the Company’s cash position, the number of Warrants that are outstanding and the dilutive effect on the Company’s stockholders of issuing the maximum number of shares of common stock issuable upon the exercise of the Warrants. Each holder of a Right received one-tenth (1/10) of one share of common stock upon consummation of the Business Combination. No fractional shares were issued upon exchange of the Rights. No additional consideration was paid by a holder of Rights in order to receive its additional shares upon consummation of the Business Combination as the consideration related thereto has been included in the Unit purchase price paid for by investors in the Initial Public Offering. The Company granted the underwriters a 45-day option to purchase up to 750,000 additional Public Units to cover any over-allotment, at the initial public offering price less any underwriting discounts and commissions. On September 13, 2017, the underwriters purchased 200,000 additional Public Units for gross proceeds of $2,000,000, less commissions of $110,000, of which $70,000 are deferred. The Company issued Maxim Group LLC (“Maxim”), as compensation for the Initial Public Offering, an aggregate of 52,000 shares, including 2,000 shares issued in connection with the partial exercise of the over-allotment option. The Company accounted for the fair value of these shares as an expense of the Initial Public Offering resulting in a charge directly to stockholders’ equity. Settlement Agreement On November 20, 2018, the Company entered into a settlement and release agreement (“Settlement Agreement”) with Maxim. Pursuant to the Settlement Agreement, the Company made a cash payment of $20,000 to Maxim and issued the Note in favor of Maxim in order to settle the payment obligations of the Company under the underwriting agreement dated August 16, 2017, by and between the Company and Maxim. The Company also agreed to remove the restrictive legends on an aggregate of 6,500 (52,000 pre-reverse split) shares of its common stock held by Maxim and its affiliate. See “Note Payable” under Note 8 below. Unit Purchase Option At the time of the closing of the Initial Public Offering, the Company sold to Maxim, for an aggregate of $100, an option (the “UPO”) to purchase 250,000 Units (which increased to 260,000 units upon the partial exercise of the underwriters’ over-allotment option). The Company has accounted for the fair value of the UPO, inclusive of the receipt of the $100 cash payment, as an expense of the Initial Public Offering resulting in a charge directly to shareholders’ equity. The Company estimates that the fair value of this UPO is approximately $743,600 (or $2.86 per Unit) using the Black-Scholes option-pricing model. The fair value of the UPO is estimated as of the date of grant using the following assumptions: (1) expected volatility of 35%, (2) risk-free interest rate of 1.73% and (3) expected life of five years. The UPO may be exercised for cash or on a “cashless” basis, at the holder’s option (except in the case of a forced cashless exercise upon the Company’s redemption of the Warrants, as described above), such that the holder may use the appreciated value of the UPO (the difference between the exercise prices of the UPO and the underlying Warrants and Rights, and the market price of the Units and underlying shares of common stock) to exercise the UPO without the payment of any cash. The Company will have no obligation to net cash settle the exercise of the UPO or the Warrants or Rights underlying the UPO. The holder of the UPO will not be entitled to exercise the UPO or the Warrants or Rights underlying the UPO unless a registration statement covering the securities underlying the UPO is effective or an exemption from registration is available. If the holder is unable to exercise the UPO or underlying Warrants or Rights, the UPO, Warrants or Rights, as applicable, will expire worthless. The Company granted the holders of the UPO, demand and “piggy back” registration rights for periods of five and seven years, respectively, from the effective date of the registration statement relating to the Initial Public Offering, including securities directly and indirectly issuable upon exercise of the UPO. Private Placement Concurrently with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 254,500 Private Units at $10.00 per Private Unit, generated gross proceeds of $2,545,000 in a Private Placement. The proceeds from the Private Units was added to the proceeds from the Initial Public Offering held in the Trust Account. The Private Units (including their component securities) were not transferable, assignable or salable until 30 days after the completion of the initial Business Combination and the warrants included in the Private Units (the “Private Placement Warrants”) will be non-redeemable so long as they are held by the Sponsor or their permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Warrants included in the Public Units sold in the Initial Public Offering. Otherwise, the Private Placement Warrants and the Rights underlying the Private Units have terms and provisions that are identical to those of the Warrants and Rights, respectively, sold as part of the Public Units in the Initial Public Offering and have no net cash settlement provisions. On September 13, 2017, the Sponsor purchased 7,000 additional Private Units for gross proceeds of $70,000 upon the partial exercise of the over-allotment option. |
Property and Equipment
Property and Equipment | 6 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Property and Equipment | NOTE 3 — PROPERTY AND EQUIPMENT The following is a summary of property and equipment—at cost, less accumulated depreciation: November 30, 2020 May 31, 2020 Leasehold improvements $ 110,849 $ 52,189 Property and equipment 631,424 243,314 Total cost 742,273 295,503 Less accumulated depreciation (136,019 ) (62,770 ) Net property and equipment $ 606,254 $ 232,733 During the six months ended November 30, 2020 and 2019, the Company recorded depreciation expense of $73,249 and $21,148, respectively | NOTE 4 - PROPERTY, PLANT AND EQUIPMENT The following is a summary of property, plant, and equipment—at cost, less accumulated depreciation: May 31, Leasehold improvements 52,189 Property and equipment 243,314 Total cost 295,503 Less accumulated depreciation (62,770 ) Net, property plant and equipment $ 232,733 Depreciation expense for the years ended May 31, 2020, and 2019 was $57,473 and $5,297, respectively. |
Intangible Assets
Intangible Assets | 6 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible Assets | NOTE 4 — INTANGIBLE ASSETS The following table sets forth the intangible assets, including accumulated amortization as of November 30, 2020: November 30, 2020 May 31, 2020 Remaining Useful Life Intangible Assets Remaining Useful Life Intangible Assets Non-Competes 4 years $ 1,023,118 4.50 years $ 1,023,118 Trademarks Indefinite 866,000 Indefinite 866,000 Customer database 2 years 35,000 10 years — Restrictive covenant 2 years 115,000 — — Customer contracts 10 years 343,414 — 546,000 Internet domain 2 years 3,000 2.50 years 3,000 Total intangible assets $ 2,385,532 $ 2,438,118 Accumulated amortization (429,973 ) (296,744 ) Net carrying value $ 1,955,559 $ 2,141,374 The following table sets forth the future amortization of the Company’s intangible assets as of November 30, 2020: For the fiscal years ending May 31: 2021 $ 133,229 2022 266,040 2023 265,457 2024 130,197 2025 10,834 Thereafter 283,802 Total $ 1,089,559 During the six months ended November 30, 2020 and 2019, the Company recorded amortization expense of $133,229 and $102,812, respectively. During the six months ended November 30, 2020, the Company recorded $202,586 of impairment loss in relation to the customer contracts resulting from termination of franchise agreements. Goodwill The Company’s goodwill carrying amounts relate to the acquisitions of Simplicity Esports LLC, PLAYlive Nation Inc. and Simplicity El Paso, LLC. The composition of the goodwill balance, is as follows: November 30, 2020 May 31, 2020 Simplicity Esports, LLC $ 4,456,250 $ 4,456,250 Simplicity El Paso, LLC 25,000 — PLAYlive Nation Inc. 698,891 698,891 Total Goodwill $ 5,180,141 $ 5,155,141 | NOTE 5 - INTANGIBLE ASSETS The following tables set forth the intangible assets, including accumulated amortization at May 31, 2020: May 31, 2020 Remaining Accumulated Net Carrying Useful Life Cost Amortization Value Non-Competes 4.50 years $ 1,023,118 $ 289,884 $ 733,234 Trademarks Indefinite 866,000 - 866,000 Customer Contracts 10 years 546,000 5,443 540,557 Internet domain 2.50 years 3,000 1,417 1,583 $ 2,438,118 $ 296,744 $ 2,141,374 The following table sets forth the future amortization of the Company’s intangible assets at May 31, 2020: 2021 2022 2023 2024 2025 Thereafter Total Non-Competes $ 204,624 $ 204,624 $ 204,624 $ 119,362 $ - $ - $ 733,234 Customer contracts 54,600 54,600 54,600 54,600 54,600 267,557 540,557 Internet domain 1,000 583 - - - - 1,583 Total $ 260,224 $ 259,807 $ 259,224 $ 173,962 $ 54,600 $ 267,557 $ 1,275,374 Amortization expense for the years ended May 31, 2020, and 2019 was $211,067 and $85,677, respectively. Goodwill The Company’s goodwill carrying amounts relate to the acquisitions of Simplicity Esports LLC and PLAYlive Nation Inc. The composition of the goodwill balance, is as follows: Fiscal Year Fiscal Year Simplicity Esports LLC $ 4,456,250 $ 4,456,250 PLAYlive Nation Inc. 698,891 - Total Goodwill $ 5,155,141 $ 4,456,250 |
Acquisitions
Acquisitions | 6 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Business Combinations [Abstract] | ||
Acquisitions | NOTE 5 — ACQUISITIONS The Simplicity One Acquisition: On January 14, 2020 the Company acquired a 90% interest in Simplicity One Brasil Ltda, for approximately $2,000. This interest was reduced during the three months ended August 31, 2020 as more fully described in Note 7. Simplicity El Paso, LLC: On June 26, 2020, the Company through its wholly owned subsidiary, Simplicity El Paso, LLC acquired a 51% controlling interest in an existing franchise in exchange for 150,000 shares of common stock at $1.10 per share. The total purchase price for the acquisition was $315,000 of which $150,000 was paid in cash by the 49% minority interest owner, an unrelated third party, and $165,000 in common stock by the Company. This has been accounted for by the Company using the acquisition method under business combination accounting. Under this method, the purchase price paid by the acquirer is allocated to the assets acquired and liabilities assumed as of the acquisition date based on the fair value. Determining the fair value of certain assets and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions. All fair value measurements of acquired assets and liabilities are non-recurring in nature and classified as level 3 on the fair value hierarchy. The table below presents a provisional allocation of the gross $315,000 purchase price as of June 26, 2020: Merchandise $ 27,000 Furniture, Fixtures and Equipment 113,000 Customer Database 35,000 Goodwill 25,000 Restrictive Covenant 115,000 Total value of acquisition $ 315,000 Asset Purchase Agreements: Simplicity Kennewick, LLC: On September 22, 2020, the Company’s wholly-owned subsidiary, Simplicity Kennewick, LLC (“Simplicity Kennewick”) entered into an Asset Purchase agreement (“APA”) with Ignatious O’Riley, an existing franchisee (“Seller or Franchisee”), to acquire the Franchisee’s assets in exchange for 2,990 shares of the Company’s common stock with fair value of $29,416 or $9.84 per share based on the fair value of assets acquired. Pursuant to ASU 2017-01 and ASC 805, the Company analyzed the APA to determine if the Company acquired a business or acquired assets. Simplicity Union Gap, LLC: On September 23, 2020, the Company’s wholly-owned subsidiary, Simplicity Union Gap, LLC (“Simplicity Union Gap”) entered into an Asset Purchase agreement (“APA”) with Five Point Legacy Corp., an existing franchisee (“Seller or Franchisee”), to acquire the Franchisee’s assets in exchange for 4,506 shares of the Company’s common stock with fair value of $43,974 or $9.76 per share based on the fair value of assets acquired. Pursuant to ASU 2017-01 and ASC 805, the Company analyzed the APA to determine if the Company acquired a business or acquired assets. Simplicity St Petersburg, LLC: On October 1, 2020, the Company entered into an Asset Purchase agreement (“APA”) with Parryproject LLC., Owen Parry and Jennie Parry, an existing franchisee (collectively as “Seller or Franchisee”), to acquire the Franchisee’s assets in exchange for 3,688 shares of the Company’s common stock with fair value of $38,650 or $10.48 per share based on the fair value of assets acquired. These assets were transferred to the Company’s wholly-owned subsidiary, Simplicity St. Peterburg, LLC. Pursuant to ASU 2017-01 and ASC 805, the Company analyzed the APA to determine if the Company acquired a business or acquired assets. Simplicity Humble, LLC: On October 1, 2020, the Company’s wholly-owned subsidiary, Simplicity Humble, LLC (“Simplicity Humble”) entered into an Asset Purchase agreement (“APA”) with Team Centore Entertainment Corp., and Charles Centore, an existing franchisee (collectively as “Seller or Franchisee”), to acquire the Franchisee’s assets in exchange for 8,402 shares of the Company’s common stock with fair value of $88,052 or $10.48 per share based on the fair value of assets acquired. Pursuant to ASU 2017-01 and ASC 805, the Company analyzed the APA to determine if the Company acquired a business or acquired assets. Simplicity Frisco, LLC: On October 12, 2020, the Company’s wholly-owned subsidiary, Simplicity Frisco, LLC (“Simplicity Frisco”) entered into an Asset Purchase agreement (“APA”) with JAR Mathis Holdings, Jared Mathis and Amy Mathis, an existing franchisee (collectively as “Seller or Franchisee”), to acquire the Franchisee’s assets in exchange for 6,202 shares of the Company’s common stock with fair value of $74,423 or $12.00 per share based on the fair value of assets acquired. Pursuant to ASU 2017-01 and ASC 805, the Company analyzed the APA to determine if the Company acquired a business or acquired assets. Simplicity Santa Rosa, LLC: On October 30, 2020, the Company’s wholly-owned subsidiary, Simplicity Santa Rosa, LLC (“Simplicity Santa Rosa”) entered into an Asset Purchase agreement (“APA”) with B&R Franchise Investments, LLC, Brian Chu and Richard Loo, an existing franchisee (collectively as “Seller or Franchisee”), to acquire the Franchisee’s assets in exchange for 4,202 shares of the Company’s common stock with fair value of $48,068 or $11.44 per share based on the fair value of assets acquired. Pursuant to ASU 2017-01 and ASC 805, the Company analyzed the APA to determine if the Company acquired a business or acquired assets. Simplicity Brea, LLC: On October 30, 2020, the Company’s wholly-owned subsidiary, Simplicity Brea, LLC (“Simplicity Brea”) entered into an Asset Purchase agreement (“APA”) with Nextgen Gaming, LLC, Ajay Chunilal Shah and Shweta Shah, an existing franchisee (collectively as “Seller or Franchisee”), to acquire the Franchisee’s assets in exchange for 3,255 shares of the Company’s common stock with fair value of $37,237 or $11.44 per share based on the fair value of assets acquired. Pursuant to ASU 2017-01 and ASC 805, the Company analyzed the APA to determine if the Company acquired a business or acquired assets. Simplicity Billings, LLC: On October 30, 2020, the Company’s wholly-owned subsidiary, Simplicity Billings, LLC (“Simplicity Billings”) entered into an Asset Purchase agreement (“APA”) with Button Mashers, Inc, Jon Bessmer and Brandy Bessmer, an existing franchisee (collectively as “Seller or Franchisee”), to acquire the Franchisee’s assets in exchange for 4,696 shares of the Company’s common stock with fair value of $53,725 or $11.44 per share based on the fair value of assets acquired. Pursuant to ASU 2017-01 and ASC 805, the Company analyzed the APA to determine if the Company acquired a business or acquired assets. The following table summarizes the total of the assets acquired during the three months ended November 30, 2020: Assets acquired: Furniture, Fixtures and Equipment $ 330,234 Inventory 83,310 Total assets acquired at fair value $ 413,544 Purchase consideration paid: 37,941 shares of common stock $ 413,544 Total purchase consideration paid $ 413,544 | NOTE 6 - ACQUISITIONS The Simplicity Esports, LLC Acquisition On January 4, 2019, the Company consummated the transactions contemplated by the share exchange agreement, dated December 21, 2018 (as amended by Amendment No. 1 to Share Exchange Agreement, dated December 28, 2018 and by Amendment No. 2 to Share Exchange Agreement, dated December 30, 2018, the “Share Exchange Agreement”) by and among the Company, Smaaash Entertainment, Inc. (“Smaaash”), each of the equity holders of Simplicity (“Simplicity Owners”) and Jed Kaplan, in the capacity as the representative of the Simplicity Owners (the “Representative”). Pursuant to the Share Exchange Agreement the Simplicity Owners transferred all the issued and outstanding equity interests of Simplicity to the Company in exchange for newly issued shares of common stock of the Company (the “Acquisition”). The Simplicity Owners received an aggregate of 300,000 shares of common stock at the closing of the Acquisition and an additional aggregate of 700,000 shares of common stock on January 7, 2019 and the remaining 2,000,000 shares in March of 2019. The acquisition of Simplicity, in an all-stock deal, creates a pure play esports team and entertainment platform opportunity, which we believe will increase shareholder value and boost our growth strategy as we endeavor the build out of our brick and mortar esports centers. The acquisition was accounted for by the Company using the acquisition method under business combination accounting. Under this method, the purchase price paid by the acquirer is allocated to the assets acquired and liabilities assumed as of the acquisition date based on the fair value. Determining the fair value of certain assets and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions. All fair value measurements of acquired assets and liabilities assumed are non-recurring in nature and classified as level 3 on the fair value hierarchy. The aggregate purchase price consisted of the following: Restricted stock consideration 6,090,000 Total $ 6,090,000 As noted in the table above, the Company issued 3,000,000 restricted shares of common stock as consideration which was valued at market at the date of the closing, fair value of approximately $6,090,000. The following table summarizes the estimated fair value of The Simplicity Esports, LLC assets acquired, and liabilities assumed at the date of acquisition: Cash 76,000 Internet Domain 3,000 Trade names and trademarks 588,000 Non-Competes 1,023,118 Accounts payable and accrued liabilities (56,000 ) Goodwill 4,455,882 Total $ 6,090,000 Revenue and net loss included in the year ended May 31, 2020, consolidated financial statements attributable to Simplicity Esports, LLC is approximately $38,000 and $400,000, respectively. PLAYlive Nation Acquisition On July 29, 2019, the Company entered into a definitive agreement to acquire PLAYlive for total consideration of 750,000 shares of common stock. The PLAYlive acquisition closed on July 30, 2019. The acquisition was accounted for by the Company using the acquisition method under business combination accounting. Under this method, the purchase price paid by the acquirer is allocated to the assets acquired and liabilities assumed as of the acquisition date based on the fair value. Determining the fair value of certain assets and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions. All fair value measurements of acquired assets and liabilities assumed are non-recurring in nature and classified as level 3 on the fair value hierarchy. The aggregate purchase price consisted of the following: Restricted stock consideration 1,440,000 Total $ 1,440,000 As noted in the table above, the Company issued 750,000 restricted shares of common stock as consideration which was valued at market at the date of the closing, fair value of approximately $1,440,000. The following table summarizes the estimated fair value of the PLAYlive assets acquired and liabilities assumed at the date of acquisition: Cash 26,000 Property, plant and equipment 10,000 Net deferred revenue (115,000 ) Customer relationships Accounts payable and accrued liabilities (4,000 ) Goodwill 699,000 Trademarks 278,000 Customer contracts 546,000 Total $ 1,440,000 Revenue and net loss included in the year ended May 31, 2020, consolidated financial statements attributable to PLAYlive is approximately $442,000 and $72,000, respectively. |
Operating Lease Right-of-use (R
Operating Lease Right-of-use (ROU) Assets and Operating Lease Liabilities | 6 Months Ended |
Nov. 30, 2020 | |
Leases [Abstract] | |
Operating Lease Right-of-use ("ROU") Assets and Operating Lease Liabilities | NOTE 6 – OPERATING LEASE RIGHT-OF-USE (“ROU”) ASSETS AND OPERATING LEASE LIABILITIES In adopting ASC Topic 842, Leases (Topic 842), the Company has elected the ‘package of practical expedients’, which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs (see Note 2). In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 month or less. The Company entered various lease agreements. These leases require the Company to pay a monthly base rent plus a pro rata share of operating expenses beginning 2019 until 2025. The Company recorded right-of-use assets and lease liabilities in aggregate amount of $1,575,265 as of November 30, 2020. For the six months ended November 30, 2020, lease costs amounted to $83,042 which included base lease costs of $74,452 and common area and other expenses of $8,589, all of which were expensed during the period and included in general and administrative expenses on the accompanying unaudited condensed consolidated statements of operations. The significant assumption used to determine the present value of the lease liability was a discount rate of 10% which was based on the Company’s estimated incremental borrowing rate. Right-of-use asset (“ROU”) is summarized below: November 30, 2020 Operating leases $ 1,575,265 Less accumulated reduction (254,420 ) Balance of ROU asset as of November 30, 2020 $ 1,320,845 Operating lease liability related to the ROU asset is summarized below: November 30, 2020 Operating leases $ 1,575,265 Total lease liabilities 1,575,265 Reduction of lease liability (251,921 ) Total 1,323,344 Less: short term portion as of November 30, 2020 (281,088 ) Long term portion as of November 30, 2020 $ 1,042,256 Future base lease payments under the non-cancelable operating lease at November 30, 2020 are as follows: Years Ending May 31, Amount 2021 $ 203,709 2022 407,278 2023 391,832 2024 373,870 2025 330,017 2026 110,000 Total minimum non-cancelable operating lease payments 1,816,706 Less: discount to fair value (493,362 ) Total lease liability at November 30, 2020 $ 1,323,344 |
Related Party Transactions
Related Party Transactions | 6 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions | NOTE 7 — RELATED PARTY TRANSACTIONS Kaplan Promissory Note On May 12, 2020 (the “Issue Date”), the Company issued a promissory note (the “Kaplan Note”) in the principal sum of $90,000 in favor of Jed Kaplan, the Company’s Chief Executive Officer, interim Chief Financial Officer, member of the Company’s Board of Directors and greater than 5% stockholder of the Company. The Kaplan Note matures on the first business day following the 150-day anniversary of the Issue Date (the “Maturity Date”). The Company will use the proceeds of the Kaplan Note to fund the operations of Simplicity One Brasil Ltda, the Company’s majority owned subsidiary (“Simplicity Brasil”) (see Note 9). As of May 31, 2020, advances under the terms of this note were $64,728. On various dates subsequent to May 31, 2020, Mr. Kaplan funded $25,272 pursuant to the Kaplan Promissory Note. With the contributions subsequent to May 31, 2020, the principal balances outstanding and due Mr. Kaplan amounted to $90,000. On June 22, 2020, Mr. Kaplan agreed to exchange the debt of the Kaplan Promissory Note with a principal balance of $90,000 in exchange for the Company assigning to Mr. Kaplan a 10% equity interest in Simplicity One Brasil, Ltda, a subsidiary of the Company. Equity Sales Effective June 1, 2020, the Company issued 23,809 shares of our restricted Common Stock, sold effective May 7, 2020 at a price of $1.09 per share, to William H. Herrmann, Jr. a member of our board of directors, for an aggregate purchase price of $25,000. The Company maintains its cash balance at a financial services company that is owned by an officer of the Company. The Company maintains a portion of its cash balance at a financial services company that is owned by an officer of the Company. | NOTE 7 — RELATED PARTY TRANSACTIONS Private Units In addition, the Sponsor purchased an aggregate of 254,500 Private Units at $10.00 per Private Unit for proceeds of $2,545,000 in the aggregate in the Private Placement. This purchase took place on a private placement basis simultaneously with the completion of the Initial Public Offering. This issuance was be made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. The Sponsor committed to purchase from the Company up to an additional 26,250 Private Units if the underwriters’ over-allotment option was exercised in full. On September 13, 2017, 7,000 additional Private Units were purchased by the Sponsor at $10.00 per Private Unit upon the partial exercise of the over-allotment option. Kaplan Promissory Note On May 12, 2020 (the “Issue Date”), the Company issued a promissory note (the “Kaplan Note”) in the principal sum of $90,000 in favor of Jed Kaplan, the Company’s Chief Executive Officer, interim Chief Financial Officer, member of the Company’s Board of Directors and greater than 5% stockholder of the Company. The Kaplan Note matures on the first business day following the 150-day anniversary of the Issue Date (the “Maturity Date”). The Company will use the proceeds of the Kaplan Note to fund the operations of Simplicity One Brasil Ltda, the Company’s majority owned subsidiary (“Simplicity Brasil”). As of May 31, 2020, advances under the terms of this note were $64,728 (Note 8). Equity Sales On May 7, 2020, we authorized the sale of 22,936 shares of our restricted Common Stock at $1.09 per share to William H. Herrmann, Jr. a member of our board of directors for $25,000 (Note 10). The Company maintains its cash balance at a financial services company that is owned by an officer of the Company. Sponsor Fees The Company agreed, commencing on the effective date of the Initial Public Offering through the earlier of the Company’s consummation of a Business Combination or its liquidation, to pay the Sponsor a monthly fee of $10,000 for office space, utilities and secretarial and administrative support. For the three months ended November 30, 2018, the Company paid $30,080 which is presented as general and administrative expense on the accompanying statement of operations. In December 2018, this monthly administrative service fee agreement was terminated. The Company maintains its cash balance at a financial services company that is owned by an officer of the Company. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | NOTE 8 — COMMITMENTS AND CONTINGENCIES Registration Rights Pursuant to a registration rights agreement the Company entered into with its initial stockholders and initial purchasers of the Private Units (and constituent securities) at the closing of the Initial Public Offering, the Company is required to register certain securities for sale under the Securities Act. These holders are entitled under the registration rights agreement to make up to three demands that the Company register certain of its securities held by them for sale under the Securities Act and to have the securities covered thereby registered for resale pursuant to Rule 415 under the Securities Act. In addition, these holders have the right to include their securities in other registration statements filed by the Company. The Company will bear the costs and expenses of filing any such registration statements. Unit Purchase Option The Company sold to the underwriters (and/or their designees), for $100, an option to purchase up to a total of 250,000 Units (which increased to 260,000 Units upon the partial exercise of the underwriters’ over-allotment option), exercisable at $11.50 per Unit (or an aggregate exercise price of $2,990,000) upon the closing of the Initial Public Offering. The UPO may be exercised for cash or on a cashless basis, at the holder’s option, at any time during the period commencing on the later of the first anniversary of the effective date of the registration statement relating to the Initial Public Offering and the closing of the Company’s initial Business Combination and terminating on the fifth anniversary of such effectiveness date. The Units issuable upon exercise of this UPO are identical to those offered in the Initial Public Offering, except that the exercise price of the warrants underlying the Units sold to the underwriters is $13.00 per share. Operating Lease Right of Use Obligation The Company entered into various lease agreements; these leases require the Company to pay a monthly base rent plus a pro rata share of operating expenses beginning 2019 until 2025 (see Note 6). Employment Agreements, Board Compensation and Bonuses On July 29, 2020, the Company entered into a new employment agreement (the “Kaplan 2020 Agreement”) with Mr. Kaplan. Such employment agreement replaced the Kaplan 2018 Agreement. As a result, the Kaplan 2018 Agreement was terminated and is of no further force or effect. Pursuant to the terms of the Kaplan 2020 Agreement, the Company agreed to pay Mr. Kaplan a monthly base salary of $5,000; provided, however, that the parties agreed that such base salary will be deferred and will accumulate until the Company has sufficient cash available to make such payments, to be reasonably determined by the Board of Directors and Mr. Kaplan, at which time all accrued and unpaid base salary will be paid. In addition, Mr. Kaplan will receive an equity grant of 15,000 shares of common stock per month, which shares will be fully vested upon grant. Mr. Kaplan will also be eligible to receive a quarterly bonus in the form of cash or equity shares and will be entitled to participate in the Company’s employee benefit plans. In addition, if, during the term of the Kaplan 2020 Agreement, the Company’s shares are approved for listing on a U.S. national securities exchange, the Company will pay Mr. Kaplan a $50,000 cash bonus, to be paid upon such listing begin effective. The term of the Kaplan 2020 Agreement is for an initial one-year term, which shall automatically renew for successive one-year terms unless either party provides 60 days’ advance written notice of its intention not to renew the Kaplan 2020 Agreement at the conclusion of the then applicable term. The term of the Kaplan 2020 Agreement may be terminated by the Company with or without cause or by Mr. Kaplan with or without good reason, as such terms are defined therein. On July 29, 2020, the Board of Directors approved for Mr. Kaplan a $75,000 cash bonus and authorized the issuance of 250,000 shares of the Company’s common stock both related to his performance during the fiscal year ended May 31, 2020. As of November 30, 2020, the Company has accrued $75,000 related to Mr. Kaplans cash bonus. During the six months ended November 30, 2020, the 250,000 shares of common stock valued at $216,625 were issued. On July 29, 2020, the Company entered into a new employment agreement (the “Franklin 2020 Agreement”) with Mr. Franklin. Such employment agreement replaced the Franklin 2018 Agreement. As a result, the Franklin 2018 Agreement was terminated and is of no further force or effect. Pursuant to the terms of the Franklin 2020 Agreement, the Company agreed to pay Mr. Franklin a monthly base salary of $12,500; provided, however, that the parties agreed that such base salary will be deferred and will accumulate until the Company has sufficient cash available to make such payments, to be reasonably determined by the Board of Directors and Mr. Franklin, at which time all accrued and unpaid base salary will be paid. In addition, Mr. Franklin will receive an equity grant of 6,250 shares of common stock per month, which shares will be fully vested upon grant. Mr. Franklin will also be eligible to receive a quarterly bonus in the form of cash or equity shares and will be entitled to participate in the Company’s employee benefit plans. In addition, if, during the term of the Franklin 2020 Agreement, the Company’s shares are approved for listing on a U.S. national securities exchange, the Company will pay Mr. Franklin a $50,000 cash bonus, to be paid upon such listing begin effective. On July 29, 2020, the Board of Directors approved for Mr. Franklin a $75,000 cash bonus and authorized the issuance of 250,000 fully vested shares of the Company’s common stock both related to his performance during the fiscal year ended May 31, 2020. As of November 30, 2020, the Company has accrued $75,000 related to Mr. Franklins cash bonus and $216,625 related to the Common Shares to be issued to Mr. Franklin. On July 29, 2020, the Board of Directors approved the issuance of 192,000 shares of common stock to an employee and the Directors of the Company for services provided during the fiscal year ended May 31, 2020. Litigation On August 5, 2020, a lawsuit styled Duncan Wood v. PLAYlive Nation, Inc. and Simplicity eSports and Gaming Company (Case No. 20-1043) was filed in the U.S. District Court for the District of Delaware. The complaint alleges unlawful failure to make timely and reasonable payment of wages, breach of contract, breach of the duty of good faith and fair dealing and unjust enrichment. The plaintiff seeks monetary damages for compensation alleged to be owed, treble damages, interest on all wage compensation, reasonable attorneys’ fees and other relief as the Court deems just and proper. On October 30, 2020 Duncan Wood and Simplicity Esports and Gaming Company executed a mutual General Release and the lawsuit was dismissed with prejudice. | NOTE 9 — COMMITMENTS AND CONTINGENCIES Nasdaq Delisting On December 10, 2018, the Company received a written notice (the “Notice”) from the Listing Qualifications Division of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Company has not complied with the requirements of IM-5101-2 of the listing rules of Nasdaq (the “Listing Rules”). The Notice stated that after its Business Combination, the Company had not demonstrated that its common stock met Listing Rule 5505(b)(1) that requires a market value of publicly held shares of at least $15 million. Additionally, the Company has not provided evidence that its common stock has at least 300 round lot holders as required by Listing Rule 5505(a)(3) and that its warrant has at least 400 round lot holders as required by Listing Rule 5515(a)(4). Finally, the Company does not comply with Listing Rule 5515(a)(2) which requires that for initial listing of a warrant the underlying security must be listed on Nasdaq. On January 7, 2019, the Company received a second written notice from Nasdaq informing it that the Company failed to comply with Listing Rule 5250(e)(2) which requires companies listed on Nasdaq to timely file notification forms for the Listing of Additional Shares (the “LAS Notification”). The Company was required to submit the LAS Notification 15 days prior to the issuance of the securities, however, the Company filed the LAS Notification for the issuance of the Series A-1 Note and Series A-2 Note and for the share exchange under our Share Exchange Agreement after such 15-day periods. Nasdaq notified the Company that each of these matters serves as an additional and separate basis for delisting the Company’s securities and that the review panel will consider these matters in rendering a determination regarding the Company’s continued listing on Nasdaq. Management of Simplicity Esports and Gamily Company has decided that moving from The Nasdaq Stock Market (“Nasdaq”) to the OTCQB is more appropriate for the Company at this time, while the Company builds out its planned network of retail esport centers. On April 1, 2019, the Company was notified by Nasdaq that it would delist the Company’s common stock and warrants. The Company’s common stock and warrants were previously suspended from trading on Nasdaq, effective January 25, 2019. On April 2, 2019, Nasdaq filed a Notification of Removal from Listing and/or Registration under Section 12(b) of the Securities and Exchange Act of 1934 on Form 25 with the Securities and Exchange Commission relating to the Company’s common stock and warrants. As a result, the Company’s common stock and warrants were delisted from Nasdaq effective April 2, 2019. The Company’s common stock and warrants currently have been quoted on the OTCQB under the symbols “WINR” and “WINRW,” respectively. Registration Rights Pursuant to a registration rights agreement the Company entered into with its initial stockholders and initial purchasers of the Private Units (and constituent securities) at the closing of the Initial Public Offering, the Company is required to register certain securities for sale under the Securities Act. These holders are entitled under the registration rights agreement to make up to three demands that the Company register certain of its securities held by them for sale under the Securities Act and to have the securities covered thereby registered for resale pursuant to Rule 415 under the Securities Act. In addition, these holders have the right to include their securities in other registration statements filed by the Company. The Company will bear the costs and expenses of filing any such registration statements. Unit Purchase Option The Company sold to the underwriters (and/or their designees), for $100, an option to purchase up to a total of 250,000 Units (which increased to 260,000 Units upon the partial exercise of the underwriters’ over-allotment option), exercisable at $11.50 per Unit (or an aggregate exercise price of $2,990,000) upon the closing of the Initial Public Offering. The UPO may be exercised for cash or on a cashless basis, at the holder’s option, at any time during the period commencing on the later of the first anniversary of the effective date of the registration statement relating to the Initial Public Offering and the closing of the Company’s initial Business Combination and terminating on the fifth anniversary of such effectiveness date. The Units issuable upon exercise of this UPO are identical to those offered in the Initial Public Offering, except that the exercise price of the warrants underlying the Units sold to the underwriters is $13.00 per share. Operating Lease Right of Use Obligation The Company adopted Topic 842 on January 1, 2019. The Company elected to adopt this standard using the optional modified retrospective transition method and recognized a cumulative-effect adjustment to the consolidated balance sheet on the date of adoption. Comparative periods have not been restated. With the adoption of Topic 842, the Company’s consolidated balance sheet now contains the following line items: Operating lease right-of-use assets, Current portion of operating lease liabilities and Operating lease liabilities, net of current portion. As all the existing leases subject to the new lease standard were previously classified as operating leases by the Company, they were similarly classified as operating leases under the new standard. The Company has determined that the identified operating leases did not contain non-lease components and require no further allocation of the total lease cost. Additionally, the agreements in place did not contain information to determine the rate implicit in the leases, so we used our incremental borrowing rate as the discount rate. Our weighted average discount rate is 10.4% and the weighted average remaining lease terms are 41 months. As of May 31, 2020, operating lease right-of-use assets and liabilities arising from operating leases was $490,984 and $490,983, respectively. During the year ended May 31, 2020, the Company recorded operating lease expense of approximately $147,000. The following is a schedule showing the future minimum lease payments under operating leases by years and the present value of the minimum payments as of May 31, 2020. 2020 $ 174,728 2021 $ 141,278 2022 $ 145,832 2023 $ 127,900 2024 $ 84,017 Total Operating Lease Obligations $ 673,755 Less: Amount representing interest $ (184,977 ) Present Value of minimum lease payments $ 488,778 Employment Agreements, Board Compensation and Bonuses On July 29, 2020, the Company entered into a new employment agreement (the “Kaplan 2020 Agreement”) with Mr. Kaplan. Such employment agreement replaced the Kaplan 2018 Agreement. As a result, the Kaplan 2018 Agreement was terminated and is of no further force or effect. Pursuant to the terms of the Kaplan 2020 Agreement, the Company agreed to pay Mr. Kaplan a monthly base salary of $5,000; provided, however, that the parties agreed that such base salary will be deferred and will accumulate until the Company has sufficient cash available to make such payments, to be reasonably determined by the Board of Directors and Mr. Kaplan, at which time all accrued and unpaid base salary will be paid. In addition, Mr. Kaplan will receive an equity grant of 15,000 shares of common stock per month, which shares will be fully vested upon grant. Mr. Kaplan will also be eligible to receive a quarterly bonus in the form of cash or equity shares and will be entitled to participate in the Company’s employee benefit plans. In addition, if, during the term of the Kaplan 2020 Agreement, the Company’s shares are approved for listing on a U.S. national securities exchange, the Company will pay Mr. Kaplan a $50,000 cash bonus, to be paid upon such listing begin effective. The term of the Kaplan 2020 Agreement is for an initial one-year term, which shall automatically renew for successive one-year terms unless either party provides 60 days’ advance written notice of its intention not to renew the Kaplan 2020 Agreement at the conclusion of the then applicable term. The term of the Kaplan 2020 Agreement may be terminated by the Company with or without cause or by Mr. Kaplan with or without good reason, as such terms are defined therein. On July 29, 2020, the Board of Directors approved for Mr. Kaplan a $75,000 cash bonus and authorized the issuance of 250,000 shares of the Company’s common stock both related to his performance during the fiscal year ended May 31, 2020. As of May 31, 2020, the Company has accrued $75,000 related to Mr. Kaplans cash bonus and $216,625 related to the Common Shares to be issued to Mr. Kaplan. On July 29, 2020, the Company entered into a new employment agreement (the “Franklin 2020 Agreement”) with Mr. Franklin. Such employment agreement replaced the Franklin 2018 Agreement. As a result, the Franklin 2018 Agreement was terminated and is of no further force or effect. Pursuant to the terms of the Franklin 2020 Agreement, the Company agreed to pay Mr. Franklin a monthly base salary of $12,500; provided, however, that the parties agreed that such base salary will be deferred and will accumulate until the Company has sufficient cash available to make such payments, to be reasonably determined by the Board of Directors and Mr. Franklin, at which time all accrued and unpaid base salary will be paid. In addition, Mr. Franklin will receive an equity grant of 6,250 shares of common stock per month, which shares will be fully vested upon grant. Mr. Franklin will also be eligible to receive a quarterly bonus in the form of cash or equity shares and will be entitled to participate in the Company’s employee benefit plans. In addition, if, during the term of the Franklin 2020 Agreement, the Company’s shares are approved for listing on a U.S. national securities exchange, the Company will pay Mr. Franklin a $50,000 cash bonus, to be paid upon such listing begin effective. On July 29, 2020, the Board of Directors approved for Mr. Franklin a $75,000 cash bonus and authorized the issuance of 250,000 fully vested shares of the Company’s common stock both related to his performance during the fiscal year ended May 31, 2020. As of May 31, 2020, the Company has accrued $75,000 related to Mr. Franklins cash bonus and $216,625 related to the Common Shares to be issued to Mr. Franklin. On July 29, 2020, the Board of Directors approved the issuance of 192,000 shares of common stock to an employee and the Directors of the Company for services provided during the fiscal year ended May 31, 2020. As of May 31, 2020, the Company has accrued $166,675 related to the authorized issuance of these shares. Litigation On August 5, 2020, a lawsuit styled Duncan Wood v. PLAYlive Nation, Inc. and Simplicity eSports and Gaming Company (Case No. 20-1043) was filed in the U.S. District Court for the District of Delaware. The complaint alleges unlawful failure to make timely and reasonable payment of wages, breach of contract, breach of the duty of good faith and fair dealing and unjust enrichment. The plaintiff seeks monetary damages for compensation alleged to be owed, treble damages, interest on all wage compensation, reasonable attorneys’ fees and other relief as the Court deems just and proper. Defendants’ responsive pleading is not yet due and has not been filed. The litigation is in its initial stages and the Company is unable to reasonably predict its potential outcome. The Company, however, believes that the lawsuit is without merit and intends to vigorously defend the claims. |
Debt
Debt | 6 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Debt Disclosure [Abstract] | ||
Debt | NOTE 9 - DEBT The table below presents outstanding debt instruments as of November 30, 2020 and May 31, 2020: November 30, 2020 May 31,2020 10% Fixed Convertible Promissory Note $ — $ 152,500 Self-amortization promissory notes 1,133,023 — August 7, 2020 self-amortization promissory note 333,333 — Related Party Note — 64,728 Convertible Note Payable 1,000,000 1,000,000 2,466,356 1,217,228 Less: debt discount (366,227 ) (25,180 ) Total $ 2,100,129 $ 1,192,048 10% Fixed Convertible Promissory Note On April 29, 2020 (the “Effective Date”), the Company issued a 10% Fixed Convertible Promissory Note (the “Harbor Gates Note”), with a maturity date of October 29, 2020 (the “Maturity Date”), in the principal sum of $152,000 in favor of Harbor Gates Capital, LLC (“Harbor Gates”). Pursuant to the terms of the Harbor Gates Note, the Company agreed to pay to Harbor Gates $152,500 (the “Principal Sum”) and to pay “guaranteed” interest on the principal balance at an amount equivalent to 10% of the Principal Sum, to the extent such Principal Sum and “guaranteed” interest and any other interest, fees, liquidated damages and/or items due to Harbor Gates have not been repaid or converted into Company common stock in accordance with the terms of the Harbor Gates Note. The Harbor Gates Note carries an original issue discount (“OID”) of $2,500. Accordingly, on the Effective Date, Harbor Gates delivered $150,000 to the Company in exchange for the Harbor Gates Note. In addition to the “guaranteed” interest, and upon the occurrence of an Event of Default (as hereinafter defined), additional interest would accrue from the date of the Event of Default at the rate equal to the lower of 20% per annum or the highest rate permitted by law. The Company may prepay the Harbor Gates Note according to the following schedule: Days Since Payment Amount Under 30 115% of Principal Amount (as hereinafter defined) so paid 31-60 120% of Principal Amount so paid 61-90 125% of Principal Amount so paid 91-180 135% of Principal Amount so paid 135% of the remaining unpaid and unconverted Principal Amount, plus all accrued and unpaid interest will be due and payable on the Maturity Date. “Principal Amount” refers to the sum of (i) the original principal amount of the Harbor Gates Note (including the OID, prorated if the Harbor Gates Note has not been funded in full); (ii) all guaranteed and other accrued but unpaid interest under the Harbor Gates Note; (iii) any fees due under the Harbor Gates Notes; (iv) liquidated damages; and (v) any default payments owing under the Harbor Gates Note, in each case previously paid or added to the Principal Amount. Pursuant to the terms of the Harbor Gates Note, the Company agreed to issue Harbor Gates shares of Company common stock in two tranches as follows: (i) 1,250 shares of common stock within three trading days of the Effective Date; and (ii) In the event the average of the three-volume weighted average prices for the Company’s common stock during the three consecutive trading days immediately preceding the date which is the 180 th If an Event of Default (as defined in the Promissory Note) occurs, the outstanding Principal Amount of the Harbor Gates Note owing in respect thereof through the date of acceleration, shall become, at Harbor Gates’ election, immediately due and payable in cash at the “Mandatory Default Amount”. The Mandatory Default Amount means 35% of the outstanding Principal Amount of the Harbor Gates Note will be automatically added to the Principal Sum of the Harbor Gates Note and tack back to the Effective Date for purposes of Rule 144 promulgated under the 1934 Act. Commencing five days after the occurrence of any Event of Default that results in the eventual acceleration of the Harbor Gates Note, the Harbor Gates Note will accrue additional interest, in addition to the Harbor Gates Note’s “guaranteed” interest, at a rate equal to the lesser of 20% per annum or the maximum rate permitted under applicable law. On July 2, 2020, the 10% Fixed Convertible Promissory Note was repaid in full. A cash payment of $201,300 including principal of $152,500, guaranteed interest of $15,200 and prepayment penalties of $33,600 was made to the lender. In connection with the repayment of the note, the Company recorded a charge to interest expense in the amount of $73,980 comprised of $48,800 related to interest and prepayment penalties and $25,180 related to accelerated accretion of unamortized debt discount recorded in connection with the original issue discount and in connection with common shares issued to the lender. Self-Amortization Promissory Notes On June 18, 2020 (the “Issue Date”), the Company entered into a securities purchase agreement (the “June 18, 2020 SPA”) with an accredited investor (the “Holder”), pursuant to which the Company issued a 12% self-amortization promissory note (the “June Amortization Note”) with a maturity date of June 18, 2021 (the “Maturity Date”), in the principal sum of $550,000. Pursuant to the terms of the June Amortization Note, the Company agreed to pay to $550,000 (the “Principal Sum”) to the Holder and to pay interest on the principal balance at the rate of 12% per annum. The Amortization Note carries an original issue discount (“OID”) of $55,000. The Company received net proceeds of $467,650, net of original issue discount of $55,000 and origination fees of $27,350. In addition, pursuant to the terms of the SPA, the Company issued 6,875 shares of the Company’s common stock to the Holder as additional consideration. The 6,875 shares were value at $62,150, or $9.04 per share, based on the quoted trading price on the date of grant. The Company may prepay the June Amortization Note at any time prior to the date that an Event of Default (as defined in the Amortization Note) (each an “Event of Default”) occurs at an amount equal to 100% of the Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium). The Amortization Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the Amortization Note or SPA. The Company is required to make amortization payments to the Holder according to the following schedule: Payment Date Payment Amount 10/16/2020 $ 66,125 11/16/2020 66,125 12/16/2020 66,125 01/18/2021 66,125 02/18/2021 66,125 03/18/2021 66,125 04/16/2021 66,125 05/18/2021 66,125 06/18/2021 65,921 Total: $ 594,921 In connection with the November 23, 2020 SPA discussed below, the Company repaid principal and interest of $198,375 on this June 18, 2020 Note. Upon the Holder’s provision of notice to the Company of the occurrence of any Event of Default, which has not been cured within five (5) calendar days (provided, however, that this five (5) calendar day cure period shall not apply to any event of default under Sections 3.1, 3.2, and 3.19 of the Amortization Note), the Amortization Note shall become immediately due and payable and the Company shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Principal Sum then outstanding plus accrued interest multiplied by 125% (the “Default Amount”). Upon the occurrence of an Event of Default (as hereinafter defined), additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 15% per annum or the highest rate permitted by law. The Company shall have the right to pay the Default Amount in cash at any time, provided, however that the Holder may convert the Amortization Note into the Company’s common stock (subject to the beneficial ownership limitations of 4.99% contained in the Amortization Note) at any time after the date that is five (5) calendar days after the Amortization Note becomes immediately due and payable as a result of an Event of Default until the Company has repaid the Amortization Note in cash. If the aforementioned event occurs, the conversion price will be equal to the closing bid price of the Company’s common stock on the trading day immediately preceding the date of the respective conversion. The Company intends to repay the Amortization Note in accordance with its terms so that no amount under the Amortization Note is converted into shares of the Company’s common stock. On November 25, 2020, the Company entered into a securities purchase agreement (the “November 23, 2020 SPA”), dated as of November 23, 2020 (the “Effective Date”) with the Holder, pursuant to which the Company issued a 12% self-amortization promissory note (the “November Amortization Note”) with a maturity date of November 23, 2021 (the “Maturity Date”), in the principal sum of $750,000. Pursuant to the terms of the November Amortization Note, the Company agreed to pay to $750,000 (the “Principal Sum”) to the Holder and to pay interest on the principal balance at the rate of 12% per annum. The Company received net proceeds of $441,375, net of original issue discount of $75,000, origination fees of $35,250, and the partial repayment of principal and interest of $198,375 on the June 18, 2020 Note. In addition, pursuant to the terms of the SPA, the Company granted 17,054 warrants to purchase 17,054 shares of the Company’s common stock, subject to adjustment. In connection with the November Amortization Note, during the first twelve months of this note, interest equal to $90,000 shall be guaranteed and earned in full as of the Effective Date, provided, however, that if the November Amortization Note is repaid in its entirety on or prior to February 23, 2021, then the interest shall be accrued on a per annum basis based on the number of days elapsed as of the repayment date from the Effective Date. In connection with the November 23, 2020 SPA, the Company shall issue warrants equal to 375,000 divided by the Exercise Price (as defined below) (the “Warrant Shares”) (whereby such number may be adjusted from time to time pursuant to the terms and conditions of this Warrant) at the Exercise Price per share then in effect. For purposes of this Warrant, the term “Exercise Price” shall mean 110% of the public offering price of the Company’s common stock under the public offering contemplated by the registration statement on Form S-1 filed by the Company on October 23, 2020 (the “Uplist Offering”), provided, however, that if the Uplist Offering has not been consummated on or before May 23, 2021, then the Exercise Price shall mean the closing bid price of the Company’s common stock on December 23, 2020, subject to adjustment as provided in the warrant (including but not limited to cashless exercise), and the term “Exercise Period” shall mean the period commencing on the earlier of (i) the date of the Company’s consummation of the Uplist Offering or (ii) May 23, 2021, and ending on the five-year anniversary thereof. In connection with the issuance of these warrants, on the initial measurement date, the relative fair value of the warrants of $157,438 was recorded as a debt discount and an increase in paid-in capital. The Company may prepay the Amortization Note at any time prior to the date that an Event of Default (as defined in the Amortization Note) (each an “Event of Default”) occurs at an amount equal to 100% of the Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium). The Amortization Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the Amortization Note or SPA. The Company is required to make ten monthly amortization payments to the Holder of $84,000 commencing on February 23, 2021 through November 23,2021. according to the following schedule: Upon the Holder’s provision of notice to the Company of the occurrence of any Event of Default, which has not been cured within five (5) calendar days (provided, however, that this five (5) calendar day cure period shall not apply to any event of default under Sections 3.1, 3.2, and 3.19 of the Amortization Note), the Amortization Note shall become immediately due and payable and the Company shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Principal Sum then outstanding plus accrued interest multiplied by 125% (the “Default Amount”). Upon the occurrence of an Event of Default (as hereinafter defined), additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 15% per annum or the highest rate permitted by law. The Company shall have the right to pay the Default Amount in cash at any time, provided, however that the Holder may convert the Amortization Note into the Company’s common stock (subject to the beneficial ownership limitations of 4.99% contained in the Amortization Note) at any time after the date that is five (5) calendar days after the Amortization Note becomes immediately due and payable as a result of an Event of Default until the Company has repaid the Amortization Note in cash. If the aforementioned event occurs, the conversion price will be equal to the closing bid price of the Company’s common stock on the trading day immediately preceding the date of the respective conversion. The Holder shall have the right, at any time following an Uncured Default Date (as defined in this Note), to convert all or any portion of the then outstanding and unpaid principal amount and interest (including any default interest) into shares of the Company’s common stock at the Conversion Price. Following the Uncured Default Date the Conversion Price shall equal the lesser of (i) 105% multiplied by the closing bid price of the Company’s common stock or (ii) the closing bid price of the Company’s common stock immediately preceding the date of the respective conversion (the “Conversion Price”). The Company intends to repay the Amortization Note in accordance with its terms so that no amount under the Amortization Note is converted into shares of the Company’s common stock. As of November 30, 2020, the June and August Amortization Notes are not in default. The Company recorded a total debt discount in the amount of $144,500 in connection with the common shares issued to the Holder and an original issue discount associated with the note. In connection with the June and August Amortization Notes, during the six months ended November 30, 2020. the Company recognized interest expense of $90,474 related to amortization of the discount August 7, 2020 Self-Amortization Promissory Note On August 7, 2020 (the “Issue Date”), the Company, entered into a securities purchase agreement (the “SPA”) with FirstFire Global Opportunities Fund, LLC, an accredited investor (the “Holder”), pursuant to which the Company issued a 12% self-amortization promissory note (the “Amortization Note”) with a maturity date of August 7, 2021 (the “Maturity Date”), in the principal sum of $333,333. Pursuant to the terms of the Amortization Note, the Company agreed to pay to $333,333 (the “Principal Sum”) to the Holder and to pay interest on the principal balance at the rate of 12% per annum. The Amortization Note carries an original issue discount (“OID”) of $33,333. The Company received net proceeds of $280,500, net of original issue discount of $33,333 and origination fees of $19,500. In addition, pursuant to the terms of the SPA, the Company issued 4,167 shares of the Company’s common stock to the Holder as additional consideration. The 4,167 shares were value at $30,166, or $7.24 per share, based on the quoted trading price on the date of grant. The Company may prepay the Amortization Note at any time prior to the date that an Event of Default (as defined in the Amortization Note) (each an “Event of Default”) occurs at an amount equal to 100% of the Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium). The Amortization Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the Amortization Note or SPA. The Company is required to make amortization payments to the Holder according to the following schedule: Payment Date Payment Amount 12/07/2020 $ 40,075.75 01/07/2021 40,075.75 02/08/2021 40,075.75 03/08/2021 40,075.75 04/07/2021 40,075.75 05/07/2021 40,075.75 06/07/2021 40,075.75 07/07/2021 40,075.75 08/07/2021 39,952.34 Total: $ 360,558.34 Upon the Holder’s provision of notice to the Company of the occurrence of any Event of Default, which has not been cured within five (5) calendar days (provided, however, that this five (5) calendar day cure period shall not apply to any event of default under Sections 3.1, 3.2, and 3.19 of the Amortization Note), the Amortization Note shall become immediately due and payable and the Company shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Principal Sum then outstanding plus accrued interest multiplied by 125% (the “Default Amount”). Upon the occurrence of an Event of Default (as hereinafter defined), additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 15% per annum or the highest rate permitted by law. The Company shall have the right to pay the Default Amount in cash at any time, provided, however that the Holder may convert the Amortization Note into the Company’s common stock (subject to the beneficial ownership limitations of 4.99% contained in the Amortization Note) at any time after the date that is five (5) calendar days after the Amortization Note becomes immediately due and payable as a result of an Event of Default until the Company has repaid the Amortization Note in cash. If the aforementioned event occurs, the conversion price will be equal to the closing bid price of the Company’s common stock on the trading day immediately preceding the date of the respective conversion. The Company intends to repay the Amortization Note in accordance with its terms so that no amount under the Amortization Note is converted into shares of the Company’s common stock. In connection with the August 7, 2020 Self-Amortization promissory note, during the six months ended November 30, 2020. the Company recognized interest expense of $38,487 related to amortization of the discount. Related Party - Kaplan Promissory Note On May 12, 2020 (the “Issue Date”), the Company issued a promissory note (the “Kaplan Note”) in the principal sum of $90,000 in favor of Jed Kaplan, the Company’s Chief Executive Officer, interim Chief Financial Officer, member of the Company’s Board of Directors and greater than 5% stockholder of the Company. The Kaplan Note matures on the first business day following the 150-day anniversary of the Issue Date (the “Maturity Date”). The Company will use the proceeds of the Kaplan Note to fund the operations of Simplicity One Brasil Ltda, the Company’s majority owned subsidiary (“Simplicity Brasil”) (see Note 7). Pursuant to the terms of the Kaplan Note, the Company agreed to pay to Mr. Kaplan the lesser of (i) the principal sum of $90,000 (the “Maximum Commitment”), or (ii) the aggregate principal amount of all direct advances of the proceeds of the Kaplan Note (each, an “Advance”), together with any interest thereon, and any and all other amounts which may be due and payable thereunder from time to time. Subject to the terms of the Kaplan Note, Mr. Kaplan agreed to make one direct Advance to and for the benefit of the Company on the Issue Date in the amount of $45,000, and one additional Advance to and for the benefit of the Company at such time as the Company may request during the two-month period following the Issue Date. The total of the aggregate principal balance of all Advances (collectively referred to herein as the “Principal Amount”) outstanding at any time shall not exceed the Maximum Commitment. Advances made by Mr. Kaplan to the Company under the Kaplan Note which have been repaid may not be borrowed again. Prior to the Maturity Date or an Event of Default (as hereinafter defined), the Principal Amount outstanding under the Kaplan Note will bear interest at a rate of 3% (the “Interest Rate”). From and after the Maturity Date or upon and during the continuance of an Event of Default, interest will accrue on the unpaid Principal Amount during any such period at an annual rate (the “Default Rate”) equal to 10% plus the Interest Rate; provided, however, that in no event will the Default Rate exceed the maximum rate permitted by law. The Company may prepay the Kaplan Note, in whole or in part, without a prepayment penalty, at any time provided that an Event of Default has not then occurred. As of May 31, 2020, the balance of the Kaplan noted was $64,728. During the six months ended November 30, 2020 Mr. Kaplan advanced an additional $25,272 under the terms of the note. During the quarter ended November 30, 2020, Mr. Kaplan exchanged the note together with accrued interest in exchange for his acquisition of a 10% interest in the Company’s wholly owned subsidiary Simplicity Brasil. Convertible Note Payable On December 20, 2018, the Company entered into a securities exchange agreement (“Exchange Agreement”) with Maxim. Pursuant to the terms of the Exchange Agreement, Maxim agreed to surrender and exchange the Note. In exchange, the Company issued to Maxim a Series A-1 Exchange Convertible Note in the principal amount of $500,000 (the “Series A-1 Note”) and a Series A-2 Exchange Convertible Note in the principal amount of $1,000,000 (the “Series A-2 Note,” and collectively with Series A-1 Note, the “Exchange Notes”). As of December 31, 2018, upon the closing of the Acquisition, the Series A-1 Note automatically converted into 193,648 shares of the Company’s common stock. The original amount of the promissory note was $1,800,000, the total amount of the two exchange notes is $1,500,000, and the difference of $300,000 was recorded as debt forgiveness income. Prior to conversion, the Series A-1 Note bore interest at 2.67% per annum, was payable quarterly and had a maturity date of the earlier of the closing date of the Acquisition (as defined below) or June 20, 2020 (the “Maturity Date”). The Company was permitted to pay the interest in cash or at its sole discretion, in shares of its common stock or a combination of cash and common stock. However, the Company could only pay the interest in shares of its common stock if (i) all the equity conditions specified in the note (“Equity Conditions”) had been met (unless waived by Maxim in writing) during the 20 trading days immediately prior to the interest payment date (“Interest Notice Period”), (ii) the Company had provided proper notice pursuant to the terms of the note and (iii) the Company had delivered to Maxims’ account certain number of shares of its common stock to be applied against such interest payment prior to (but no more than five trading days before) the Interest Notice Period. The Series A-1 Note was convertible into shares of the Company’s common stock (“Conversion Shares”) at an initial conversion price of $15.44 per share, subject to adjustment for any stock dividends and splits, rights offerings, distributions, combinations or similar transactions. Upon the closing of the Acquisition, the conversion price was automatically adjusted to equal the arithmetic average of the volume weighted average price (“VWAP”) of the Company’s common stock in the five trading days prior to the closing date of the Acquisition. Maxim was permitted to convert the Series A-1 Note at any time, in whole or in part, provided that upon receipt of a notice of conversion Maxim, the Company had the right to repay all or any portion of the Series A-1 Note included in the notice of conversion. Additionally, the Series A-1 Note would have automatically converted into shares of the Company’s common stock on the earlier of the Maturity Date or the closing date of the Acquisition provided that (i) no event of default then existed, and (ii) solely if such automatic conversion date was also the Maturity Date, each of the Equity Conditions had been met (unless waived in writing by Maxim) on each trading day during the 20 trading day period ending on the trading day immediately prior to the automatic conversation date. At any time prior to the Maturity Date, the Company also had the right to elect to redeem some or all of the outstanding principal amount for cash in an amount (the “Optional Redemption Amount”) equal to the sum of (a) 100% of the then outstanding principal amount of the note, (b) accrued but unpaid interest and (c) all liquidated damages and other amounts due in respect of the note (the “Optional Redemption”). The Company could only effect an Optional Redemption if each of the Equity Conditions had been met (unless waived in writing by Maxim) on each trading day during the period commencing on the date when the notice of the Optional Redemption was delivered to the date of the Optional Redemption and through and including the date payment of the Optional Redemption Amount was actually made in full. Except as otherwise provided in the Series A-1 Note, including, without limitation, an Option Redemption, the Company may not prepay any portion of the principal amount of the note without the prior written consent of Maxim. Pursuant to the terms of the Series A-1 Note, the Company was not permitted to convert any portion of the Series A-1 Note if doing so results in Maxim beneficially owning more than 4.99% of the outstanding common stock of the Company after giving effect to such conversion, provided that on 61 days’ prior written notice from Maxim to the Company, that percentage could increase to 9.99%. However, if there was an automatic conversion, and the conversion would result in the Company issuing a number of shares in excess of the beneficial ownership limitation, then any such shares in excess of the beneficial ownership limitation would be held in abeyance for the benefit of Maxim until such time or times, if ever, as its right thereto would not result in Maxim exceeding the beneficial ownership limitation, at which time or times Maxim would be issued such shares to the same extent as if there had been no such limitation. The Series A-1 Note contained restrictive covenants which, among other things, restricted the Company’s ability to repay or repurchase any indebtedness, make distributions on or repurchase its common stock or enter into transactions with its affiliates. The Series A-2 Note has terms substantially similar to those of the Series A-1 Note except that the Series A-2 Note has a maturity date of June 20, 2020, and an initial conversion price of $15.44, which will be automatically adjusted to the lower of (i) the conversion price then in effect, and (ii) the greater of the arithmetic average of the VWAP of the Company’s common stock in the five trading days prior to the notice of conversion and $4.00. As of December 31, 2018, upon the closing of the Acquisition, the Series A-1 Note automatically converted into 24,206 shares of the Company’s common stock On June 4, 2020, $100,000 of principal balance was converted into 10,738 shares of common stock in accordance with the terms of the Maxim Note. On June 18, 2020, the Company and Maxim entered into that certain first amendment to the Maxim Note (the “Amendment”), pursuant to which the Parties agreed to the following: (i) Maxim’s resale of the Company’s common stock (the “Common Stock”) underling the Maxim Note shall be limited to 10% of the daily volume of the Common Stock on each respective trading day, (ii) the maturity date of the Maxim Note was extended to December 31, 2020, (iii) the principal amount of the Maxim Note was increased by $100,000, which is included in interest expense on the accompanying condensed consolidated statement of operations, and (iv) the reference to “$15.44” in Section 4(b) of the Maxim Note was replaced with “$9.20”. During the six months ended November 30, 2020 the Company recorded interest expense of $38,069. Total principal and accrued interest on Maxim note amounted to $1,000,000 and $75,894 as of November 30, 2020. | NOTE 8 – DEBT The table below presents outstanding debt instruments as of May 31: 2020 2019 Sponsor loan $ - $ 93,761 10% Fixed Convertible Promissory Note 152,500 - Less Discount (25,180 ) - Related Party Note 64,728 - Convertible Note Payable 1,000,000 1,000,000 Total $ 1,192,048 $ 1,093,761 The Sponsor loaned the Company $201,707 in the aggregate, to be used for a portion of the expenses of the Initial Public Offering and working capital purposes. The loan is non-interest bearing, unsecured and due at the earlier of December 31, 2017 or the closing of the Initial Public Offering. As of May 31, 2020, and 2019, the balance of the Sponsor loan was $0 and $93,761, respectively. 10% Fixed Convertible Promissory Note On April 29, 2020 (the “Effective Date”), the Company issued a 10% Fixed Convertible Promissory Note (the “Harbor Gates Note”), with a maturity date of October 29, 2020 (the “Maturity Date”), in the principal sum of $152,000 in favor of Harbor Gates Capital, LLC (“Harbor Gates”). Pursuant to the terms of the Harbor Gates Note, the Company agreed to pay to Harbor Gates $152,500 (the “Principal Sum”) and to pay “guaranteed” interest on the principal balance at an amount equivalent to 10% of the Principal Sum, to the extent such Principal Sum and “guaranteed” interest and any other interest, fees, liquidated damages and/or items due to Harbor Gates have not been repaid or converted into Company common stock in accordance with the terms of the Harbor Gates Note. The Harbor Gates Note carries an original issue discount (“OID”) of $2,500. Accordingly, on the Effective Date, Harbor Gates delivered $150,000 to the Company in exchange for the Harbor Gates Note. In addition to the “guaranteed” interest, and upon the occurrence of an Event of Default (as hereinafter defined), additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 20% per annum or the highest rate permitted by law. The Company may prepay the Harbor Gates Note according to the following schedule: Days Since Payment Amount Under 30 115% of Principal Amount (as hereinafter defined) so paid 31-60 120% of Principal Amount so paid 61-90 125% of Principal Amount so paid 91-180 135% of Principal Amount so paid 135% of the remaining unpaid and unconverted Principal Amount, plus all accrued and unpaid interest will be due and payable on the Maturity Date. “Principal Amount” refers to the sum of (i) the original principal amount of the Harbor Gates Note (including the OID, prorated if the Harbor Gates Note has not been funded in full); (ii) all guaranteed and other accrued but unpaid interest under the Harbor Gates Note; (iii) any fees due under the Harbor Gates Notes; (iv) liquidated damages; and (v) any default payments owing under the Harbor Gates Note, in each case previously paid or added to the Principal Amount. Pursuant to the terms of the Harbor Gates Note, the Company agreed to issue Harbor Gates shares of Company common stock in two tranches as follows: (i) 10,000 shares of common stock within three trading days of the Effective Date; and (ii) In the event the average of the three volume weighted average prices for the Company’s common stock during the three consecutive trading days immediately preceding the date which is the 180 th If an Event of Default (as defined in the Promissory Note) occurs, the outstanding Principal Amount of the Harbor Gates Note owing in respect thereof through the date of acceleration, shall become, at Harbor Gates’ election, immediately due and payable in cash at the “Mandatory Default Amount”. The Mandatory Default Amount means 35% of the outstanding Principal Amount of the Harbor Gates Note will be automatically added to the Principal Sum of the Harbor Gates Note and tack back to the Effective Date for purposes of Rule 144 promulgated under the 1934 Act. Commencing five days after the occurrence of any Event of Default that results in the eventual acceleration of the Harbor Gates Note, the Harbor Gates Note will accrue additional interest, in addition to the Harbor Gates Note’s “guaranteed” interest, at a rate equal to the lesser of 20% per annum or the maximum rate permitted under applicable law. If the Harbor Gates Note is not retired on or before the Maturity Date, then at any time and from time to time after the Maturity Date, and subject to the terms hereof and restrictions and limitations contained in the Harbor Gates Note, Harbor Gates has the right, at Harbor Gates’ sole option, to convert in whole or in part the outstanding and unpaid Principal Amount under the Harbor Gates Note into shares of the Company’s common stock at the Variable Conversion Price. The “Variable Conversion Price” will be equal to the lower of: (a) $1.00, or (b) 70% of the lowest volume weighted average price of the Company’s common stock during the 15 consecutive trading days prior to the date on Harbor Gates elects to convert all or part of the Harbor Gates Note. The Company intends to prepay the Harbor Gates Note in accordance with its terms so that no amount under the Harbor Gates Note is converted into shares of the Company’s common stock. This note along with guaranteed interest of $15,000 was repaid on July 2, 2020. Kaplan Promissory Note On May 12, 2020 (the “Issue Date”), the Company issued a promissory note (the “Kaplan Note”) in the principal sum of $90,000 in favor of Jed Kaplan, the Company’s Chief Executive Officer, interim Chief Financial Officer, member of the Company’s Board of Directors and greater than 5% stockholder of the Company. The Kaplan Note matures on the first business day following the 150-day anniversary of the Issue Date (the “Maturity Date”). The Company will use the proceeds of the Kaplan Note to fund the operations of Simplicity One Brasil Ltda, the Company’s majority owned subsidiary (“Simplicity Brasil”). Pursuant to the terms of the Kaplan Note, the Company agreed to pay to Mr. Kaplan the lesser of (i) the principal sum of $90,000 (the “Maximum Commitment”), or (ii) the aggregate principal amount of all direct advances of the proceeds of the Kaplan Note (each, an “Advance”), together with any interest thereon, and any and all other amounts which may be due and payable thereunder from time to time. Subject to the terms of the Kaplan Note, Mr. Kaplan agreed to make one direct Advance to and for the benefit of the Company on the Issue Date in the amount of $45,000, and one additional Advance to and for the benefit of the Company at such time as the Company may request during the two month period following the Issue Date. The total of the aggregate principal balance of all Advances (collectively referred to herein as the “Principal Amount”) outstanding at any time shall not exceed the Maximum Commitment. Advances made by Mr. Kaplan to the Company under the Kaplan Note which have been repaid may not be borrowed again. Prior to the Maturity Date or an Event of Default (as hereinafter defined), the Principal Amount outstanding under the Kaplan Note will bear interest at a rate of 3% (the “Interest Rate”). From and after the Maturity Date or upon and during the continuance of an Event of Default, interest will accrue on the unpaid Principal Amount during any such period at an annual rate (the “Default Rate”) equal to 10% plus the Interest Rate; provided, however, that in no event will the Default Rate exceed the maximum rate permitted by law. The Company may prepay the Kaplan Note, in whole or in part, without a prepayment penalty, at any time provided that an Event of Default has not then occurred. As of May 31, 2020, advances under the terms of this note were $64,728. Note Payable On November 20, 2018, the Company paid its underwriter $20,000 and issued its underwriter a secured demand promissory note (the “Note”) in the amount of $1,800,000. The Note accrued interest at 8% per annum from the date of the Note through and including May 20, 2019, 12% per annum from and including May 21, 2019, through and including August 20, 2019, and 15% per annum from and including August 21, 2019, through and including November 20, 2019. If a late payment had occurred and continued, the interest rate would have increased to 12% per annum from the date of the Note through and including August 20, 2019 and 18% per annum from after August 21, 2019. If a late payment had remained outstanding for over 48 hours, Maxim could have required the Company to redeem all or any part of the Note at a redemption price equal to 125% of the Alternate Payment Amount. The principal and interest of the Note was payable upon demand by Maxim or from time to time, in accordance the following schedule: (i) one third of the principal, accrued and unpaid interest and any late charges on May 20, 2019; (ii) one third of the principal, accrued and unpaid interest and any late charges on August 20, 2019; and (iii) one third of the principal, accrued and unpaid interest and any late charges on November 20, 2019. The Note was secured by a first priority security interest in all personal property and assets of the Company excluding the assets held in escrow with respect to (i) that certain stock purchase agreement with Polar, pursuant to which Polar agreed to sell up to 490,000 shares of the Company’s common stock to the Company thirty days after the consummation of the Business Combination and (ii) that certain stock purchase agreement with K2, pursuant to which K2 agreed to sell up to 220,000 shares of the Company’s common stock to the Company thirty days after the consummation of the Business Combination. The amount payable under the Note could also have been paid in shares of common stock of the Company or securities convertible or exercisable into shares of common stock of the Company (the “Alternate Equity Payment”) if and only if the Company and Maxim mutually agree on both the purchase price and, if applicable, the conversion and/or exercise price of each security of the Company issued in such Alternative Equity Payment. Otherwise, the payment should be made in cash only. So long as any amount under the Note remained outstanding, all cash proceeds received by the Company from any sales of its securities was to be used to repay this Note. Convertible Note Payable On December 20, 2018, the Company entered into a securities exchange agreement (“Exchange Agreement”) with Maxim Group LLC (the “Holder”). Pursuant to the terms of the Exchange Agreement, the Holder agreed to surrender and exchange the Note. In exchange, the Company issued to the Holder a Series A-1 Exchange Convertible Note in the principal amount of $500,000 (the “Series A-1 Note”) and a Series A-2 Exchange Convertible Note in the principal amount of $1,000,000 (the “Series A-2 Note,” and collectively with Series A-1 Note, the “Exchange Notes”). As of December 31, 2018, upon the closing of the Acquisition, the Series A-1 Note automatically converted into 193,648 shares of the Company’s common stock. The original amount of the promissory note was $1,800,000, the total amount of the two exchange notes is $1,500,000, and the difference of $300,000 has been recorded as debt forgiveness income. Prior to conversion, the Series A-1 Note bore interest at 2.67% per annum, was payable quarterly and had a maturity date of the earlier of the closing date of the Acquisition (as defined below) or June 20, 2020 (the “Maturity Date”). The Company was permitted to pay the interest in cash or at its sole discretion, in shares of its common stock or a combination of cash and common stock. However, the Company could only pay the interest in shares of its common stock if (i) all the equity conditions specified in the note (“Equity Conditions”) had been met (unless waived by the Holder in writing) during the 20 trading days immediately prior to the interest payment date (“Interest Notice Period”), (ii) the Company had provided proper notice pursuant to the terms of the note and (iii) the Company had delivered to the Holder’s account certain number of shares of its common stock to be applied against such interest payment prior to (but no more than five trading days before) the Interest Notice Period. The Series A-1 Note was convertible into shares of the Company’s common stock (“Conversion Shares”) at an initial conversion price of $1.93 per share, subject to adjustment for any stock dividends and splits, rights offerings, distributions, combinations or similar transactions. Upon the closing of the Acquisition, the conversion price was automatically adjusted to equal the arithmetic average of the volume weighted average price (“VWAP”) of the Company’s common stock in the five trading days prior to the closing date of the Acquisition. The Holder was permitted to convert the Series A-1 Note at any time, in whole or in part, provided that upon receipt of a notice of conversion from the Holder, the Company had the right to repay all or any portion of the Series A-1 Note included in the notice of conversion. Additionally, the Series A-1 Note would have automatically converted into shares of the Company’s common stock on the earlier of the Maturity Date or the closing date of the Acquisition provided that (i) no event of default then existed, and (ii) solely if such automatic conversion date was also the Maturity Date, each of the Equity Conditions had been met (unless waived in writing by the Holder) on each trading day during the 20 trading day period ending on the trading day immediately prior to the automatic conversation date. At any time prior to the Maturity Date, the Company also had the right to elect to redeem some or all of the outstanding principal amount for cash in an amount (the “Optional Redemption Amount”) equal to the sum of (a) 100% of the then outstanding principal amount of the note, (b) accrued but unpaid interest and (c) all liquidated damages and other amounts due in respect of the note (the “Optional Redemption”). The Company could only effect an Optional Redemption if each of the Equity Conditions had been met (unless waived in writing by the Holder) on each trading day during the period commencing on the date when the notice of the Optional Redemption was delivered to the date of the Optional Redemption and through and including the date payment of the Optional Redemption Amount was actually made in full. Except as otherwise provided in the Series A-1 Note, including, without limitation, an Option Redemption, the Company could not prepay any portion of the principal amount of the note without the prior written consent of the Holder. Pursuant to the terms of the Series A-1 Note, the Company was not permitted to convert any portion of the Series A-1 Note if doing so results in the Holder beneficially owning more than 4.99% of the outstanding common stock of the Company after giving effect to such conversion, provided that on 61 days’ prior written notice from the Holder to the Company, that percentage could increase to 9.99%. However, if there was an automatic conversion, and the conversion would result in the Company issuing a number of shares in excess of the beneficial ownership limitation, then any such shares in excess of the beneficial ownership limitation would be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder exceeding the beneficial ownership limitation, at which time or times the Holder would be issued such shares to the same extent as if there had been no such limitation. The Series A-1 Note contained restrictive covenants which, among other things, restricted the Company’s ability to repay or repurchase any indebtedness, make distributions on or repurchase its common stock or enter into transactions with its affiliates. The Series A-2 Note has terms substantially similar to those of the Series A-1 Note except that the Series A-2 Note has a maturity date of June 20, 2020, and an initial conversion price of $1.93, which will be automatically adjusted to the lower of (i) the conversion price then, in effect, and (ii) the greater of the arithmetic average of the VWAP of the Company’s common stock in the five trading days prior to the notice of conversion and $0.50. As of December 31, 2018, upon the closing of the Acquisition, the Series A-1 Note automatically converted into 193,648 shares of the Company’s common stock, resulting in a remaining note payable balance as of May 31, 2020, and 2019 of $1,000,000 and $1,000,000 respectively. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Equity [Abstract] | ||
Stockholders' Equity | NOTE 10 -STOCKHOLDERS’ EQUITY Preferred Stock The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share. As of November 30, 2020, there were no shares of preferred stock issued or outstanding. Common Stock On August 17, 2020, the Company amended its certificate of incorporation to increase the total number of authorized shares of the Company’s common stock from 20,000,000 to 36,000,000. Holders of the shares of the Company’s common stock are entitled to one vote for each share. At, November 30, 2020 and May 31, 2020, there were 1,217,376 and 998,622 shares of common stock issued and outstanding respectively. Common Stock Issued for Cash In May 2020, the Company issued 2,976 shares of its restricted common stock at a price of $8.72 per share, to William H. Herrmann, Jr. a member of the Company’s board of directors, for an aggregate purchase price of $25,000. Common Stock Issued in Connection with Debt Effective June 4, 2020, the Company issued 10,738 shares of common stock at $9.28 per share in connection with the conversion of $100,000 in principal balance of the Convertible Note Payable (see Note 8). On June 18, 2020, pursuant to the terms of the June 18, 2020 SPA between the Company and an accredited investor, pursuant to which the Company issued a 12% self-amortization promissory note (Note 8) in the principal amount of $550,000, the Company issued 6,875 shares of common stock at $9.04 per share, to such accredited investor as additional consideration for the purchase of such note. The 6,875 shares were value at $62,150, or $9.04 per share, based on the quoted trading price on the date of grant, which was included in debt discount and accreted over the term of the debt. Effective July 1, 2020 pursuant to the terms of that certain 10% Fixed Convertible Promissory Note dated April 29, 2020 in the principal amount of $152,500 issued by the Company in favor of Harbor Gates Capital, LLC, the Company issued 1,250 shares of our restricted common stock, issued at $7.92 per share, to Harbor Gates Capital, LLC as additional consideration for the purchase of such note. The 1,250 shares were value at $9,900, or $7.92 per share, based on the quoted trading price on the date of grant, which was included in debt discount and accreted over the term of the debt. Effective August 10, 2020, pursuant to the terms of that certain Securities Purchase Agreement between the Company and an accredited investor pursuant to which we issued a 12% self-amortization promissory note (Note 8) in the principal amount of $333,333, the Company issued 4,167 shares of common stock at $7.28 per share. The 4,167 shares were value at $30,166, or $7.24 per share, based on the quoted trading price on the date of grant, which was included in debt discount and accreted over the term of the debt. Common Stock Issued for Accounts Payable On June 4, 2020, the Company issued 3,125 shares of common stock at $14.72 per share in satisfaction of an outstanding balance owed to a vendor in the amount of $46,000. In connection with this issuance, the Company reduced accounts payable by $33,865 and recorded debt settlement expense of $12,135. Common Stock Issued for Acquisitions On July 1, 2020, the Company acquired the assets of one of its franchisee-owned esports gaming centers on Fort Bliss U.S. Military base in El Paso, TX. In connection with the acquisition the Company issued 18,750 restricted shares at $8.80 per share, or $165,000. On September 22, 2020, in connection with an Asset Purchase agreement with Ignatious O’Riley, an existing franchisee (“Seller or Franchisee”), to acquire the Franchisee’s assets in exchange for 2,989 shares of the Company’s common stock with fair value of $29,416 or $9.84 per share (see Note 5). On September 23, 2020, the Company’s wholly-owned subsidiary, Simplicity Union Gap entered into an Asset Purchase agreement with Five Point Legacy Corp., an existing franchisee (“Seller or Franchisee”), to acquire the Franchisee’s assets in exchange for 4,506 shares of the Company’s common stock with fair value of $43,974 or $9.76 per share (see Note 5). On October 1, 2020, the Company entered into an Asset Purchase agreement with Parryproject LLC., Owen Parry and Jennie Parry, an existing franchisee (collectively as “Seller or Franchisee”), to acquire the Franchisee’s assets in exchange for 3,688 shares of the Company’s common stock with fair value of $38,650 or $10.48 per share (see Note 5). On October 1, 2020, the Company’s wholly-owned subsidiary, Simplicity Humble entered into an Asset Purchase agreement with Team Centore Entertainment Corp., and Charles Centore, an existing franchisee (collectively as “Seller or Franchisee”), to acquire the Franchisee’s assets in exchange for 8,402 shares of the Company’s common stock with fair value of $88,052 or $10.48 per share (see Note 5). On October 12, 2020, the Company’s wholly-owned subsidiary, Simplicity Frisco entered into an Asset Purchase agreement with JAR Mathis Holdings, Jared Mathis and Amy Mathis, an existing franchisee (collectively as “Seller or Franchisee”), to acquire the Franchisee’s assets in exchange for 6,202 shares of the Company’s common stock with fair value of $74,423 or $12.00 per share (see Note 5). On October 30, 2020, the Company’s wholly-owned subsidiary, Simplicity Santa Rosa entered into an Asset Purchase agreement with B&R Franchise Investments, LLC, Brian Chu and Richard Loo, an existing franchisee (collectively as “Seller or Franchisee”), to acquire the Franchisee’s assets in exchange for 4,202 shares of the Company’s common stock with fair value of $46,068 or $11.44 per share (see Note 5). On October 30, 2020, the Company’s wholly-owned subsidiary, Simplicity Brea entered into an Asset Purchase agreement (“APA”) with Nextgen Gaming, LLC, Ajay Chunilal Shah and Shweta Shah, an existing franchisee (collectively as “Seller or Franchisee”), to acquire the Franchisee’s assets in exchange for 3,255 shares of the Company’s common stock with fair value of $37,237 or $11.44 per share (see Note 5). On October 30, 2020, the Company’s wholly-owned subsidiary, Simplicity Billings entered into an Asset Purchase agreement with Button Mashers, Inc, Jon Bessmer and Brandy Bessmer, an existing franchisee (collectively as “Seller or Franchisee”), to acquire the Franchisee’s assets in exchange for 4,697 shares of the Company’s common stock with fair value of $52,725 or $11.44 per share (see Note 5). Common Stock Issued for Compensation On June 30, 2020, the Company issued 12,334 shares of common stock at $7.76 per share to various employees of the Company as compensation. In connection with the issuance of these shares, the Company recorded stock-based compensation of $95,700. During the three months ended August 31, 2020, the Company issued 84,062 shares of common stock to executive officers of the Company for services rendered. Additionally, the Company issued 19,779 shares of common stock to employees for services rendered. The shares were valued at per share prices ranging from $6.56 to $14.72, based on the quoted trading price on the date of grant. In connection with the issuance of these shares, during the six months ended November 30, 2020, the Company recorded stock-based compensation of $54,395 and reduced prior accrued compensation by $669,215. Effective August 1, 2020, the Company entered into a marketing agreement whereby the Company issued 3,472 shares of common stock at $6.56 per share. In connection with the issuance of these shares, the Company recorded stock-based professional fees of $15,185 and prepaid expenses of $7,593 which will be amortized over the remaining service period. During the three months ended November 30, 2020, the Company issued an aggregate of 9,844 restricted common shares of the Company to executive officers of the Company for services rendered. These shares were valued at $119,632, or per share prices ranging from $9.04 per share to $11.44 per common share, based on the quoted trading price on the date of grant. In connection with the issuance of these shares, during the six months ended November 30, 2020, the Company recorded stock-based compensation of $119,632. On September 16, 2020, the Company issued an aggregate of 2,813 restricted common shares of the Company to executive officers and employees of the Company for services rendered. These shares were valued at $25,420, or $9.04 per share, based on the quoted trading price on the date of grant. In connection with the issuance of these shares, during the six months ended November 30, 2020, the Company recorded stock-based professional fees of $25,420. Warrants In connection with the November 23, 2020 SPA (see Note 8), the Company shall issue warrants equal to 375,000 divided by the Exercise Price (as defined below) (the “Warrant Shares”) (whereby such number may be adjusted from time to time pursuant to the terms and conditions of this Warrant) at the Exercise Price per share then in effect. For purposes of this Warrant, the term “Exercise Price” shall mean 110% of the public offering price of the Company’s common stock under the public offering contemplated by the registration statement on Form S-1 filed by the Company on October 23, 2020 (the “Uplist Offering”), provided, however, that if the Uplist Offering has not been consummated on or before May 23, 2021, then the Exercise Price shall mean the closing bid price of the Company’s common stock on December 23, 2020, subject to adjustment as provided in the warrant (including but not limited to cashless exercise), and the term “Exercise Period” shall mean the period commencing on the earlier of (i) the date of the Company’s consummation of the Uplist Offering or (ii) May 23, 2021, and ending on the five-year anniversary thereof. In connection with the issuance of these warrants, on the initial measurement date, the relative fair value of the warrants of $157,438 was recorded as a debt discount and an increase in paid-in capital. Warrant activities for the six months ended November 30, 2020 are summarized as follows: Number of Warrants Weighted Average Weighted Aggregate Balance Outstanding May 31, 2020 803,000 $ 83.04 - $ - Granted 17,054 21.99 Cancelled - - Balance Outstanding November 30, 2020 820,054 $ 81.74 3.10 $ - Exercisable, November 30, 2020 820,054 $ 81.74 3.10 $ - | NOTE 10 — STOCKHOLDERS’ EQUITY Preferred Stock The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share. At May 31, 2020 and 2019, there were no shares of preferred stock issued or outstanding. Common Stock The Company is authorized to issue 20,000,000 shares of common stock with a par value of $0.0001 per share. Holders of the shares of the Company’s common stock are entitled to one vote for each share. At May 31, 2020, and May 31, 2019, there were 7,988,975 and 7,003,975 shares of common stock issued and outstanding respectively. 2020 Transactions On July 30, 2019, in connection with the PLAYlive Merger, the Company issued 750,000 shares of the Company’s common stock as Merger Consideration (Note 6). On September 16, 2019, pursuant to a Restricted Award, the Company authorized the grant to Jed Kaplan, our Chief Financial Executive Officer and Interim Chief Financial Officer and a member of our board of directors, of 70,000 shares of our restricted Common Stock. As of May 31, 2020, these shares have been issued. On September 16, 2019, pursuant to a Restricted Award, the Company authorized the grant to Roman Franklin, our President and a member of our board of directors, of 21,000 shares of our restricted Common Stock. As of May 31, 2020, these shares have been issued. On September 16, 2019, pursuant to a Restricted Award, the Company authorized the grant to Steven Grossman, our Corporate Secretary, of 14,000 shares of our restricted Common Stock. As of May 31, 2020, these shares have been issued. On March 11, 2020, in connection with the execution of the Common Stock Purchase Agreement with Triton Funds, LP, the Company issued 5,000 shares of our restricted Common Stock at $1.18 per share to Triton Funds, LP as a donation. On April 9, 2020, the Company delivered a Purchase Notice to Triton Funds, LP pursuant to the terms of the Common Stock Purchase Agreement requiring Triton Funds, LP to acquire 125,000 shares of our restricted Common Stock at a price of $0.70 per share. In accordance therewith, we issued 125,000 shares of our Common Stock to Triton Funds, LP, which rendered $87,700 in proceeds to the Company. On May 4, 2020, pursuant to the terms of that certain 10% Fixed Convertible Promissory Note dated April 29, 2020 in the principal amount of $152,500 issued by the Company in favor of Harbor Gates Capital, LLC, the Company issued 10,000 shares of our restricted Common Stock, issued at $0.99 per share, to Harbor Gates Capital, LLC as additional consideration for the purchase of such note. As of May 31, 2020, these shares were not issued. As of August 31, 2020, these shares have been issued. On May 7, 2020, the Company authorized the sale of 22,936 shares of our restricted Common Stock, at a price of $1.09 per share, to William H. Herrmann, Jr. a member of our board of directors, for an aggregate purchase price of $25,000. As of May 31, 2020, and August 31, 2020, such shares have not been issued. Subsequent to May 31, 2020, on June 4, 2020, the Company authorized the issuance of 85,905 shares of common stock in connection with the conversion of $100,000 in principal of a convertible note payable. As of May 31, 2020 and August 31, 2020, these shares have been issued. Subsequent to May 31, 2020, on June 15, 2020, we issued 25,000 shares of common stock in satisfaction of an outstanding balance owed to a vendor. Subsequent to May 31, 2020, on June 18, 2020, pursuant to the terms of that certain Securities Purchase Agreement between the Company and an accredited investor, pursuant to which the Company issued a 12% self-amortization promissory note (described elsewhere herein) in the principal amount of $550,000, the Company issued 55,000 shares of the Company’s common stock to such accredited investor as additional consideration for the purchase of such note. Subsequent to May 31, 2020, on June 29, 2020, the Company acquired the assets of one of its top performing franchisee owned esports gaming centers on Fort Bliss U.S. Military base in El Paso, TX. In connection with the acquisition the Company authorized the issuance of 150,000 restricted shares As of August 31, 2020 such shares have not been issued. Subsequent to May 31, 2020, on July 29, 2020, the Company authorized the grant to Mr. Kaplan of 300,000 shares of common stock. As of August 31, 2020, such shares have not been issued. Subsequent to May 31, 2020, on July 29, 2020, the Company authorized the grant to Mr. Franklin of 265,000 shares of common stock. As of August 31, 2020, such shares have not been issued. Subsequent to May 31, 2020, on July 29, 2020, the Company authorized the grant of 192,000 shares of common stock to an employee and the Directors of the Company as of August 31, 2020 such shares have not been issued. Subsequent to May 31, 2020, on July 31, 2020, the Company entered into a marketing agreement whereby we agreed to issue 27,778 shares of common stock. As of August 31, 2020, such shares have not been issued. Subsequent to May 31, 2020, on August 7, 2020, pursuant to the terms of that certain Securities Purchase Agreement between the Company and an accredited investor pursuant to which we issued a 12% self-amortization promissory note (described elsewhere herein) in the principal amount of 333,333, the Company authorized the grant of 33,333 shares of common stock. As of August 31, 2020, such shares have been issued. Private Placement Beginning in February of 2019 and closing in May of 2019, the Company sold units in connection with a private offering by the Company to raise working capital of up to $2,000,000 (the “Offering Amount”) through the sale to accredited investors only of up to up to 1,000,000 “Units” of the Company’s securities, at a purchase price of $2.00 per Unit, with each Unit consisting of (i) one share of common stock, par value $0.0001 per share of the Company (the “Common Stock”) and (ii) a warrant to purchase one share of Common Stock, exercisable at a price of $4.00 per share, exercisable at any time within five years of issuance (each, a “Warrant”) as provided for in the Company’s Term Sheet for Unit Offering dated February 6, 2019 (the “Term Sheet”). The Company sold 962,500 units for gross proceeds of $1,925,000. Stock Based Compensation On March 27, 2019, the Company issued 180,000 shares of common stock at $0.60 per share to 3 employees of the Company. The shares were issued in conjunction with their employment agreements. During the fiscal year ended May 31, 2020 105,000 shares vested ratably through December 31, 2019. As of May 31, 2020, all 180,000 shares have vested. On July 29, 2020, the Company authorized the issuance of 67,000 shares of common stock at $1.02 per share to 3 employees of the Company. The shares were issued in conjunction with their employment agreements and vested ratably through May 31, 2020. On July 29, 2020, the Company authorized the issuance of 690,000 shares of common stock at $0.87 per share to the Executive Officers, an employee of the Company and the Members of the Company’s Board of Directors. The shares have all vested as of May 31, 2020. In connection with these issuances the Company recorded share-based compensation expense of $669,215. At May 31, 2020, the Company has no unrecognized share-based compensation. Warrants For the year ended May 31, 2020, there was no activity with respect to warrants. For the year ended May 31, 2019, the Company issued 5,461,500 warrants in conjunction with its Initial Public Offerings. These warrants are exercisable for five years from November 20, 2018, the date of the initial business combination and have an exercise price equal to $11.50. For the year ended May 31, 2019, the Company issued 962,500 warrants in conjunction with the above-mentioned private placement. These warrants are exercisable for 5 years and have an exercise price of $4.00. A summary of the status of the Company’s outstanding stock warrants for the years ended May 31, 2020 and 2019 is as follows: Number of Average Expiration Outstanding – May 31, 2018 5,461,500 $ 11.50 Nov 2023 Granted – May 31, 2019 962,500 4.00 May 2024 Outstanding – May 31, 2019 6,424,000 10.38 Outstanding – May 31, 2020 6,424.000 $ 10.38 Warrants exercisable at May 31, 2020 6,424,000 |
Income Taxes
Income Taxes | 12 Months Ended |
May 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11 - INCOME TAXES For the year ended May 31, 2020 and 2019, the income tax provisions for current taxes were $0. Deferred income taxes reflect the net tax effects of permanent and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The temporary differences that result in deferred tax assets and liabilities are the results of carry forward tax losses, amortization and impairment expense. The components of the net deferred tax assets for the year ended May 31, 2020 and 2019 are as follows: Year ended Year ended Net Operating Loss $ 770,000 $ 364,000 Impairment of cost method investment - 38,000 Gross deferred tax asset 770,000 402,000 Less: Valuation allowance (825,000 ) (381,000 ) Net deferred tax asset $ 55,000 $ 21,000 Deferred tax liabilities: Amortization of intangible assets (55,000 ) (21,000 ) Net deferred assets/liabilities - - In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a valuation allowance, in an amount equal to gross deferred tax assets less deferred tax liabilities. For the year ended May 31, 2020, the change in the valuation allowance was $444,000. The table below summarizes the reconciliation of our income tax provision computed at the federal statutory rate of 21% for the years ended May 31, 2020 and 2019 and the actual tax provisions for the year ended May 31, 2020 and 2019. 2020 2019 Expected provision (benefit) at statutory rate (21.0 )% (21.0 )% State taxes, net of federal tax benefit (4.4 )% (4.4 )% Change in federal rate - % - % Permanent differences-stock based compensation 15.0 15.0 Increase in valuation allowance 10.4 % 10.4 % Total provision (benefit) for income taxes 0.0 % 0.0 % At May 31, 2020 and May 31, 2019, the Company had Federal net operating loss carry forwards of approximately $3,029,000 and $1,474,000, respectively. The net operating loss of approximately $3,029,000 can be carried forward indefinitely subject to annual usage limitations. In accordance with Section 382 of the Internal Revenue Code, deductibility of the Company’s NOLs may be subject to an annual limitation in the event of a change in control as defined under the regulations. The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions and is subject to examination by the various taxing authorities. |
Segment and Related Information
Segment and Related Information | 12 Months Ended |
May 31, 2020 | |
Segment Reporting [Abstract] | |
Segment and Related Information | NOTE 12 — SEGMENT AND RELATED INFORMATION Historically, the Company had one operating segment. However, with the acquisition of PLAYlive and the opening of two Company-owned retail stores, the Company’s operations are now managed through three operating segments: Franchise royalties and license fees, Company-owned stores and Esports revenue. These three operating segments and corporate are presented below as its reportable segments. Summarized financial information concerning our reportable segments for the year ended May 31, 2020 is shown in the following table: Revenues Net Depreciation Capital Goodwill Total Franchise royalties and fees $ 523,000 $ (124,000 ) $ - $ - $ 699,000 $ 1,610,000 Company-owned stores 174,000 (330,000 ) 54,000 142,000 - 1,124,000 Esports revenue 165,000 (345,000 ) 215,000 9,000 4,456,000 5,750,000 Corporate - (1,856,000 ) - - - 108,000 Total $ 862,000 $ (2,655,000 ) $ 269,000 $ 151,000 $ 5,155,000 $ 8,592,000 |
Subsequent Events
Subsequent Events | 6 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Subsequent Events [Abstract] | ||
Subsequent Events | NOTE 11 — SUBSEQUENT EVENTS On December 3, 2020, the Company issued 5,000 shares of its common stock in satisfaction of $50,000 in legal fees. These shares were valued at $80,000, or $16.00 per share, based on the quoted trading price on the date of grant. In connection with the issuance of these shares, the Company reduced accounts payable by $50,000 and recorded legal fees of $30,000. On December 18, 2020, the Company issued an aggregate of 100,000 shares (50,000 each) to two executive officers as a bonus. These shares were valued at $1,410,000, or $14.10 per share, based on the quoted trading price on the date of grant. In connection with the issuance of these shares, the Company recorded stock-based compensation of $1,410,000. Additionally, these officers shall receive a cash bonus of $125,000 each to be paid when funds are available. | NOTE 13 — SUBSEQUENT EVENTS Self-Amortization Promissory Note On June 18, 2020 (the “Issue Date”), Simplicity Esports and Gaming Company, a Delaware corporation (the “Company”), entered into a securities purchase agreement (the “SPA”) with an accredited investor (the “Holder”), pursuant to which the Company issued a 12% self-amortization promissory note (the “Amortization Note”) with a maturity date of June 18, 2021 (the “Maturity Date”), in the principal sum of $550,000. Pursuant to the terms of the Amortization Note, the Company agreed to pay to $550,000 (the “Principal Sum”) to the Holder and to pay interest on the principal balance at the rate of 12% per annum. The Amortization Note carries an original issue discount (“OID”) of $55,000. Accordingly, on the Closing Date (as defined in the SPA), the Holder paid the purchase price of $495,000 in exchange for the Amortization Note. In addition, pursuant to the terms of the SPA, the Company agreed to issue 55,000 shares of the Company’s common stock to the Holder as additional consideration. The Company may prepay the Amortization Note at any time prior to the date that an Event of Default (as defined in the Amortization Note) (each an “Event of Default”) occurs at an amount equal to 100% of the Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium). The Amortization Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the Amortization Note or SPA. On various dates subsequent to May 31, 2020, Jed Kaplan our Chief Executive Officer and Interim Chief Financial Officer funded $25,272 pursuant to the Kaplan Promissory Note. With the contributions subsequent to May 31, 2020, the principal balances outstanding and due Mr. Kaplan amount to $90,000 (Note 8). The promissory note was subsequently converted into 20% of the common equity of Simplicity One Brasil, LTD by SEGC and Mr. Kaplan. On April 10, 2020, the Company filed a Registration Statement on Form S-1 relating to the Company’s offering of units. Each unit consists of one share of the Company’s common stock and one warrant to purchase one share of the Company’s common stock. On July 2, 2020, the Company filed Amendment No. 1 to its Registration Statement on Form S-1. The registration statement is not yet effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. On June 23, 2020, the Company’s stockholders approved an amendment to the Company’s Third Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), to effect a reverse stock split of the Company’s outstanding shares of common stock, at a ratio of no less than 1-for-2 and no more than 1-for-10, with such ratio to be determined by the sole discretion of the Board of Directors, with any fractional shares being rounded up to the next higher whole shares (the “Reverse Split”). The Board will implement the Reverse Split only upon a determination that the Reverse Split is in the best interests of the stockholders at that time. The Board will then select the ratio for the Reverse Split within the range approved by stockholders that the Board determines to be advisable and in the best interests of the stockholders, considering relevant market conditions at the time the Reverse Split is to be implemented. The Reverse Split may be delayed or abandoned without further action by the stockholders at any time prior to effectiveness of the Certificate of Amendment with the Delaware Secretary of State, notwithstanding stockholder adoption and approval of the Reverse Split amendment, if the Board, in its sole discretion, determines that it is in the best interests of the Company and its stockholders to delay or abandon the Reverse Split. If the Certificate of Amendment implementing the Reverse Split has not been filed with the Delaware Secretary of State on or before the date of the 2021 annual meeting of stockholders, the Board will be deemed to have abandoned the Reverse Split. The board and shareholders of the Company approved the Simplicity Esports and Gaming Company 2020 Omnibus Incentive Plan (the “2020 Plan”) on April 22, 2020 and June 23, 2020, respectively. Under the 2020 Plan, 1,000,000 shares of common stock are authorized for issuance to employees, directors and independent contractors (except those performing services in connection with the offer or sale of the Company’s securities in a capital raising transaction, or promoting or maintaining a market for the Company’s securities) of the Company or its subsidiaries. The 2020 Plan authorizes equity-based and cash-based incentives for participants. There were 1,000,000 shares available for award at May 31, 2020 under the 2020 Plan. On June 29, 2020, the Company acquired the assets of one of its top performing franchisee owned esports gaming centers on Fort Bliss U.S. Military base in El Paso, TX. Simplicity El Paso, LLC was created by SEGC and purchased the assets of the franchisee location for 150,000 shares of restricted Company common stock and $150,000 in cash. On July 2, 2020, the Company repaid $152,500 and $15,000 in accrued interest in full satisfaction of the 10% Convertible Promissory Harbor Gates Note (Note 8). On July 29, 2020, the Board of Directors of the Company approved the issuance of 757,000 shares of the Common Stock of the Company and $150,000 in cash as compensation for the year ended May 31, 2020. The shares were granted to Jed Kaplan the Company’s Chief Executive Officer and Interim Chief Financial Officer, Roman Franklin the Company’s President, the members of the Company’s Board of Directors as well as an employee of the Company (Note 8). On July 29, 2020, The Company entered into employment agreements with Jed Kaplan the Company’s Chief Executive Officer and Interim Chief Financial Officer and Roman Franklin the Company’s President, the members of the Company’s Board of Directors as well as an employee of the Company (Note 8). Self-Amortization Promissory Note On August 7, 2020 (the “Issue Date”), the Company, entered into a securities purchase agreement (the “SPA”) with FirstFire Global Opportunities Fund, LLC, an accredited investor (the “Holder”), pursuant to which the Company issued a 12% self-amortization promissory note (the “Amortization Note”) with a maturity date of August 7, 2021 (the “Maturity Date”), in the principal sum of $333,333. Pursuant to the terms of the Amortization Note, the Company agreed to pay to $333,333 (the “Principal Sum”) to the Holder and to pay interest on the principal balance at the rate of 12% per annum. The Amortization Note carries an original issue discount (“OID”) of $33,333. Accordingly, on the Closing Date (as defined in the SPA), the Holder paid the purchase price of $300,000 in exchange for the Amortization Note. In addition, pursuant to the terms of the SPA, the Company agreed to issue 33,333 shares of the Company’s common stock to the Holder as additional consideration. Amendment of Certificate of Incorporation On August 17, 2020, the Company amended its certificate of incorporation to increase the total number of authorized shares of the Company’s common stock from 20,000,000 to 36,000,000. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in condensed consolidated financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the condensed consolidated financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended May 31, 2020, as filed with the SEC on August 31, 2020. The interim results for the six months ended November 30, 2020, are not necessarily indicative of the results to be expected for the year ending May 31, 2021 or for any future interim periods. | Basis of Presentation The accompanying consolidated financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). |
Emerging Growth Company | Emerging Growth Company Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. | Emerging Growth Company Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. |
Basis of Consolidation | Basis of Consolidation The condensed consolidated financial statements include the operations of the Company and its wholly-owned subsidiaries and majority-owned subsidiaries and all intercompany accounts and transactions have been eliminated in consolidation. | Basis of Consolidation The consolidated financial statements include the operations of the Company and its wholly owned subsidiaries, Simplicity Esports, LLC, PLAYlive Nation, Inc., and PLAYlive Nation Holdings, LLC, its 90% owned subsidiary Simplicity One Brasil Ltd, and its 79% owned subsidiaries Simplicity Happy Valley, LLC and Simplicity Redmond, LLC. In November 2019, the Company organized Happy Valley, LLC and Redmond, LLC for the purpose of converting franchised stores into Company owned stores. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Cash and Cash Equivalents | Cash and cash equivalents The Company considers short-term interest-bearing investments with initial maturities of three months or less to be cash equivalents. The Company has no cash equivalents as of November 30, 2020 and May 31, 2020. | Cash and cash equivalents The Company considers short-term interest-bearing investments with initial maturities of three months or less to be cash equivalents. The Company has no cash equivalents. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and accounts receivable. Cash and cash equivalents in a financial institution, which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts through November 30, 2020. | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. |
Fair Value of Financial Instruments and Fair Value Measurements | Fair Value of Financial Instruments and Fair Value Measurements FASB ASC 820 - Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on November 30, 2020. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments. FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2—Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3—Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash, due from and to related parties, prepaid expenses, accounts payable and accrued liabilities approximate their fair market value based on the short-term maturity of these instruments. | Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the consolidated balance sheet. |
Foreign Currencies | Foreign Currencies Revenue and expenses are translated at average rates of exchange prevailing during the year. | |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates during the six months ended November 30, 2020 and 2019 include estimates for allowance for doubtful accounts on accounts receivable, the estimates for obsolete or slow-moving inventory, the useful life of property and equipment, assumptions used in assessing impairment of long-term assets, the estimate of the fair value of the right of use asset and lease liability, the value of beneficial conversion features, and the fair value of non-cash equity transactions. | Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company follows Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods and services. Our revenue is derived from the three sources listed below. | Revenue Recognition As of January 1, 2018, the Company adopted Revenue from Contracts with Customers (Topic 606) (“ASC 606”). The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The Company adopted the standard using the modified retrospective method and the adoption did not have a material impact on its financial statements. The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods and services. The following describes principal activities, separated by major product or service, from which the Company generates its revenues. |
Company-owned Stores Sales | Company-owned Stores Sales The Company-owned stores principally generate revenue from retail esports gaming centers. Revenues from Company-owned stores are recognized when the products are delivered, or the service is provided. | |
Franchise Royalties and Fees | Franchise Royalties and Fees Franchise royalties which are based on eight percent of franchise store sales after a minimum level of sales occur and are recognized as sales occur. Any royalty reductions, including waivers or those offered as part of a new store development incentive or as incentive for other behaviors are recognized at the same time as the related royalty as they are not separately distinguishable from the full royalty rate. Franchise royalties are billed on a monthly basis. The Company recognizes initial franchise license fee revenue, when the Company has performed substantially all the services required in the franchise agreement. Fees received that do not meet these criteria are recorded as deferred revenues until earned. The pre-opening services provided to franchisees do not contain separate and distinct performance obligations from the franchise right; thus, the fees collected will be amortized on a straight-line basis beginning at the store opening date through the term of the franchise agreement, which is typically 10 years. Franchise license renewal fees, which generally occur every 10 years, are billed before the renewal date. Fees received for future license renewal periods are amortized over the life of the renewal period. The Company offers various incentive programs for franchisees including royalty incentives, new store opening incentives (i.e. development incentives) and other support initiatives. Royalties and franchise fees sales are reduced to reflect any royalty incentives earned or granted under these programs that are in the form of discounts. Commissary sales are comprised of food and supplies sold to franchised stores and are recognized as revenue upon shipment or delivery of the related products to the franchisees. Payments are generally due within 30 days. Fees for information services, including software maintenance fees, marketing fees and website maintenance, graphic and promotion fees are recognized as revenue as such services are provided. | |
Esports Revenue | Esports Revenue Esports revenue is a form of competition using video games. Most commonly, esports takes the form of organized, single player and multiplayer video game competitions, particularly between professional players, individually or as teams. Revenues from Esports revenue are recognized when the competition is completed, and prize money is awarded. Revenues earned from league sponsorships from the Company’s share of league revenues including domestic esports teams competing in games such as Overwatch, Apex Legends, PUBG and more are included here. Revenue from international esports teams including Flamengo esports are included here. League revenues are earned through sponsorship fees on a per tournament, or per season basis. As of March 22, 2020, the Company commenced weekly online esports tournaments promoted directly to its existing customer base. Revenue from these weekly tournaments, comprised of registration fees on a per player basis, is included here. | |
Deferred Revenues | Deferred Revenues Deferred revenues are classified as current and long-term based on when management estimates the revenues will be recognized. The Company receives payments from franchisees in advance of all performance obligations having been met, including but not limited to franchise locations being opened. As certain conditions agreed to in these franchise agreements are performed, revenues are recognized. Deferred costs include commissions paid to brokers related to the sale of specific new franchises which have not met revenue recognition criteria as of November 30, 2020. These costs are recognized in the same period as the initial franchise fee revenue is recognized. | Deferred Revenues Deferred revenues are classified as current or long-term based on when management estimates the revenues will be recognized. The Company receives payments from franchisees in advance of all performance obligations having been met, including but not limited to franchise locations being opened. As certain conditions agreed to in these franchise agreements are performed, revenues are recognized. Deferred costs include commissions paid to brokers related to the sale of specific new franchises which have not met revenue recognition criteria as of May 31, 2020. These costs are recognized in the same period as the initial franchise fee revenue is recognized. |
Accounts Receivable | Accounts Receivable The Company estimates the allowance for doubtful accounts based on an analysis of specific customers (i.e. franchisees), taking into consideration the age of past due accounts and an assessment of the customer’s ability to pay. Accounts receivable are written off against the allowance when management determines it is probable the receivable is worthless. Customer account balances with invoices dated over 90 days old are considered delinquent and considered in the allowance assessment. The Company performs credit evaluations of its customers and, generally, requires no collateral. As of November 30, 2020, management has recorded an allowance for doubtful accounts of $139,867. | Accounts Receivable The Company estimates the allowance for doubtful accounts based on an analysis of specific customers (i.e. franchisees), taking into consideration the age of past due accounts and an assessment of the customer’s ability to pay. Accounts receivable are written off against the allowance when management determines it is probable the receivable is worthless. Customer account balances with invoices dated over 90 days old are considered delinquent and considered in the allowance assessment. The Company performs credit evaluations of its customers and, generally, requires no collateral. Management has assessed accounts receivable as of May 31, 2020, and an allowance for doubtful accounts of approximately $52,400 has been recorded |
Property and Equipment | Property and Equipment Property and equipment and leasehold improvements are recorded at its historical cost. The cost of property and equipment is depreciated over the estimated useful lives, when placed in service (ranging from 3 -5 years), of the related assets utilizing the straight-line method of depreciation. The cost of leasehold improvements is depreciated (amortized) over the lesser of the length of the related leases or the estimated useful lives of the assets. Ordinary repairs and maintenance are expensed when incurred and major repairs will be capitalized and expensed if they benefit future periods. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. | Property and equipment Property and equipment and leasehold improvements are recorded at its historical cost. The cost of property and equipment is depreciated over the estimated useful lives, when placed in service, (ranging from 3 -5 years) of the related assets utilizing the straight-line method of depreciation. The cost of leasehold improvements is depreciated (amortized) over the lesser of the length of the related leases or the estimated useful lives of the assets. Ordinary repairs and maintenance are expensed when incurred and major repairs will be capitalized and expensed if it benefits future periods. |
Intangible Assets and Impairment | Intangible Assets and Impairment Intangible assets that are subject to amortization are reviewed for potential impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. Assets not subject to amortization are tested for impairment at least annually. These costs are included in intangible assets on our condensed consolidated balance sheet and amortized on a straight-line basis when placed into service over their estimated useful lives of the costs, which is 3 to 5 years. The Company periodically reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less that the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. | Intangible Assets and impairment Intangible assets that are subject to amortization are reviewed for potential impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. Assets not subject to amortization are tested for impairment at least annually. These costs were included in intangible assets on our balance sheet and amortized on a straight-line basis when placed into service over the estimated useful lives of the costs, which is 3 to 5 years. The Company periodically reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less that the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. |
Goodwill | Goodwill Goodwill is the excess of our purchase cost over the fair value of the net assets of acquired businesses. We do not amortize goodwill, but we assess our goodwill for impairment at least annually. We have assessed goodwill and qualitative considerations indicated no impairment. | Goodwill Goodwill is the excess of our purchase cost over the fair value of the net assets of acquired businesses. We do not amortize goodwill, but we assess our goodwill for impairment at least annually. Our assessment date was May 31, 2020, and quantitative and qualitative considerations indicated no impairment. |
Franchise Locations | Franchise Locations Through PLAYlive, the Company’s wholly owned subsidiary, the Company has entered into franchise agreements with third parties. As May 31, 2020, approximately 43 locations were open and operating, in various states including Arizona, California, Idaho, Florida, Maryland, Michigan, Mississippi, Montana, Oregon, South Carolina, Texas, Utah and Washington. | |
Stock-based Compensation | Stock-based Compensation The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation Equity-Based Payments to Non-Employees In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees. | Stock-based compensation The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation Equity-Based Payments to Non-Employees |
Related parties | Related parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. | |
Amendments to Forward Purchase Agreements and Warrants | Amendments to Forward Purchase Agreements and Warrants On December 20, 2018, the Company, Polar, K2 and the Escrow Agent, entered into an Amendment (the “Amendment”), pursuant to which, among other things, the stock purchase agreements with Polar and K2 were amended to (x) reduce the purchase price per share payable by the Company at the closing of the Stock Sales from $11.23 per share to (1) first $6.00 per share up to 20% of the original number of Shares (as defined in the respective Purchase Agreement), (2) then $5.00 per remaining share up to 20% of the original number of Shares, (3) then $4.00 per remaining share up to 20% of the original number of Shares, (4) then $3.00 per remaining Share up to 20% of the original number of Shares, and (5) then $2.00 per remaining Share up to 20% of the original number of Shares, (y) to extend the outside date of the closing of the Stock Sales until January 18, 2019, and (z) to authorize the issuance of $3,542,700 and $1,590,600 from the Escrow Account to Polar and K2, respectively, as partial payment for the Shares prior to the final closing of the Stock Sales. | |
Investments | Investments Investments in non-consolidated entities are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company’s ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company’s proportionate share of the investees’ net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company’s share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. Investments in equity securities that do not have readily determinable fair values and do not qualify for consolidation or the equity method are carried at cost. Dividends received from those companies are included in other income. Dividends received in excess of the Company’s proportionate share of accumulated earnings are applied as a reduction of the cost of the investment. Other than temporary impairments to fair value are charged against current period income. Our investments in privately held entities are accounted for under the cost method. During the quarter ended February 28, 2019 the Company recognized $150,000 of impairment expense related to the Smaaash acquisition. | |
Leases | Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases On January 1, 2019, the Company adopted ASU No. 2016-02, applying the package of practical expedients to leases that commenced before the effective date whereby the Company elected to not reassess the following: (i) whether any expired or existing contracts contain leases; and (ii) initial direct costs for any existing leases. For contracts entered into on or after the effective date, at the inception of a contract the Company assessed whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. The Company will allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. The Company has elected not to recognize right-of-use (“ROU”) assets and lease liabilities for short-term leases that have a term of 12 months or less. Operating lease ROU assets represents the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company use an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in general and administrative expenses in the condensed consolidated statements of operations. | Leases In February of 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02-Leases (Topic 842), which significantly amends the way companies are required to account for leases. Under the updated leasing guidance, some leases that did not have to be reported previously are now required to be presented as an asset and liability on the balance sheet. In addition, for certain leases, what was previously classified as an operating expense must now be allocated between amortization expense and interest expense. The Company adopted this update as of January l, 2019 using the modified retrospective transition method and prior periods have not been restated. Upon implementation, the Company recognized initial operating lease right-of-use assets of $110,003 and operating lease liabilities of $107,678. Due to the simplistic nature of the Company’s leases, no retained earnings adjustment was required. See Note 9 for further details. |
Deferred Financing Costs | Deferred Financing Costs The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (SAB) Topic 5A — “Expenses of Offering”. Offering costs of $98,198 consisting principally of legal and professional fees have been recorded as an asset as of May 31, 2020, these amounts will be charged to additional paid in capital upon the completion of the Company’s ongoing Public Offering. | |
Basic Loss Per Share | Basic Loss Per Share The Company complies with accounting and disclosure requirements ASC Topic 260, “Earnings Per Share.” Basic loss per share is calculated by dividing the Company’s net loss by the weighted average number of common shares outstanding during the period. Diluted loss per share is calculated by dividing the Company’s net loss by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. When the Company records a loss from operations, all potentially dilutive shares are anti-dilutive and are consequently excluded from the calculation of diluted net loss per common share. The following potentially dilutive equity securities outstanding as of November 30, 2020 and 2019 were not included in the computation of dilutive loss per common share because the effect would have been anti-dilutive: November 30, 2020 2019 Stock warrants 820,055 803,001 Convertible notes 108,696 64,750 Total 928,751 867,751 | Basic Income (Loss) per share The Company complies with accounting and disclosure requirements ASC Topic 260, “Earnings Per Share.” Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. Diluted earnings or loss per common share is calculated by dividing net income or loss available to common stockholders by the diluted weighted-average number of common shares outstanding, which includes the effect of potentially dilutive securities. Potentially dilutive securities for this calculation consist primarily of warrants, outstanding options, and shares into which the convertible notes are convertible. When the Company records a loss from operations, all potentially dilutive shares are anti-dilutive and are consequently excluded from the calculation of diluted net loss per common share. |
Income Taxes | Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, “ Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the consolidated financial statements recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. As of November 30, 2020 and May 31, 2020, the Company had no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. The Company recognizes interest and penalties related to uncertain income tax positions in other expense. However, no such interest and penalties were recorded as of November 30, 2020. | Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, “ Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. On December 22, 2017, the U.S. Tax Cuts and Jobs Act of 2017 (“Tax Reform”) was signed into law. As a result of Tax Reform, the U.S. statutory tax rate was lowered from 35% to 21% effective January 1, 2018, among other changes. ASC Topic 740 requires companies to recognize the effect of tax law changes in the period of enactment; therefore, the Company was required to revalue its deferred tax assets and liabilities at the new rate. The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain tax effects of Tax Reform. The ultimate impact may differ from this provisional amount, possibly materially, as a result of additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of Tax Reform. |
Recently Issued and Recently Adopted Accounting Pronouncements | Recently Issued and Recently Adopted Accounting Pronouncements Accounting standards promulgated by the FASB are subject to change. Changes in such standards may have an impact on the Company’s future financial statements. The following is summary of recent accounting developments. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of the standard on the condensed consolidated financial statements. The Company periodically reviews new accounting standards that are issued. Although some of these accounting standards may be applicable to the Company, the Company has not identified any other new standards that it believes merit further discussion, and the Company expects that none would have a significant impact on its financial statements. | Recent Accounting Pronouncements Accounting standards promulgated by the FASB are subject to change. Changes in such standards may have an impact on the Company’s future financial statements. The following are a summary of recent accounting developments. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees. The Company periodically reviews new accounting standards that are issued. Although some of these accounting standards may be applicable to the Company, the Company has not identified any other new standards that it believes merit further discussion, and the Company expects that none would have a significant impact on its financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), followed by other related ASUs that provided targeted improvements and additional practical expedient options (collectively “ASC 842”). ASC 842 requires lessees to recognize right-of-use (“ROU”) assets and lease payment liabilities on the balance sheet for leases representing the Company’s right to use the underlying assets over the lease term. Each lease that is recognized on the balance sheet is classified as either finance or operating, with such classification affecting the pattern and classification of expense recognition in the Statements of Operations Statements of Cash Flows The Company adopted ASC 842 on January 1, 2019 using the modified retrospective method. The Company elected as part of its adoption to also use the optional transition methodology whereby previously reported periods continue to be reported in accordance with historical accounting guidance for leases that were in effect for those prior periods. Policy elections and practical expedients that the Company has implemented as part of adopting ASC 842 include (a) excluding from the balance sheet leases with terms that are less than or equal to one year, (b) for all existing asset classes that contain both lease and non-lease components, combining these components together and accounting for them as a single lease component, (c) the package of practical expedients, which among other things, allows the Company to avoid reassessing contracts that commenced prior to adoption that were properly evaluated under legacy GAAP, and (d) excluding land easements, which were not accounted for under the previous leasing guidance, that existed or expired before adoption of ASC 842. The scope of ASC 842 does not apply to leases used in the exploration for minerals or use thereof, including oil, natural gas and natural gas liquids. The Company’s adoption of ASC 842 resulted in an increase in other assets, accounts payable and accrued liabilities, and other liabilities line items on the accompanying Consolidated Balance Sheets |
Going Concern, Liquidity and Management's Plan | Going Concern, Liquidity and Management’s Plan The Company’s unaudited condensed consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the unaudited condensed consolidated financial statements, the Company has an accumulated deficit, working capital deficit of and a net loss of $7,855,418, $2,670,387 and $1.684.793, respectively, as of November 30, 2020. Management believes that these matters raise substantial doubt about the Company’s ability to continue as a going concern for twelve months from the issuance date of this report. The Company has commenced operations and has begun to generate revenue; however, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds by way of private and/or public offerings. While the Company believes in the viability of its strategy and its ability to generate sufficient revenue and to raise additional funds, there can be no assurances to that effect. Should the Company fail to raise additional capital, it may be compelled to reduce the scope of its planned future business activities. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan, to generate sufficient revenue and to raise additional funds by way of public and/or private offerings. The unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. In December 2019, a novel strain of coronavirus (COVID-19) emerged in Wuhan, Hubei Province, China. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, it has now spread to several other countries and infections have been reported globally. Because COVID-19 infections have been reported throughout the United States, certain federal, state and local governmental authorities have issued stay-at-home orders, proclamations and/or directives aimed at minimizing the spread of COVID-19. Additional, more restrictive proclamations and/or directives may be issued in the future. As a result, all of our corporate and franchised Simplicity Gaming Centers were closed effective April 1, 2020. We commenced reopening Simplicity Gaming Centers as of May 1, 2020 and have since reopened ten corporate and 11 franchised Simplicity Gaming Centers as of January 14, 2021, the majority of which are operating at restricted capacity based on local COVID-19 regulations. Although our franchise agreements with franchisees of Simplicity Gaming Centers require a minimum monthly royalty payment to us from the franchisees regardless of whether the franchised Simplicity Gaming Centers are operating, there is a potential risk that franchisees of Simplicity Gaming Centers will default in their obligations to pay their minimum monthly royalty payment to us resulting in either an increase in accounts receivables or a bad debt expense where account receivables are no longer collectible due to franchisee’s inability to pay the minimum monthly royalty payments owed by the franchisee. We have not written off as bad debt any accounts receivables attributable to franchisee minimum monthly royalty payments owed during the COVID-19 pandemic. Notwithstanding, it is unclear exactly how much of the increase in accounts receivables is attributable to the impact of COVID-19. For the months of July and August 2020, we have waived the minimum monthly royalty payment obligations for the months of July and August 2020 and are instead billing the franchisees a true-up of 6% of gross sales without a minimum. The ultimate impact of the COVID-19 pandemic on the Company’s operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption, reduced customer traffic and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time but is anticipated to have a material adverse impact on our business, financial condition and results of operations. The measures taken to date have negatively impacted the Company’s business during the six months ended November 30, 2020 and will potentially continue to impact the Company’s business. Management expects that all of its business segments, across all of its geographies, will be impacted to some degree, but the significance of the impact of the COVID-19 outbreak on the Company’s business and the duration for which it may have an impact cannot be determined at this time. | Going Concern, Liquidity and Management’s Plan The Company’s consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the consolidated financial statements, the Company has an accumulated deficit as of May 31, 2020, a net loss and net cash used in operating activities for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the of the date that the financial statements are issued. The Company’s cash position may not be sufficient to support the Company’s daily operations. Management plans to raise additional funds by way of a private or ongoing public offering. While the Company believes in the viability of its strategy and its ability to generate sufficient revenue and to raise additional funds, there can be no assurances to that effect. Should the Company fail to raise additional capital, it may be compelled to reduce the scope of its planned future business activities. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan, to generate sufficient revenue and to raise additional funds by way of public and/or private offerings. The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. In December 2019, a novel strain of coronavirus (COVID-19) emerged in Wuhan, Hubei Province, China. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, it has now spread to several other countries and infections have been reported globally. Because COVID-19 infections have been reported throughout the United States, certain federal, state and local governmental authorities have issued stay-at-home orders, proclamations and/or directives aimed at minimizing the spread of COVID-19. Additional, more restrictive proclamations and/or directives may be issued in the future. As a result, all of our corporate and franchised Simplicity Gaming Centers had been closed effective April 1, 2020. Although our franchise agreements with franchisees of Simplicity Gaming Centers require a minimum monthly royalty payment to us from the franchisees regardless of whether the franchised Simplicity Gaming Centers are operating, there is a potential risk that franchisees of Simplicity Gaming Centers will default in their obligations to pay their minimum monthly royalty payment to us. As of May 31, 2020, some of our franchised gaming centers have begun to re-open. The ultimate impact of the COVID-19 pandemic on the Company’s operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption, reduced customer traffic and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time but is anticipated to have a material adverse impact on our business, financial condition and results of operations. The measures taken to date impacted the Company’s business for the fiscal fourth quarter and potentially beyond. Management expects that all of its business segments, across all of its geographies, will be impacted to some degree, but the significance of the impact of the COVID-19 outbreak on the Company’s business and the duration for which it may have an impact cannot be determined at this time. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Nov. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Computation of Dilutive Loss Per Common Share | The following potentially dilutive equity securities outstanding as of November 30, 2020 and 2019 were not included in the computation of dilutive loss per common share because the effect would have been anti-dilutive: November 30, 2020 2019 Stock warrants 820,055 803,001 Convertible notes 108,696 64,750 Total 928,751 867,751 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of Property and Equipment | The following is a summary of property and equipment—at cost, less accumulated depreciation: November 30, 2020 May 31, 2020 Leasehold improvements $ 110,849 $ 52,189 Property and equipment 631,424 243,314 Total cost 742,273 295,503 Less accumulated depreciation (136,019 ) (62,770 ) Net property and equipment $ 606,254 $ 232,733 | The following is a summary of property, plant, and equipment—at cost, less accumulated depreciation: May 31, Leasehold improvements 52,189 Property and equipment 243,314 Total cost 295,503 Less accumulated depreciation (62,770 ) Net, property plant and equipment $ 232,733 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Schedule of Intangible Assets | The following table sets forth the intangible assets, including accumulated amortization as of November 30, 2020: November 30, 2020 May 31, 2020 Remaining Useful Life Intangible Assets Remaining Useful Life Intangible Assets Non-Competes 4 years $ 1,023,118 4.50 years $ 1,023,118 Trademarks Indefinite 866,000 Indefinite 866,000 Customer database 2 years 35,000 10 years — Restrictive covenant 2 years 115,000 — — Customer contracts 10 years 343,414 — 546,000 Internet domain 2 years 3,000 2.50 years 3,000 Total intangible assets $ 2,385,532 $ 2,438,118 Accumulated amortization (429,973 ) (296,744 ) Net carrying value $ 1,955,559 $ 2,141,374 | The following tables set forth the intangible assets, including accumulated amortization at May 31, 2020: May 31, 2020 Remaining Accumulated Net Carrying Useful Life Cost Amortization Value Non-Competes 4.50 years $ 1,023,118 $ 289,884 $ 733,234 Trademarks Indefinite 866,000 - 866,000 Customer Contracts 10 years 546,000 5,443 540,557 Internet domain 2.50 years 3,000 1,417 1,583 $ 2,438,118 $ 296,744 $ 2,141,374 |
Schedule of Future Amortization of Intangible Assets | The following table sets forth the future amortization of the Company’s intangible assets as of November 30, 2020: For the fiscal years ending May 31: 2021 $ 133,229 2022 266,040 2023 265,457 2024 130,197 2025 10,834 Thereafter 283,802 Total $ 1,089,559 | The following table sets forth the future amortization of the Company’s intangible assets at May 31, 2020: 2021 2022 2023 2024 2025 Thereafter Total Non-Competes $ 204,624 $ 204,624 $ 204,624 $ 119,362 $ - $ - $ 733,234 Customer contracts 54,600 54,600 54,600 54,600 54,600 267,557 540,557 Internet domain 1,000 583 - - - - 1,583 Total $ 260,224 $ 259,807 $ 259,224 $ 173,962 $ 54,600 $ 267,557 $ 1,275,374 |
Schedule of Goodwill | The Company’s goodwill carrying amounts relate to the acquisitions of Simplicity Esports LLC, PLAYlive Nation Inc. and Simplicity El Paso, LLC. The composition of the goodwill balance, is as follows: November 30, 2020 May 31, 2020 Simplicity Esports, LLC $ 4,456,250 $ 4,456,250 Simplicity El Paso, LLC 25,000 — PLAYlive Nation Inc. 698,891 698,891 Total Goodwill $ 5,180,141 $ 5,155,141 | The Company’s goodwill carrying amounts relate to the acquisitions of Simplicity Esports LLC and PLAYlive Nation Inc. The composition of the goodwill balance, is as follows: Fiscal Year Fiscal Year Simplicity Esports LLC $ 4,456,250 $ 4,456,250 PLAYlive Nation Inc. 698,891 - Total Goodwill $ 5,155,141 $ 4,456,250 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Schedule of Aggregate Purchase Price | The table below presents a provisional allocation of the gross $315,000 purchase price as of June 26, 2020: Merchandise $ 27,000 Furniture, Fixtures and Equipment 113,000 Customer Database 35,000 Goodwill 25,000 Restrictive Covenant 115,000 Total value of acquisition $ 315,000 | |
Schedule of Estimated Fair Value of Assets Acquired and Liabilities | The following table summarizes the total of the assets acquired during the three months ended November 30, 2020: Assets acquired: Furniture, Fixtures and Equipment $ 330,234 Inventory 83,310 Total assets acquired at fair value $ 413,544 Purchase consideration paid: 37,941 shares of common stock $ 413,544 Total purchase consideration paid $ 413,544 | |
Simplicity Esports, LLC Acquisition [Member] | ||
Schedule of Aggregate Purchase Price | The aggregate purchase price consisted of the following: Restricted stock consideration 6,090,000 Total $ 6,090,000 | |
Schedule of Estimated Fair Value of Assets Acquired and Liabilities | The following table summarizes the estimated fair value of The Simplicity Esports, LLC assets acquired, and liabilities assumed at the date of acquisition: Cash 76,000 Internet Domain 3,000 Trade names and trademarks 588,000 Non-Competes 1,023,118 Accounts payable and accrued liabilities (56,000 ) Goodwill 4,455,882 Total $ 6,090,000 | |
PLAYlive Nations, Acquisition [Member] | ||
Schedule of Aggregate Purchase Price | The aggregate purchase price consisted of the following: Restricted stock consideration 1,440,000 Total $ 1,440,000 | |
Schedule of Estimated Fair Value of Assets Acquired and Liabilities | The following table summarizes the estimated fair value of the PLAYlive assets acquired and liabilities assumed at the date of acquisition: Cash 26,000 Property, plant and equipment 10,000 Net deferred revenue (115,000 ) Customer relationships Accounts payable and accrued liabilities (4,000 ) Goodwill 699,000 Trademarks 278,000 Customer contracts 546,000 Total $ 1,440,000 |
Operating Lease Right-of-use _2
Operating Lease Right-of-use (ROU) Assets and Operating Lease Liabilities (Tables) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Leases [Abstract] | ||
Schedule of Right-of-use Asset | Right-of-use asset (“ROU”) is summarized below: November 30, 2020 Operating leases $ 1,575,265 Less accumulated reduction (254,420 ) Balance of ROU asset as of November 30, 2020 $ 1,320,845 | |
Schedule of Operating Lease Liability | Operating lease liability related to the ROU asset is summarized below: November 30, 2020 Operating leases $ 1,575,265 Total lease liabilities 1,575,265 Reduction of lease liability (251,921 ) Total 1,323,344 Less: short term portion as of November 30, 2020 (281,088 ) Long term portion as of November 30, 2020 $ 1,042,256 | |
Schedule of Future Base Operating Lease Payments | Future base lease payments under the non-cancelable operating lease at November 30, 2020 are as follows: Years Ending May 31, Amount 2021 $ 203,709 2022 407,278 2023 391,832 2024 373,870 2025 330,017 2026 110,000 Total minimum non-cancelable operating lease payments 1,816,706 Less: discount to fair value (493,362 ) Total lease liability at November 30, 2020 $ 1,323,344 | The following is a schedule showing the future minimum lease payments under operating leases by years and the present value of the minimum payments as of May 31, 2020. 2020 $ 174,728 2021 $ 141,278 2022 $ 145,832 2023 $ 127,900 2024 $ 84,017 Total Operating Lease Obligations $ 673,755 Less: Amount representing interest $ (184,977 ) Present Value of minimum lease payments $ 488,778 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Schedule Showing the Future Minimum Lease Payments | Future base lease payments under the non-cancelable operating lease at November 30, 2020 are as follows: Years Ending May 31, Amount 2021 $ 203,709 2022 407,278 2023 391,832 2024 373,870 2025 330,017 2026 110,000 Total minimum non-cancelable operating lease payments 1,816,706 Less: discount to fair value (493,362 ) Total lease liability at November 30, 2020 $ 1,323,344 | The following is a schedule showing the future minimum lease payments under operating leases by years and the present value of the minimum payments as of May 31, 2020. 2020 $ 174,728 2021 $ 141,278 2022 $ 145,832 2023 $ 127,900 2024 $ 84,017 Total Operating Lease Obligations $ 673,755 Less: Amount representing interest $ (184,977 ) Present Value of minimum lease payments $ 488,778 |
Debt (Tables)
Debt (Tables) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Schedule of Outstanding Debt Instrument | The table below presents outstanding debt instruments as of November 30, 2020 and May 31, 2020: November 30, 2020 May 31,2020 10% Fixed Convertible Promissory Note $ — $ 152,500 Self-amortization promissory notes 1,133,023 — August 7, 2020 self-amortization promissory note 333,333 — Related Party Note — 64,728 Convertible Note Payable 1,000,000 1,000,000 2,466,356 1,217,228 Less: debt discount (366,227 ) (25,180 ) Total $ 2,100,129 $ 1,192,048 | The table below presents outstanding debt instruments as of May 31: 2020 2019 Sponsor loan $ - $ 93,761 10% Fixed Convertible Promissory Note 152,500 - Less Discount (25,180 ) - Related Party Note 64,728 - Convertible Note Payable 1,000,000 1,000,000 Total $ 1,192,048 $ 1,093,761 |
Schedule of Prepayment of Debt Note | The Company may prepay the Harbor Gates Note according to the following schedule: Days Since Payment Amount Under 30 115% of Principal Amount (as hereinafter defined) so paid 31-60 120% of Principal Amount so paid 61-90 125% of Principal Amount so paid 91-180 135% of Principal Amount so paid | The Company may prepay the Harbor Gates Note according to the following schedule: Days Since Payment Amount Under 30 115% of Principal Amount (as hereinafter defined) so paid 31-60 120% of Principal Amount so paid 61-90 125% of Principal Amount so paid 91-180 135% of Principal Amount so paid |
June 18, 2020 Self-Amortization Note [Member] | ||
Schedule of Amortization Payments | The Company is required to make amortization payments to the Holder according to the following schedule: Payment Date Payment Amount 10/16/2020 $ 66,125 11/16/2020 66,125 12/16/2020 66,125 01/18/2021 66,125 02/18/2021 66,125 03/18/2021 66,125 04/16/2021 66,125 05/18/2021 66,125 06/18/2021 65,921 Total: $ 594,921 | |
August 7, 2020 Self-Amortization Note [Member] | ||
Schedule of Amortization Payments | The Company is required to make amortization payments to the Holder according to the following schedule: Payment Date Payment Amount 12/07/2020 $ 40,075.75 01/07/2021 40,075.75 02/08/2021 40,075.75 03/08/2021 40,075.75 04/07/2021 40,075.75 05/07/2021 40,075.75 06/07/2021 40,075.75 07/07/2021 40,075.75 08/07/2021 39,952.34 Total: $ 360,558.34 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Equity [Abstract] | ||
Schedule of Outstanding Stock Warrants | Warrant activities for the six months ended November 30, 2020 are summarized as follows: Number of Warrants Weighted Average Weighted Aggregate Balance Outstanding May 31, 2020 803,000 $ 83.04 - $ - Granted 17,054 21.99 Cancelled - - Balance Outstanding November 30, 2020 820,054 $ 81.74 3.10 $ - Exercisable, November 30, 2020 820,054 $ 81.74 3.10 $ - | A summary of the status of the Company’s outstanding stock warrants for the years ended May 31, 2020 and 2019 is as follows: Number of Average Expiration Outstanding – May 31, 2018 5,461,500 $ 11.50 Nov 2023 Granted – May 31, 2019 962,500 4.00 May 2024 Outstanding – May 31, 2019 6,424,000 10.38 Outstanding – May 31, 2020 6,424.000 $ 10.38 Warrants exercisable at May 31, 2020 6,424,000 |
Income Taxes (Tables) (10-K)
Income Taxes (Tables) (10-K) | 12 Months Ended |
May 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Deferred Tax Assets | The components of the net deferred tax assets for the year ended May 31, 2020 and 2019 are as follows: Year ended Year ended Net Operating Loss $ 770,000 $ 364,000 Impairment of cost method investment - 38,000 Gross deferred tax asset 770,000 402,000 Less: Valuation allowance (825,000 ) (381,000 ) Net deferred tax asset $ 55,000 $ 21,000 Deferred tax liabilities: Amortization of intangible assets (55,000 ) (21,000 ) Net deferred assets/liabilities - - |
Schedule of Reconciliation of the Statutory Federal Income Tax Rate | The table below summarizes the reconciliation of our income tax provision computed at the federal statutory rate of 21% for the years ended May 31, 2020 and 2019 and the actual tax provisions for the year ended May 31, 2020 and 2019. 2020 2019 Expected provision (benefit) at statutory rate (21.0 )% (21.0 )% State taxes, net of federal tax benefit (4.4 )% (4.4 )% Change in federal rate - % - % Permanent differences-stock based compensation 15.0 15.0 Increase in valuation allowance 10.4 % 10.4 % Total provision (benefit) for income taxes 0.0 % 0.0 % |
Segment and Related Informati_2
Segment and Related Information (Tables) | 12 Months Ended |
May 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Summarized financial information concerning our reportable segments for the year ended May 31, 2020 is shown in the following table: Revenues Net Depreciation Capital Goodwill Total Franchise royalties and fees $ 523,000 $ (124,000 ) $ - $ - $ 699,000 $ 1,610,000 Company-owned stores 174,000 (330,000 ) 54,000 142,000 - 1,124,000 Esports revenue 165,000 (345,000 ) 215,000 9,000 4,456,000 5,750,000 Corporate - (1,856,000 ) - - - 108,000 Total $ 862,000 $ (2,655,000 ) $ 269,000 $ 151,000 $ 5,155,000 $ 8,592,000 |
Organization and Description _2
Organization and Description of Business (Details Narrative) - shares | Nov. 17, 2020 | Sep. 28, 2020 | Nov. 30, 2020 | Aug. 17, 2020 | May 31, 2020 | May 31, 2019 |
Common stock, authorized | 36,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | ||
Preferred stock, authorized | 1,000,000 | 1,000,000 | 1,000,000 | |||
Reverse stock split | 1-for-8 | 1-for-6 | ||||
Reverse stock split effective date | Nov. 20, 2020 | Oct. 13, 2020 | ||||
Simplicity One Brasil Ltd [Member] | ||||||
Subsidiary ownership percentage | 76.00% | |||||
Simplicity Happy Valley, LLC [Member] | ||||||
Subsidiary ownership percentage | 79.00% | |||||
Simplicity Redmond, LLC [Member] | ||||||
Subsidiary ownership percentage | 79.00% | |||||
Simplicity El Paso, LLC [Member] | ||||||
Subsidiary ownership percentage | 51.00% |
Organization and Description _3
Organization and Description of Business (Details Narrative) (10-K) - USD ($) | Jun. 04, 2020 | Nov. 20, 2018 | Nov. 20, 2018 | Nov. 09, 2018 | Aug. 20, 2020 | Nov. 30, 2020 | May 31, 2019 | Aug. 21, 2018 | Aug. 22, 2017 |
Deposit in trust account | $ 303,610 | ||||||||
Price per unit under trust account | $ 0.058 | ||||||||
Number of shares issued restricted shares | 150,000 | ||||||||
Shares issued, price per share | $ 9.28 | ||||||||
Number of common stock issued | 10,738 | 250,000 | |||||||
Number of shares issued upon conversion of convertible securities | 520,000 | ||||||||
Chardan Capital Markets [Member] | Restricted Stock [Member] | |||||||||
Number of shares issued restricted shares | 208,000 | ||||||||
Shares issued, price per share | $ 10.21 | $ 10.21 | |||||||
Chardan Capital Markets [Member] | Restricted Stock [Member] | General and Administrative Expense [Member] | |||||||||
Number of shares issued restricted shares, value | $ 2,125,000 | ||||||||
Smaaash Entertainment Private Limited [Member] | |||||||||
Number of common stock issued | 2,000,000 | ||||||||
Initial Public Offering [Member] | |||||||||
Sale of stock, price per unit | $ 10 | ||||||||
Number of common stock shares and warrants outstanding | 5,119,390 | ||||||||
Number of common stock shares eligible for outstanding warrants | 5,461,500 | 5,461,500 | |||||||
Initial Public Offering [Member] | I-AM Capital Partners LLC (the "Sponsor") [Member] | |||||||||
Number of shares redeemed | 4,448,260 | ||||||||
Sale of stock, price per unit | $ 10.2187363 | ||||||||
Number of shares redeemed, value | $ 45,455,596 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Nov. 30, 2020 | Nov. 30, 2019 | Nov. 30, 2020 | Nov. 30, 2019 | May 31, 2020 | May 31, 2019 | |
Cash equivalents | ||||||
Federal depository insurance coverage | 250,000 | 250,000 | 250,000 | |||
Allowance for doubtful accounts | 139,867 | $ 139,867 | 52,400 | |||
Lease description | The Company has elected not to recognize right-of-use ("ROU") assets and lease liabilities for short-term leases that have a term of 12 months or less. | |||||
Uncertain tax positions | ||||||
Income tax interest and penalties | ||||||
Accumulated deficit | (7,855,418) | (7,855,418) | (6,195,044) | $ (3,574,806) | ||
Working capital deficit | (2,670,387) | (2,670,387) | ||||
Net loss | $ (1,013,693) | $ (571,502) | $ (1,684,793) | $ (854,894) | $ (2,665,779) | $ (3,565,272) |
Minimum [Member] | ||||||
Property, plant and equipment, useful life | 3 years | 3 years | ||||
Finite lived intangible asset, useful life | 3 years | 3 years | ||||
Maximum [Member] | ||||||
Property, plant and equipment, useful life | 5 years | 5 years | ||||
Finite lived intangible asset, useful life | 5 years | 5 years | ||||
Minimum monthly royalty payment obligations percentage | 6.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) (10-K) - USD ($) | Dec. 20, 2018 | Dec. 22, 2017 | Feb. 28, 2019 | Nov. 30, 2020 | May 31, 2020 | May 31, 2019 | Jan. 01, 2019 |
Federal depository insurance coverage | $ 250,000 | $ 250,000 | |||||
Allowance for doubtful accounts | 139,867 | 52,400 | |||||
Operating lease right-of-use asset | 1,320,846 | 490,984 | $ 100,146 | $ 500,000 | |||
Operating lease liability | $ 281,088 | 151,867 | $ 32,045 | ||||
Offering costs | $ 98,198 | ||||||
Statutory tax rate | 35.00% | 21.00% | 21.00% | ||||
Accounting Standards Update 2016-02 [Member] | |||||||
Operating lease right-of-use asset | 110,003 | ||||||
Operating lease liability | 107,678 | ||||||
Polar, K2 And Escrow Agent [Member] | Stock Purchase Agreement [Member] | |||||||
Description of amendment of payment terms | The Company at the closing of the Stock Sales from $11.23 per share to (1) first $6.00 per share up to 20% of the original number of Shares (as defined in the respective Purchase Agreement), (2) then $5.00 per remaining share up to 20% of the original number of Shares, (3) then $4.00 per remaining share up to 20% of the original number of Shares, (4) then $3.00 per remaining Share up to 20% of the original number of Shares, and (5) then $2.00 per remaining Share up to 20% of the original number of Shares, (y) to extend the outside date of the closing of the Stock Sales until January 18, 2019, and (z) to authorize the issuance of $3,542,700 and $1,590,600 from the Escrow Account to Polar and K2, respectively, as partial payment for the Shares prior to the final closing of the Stock Sales. | ||||||
Minimum [Member] | |||||||
Property, plant and equipment, useful life | 3 years | 3 years | |||||
Finite lived intangible asset, useful life | 3 years | 3 years | |||||
Maximum [Member] | |||||||
Property, plant and equipment, useful life | 5 years | 5 years | |||||
Finite lived intangible asset, useful life | 5 years | 5 years | |||||
Operating Lease Current Liabilities [Member] | |||||||
Operating lease liability | $ 151,867 | $ 500,000 | |||||
Simplicity One Brasil Ltd [Member] | |||||||
Equity method investment, ownership percentage | 90.00% | ||||||
Simplicity Happy Valley, LLC and Simplicity Redmond, LLC [Member] | |||||||
Equity method investment, ownership percentage | 79.00% | ||||||
Smaaash Entertainment, Inc [Member] | |||||||
Impairment expense | $ 150,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Computation of Dilutive Loss Per Common Share (Details) - shares | 6 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Total | 928,751 | 867,751 |
Stock Warrants [Member] | ||
Total | 820,055 | 803,001 |
Convertible Notes [Member] | ||
Total | 108,696 | 64,750 |
Initial Public Offering and P_2
Initial Public Offering and Private Placement (Details Narrative) (10-K) | Sep. 13, 2017USD ($)shares | Aug. 22, 2017USD ($)$ / sharesshares | Nov. 30, 2020USD ($)shares | May 31, 2020USD ($)Integer$ / sharesshares | May 31, 2019USD ($)$ / shares | Nov. 20, 2018USD ($)shares |
Offering costs | $ 98,198 | |||||
Deferred underwriting fees | 1,820,000 | |||||
Amount of estimated fair value | $ 743,600 | |||||
Fair value, per unit | $ / shares | $ 2.86 | |||||
Proceeds from sale of private units | $ 87,700 | $ 1,925,000 | ||||
Volatility rate [Member] | ||||||
Fair value measurement input | Integer | 35 | |||||
Risk Free Interest Rate [Member] | ||||||
Fair value measurement input | Integer | 1.73 | |||||
Expected Life [Member] | ||||||
Maturity term | 5 years | |||||
Securities Exchange Agreement [Member] | Settlement Agreement [Member] | ||||||
Cash payment | $ 20,000 | |||||
Securities Exchange Agreement [Member] | Settlement Agreement [Member] | Restricted Stock [Member] | ||||||
Number of shares removed | shares | 52,000 | |||||
Initial Public Offering [Member] | ||||||
Number of shares purchased | shares | 5,000,000 | 250,000 | ||||
Sale of stock, price per unit | $ / shares | $ 10 | |||||
Proceeds from sale of units, net of underwriting discounts paid | $ 50,000,000 | |||||
Offering costs | 3,700,000 | |||||
Underwriter fees | $ 3,200,000 | $ 1,000,000 | ||||
Issuance of shares to underwriter, shares | shares | 50,000 | |||||
Securities included in one unit, description | Each Unit consisted of one share of the Company's common stock, one right to receive one-tenth of one share of the Company's common stock upon consummation of the Company's initial Business Combination ("Right"), and one redeemable warrant ("Warrant") | |||||
Description of warrants rights | Each Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50 per share, subject to adjustment. No fractional shares will be issued upon exercise of the Warrants. The Warrants became exercisable 30 days after the completion of the initial Business Combination and will expire five years after the completion of the initial Business Combination or earlier upon redemption or liquidation | |||||
Exercise price of warrants per share | $ / shares | $ 0.01 | $ 11.50 | ||||
Warrants term | 5 years | |||||
Sale price per share | $ / shares | $ 21 | |||||
Exchange of rights, description | Each holder of a Right received one-tenth (1/10) of one share of common stock upon consummation of the Business Combination. No fractional shares were issued upon exchange of the Rights. | |||||
Number of units issued under purchase option | shares | 250,000 | |||||
Sale of stock, consideration received | $ 100 | |||||
Proceeds from sale of private units | $ 2,545,000 | |||||
Demand registration rights term | 5 years | |||||
Piggy back registration rights term | 7 years | |||||
Initial Public Offering [Member] | Securities Exchange Agreement [Member] | ||||||
Number of shares purchased | shares | 6,500 | |||||
Initial Public Offering [Member] | Securities Exchange Agreement [Member] | Pre-Reverse Split [Member] | ||||||
Number of shares purchased | shares | 52,000 | |||||
Initial Public Offering [Member] | Underwriters [Member] | ||||||
Number of shares purchased | shares | 200,000 | 250,000 | ||||
Underwriter fees | $ 110,000 | |||||
Deferred underwriting fees | 70,000 | |||||
Number of shares agreed to be purchased under commitment | shares | 750,000 | |||||
Proceeds from sale of equity | $ 2,000,000 | |||||
Sale of stock, consideration received | $ 100 | |||||
Initial Public Offering [Member] | Common Stock [Member] | ||||||
Number of securities eligible for each warrant | shares | 1 | |||||
Exercise price of warrants per share | $ / shares | $ 11.50 | |||||
Warrants term | 5 years | |||||
Over-Allotment Option [Member] | Securities Exchange Agreement [Member] | ||||||
Number of shares purchased | shares | 2,000 | |||||
Over-Allotment Option [Member] | Underwriters [Member] | ||||||
Number of shares purchased | shares | 260,000 | 260,000 | ||||
Number of units issued under purchase option | shares | 260,000 | |||||
Sale of stock, consideration received | $ 2,990,000 | $ 2,990,000 | ||||
Private Placement [Member] | ||||||
Number of shares purchased | shares | 7,000 | 254,500 | ||||
Sale of stock, price per unit | $ / shares | $ 10 | |||||
Exercise price of warrants per share | $ / shares | $ 4 | |||||
Warrants term | 5 years | |||||
Sale price per share | $ / shares | $ 10 | |||||
Proceeds from sale of equity | $ 70,000 | |||||
Proceeds from sale of private units | $ 2,545,000 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Nov. 30, 2020 | Nov. 30, 2019 | May 31, 2020 | May 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 73,249 | $ 21,148 | $ 57,473 | $ 5,298 |
Property, Plant and Equipment (
Property, Plant and Equipment (Details Narrative) (10-K) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Nov. 30, 2020 | Nov. 30, 2019 | May 31, 2020 | May 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 73,249 | $ 21,148 | $ 57,473 | $ 5,298 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Nov. 30, 2020 | May 31, 2020 | May 31, 2019 |
Property, Plant and Equipment [Line Items] | |||
Total cost | $ 742,273 | $ 295,503 | |
Less accumulated depreciation | (136,019) | (62,770) | |
Net property and equipment | 606,254 | 232,733 | $ 117,231 |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | 110,849 | 52,189 | |
Property and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | $ 631,424 | $ 243,314 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) (10-K) - USD ($) | Nov. 30, 2020 | May 31, 2020 | May 31, 2019 |
Property, Plant and Equipment [Line Items] | |||
Total cost | $ 742,273 | $ 295,503 | |
Less accumulated depreciation | (136,019) | (62,770) | |
Net property plant and equipment | 606,254 | 232,733 | $ 117,231 |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | 110,849 | 52,189 | |
Property and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | $ 631,424 | $ 243,314 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Nov. 30, 2020 | Nov. 30, 2019 | May 31, 2020 | May 31, 2019 | |
Amortization expense | $ 133,229 | $ 102,812 | $ 211,067 | $ 85,677 |
Termination of Franchise Agreement [Member] | ||||
Impairment loss | $ 202,586 |
Intangible Assets (Details Na_2
Intangible Assets (Details Narrative) (10-K) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Nov. 30, 2020 | Nov. 30, 2019 | May 31, 2020 | May 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 133,229 | $ 102,812 | $ 211,067 | $ 85,677 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Nov. 30, 2020 | May 31, 2020 | May 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Total intangible assets | $ 2,385,532 | $ 2,438,118 | |
Accumulated amortization | (429,973) | (296,744) | |
Intangible assets, Net Carrying Value | $ 1,955,559 | $ 2,141,374 | $ 1,528,441 |
Non-Competes [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, useful life | 4 years | 4 years 6 months | |
Total intangible assets | $ 1,023,118 | $ 1,023,118 | |
Accumulated amortization | (289,884) | ||
Intangible assets, Net Carrying Value | $ 733,234 | ||
Trademarks [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, useful life, description | Indefinite | Indefinite | |
Total intangible assets | $ 866,000 | $ 866,000 | |
Accumulated amortization | |||
Intangible assets, Net Carrying Value | $ 866,000 | ||
Customer Database [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, useful life | 2 years | 10 years | |
Total intangible assets | $ 35,000 | ||
Restrictive Covenant [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, useful life | 2 years | ||
Total intangible assets | $ 115,000 | ||
Customer Contracts [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, useful life | 10 years | 10 years | |
Total intangible assets | $ 343,414 | $ 546,000 | |
Accumulated amortization | (5,443) | ||
Intangible assets, Net Carrying Value | $ 540,557 | ||
Internet Domain [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, useful life | 2 years | 2 years 6 months | |
Total intangible assets | $ 3,000 | $ 3,000 | |
Accumulated amortization | (1,417) | ||
Intangible assets, Net Carrying Value | $ 1,583 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Intangible Assets (Details) (10-K) - USD ($) | 6 Months Ended | 12 Months Ended | |
Nov. 30, 2020 | May 31, 2020 | May 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Finite lived intangible assets, Cost | $ 2,385,532 | $ 2,438,118 | |
Accumulated Amortization | 429,973 | 296,744 | |
Intangible assets, Net Carrying Value | $ 1,955,559 | $ 2,141,374 | $ 1,528,441 |
Non-Competes [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, useful life | 4 years | 4 years 6 months | |
Finite lived intangible assets, Cost | $ 1,023,118 | $ 1,023,118 | |
Accumulated Amortization | 289,884 | ||
Intangible assets, Net Carrying Value | $ 733,234 | ||
Trademarks [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, useful life, description | Indefinite | Indefinite | |
Finite lived intangible assets, Cost | $ 866,000 | $ 866,000 | |
Accumulated Amortization | |||
Intangible assets, Net Carrying Value | $ 866,000 | ||
Customer Contracts [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, useful life | 10 years | 10 years | |
Finite lived intangible assets, Cost | $ 343,414 | $ 546,000 | |
Accumulated Amortization | 5,443 | ||
Intangible assets, Net Carrying Value | $ 540,557 | ||
Internet Domain [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, useful life | 2 years | 2 years 6 months | |
Finite lived intangible assets, Cost | $ 3,000 | $ 3,000 | |
Accumulated Amortization | 1,417 | ||
Intangible assets, Net Carrying Value | $ 1,583 |
Intangible Assets - Schedule _3
Intangible Assets - Schedule of Future Amortization of Intangible Assets (Details) - USD ($) | Nov. 30, 2020 | May 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 | $ 133,229 | |
2022 | 266,040 | $ 260,224 |
2023 | 265,457 | 259,807 |
2024 | 130,197 | 259,224 |
2025 | 10,834 | 173,962 |
Thereafter | 283,802 | 267,557 |
Total | $ 1,089,559 | $ 1,275,374 |
Intangible Assets - Schedule _4
Intangible Assets - Schedule of Future Amortization of Intangible Assets (Details) (10-K) - USD ($) | Nov. 30, 2020 | May 31, 2020 |
2021 | $ 266,040 | $ 260,224 |
2022 | 265,457 | 259,807 |
2023 | 130,197 | 259,224 |
2024 | 10,834 | 173,962 |
2025 | 54,600 | |
Thereafter | 283,802 | 267,557 |
Total | $ 1,089,559 | 1,275,374 |
Non-Competes [Member] | ||
2021 | 204,624 | |
2022 | 204,624 | |
2023 | 204,624 | |
2024 | 119,362 | |
2025 | ||
Thereafter | ||
Total | 733,234 | |
Customer Contracts [Member] | ||
2021 | 54,600 | |
2022 | 54,600 | |
2023 | 54,600 | |
2024 | 54,600 | |
2025 | 54,600 | |
Thereafter | 267,557 | |
Total | 540,557 | |
Internet Domain [Member] | ||
2021 | 1,000 | |
2022 | 583 | |
2023 | ||
2024 | ||
2025 | ||
Thereafter | ||
Total | $ 1,583 |
Intangible Assets - Schedule _5
Intangible Assets - Schedule of Goodwill (Details) - USD ($) | Nov. 30, 2020 | Jun. 26, 2020 | May 31, 2020 | May 31, 2019 |
Goodwill | $ 5,180,141 | $ 5,155,141 | $ 4,456,250 | |
Simplicity Esports, LLC [Member] | ||||
Goodwill | 4,456,250 | 4,456,250 | ||
Simplicity El Paso, LLC [Member] | ||||
Goodwill | 25,000 | $ 25,000 | ||
PLAYLive Nation, Inc [Member] | ||||
Goodwill | $ 698,891 | $ 698,891 |
Intangible Assets - Schedule _6
Intangible Assets - Schedule of Goodwill (Details) (10-K) - USD ($) | Nov. 30, 2020 | May 31, 2020 | May 31, 2019 |
Goodwill | $ 5,180,141 | $ 5,155,141 | $ 4,456,250 |
The Simplicity Esports, LLC [Member] | |||
Goodwill | 4,456,250 | 4,456,250 | |
PLAYLive Nation, Inc [Member] | |||
Goodwill | $ 698,891 | $ 698,891 |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | Oct. 30, 2020 | Oct. 12, 2020 | Oct. 01, 2020 | Sep. 23, 2020 | Sep. 22, 2020 | Jun. 26, 2020 | Jan. 14, 2020 | Nov. 30, 2020 | Aug. 31, 2020 | Nov. 30, 2020 | May 31, 2020 | May 31, 2019 | Jun. 04, 2020 |
Percentage interest acquired | 49.00% | ||||||||||||
Payment on acquisition | $ 150,000 | ||||||||||||
Asset accquired in exchange of shares | 37,941 | ||||||||||||
Share issued price per share | $ 9.28 | ||||||||||||
Purchase price | 315,000 | ||||||||||||
Number of common stock shares issued | $ 25,000 | $ 216,625 | $ 87,700 | ||||||||||
Value of shares issued for acquisition | $ 413,544 | $ 165,000 | $ 6,090,000 | ||||||||||
Unrelated Third Party [Member] | |||||||||||||
Number of common stock shares issued | $ 165,000 | ||||||||||||
Simplicity One Brasil Ltd [Member] | |||||||||||||
Percentage interest acquired | 90.00% | ||||||||||||
Payment on acquisition | $ 2,000 | ||||||||||||
Simplicity El Paso, LLC [Member] | |||||||||||||
Percentage interest acquired | 51.00% | ||||||||||||
Asset accquired in exchange of shares | 150,000 | ||||||||||||
Share issued price per share | $ 1.10 | ||||||||||||
Purchase price | $ 315,000 | ||||||||||||
Simplicity Kennewick, LLC [Member] | Asset Purchase Agreement [Member] | |||||||||||||
Asset accquired in exchange of shares | 2,990 | ||||||||||||
Share issued price per share | $ 9.84 | ||||||||||||
Value of shares issued for acquisition | $ 29,416 | ||||||||||||
Simplicity Union Gap, LLC [Member] | Asset Purchase Agreement [Member] | |||||||||||||
Asset accquired in exchange of shares | 4,506 | ||||||||||||
Share issued price per share | $ 9.76 | ||||||||||||
Value of shares issued for acquisition | $ 43,974 | ||||||||||||
Simplicity St Petersburg, LLC [Member] | Asset Purchase Agreement [Member] | |||||||||||||
Asset accquired in exchange of shares | 3,688 | ||||||||||||
Share issued price per share | $ 10.48 | ||||||||||||
Value of shares issued for acquisition | $ 38,650 | ||||||||||||
Simplicity Humble, LLC [Member] | Asset Purchase Agreement [Member] | |||||||||||||
Asset accquired in exchange of shares | 8,402 | ||||||||||||
Share issued price per share | $ 10.48 | ||||||||||||
Value of shares issued for acquisition | $ 88,052 | ||||||||||||
Simplicity Frisco, LLC [Member] | Asset Purchase Agreement [Member] | |||||||||||||
Asset accquired in exchange of shares | 6,202 | ||||||||||||
Share issued price per share | $ 12 | ||||||||||||
Value of shares issued for acquisition | $ 74,423 | ||||||||||||
Simplicity Santa Rosa, LLC [Member] | Asset Purchase Agreement [Member] | |||||||||||||
Asset accquired in exchange of shares | 4,202 | ||||||||||||
Share issued price per share | $ 11.44 | ||||||||||||
Value of shares issued for acquisition | $ 48,068 | ||||||||||||
Simplicity Brea, LLC [Member] | Asset Purchase Agreement [Member] | |||||||||||||
Asset accquired in exchange of shares | 3,255 | ||||||||||||
Share issued price per share | $ 11.44 | ||||||||||||
Value of shares issued for acquisition | $ 37,237 | ||||||||||||
Simplicity Billings, LLC [Member] | Asset Purchase Agreement [Member] | |||||||||||||
Asset accquired in exchange of shares | 4,696 | ||||||||||||
Share issued price per share | $ 11.44 | ||||||||||||
Value of shares issued for acquisition | $ 53,725 |
Acquisitions (Details Narrati_2
Acquisitions (Details Narrative) (10-K) - USD ($) | Jul. 29, 2019 | Jan. 07, 2019 | Jan. 04, 2019 | Mar. 31, 2019 | Nov. 30, 2020 | May 31, 2020 | Jun. 26, 2020 |
Business Acquisition [Line Items] | |||||||
Business combination, consideration | $ 413,544 | ||||||
Percentage interest acquired | 49.00% | ||||||
The Simplicity Esports, LLC [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Number of share issued | 700,000 | 300,000 | 2,000,000 | ||||
Business combination, consideration | $ 6,090,000 | ||||||
Revenue | 38,000 | ||||||
Net income (loss) | $ 400,000 | ||||||
The Simplicity Esports, LLC [Member] | Restricted Stock [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Number of share issued | 3,000,000 | ||||||
Business combination, consideration | $ 6,090,000 | ||||||
PLAYLive Nation, Inc [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Number of share issued | 750,000 | ||||||
Business combination, consideration | 1,440,000 | ||||||
Revenue | 442,000 | ||||||
Net income (loss) | $ 72,000 | ||||||
PLAYLive Nation, Inc [Member] | Restricted Stock [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Number of share issued | 750,000 | ||||||
Business combination, consideration | $ 1,440,000 |
Acquisitions - Schedule of Busi
Acquisitions - Schedule of Business Acquisition (Details) - USD ($) | Nov. 30, 2020 | Jun. 26, 2020 | May 31, 2020 | May 31, 2019 |
Goodwill | $ 5,180,141 | $ 5,155,141 | $ 4,456,250 | |
Simplicity El Paso, LLC [Member] | ||||
Merchandise | $ 27,000 | |||
Furniture, Fixtures and Equipment | 113,000 | |||
Customer Database | 35,000 | |||
Goodwill | $ 25,000 | 25,000 | ||
Restrictive Covenant | 115,000 | |||
Total value of acquisition | $ 315,000 |
Acquisitions - Schedule of Fair
Acquisitions - Schedule of Fair Value of Assets Acquired (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Nov. 30, 2020 | Aug. 31, 2020 | May 31, 2019 | |
Business Combinations [Abstract] | |||
Assets acquired: Furniture, Fixtures and Equipment | $ 330,234 | ||
Assets acquired: Inventory | 83,310 | ||
Total assets acquired at fair value | 413,544 | ||
Purchase consideration paid: 37,941 shares of common stock | 413,544 | $ 165,000 | $ 6,090,000 |
Total purchase consideration paid | $ 413,544 |
Acquisitions - Schedule of Fa_2
Acquisitions - Schedule of Fair Value of Assets Acquired (Details) (Parenthetical) | 6 Months Ended |
Nov. 30, 2020shares | |
Business Combinations [Abstract] | |
Stock issued during period, shares, acquisitions | 37,941 |
Acquisitions - Schedule of Aggr
Acquisitions - Schedule of Aggregate Purchase Price (Details) (10-K) - USD ($) | 3 Months Ended | 12 Months Ended |
Nov. 30, 2020 | May 31, 2020 | |
Business Acquisition [Line Items] | ||
Total | $ 413,544 | |
The Simplicity Esports, LLC [Member] | ||
Business Acquisition [Line Items] | ||
Total | $ 6,090,000 | |
PLAYLive Nation, Inc [Member] | ||
Business Acquisition [Line Items] | ||
Total | 1,440,000 | |
Restricted Stock [Member] | The Simplicity Esports, LLC [Member] | ||
Business Acquisition [Line Items] | ||
Total | 6,090,000 | |
Restricted Stock [Member] | PLAYLive Nation, Inc [Member] | ||
Business Acquisition [Line Items] | ||
Total | $ 1,440,000 |
Acquisitions - Schedule of Esti
Acquisitions - Schedule of Estimated Fair Value of Assets Acquired and Liabilities (Details) (10-K) | May 31, 2020USD ($) |
The Simplicity Esports, LLC [Member] | |
Business Acquisition [Line Items] | |
Cash | $ 76,000 |
Trade names and trademarks | 588,000 |
Accounts payable and accrued liabilities | (56,000) |
Goodwill | 4,455,882 |
Total | 6,090,000 |
The Simplicity Esports, LLC [Member] | Internet Domain [Member] | |
Business Acquisition [Line Items] | |
Finite lived intangible assets | 3,000 |
The Simplicity Esports, LLC [Member] | Non-Competes [Member] | |
Business Acquisition [Line Items] | |
Finite lived intangible assets | 1,023,118 |
PLAYLive Nation, Inc [Member] | |
Business Acquisition [Line Items] | |
Cash | 26,000 |
Property, plant and equipment | 10,000 |
Net deferred revenue | (115,000) |
Customer relationships | |
Accounts payable and accrued liabilities | (4,000) |
Goodwill | 699,000 |
Total | 1,440,000 |
PLAYLive Nation, Inc [Member] | Trademarks [Member] | |
Business Acquisition [Line Items] | |
Trade names and trademarks | 278,000 |
PLAYLive Nation, Inc [Member] | Customer Contracts [Member] | |
Business Acquisition [Line Items] | |
Trade names and trademarks | $ 546,000 |
Operating Lease Right-of-use _3
Operating Lease Right-of-use (ROU) Assets and Operating Lease Liabilities (Details Narrative) | 6 Months Ended |
Nov. 30, 2020USD ($) | |
Lease description | Beginning 2019 until 2025 |
Right-of-use assets | $ 1,575,265 |
Operating lease liabilities | 1,575,265 |
Lease costs | $ 83,042 |
Lease discount rate | 10.00% |
Base Lease [Member] | |
Lease costs | $ 74,452 |
Other Expenses [Member] | |
Lease costs | $ 8,589 |
Operating Lease Right-of-use _4
Operating Lease Right-of-use (ROU) Assets and Operating Lease Liabilities - Schedule of Right-of-use Asset (Details) - USD ($) | Nov. 30, 2020 | May 31, 2020 | May 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||||
Operating leases | $ 1,575,265 | |||
Less accumulated reduction | (254,420) | |||
Balance of ROU asset | $ 1,320,846 | $ 490,984 | $ 100,146 | $ 500,000 |
Operating Lease Right-of-use _5
Operating Lease Right-of-use (ROU) Assets and Operating Lease Liabilities - Schedule of Operating Lease Liability (Details) - USD ($) | Nov. 30, 2020 | May 31, 2020 | May 31, 2019 |
Leases [Abstract] | |||
Operating leases | $ 1,575,265 | ||
Total lease liabilities | 1,575,265 | ||
Reduction of lease liability | (251,921) | ||
Total | 1,323,344 | $ 490,983 | |
Less: short term portion as of November 30, 2020 | (281,088) | $ (151,867) | $ (32,045) |
Long term portion as of November 30, 2020 | $ 1,042,256 |
Operating Lease Right-of-use _6
Operating Lease Right-of-use (ROU) Assets and Operating Lease Liabilities - Schedule of Future Base Operating Lease Payments (Details) - USD ($) | Nov. 30, 2020 | May 31, 2020 |
Leases [Abstract] | ||
2021 | $ 203,709 | |
2022 | 407,278 | |
2023 | 391,832 | |
2024 | 373,870 | |
2025 | 330,017 | |
2026 | 110,000 | |
Total Operating Lease Obligations | 1,816,706 | |
Less: discount to fair value | (493,362) | |
Present Value of minimum lease payments | $ 1,323,344 | $ 490,983 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jun. 02, 2020 | May 07, 2020 | Sep. 16, 2019 | May 31, 2020 | Aug. 20, 2020 | Nov. 30, 2020 | Oct. 13, 2020 | Jun. 22, 2020 | May 12, 2020 |
Debt principal amount | $ 1,217,228 | $ 2,466,356 | |||||||
Number of shares issued restricted shares | 150,000 | ||||||||
Jed Kaplan [Member] | |||||||||
Number of shares issued restricted shares | 70,000 | ||||||||
William H. Herrmann [Member] | |||||||||
Number of shares issued restricted shares | 2,976 | ||||||||
Number of shares issued restricted shares, value | $ 25,000 | ||||||||
William H. Herrmann [Member] | Restricted Stock [Member] | |||||||||
Number of shares issued restricted shares | 23,809 | 22,936 | |||||||
Number of shares issued restricted shares, value | $ 25,000 | $ 25,000 | |||||||
Sale of stock, price per share | $ 1.09 | ||||||||
Kaplan Promissory Note [Member] | |||||||||
Debt instrument, face amount | $ 45,000 | ||||||||
Kaplan Promissory Note [Member] | Jed Kaplan [Member] | |||||||||
Debt instrument, face amount | $ 64,728 | $ 25,272 | $ 25,272 | $ 90,000 | $ 90,000 | ||||
Equity method investment, ownership percentage | 10.00% | 10.00% | 5.00% | ||||||
Debt principal amount | $ 90,000 |
Related Party Transactions (D_2
Related Party Transactions (Details Narrative) (10-K) - USD ($) | Jun. 02, 2020 | May 07, 2020 | Sep. 16, 2019 | Sep. 13, 2017 | May 31, 2020 | Nov. 30, 2020 | Aug. 20, 2020 | Nov. 30, 2019 | Nov. 30, 2018 | Nov. 30, 2020 | Nov. 30, 2019 | May 31, 2020 | May 31, 2019 | Oct. 13, 2020 | Jun. 22, 2020 | May 12, 2020 |
Proceeds from sale of private units | $ 87,700 | $ 1,925,000 | ||||||||||||||
Number of shares issued restricted shares | 150,000 | |||||||||||||||
General and administrative expense | $ 1,013,177 | $ 819,305 | $ 1,658,539 | $ 1,258,257 | 3,170,992 | $ 4,353,189 | ||||||||||
Jed Kaplan [Member] | ||||||||||||||||
Number of shares issued restricted shares | 70,000 | |||||||||||||||
William H. Herrmann [Member] | ||||||||||||||||
Number of shares issued restricted shares | 2,976 | |||||||||||||||
Number of shares issued restricted shares, value | $ 25,000 | |||||||||||||||
William H. Herrmann [Member] | Restricted Stock [Member] | ||||||||||||||||
Sale of stock, price per share | $ 1.09 | |||||||||||||||
Number of shares issued restricted shares | 23,809 | 22,936 | ||||||||||||||
Number of shares issued restricted shares, value | $ 25,000 | $ 25,000 | ||||||||||||||
Kaplan Promissory Note [Member] | ||||||||||||||||
Debt instrument, face amount | $ 45,000 | |||||||||||||||
Kaplan Promissory Note [Member] | Jed Kaplan [Member] | ||||||||||||||||
Debt instrument, face amount | $ 64,728 | $ 25,272 | $ 25,272 | $ 64,728 | $ 25,272 | $ 90,000 | $ 90,000 | |||||||||
Equity method investment, ownership percentage | 10.00% | 10.00% | 10.00% | 5.00% | ||||||||||||
I-AM Capital Partners LLC (the "Sponsor") [Member] | ||||||||||||||||
Number of shares agreed to be purchased under commitment | 26,250 | |||||||||||||||
Monthly fees for office space, utilities and secretarial and administrative support | $ 10,000 | |||||||||||||||
General and administrative expense | $ 30,080 | |||||||||||||||
Private Placement [Member] | ||||||||||||||||
Number of shares purchased | 7,000 | 254,500 | ||||||||||||||
Sale of stock, price per share | $ 10 | $ 10 | ||||||||||||||
Proceeds from sale of private units | $ 2,545,000 | |||||||||||||||
Private Placement [Member] | I-AM Capital Partners LLC (the "Sponsor") [Member] | ||||||||||||||||
Number of shares purchased | 7,000 | |||||||||||||||
Sale of stock, price per share | $ 10 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) | Jul. 29, 2020USD ($)shares | Jun. 04, 2020shares | Sep. 13, 2017shares | Aug. 22, 2017$ / sharesshares | Aug. 31, 2020USD ($) | Nov. 30, 2020USD ($)$ / sharesshares | May 31, 2020USD ($)$ / sharesshares | Jul. 02, 2020USD ($) |
Other Commitments [Line Items] | ||||||||
Lease description | Beginning 2019 until 2025 | |||||||
Number of common stock shares issued | $ 25,000 | $ 216,625 | $ 87,700 | |||||
Number of common stock shares issued | shares | 10,738 | 250,000 | ||||||
Accrued interest | $ 150,000 | $ 15,000 | ||||||
Number of common stock shares issued for services | shares | 5,899 | |||||||
Underwriter [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Sale of stock, price per share | $ / shares | $ 13 | $ 13 | ||||||
Jed Kaplan [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Cash bonus | 75,000 | $ 216,625 | ||||||
Accrued interest | $ 75,000 | 75,000 | ||||||
Jed Kaplan [Member] | Kaplan 2020 Agreement [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Monthly base salary | $ 5,000 | |||||||
Number of shares of common stock fully vested upon grant | shares | 15,000 | |||||||
Cash bonus | $ 50,000 | |||||||
Initial term | 1 year | |||||||
Board of Directors [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Number of common stock shares issued | 250,000 | |||||||
Mr. Franklin [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Number of shares of common stock fully vested upon grant | shares | 250,000 | |||||||
Cash bonus | $ 75,000 | 216,625 | 216,625 | |||||
Accrued interest | 75,000 | 75,000 | ||||||
Mr. Franklin [Member] | Franklin 2020 Agreement [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Monthly base salary | $ 12,500 | |||||||
Number of shares of common stock fully vested upon grant | shares | 6,250 | |||||||
Cash bonus | $ 50,000 | |||||||
Employee and Directors [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Accrued interest | 166,675 | |||||||
Number of common stock shares issued for services | shares | 192,000 | |||||||
Initial Public Offering [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Aggregate exercise price of unit sold to underwriters | $ 100 | |||||||
Number of shares issued under purchase option | shares | 5,000,000 | 250,000 | ||||||
Options exercisable, per unit | 11.50 | |||||||
Sale of stock, price per share | $ / shares | $ 10 | |||||||
Initial Public Offering [Member] | Underwriters [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Aggregate exercise price of unit sold to underwriters | $ 100 | |||||||
Number of shares issued under purchase option | shares | 200,000 | 250,000 | ||||||
Options exercisable, per unit | 11.50 | |||||||
Over-Allotment Option [Member] | Underwriters [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Aggregate exercise price of unit sold to underwriters | $ 2,990,000 | $ 2,990,000 | ||||||
Number of shares issued under purchase option | shares | 260,000 | 260,000 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Narrative) (10-K) | Jul. 29, 2020USD ($)shares | Jul. 29, 2020USD ($)shares | Jun. 04, 2020shares | Sep. 13, 2017shares | Aug. 22, 2017$ / sharesshares | Jun. 15, 2020shares | Jul. 29, 2020USD ($)shares | Nov. 30, 2020USD ($)$ / sharesshares | May 31, 2020USD ($)$ / sharesshares | Jul. 02, 2020USD ($) | May 31, 2019USD ($) | Jan. 01, 2019USD ($) |
Other Commitments [Line Items] | ||||||||||||
Weighted average discount rate | 10.40% | |||||||||||
Weighted average remaining lease term | 41 months | |||||||||||
Operating lease right-of-use assets | $ 1,320,846 | $ 490,984 | $ 100,146 | $ 500,000 | ||||||||
Operating lease liabilities | $ 1,323,344 | 490,983 | ||||||||||
Operating lease expense | $ 56,000 | |||||||||||
Number of common stock shares issued | shares | 757,000 | 95,700 | ||||||||||
Accrued interest | $ 150,000 | $ 150,000 | $ 150,000 | $ 15,000 | ||||||||
Number of common stock shares issued for services | shares | 5,899 | |||||||||||
Subsequent Event [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Number of common stock shares issued | shares | 85,905 | 25,000 | ||||||||||
Operating Lease Liabilities [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Operating lease liabilities | $ 488,778 | |||||||||||
Underwriter [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Sale of stock, price per share | $ / shares | $ 13 | $ 13 | ||||||||||
Jed Kaplan [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Cash bonus | 75,000 | $ 75,000 | $ 75,000 | $ 216,625 | ||||||||
Accrued interest | $ 75,000 | $ 75,000 | ||||||||||
Jed Kaplan [Member] | Kaplan 2020 Agreement [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Monthly base salary | $ 5,000 | |||||||||||
Number of shares of common stock fully vested upon grant | shares | 15,000 | 15,000 | 15,000 | |||||||||
Cash bonus | $ 50,000 | $ 50,000 | $ 50,000 | |||||||||
Initial term | 1 year | |||||||||||
Jed Kaplan [Member] | Subsequent Event [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Cash bonus | $ 75,000 | $ 75,000 | $ 75,000 | |||||||||
Number of common stock shares issued | shares | 300,000 | |||||||||||
Jed Kaplan [Member] | Subsequent Event [Member] | Kaplan 2020 Agreement [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Monthly base salary | $ 5,000 | |||||||||||
Number of shares of common stock fully vested upon grant | shares | 15,000 | 15,000 | 15,000 | |||||||||
Cash bonus | $ 50,000 | $ 50,000 | $ 50,000 | |||||||||
Initial term | 1 year | |||||||||||
Board of Directors [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Number of common stock shares issued | shares | 250,000 | |||||||||||
Mr. Franklin [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Number of shares of common stock fully vested upon grant | shares | 250,000 | 250,000 | 250,000 | |||||||||
Cash bonus | $ 75,000 | $ 75,000 | $ 75,000 | 216,625 | $ 216,625 | |||||||
Accrued interest | 75,000 | 75,000 | ||||||||||
Mr. Franklin [Member] | Franklin 2020 Agreement [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Monthly base salary | $ 12,500 | |||||||||||
Number of shares of common stock fully vested upon grant | shares | 6,250 | 6,250 | 6,250 | |||||||||
Cash bonus | $ 50,000 | $ 50,000 | $ 50,000 | |||||||||
Mr. Franklin [Member] | Subsequent Event [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Number of shares of common stock fully vested upon grant | shares | 250,000 | 250,000 | 250,000 | |||||||||
Cash bonus | $ 75,000 | $ 75,000 | $ 75,000 | |||||||||
Number of common stock shares issued | shares | 265,000 | |||||||||||
Mr. Franklin [Member] | Subsequent Event [Member] | Franklin 2020 Agreement [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Monthly base salary | $ 12,500 | |||||||||||
Number of shares of common stock fully vested upon grant | shares | 6,250 | 6,250 | 6,250 | |||||||||
Cash bonus | $ 50,000 | $ 50,000 | $ 50,000 | |||||||||
Employee and Directors [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Accrued interest | 166,675 | |||||||||||
Number of common stock shares issued for services | shares | 192,000 | |||||||||||
Employee and Directors [Member] | Subsequent Event [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Number of common stock shares issued | shares | 192,000 | |||||||||||
Number of common stock shares issued for services | shares | 192,000 | |||||||||||
Initial Public Offering [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Market value of shares held | 15,000,000 | |||||||||||
Aggregate exercise price of unit sold to underwriters | $ 100 | |||||||||||
Number of shares issued under purchase option | shares | 5,000,000 | 250,000 | ||||||||||
Options exercisable, per unit | 11.50 | |||||||||||
Sale of stock, price per share | $ / shares | $ 10 | |||||||||||
Weighted average discount rate | 12.00% | |||||||||||
Initial Public Offering [Member] | Underwriters [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Aggregate exercise price of unit sold to underwriters | $ 100 | |||||||||||
Number of shares issued under purchase option | shares | 200,000 | 250,000 | ||||||||||
Options exercisable, per unit | 11.50 | |||||||||||
Over-Allotment Option [Member] | Underwriters [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Aggregate exercise price of unit sold to underwriters | $ 2,990,000 | $ 2,990,000 | ||||||||||
Number of shares issued under purchase option | shares | 260,000 | 260,000 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule Showing the Future Minimum Lease Payments (Details) (10-K) - USD ($) | Nov. 30, 2020 | May 31, 2020 |
2020 | $ 407,278 | |
2021 | 391,832 | |
2022 | 373,870 | |
2023 | 330,017 | |
2024 | 110,000 | |
Total Operating Lease Obligations | 1,816,706 | |
Less: Amount representing interest | (493,362) | |
Present Value of minimum lease payments | $ 1,323,344 | $ 490,983 |
Operating Lease Liabilities [Member] | ||
2020 | 174,728 | |
2021 | 141,278 | |
2022 | 145,832 | |
2023 | 127,900 | |
2024 | 84,017 | |
Total Operating Lease Obligations | 673,755 | |
Less: Amount representing interest | (184,977) | |
Present Value of minimum lease payments | $ 488,778 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | Nov. 25, 2020 | Aug. 10, 2020 | Aug. 07, 2020 | Jul. 02, 2020 | Jul. 01, 2020 | Jun. 18, 2020 | Jun. 04, 2020 | Apr. 29, 2020 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 21, 2018 | Dec. 20, 2018 | Nov. 09, 2018 | Nov. 30, 2020 | Aug. 31, 2020 | Nov. 30, 2019 | Nov. 30, 2020 | Nov. 30, 2019 | May 31, 2020 | May 31, 2019 | Oct. 13, 2020 | Jun. 22, 2020 | May 12, 2020 | May 04, 2020 |
Debt instrument, default interest rate | 10.00% | |||||||||||||||||||||||
Repayment of debt | $ 152,500 | |||||||||||||||||||||||
Number of common stock issued | 10,738 | 250,000 | ||||||||||||||||||||||
Number of common stock shares issued | $ 25,000 | $ 216,625 | $ 87,700 | |||||||||||||||||||||
Common stock price per share | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||||||
Interest expenses | $ 244,660 | $ 6,675 | $ 398,788 | $ 13,350 | $ 32,472 | $ 23,268 | ||||||||||||||||||
Principal amount of convertible securities | $ 100,000 | $ 100,000 | $ 500,000 | |||||||||||||||||||||
Number of conversion of shares | 520,000 | |||||||||||||||||||||||
Accredited Investor [Member] | ||||||||||||||||||||||||
Number of common stock issued | 6,875 | |||||||||||||||||||||||
Number of common stock shares issued | $ 62,150 | |||||||||||||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||||||||||||
Debt instrument, default interest rate | 12.00% | |||||||||||||||||||||||
Principal amount of debt instrument | $ 333,333 | |||||||||||||||||||||||
Number of common stock issued | 4,167 | |||||||||||||||||||||||
Series A-1 Exchange Convertible Note [Member] | ||||||||||||||||||||||||
Number of conversion of shares | 24,206 | |||||||||||||||||||||||
FirstFire Global Oppurtunities Fund, LLC [Member] | Securities Purchase Agreement [Member] | Accredited Investor [Member] | ||||||||||||||||||||||||
Debt instrument, default interest rate | 12.00% | 12.00% | 12.00% | |||||||||||||||||||||
Debt maturity date | Aug. 7, 2021 | |||||||||||||||||||||||
Principal amount of debt instrument | $ 333,333 | |||||||||||||||||||||||
Repayment of debt | 333,333 | |||||||||||||||||||||||
Original issue discount | $ 33,333 | |||||||||||||||||||||||
Number of common stock issued | 4,167 | 4,167 | ||||||||||||||||||||||
Net proceeds from issuance of debt | $ 280,500 | |||||||||||||||||||||||
Origination fees | 19,500 | |||||||||||||||||||||||
Number of common stock shares issued | $ 30,166 | |||||||||||||||||||||||
Common stock price per share | $ 7.24 | $ 7.24 | ||||||||||||||||||||||
FirstFire Global Oppurtunities Fund, LLC [Member] | Securities Purchase Agreement [Member] | Accredited Investor [Member] | Paid the Purchase Price In Exchange Of Amortization of Notes [Member] | ||||||||||||||||||||||||
Repayment of debt | $ 300,000 | |||||||||||||||||||||||
Securities Exchange Agreement [Member] | Series A-1 Exchange Convertible Note [Member] | ||||||||||||||||||||||||
Principal amount of convertible securities | $ 1,500,000 | |||||||||||||||||||||||
Debt forgiveness income | $ 300,000 | $ 300,000 | ||||||||||||||||||||||
10% Fixed Convertible Promissory Note [Member] | ||||||||||||||||||||||||
Debt instrument, default interest rate | 10.00% | |||||||||||||||||||||||
Principal amount of debt instrument | $ 152,500 | |||||||||||||||||||||||
Repayment of debt | 201,300 | |||||||||||||||||||||||
Interest repaid | 15,200 | |||||||||||||||||||||||
Prepaid penalties | 33,600 | |||||||||||||||||||||||
Debt interest expenses | 73,980 | |||||||||||||||||||||||
Debt principal | 48,800 | |||||||||||||||||||||||
Interest and prepayment penalties | $ 25,180 | |||||||||||||||||||||||
10% Fixed Convertible Promissory Note [Member] | Harbor Gates Capital, LLC [Member] | ||||||||||||||||||||||||
Debt instrument, default interest rate | 10.00% | 10.00% | ||||||||||||||||||||||
Debt maturity date | Oct. 29, 2020 | |||||||||||||||||||||||
Principal amount of debt instrument | $ 152,000 | $ 152,000 | $ 152,500 | |||||||||||||||||||||
Repayment of debt | 152,500 | |||||||||||||||||||||||
Original issue discount | $ 2,500 | |||||||||||||||||||||||
Remaining unpaid principal amount percentage | 135.00% | |||||||||||||||||||||||
Number of common stock issued | 1,250 | |||||||||||||||||||||||
Number of common stock shares issued | $ 9,900 | |||||||||||||||||||||||
10% Fixed Convertible Promissory Note [Member] | Harbor Gates Capital, LLC [Member] | Two Tranches [Member] | ||||||||||||||||||||||||
Debt description | 1,250 shares of common stock within three trading days of the Effective Date; and In the event the average of the three-volume weighted average prices for the Company's common stock during the three consecutive trading days immediately preceding the date which is the 180th day following the Effective Date is less than $1.00 per share, then Harbor Gates will be entitled, and the Company will issue to Harbor Gates additional shares of common stock as set forth in the Harbor Gates Note. | |||||||||||||||||||||||
Number of common stock issued | 1,250 | |||||||||||||||||||||||
10% Fixed Convertible Promissory Note [Member] | Harbor Gates Capital, LLC [Member] | Guaranteed [Member] | ||||||||||||||||||||||||
Debt instrument, default interest rate | 20.00% | |||||||||||||||||||||||
10% Fixed Convertible Promissory Note [Member] | Harbor Gates Capital, LLC [Member] | Mandatory Default Amount [Member] | ||||||||||||||||||||||||
Debt instrument, default interest rate | 35.00% | 35.00% | 35.00% | |||||||||||||||||||||
Self-Amortization Promissory Notes [Member] | Delaware Corporation [Member] | Securities Purchase Agreement [Member] | Accredited Investor [Member] | ||||||||||||||||||||||||
Debt maturity date | Jun. 18, 2021 | |||||||||||||||||||||||
Repayment of debt | $ 550,000 | |||||||||||||||||||||||
Number of common stock issued | 6,875 | 6,875 | ||||||||||||||||||||||
Net proceeds from issuance of debt | $ 467,650 | |||||||||||||||||||||||
Origination fees | 24,350 | |||||||||||||||||||||||
Number of common stock shares issued | $ 62,150 | |||||||||||||||||||||||
Common stock price per share | $ 9.04 | $ 9.04 | ||||||||||||||||||||||
Repaid principal and interest amount | $ 198,375 | |||||||||||||||||||||||
Self-Amortization Promissory Notes [Member] | Delaware Corporation [Member] | November 23, 2020 SPA [Member] | Accredited Investor [Member] | ||||||||||||||||||||||||
Debt instrument, default interest rate | 12.00% | |||||||||||||||||||||||
Debt maturity date | Nov. 23, 2021 | |||||||||||||||||||||||
Principal amount of debt instrument | $ 750,000 | |||||||||||||||||||||||
Repayment of debt | 750,000 | |||||||||||||||||||||||
Original issue discount | 75,000 | |||||||||||||||||||||||
Number of common stock issued | 17,054 | |||||||||||||||||||||||
Net proceeds from issuance of debt | 441,375 | |||||||||||||||||||||||
Origination fees | 35,250 | |||||||||||||||||||||||
Partial repayment of principal and interest | $ 198,375 | |||||||||||||||||||||||
Debt interest | 90,000 | |||||||||||||||||||||||
Self-Amortization Promissory Notes [Member] | Delaware Corporation [Member] | November 23, 2020 SPA [Member] | Accredited Investor [Member] | Stock Warrants [Member] | ||||||||||||||||||||||||
Original issue discount | $ 157,438 | |||||||||||||||||||||||
Number of common stock issued | 375,000 | |||||||||||||||||||||||
Amortization payments term | The Company is required to make ten monthly amortization payments to the Holder of $84,000 commencing on February 23, 2021 through November 23,2021. | |||||||||||||||||||||||
Self-Amortization Note [Member] | Delaware Corporation [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||||||||||
Original issue discount | $ 144,500 | |||||||||||||||||||||||
Interest expenses | $ 90,474 | |||||||||||||||||||||||
Self-Amortization Note [Member] | Delaware Corporation [Member] | Securities Purchase Agreement [Member] | Accredited Investor [Member] | ||||||||||||||||||||||||
Debt instrument, default interest rate | 12.00% | |||||||||||||||||||||||
Debt maturity date | Jun. 18, 2021 | |||||||||||||||||||||||
Principal amount of debt instrument | $ 550,000 | |||||||||||||||||||||||
Repayment of debt | 550,000 | |||||||||||||||||||||||
Original issue discount | $ 55,000 | |||||||||||||||||||||||
Debt description | The Holder paid the purchase price of $495,000 in exchange for the Amortization Note. In addition, pursuant to the terms of the SPA, the Company agreed to issue 55,000 shares of the Company's common stock to the Holder as additional consideration. | |||||||||||||||||||||||
Number of common stock issued | 55,000 | |||||||||||||||||||||||
Self-Amortization Note [Member] | Delaware Corporation [Member] | Securities Purchase Agreement [Member] | Holders [Member] | ||||||||||||||||||||||||
Debt instrument, default interest rate | 125.00% | 125.00% | ||||||||||||||||||||||
Equity method investment, ownership percentage | 4.99% | 4.99% | ||||||||||||||||||||||
Self-Amortization Note [Member] | Delaware Corporation [Member] | Securities Purchase Agreement [Member] | Holders [Member] | Minimum [Member] | ||||||||||||||||||||||||
Debt instrument, default interest rate | 15.00% | 15.00% | ||||||||||||||||||||||
Self-Amortization Note [Member] | Delaware Corporation [Member] | Securities Purchase Agreement [Member] | Lenders [Member] | ||||||||||||||||||||||||
Interest expenses | 38,487 | |||||||||||||||||||||||
Kaplan Promissory Note [Member] | ||||||||||||||||||||||||
Principal amount of debt instrument | $ 45,000 | |||||||||||||||||||||||
Kaplan Promissory Note [Member] | Jed Kaplan [Member] | ||||||||||||||||||||||||
Debt instrument, default interest rate | 3.00% | |||||||||||||||||||||||
Principal amount of debt instrument | $ 25,272 | $ 25,272 | $ 64,728 | $ 25,272 | $ 90,000 | $ 90,000 | ||||||||||||||||||
Equity method investment, ownership percentage | 10.00% | 10.00% | 10.00% | 5.00% | ||||||||||||||||||||
Debt instrument, effective interest percentage | 10.00% | |||||||||||||||||||||||
Series A 1 Exchange Convertible Note [Member] | ||||||||||||||||||||||||
Number of conversion of shares | 193,648 | |||||||||||||||||||||||
Series A 1 Exchange Convertible Note [Member] | Securities Exchange Agreement [Member] | Series A-1 Exchange Convertible Note [Member] | ||||||||||||||||||||||||
Debt instrument, default interest rate | 2.67% | |||||||||||||||||||||||
Principal amount of convertible securities | $ 500,000 | $ 500,000 | ||||||||||||||||||||||
Description of payment terms | The Company was permitted to pay the interest in cash or at its sole discretion, in shares of its common stock or a combination of cash and common stock. However, the Company could only pay the interest in shares of its common stock if (i) all the equity conditions specified in the note ("Equity Conditions") had been met (unless waived by the Holder in writing) during the 20 trading days immediately prior to the interest payment date ("Interest Notice Period"), (ii) the Company had provided proper notice pursuant to the terms of the note and (iii) the Company had delivered to the Holder's account certain number of shares of its common stock to be applied against such interest payment prior to (but no more than five trading days before) the Interest Notice Period. | The Company was permitted to pay the interest in cash or at its sole discretion, in shares of its common stock or a combination of cash and common stock. However, the Company could only pay the interest in shares of its common stock if (i) all the equity conditions specified in the note ("Equity Conditions") had been met (unless waived by Maxim in writing) during the 20 trading days immediately prior to the interest payment date ("Interest Notice Period"), (ii) the Company had provided proper notice pursuant to the terms of the note and (iii) the Company had delivered to Maxims' account certain number of shares of its common stock to be applied against such interest payment prior to (but no more than five trading days before) the Interest Notice Period. | ||||||||||||||||||||||
Conversion price | $ 15.44 | |||||||||||||||||||||||
Description of restrictive conversion terms | The Company was not permitted to convert any portion of the Series A-1 Note if doing so results in the Holder beneficially owning more than 4.99% of the outstanding common stock of the Company after giving effect to such conversion, provided that on 61 days' prior written notice from the Holder to the Company, that percentage could increase to 9.99%. | The Company was not permitted to convert any portion of the Series A-1 Note if doing so results in Maxim beneficially owning more than 4.99% of the outstanding common stock of the Company after giving effect to such conversion, provided that on 61 days' prior written notice from Maxim to the Company, that percentage could increase to 9.99%. | ||||||||||||||||||||||
Series A 2 Exchange Convertible Note [Member] | Securities Exchange Agreement [Member] | Series A-1 Exchange Convertible Note [Member] | ||||||||||||||||||||||||
Principal amount of convertible securities | $ 1,000,000 | $ 1,000,000 | ||||||||||||||||||||||
Conversion price | $ 1.93 | |||||||||||||||||||||||
Description of conversion terms | Automatically adjusted to the lower of (i) the conversion price then in effect and (ii) the greater of the arithmetic average of the VWAP of the Company's common stock in the five trading days prior to the notice of conversion and $0.50. | Automatically adjusted to the lower of (i) the conversion price then in effect, and (ii) the greater of the arithmetic average of the VWAP of the Company's common stock in the five trading days prior to the notice of conversion and $0.50. | ||||||||||||||||||||||
Promissory Note [Member] | Securities Exchange Agreement [Member] | Series A-1 Exchange Convertible Note [Member] | ||||||||||||||||||||||||
Principal amount of debt instrument | $ 1,800,000 | $ 1,800,000 | $ 1,800,000 | |||||||||||||||||||||
Maxim Note [Member] | ||||||||||||||||||||||||
Debt instrument, default interest rate | 10.00% | |||||||||||||||||||||||
Debt description | The Parties agreed to the following: (i) Maxim's resale of the Company's common stock (the "Common Stock") underling the Maxim Note shall be limited to 10% of the daily volume of the Common Stock on each respective trading day, (ii) the maturity date of the Maxim Note was extended to December 31, 2020, (iii) the principal amount of the Maxim Note was increased by $100,000, and (iv) the reference to "$1.93" in Section 4(b) of the Maxim Note was replaced with "$9.20". | |||||||||||||||||||||||
Debt interest expenses | 38,069 | |||||||||||||||||||||||
Debt principal | 1,000,000 | |||||||||||||||||||||||
Interest and prepayment penalties | $ 75,894 |
Debt (Details Narrative) (10-K)
Debt (Details Narrative) (10-K) | Dec. 03, 2020shares | Jul. 02, 2020USD ($) | Jul. 01, 2020USD ($)shares | Jun. 04, 2020USD ($)shares | Apr. 29, 2020USD ($)shares | Dec. 31, 2018shares | Dec. 31, 2018shares | Dec. 21, 2018USD ($)Integer | Dec. 20, 2018USD ($)$ / shares | Nov. 20, 2018USD ($) | Nov. 09, 2018shares | Aug. 22, 2017USD ($) | Aug. 31, 2020USD ($) | Nov. 30, 2020USD ($)shares | May 31, 2020USD ($)shares | May 31, 2019USD ($) | Oct. 13, 2020USD ($) | Jun. 22, 2020USD ($) | May 12, 2020USD ($) | May 04, 2020USD ($) | Dec. 31, 2017USD ($) |
Debt instrument, default interest rate | 10.00% | ||||||||||||||||||||
Repayment of debt | $ 152,500 | ||||||||||||||||||||
Number of common stock issued | shares | 10,738 | 250,000 | |||||||||||||||||||
Description of debt instrument priority terms | The Note was secured by a first priority security interest in all personal property and assets of the Company excluding the assets held in escrow with respect to (i) that certain stock purchase agreement with Polar, pursuant to which Polar agreed to sell up to 490,000 shares of the Company's common stock to the Company thirty days after the consummation of the Business Combination and (ii) that certain stock purchase agreement with K2, pursuant to which K2 agreed to sell up to 220,000 shares of the Company's common stock to the Company thirty days after the consummation of the Business Combination. | ||||||||||||||||||||
Principal amount of convertible securities | $ 100,000 | $ 100,000 | $ 500,000 | ||||||||||||||||||
Number of conversion of shares | shares | 520,000 | ||||||||||||||||||||
Series A-1 Exchange Convertible Note [Member] | |||||||||||||||||||||
Number of conversion of shares | shares | 24,206 | ||||||||||||||||||||
Subsequent Event [Member] | |||||||||||||||||||||
Principal amount of debt instrument | $ 100,000 | ||||||||||||||||||||
Number of common stock issued | shares | 5,000 | ||||||||||||||||||||
Polar Asset Management Partners Inc. [Member] | |||||||||||||||||||||
Number of shares agreed to sell | shares | 490,000 | ||||||||||||||||||||
K2 Principal Fund L.P. [Member] | |||||||||||||||||||||
Number of shares agreed to sell | shares | 220,000 | ||||||||||||||||||||
Securities Exchange Agreement [Member] | Series A-1 Exchange Convertible Note [Member] | |||||||||||||||||||||
Principal amount of convertible securities | $ 1,500,000 | ||||||||||||||||||||
Debt forgiveness income | $ 300,000 | $ 300,000 | |||||||||||||||||||
Initial Public Offering [Member] | |||||||||||||||||||||
Underwriter fees | $ 3,200,000 | 1,000,000 | |||||||||||||||||||
Sponsor Loan [Member] | Initial Public Offering [Member] | |||||||||||||||||||||
Loan amount | $ 0 | 93,761 | $ 201,707 | ||||||||||||||||||
10% Fixed Convertible Promissory Note [Member] | |||||||||||||||||||||
Debt instrument, default interest rate | 10.00% | ||||||||||||||||||||
Principal amount of debt instrument | $ 152,500 | ||||||||||||||||||||
Repayment of debt | 201,300 | ||||||||||||||||||||
Interest repaid | 15,200 | ||||||||||||||||||||
10% Fixed Convertible Promissory Note [Member] | Harbor Gates Capital, LLC [Member] | |||||||||||||||||||||
Debt instrument, default interest rate | 10.00% | 10.00% | |||||||||||||||||||
Debt maturity date | Oct. 29, 2020 | ||||||||||||||||||||
Principal amount of debt instrument | $ 152,000 | $ 152,000 | $ 152,500 | ||||||||||||||||||
Repayment of debt | 152,500 | ||||||||||||||||||||
Original issue discount | $ 2,500 | ||||||||||||||||||||
Remaining unpaid principal amount percentage | 135.00% | ||||||||||||||||||||
Number of common stock issued | shares | 1,250 | ||||||||||||||||||||
10% Fixed Convertible Promissory Note [Member] | Harbor Gates Capital, LLC [Member] | Subsequent Event [Member] | |||||||||||||||||||||
Interest repaid | $ 15,000 | ||||||||||||||||||||
10% Fixed Convertible Promissory Note [Member] | Harbor Gates Capital, LLC [Member] | Two Tranches [Member] | |||||||||||||||||||||
Debt description | 1,250 shares of common stock within three trading days of the Effective Date; and In the event the average of the three-volume weighted average prices for the Company's common stock during the three consecutive trading days immediately preceding the date which is the 180th day following the Effective Date is less than $1.00 per share, then Harbor Gates will be entitled, and the Company will issue to Harbor Gates additional shares of common stock as set forth in the Harbor Gates Note. | ||||||||||||||||||||
Number of common stock issued | shares | 1,250 | ||||||||||||||||||||
10% Fixed Convertible Promissory Note [Member] | Harbor Gates Capital, LLC [Member] | Guaranteed [Member] | |||||||||||||||||||||
Debt instrument, default interest rate | 20.00% | ||||||||||||||||||||
10% Fixed Convertible Promissory Note [Member] | Harbor Gates Capital, LLC [Member] | Mandatory Default Amount [Member] | |||||||||||||||||||||
Debt instrument, default interest rate | 35.00% | 35.00% | |||||||||||||||||||
Harbor Gates Note [Member] | |||||||||||||||||||||
Variable Conversion price of common stock description | The "Variable Conversion Price" will be equal to the lower of: (a) $1.00, or (b) 70% of the lowest volume weighted average price of the Company's common stock during the 15 consecutive trading days prior to the date on Harbor Gates elects to convert all or part of the Harbor Gates Note. | ||||||||||||||||||||
Kaplan Promissory Note [Member] | |||||||||||||||||||||
Principal amount of debt instrument | $ 45,000 | ||||||||||||||||||||
Kaplan Promissory Note [Member] | Jed Kaplan [Member] | |||||||||||||||||||||
Debt instrument, default interest rate | 3.00% | ||||||||||||||||||||
Principal amount of debt instrument | $ 25,272 | $ 64,728 | $ 25,272 | $ 90,000 | $ 90,000 | ||||||||||||||||
Equity method investment, ownership percentage | 10.00% | 10.00% | 5.00% | ||||||||||||||||||
Debt instrument, effective interest percentage | 10.00% | ||||||||||||||||||||
Secured Demand Promissory Note [Member] | |||||||||||||||||||||
Principal amount of debt instrument | $ 1,800,000 | ||||||||||||||||||||
Underwriter fees | $ 20,000 | ||||||||||||||||||||
Accrued interest rate of debt instrument | 125.00% | ||||||||||||||||||||
Secured Demand Promissory Note [Member] | May 20, 2019 [Member] | |||||||||||||||||||||
Accrued interest rate of debt instrument | 8.00% | ||||||||||||||||||||
Secured Demand Promissory Note [Member] | May 21, 2019 Through August 20, 2019 [Member] | |||||||||||||||||||||
Accrued interest rate of debt instrument | 12.00% | ||||||||||||||||||||
Secured Demand Promissory Note [Member] | August 21, 2019, through November 20, 2019 [Member] | |||||||||||||||||||||
Accrued interest rate of debt instrument | 15.00% | ||||||||||||||||||||
Secured Demand Promissory Note [Member] | August 20, 2019 [Member] | |||||||||||||||||||||
Interest rate for debt default | 12.00% | ||||||||||||||||||||
Secured Demand Promissory Note [Member] | After August 21, 2019 [Member] | |||||||||||||||||||||
Accrued interest rate of debt instrument | 18.00% | ||||||||||||||||||||
Series A 1 Exchange Convertible Note [Member] | |||||||||||||||||||||
Number of conversion of shares | shares | 193,648 | ||||||||||||||||||||
Remaining note payable | 1,000,000 | $ 1,000,000 | |||||||||||||||||||
Series A 1 Exchange Convertible Note [Member] | Securities Exchange Agreement [Member] | Series A-1 Exchange Convertible Note [Member] | |||||||||||||||||||||
Debt instrument, default interest rate | 2.67% | ||||||||||||||||||||
Principal amount of convertible securities | $ 500,000 | $ 500,000 | |||||||||||||||||||
Description of payment terms | The Company was permitted to pay the interest in cash or at its sole discretion, in shares of its common stock or a combination of cash and common stock. However, the Company could only pay the interest in shares of its common stock if (i) all the equity conditions specified in the note ("Equity Conditions") had been met (unless waived by the Holder in writing) during the 20 trading days immediately prior to the interest payment date ("Interest Notice Period"), (ii) the Company had provided proper notice pursuant to the terms of the note and (iii) the Company had delivered to the Holder's account certain number of shares of its common stock to be applied against such interest payment prior to (but no more than five trading days before) the Interest Notice Period. | The Company was permitted to pay the interest in cash or at its sole discretion, in shares of its common stock or a combination of cash and common stock. However, the Company could only pay the interest in shares of its common stock if (i) all the equity conditions specified in the note ("Equity Conditions") had been met (unless waived by Maxim in writing) during the 20 trading days immediately prior to the interest payment date ("Interest Notice Period"), (ii) the Company had provided proper notice pursuant to the terms of the note and (iii) the Company had delivered to Maxims' account certain number of shares of its common stock to be applied against such interest payment prior to (but no more than five trading days before) the Interest Notice Period. | |||||||||||||||||||
Threshold trading days | Integer | 20 | ||||||||||||||||||||
Conversion price | $ / shares | $ 15.44 | ||||||||||||||||||||
Description of restrictive conversion terms | The Company was not permitted to convert any portion of the Series A-1 Note if doing so results in the Holder beneficially owning more than 4.99% of the outstanding common stock of the Company after giving effect to such conversion, provided that on 61 days' prior written notice from the Holder to the Company, that percentage could increase to 9.99%. | The Company was not permitted to convert any portion of the Series A-1 Note if doing so results in Maxim beneficially owning more than 4.99% of the outstanding common stock of the Company after giving effect to such conversion, provided that on 61 days' prior written notice from Maxim to the Company, that percentage could increase to 9.99%. | |||||||||||||||||||
Series A 2 Exchange Convertible Note [Member] | Securities Exchange Agreement [Member] | Series A-1 Exchange Convertible Note [Member] | |||||||||||||||||||||
Principal amount of convertible securities | $ 1,000,000 | $ 1,000,000 | |||||||||||||||||||
Threshold trading days | Integer | 5 | ||||||||||||||||||||
Conversion price | $ / shares | $ 1.93 | ||||||||||||||||||||
Description of conversion terms | Automatically adjusted to the lower of (i) the conversion price then in effect and (ii) the greater of the arithmetic average of the VWAP of the Company's common stock in the five trading days prior to the notice of conversion and $0.50. | Automatically adjusted to the lower of (i) the conversion price then in effect, and (ii) the greater of the arithmetic average of the VWAP of the Company's common stock in the five trading days prior to the notice of conversion and $0.50. | |||||||||||||||||||
Promissory Note [Member] | Securities Exchange Agreement [Member] | Series A-1 Exchange Convertible Note [Member] | |||||||||||||||||||||
Principal amount of debt instrument | $ 1,800,000 | 1,800,000 | |||||||||||||||||||
Two Exchange Notes [Member] | Securities Exchange Agreement [Member] | Series A-1 Exchange Convertible Note [Member] | |||||||||||||||||||||
Debt forgiveness income | $ 1,500,000 |
Debt - Schedule of Outstanding
Debt - Schedule of Outstanding Debt Instrument (Details) - USD ($) | Nov. 30, 2020 | May 31, 2020 | May 31, 2019 |
Long-term debt, gross | $ 2,466,356 | $ 1,217,228 | |
Less: debt discount | (366,227) | (25,180) | |
Total | 2,100,129 | 1,192,048 | $ 1,093,761 |
10% Fixed Convertible Promissory Note [Member] | |||
Long-term debt, gross | 152,500 | ||
Self-Amortization Promissory Notes [Member] | |||
Long-term debt, gross | 1,133,023 | ||
August 7, 2020 Self-Amortization Note [Member] | |||
Long-term debt, gross | 333,333 | ||
Related Party Note [Member] | |||
Long-term debt, gross | 64,728 | ||
Convertible Note Payable [Member] | |||
Long-term debt, gross | $ 1,000,000 | $ 1,000,000 |
Debt - Schedule of Outstandin_2
Debt - Schedule of Outstanding Debt Instrument (Details) (10-K) - USD ($) | Nov. 30, 2020 | May 31, 2020 | May 31, 2019 |
Less Discount | $ (25,180) | ||
Related Party Note | 64,728 | ||
Convertible Note Payable | 1,000,000 | 1,000,000 | |
Total | $ 2,100,129 | 1,192,048 | 1,093,761 |
Sponsor Loan [Member] | |||
Less Discount | 93,761 | ||
10% Fixed Convertible Promissory Note [Member] | |||
Less Discount | $ 152,500 |
Debt - Schedule of Prepayment o
Debt - Schedule of Prepayment of Debt Note (Details) | 6 Months Ended | 12 Months Ended | |
Nov. 30, 2020 | May 31, 2020 | Jul. 02, 2020 | |
Debt interest rate | 10.00% | ||
Under 30 [Member] | |||
Payment Amount | 115% of Principal Amount (as hereinafter defined) so paid | 115% of Principal Amount (as hereinafter defined) so paid | |
Debt interest rate | 115.00% | 115.00% | |
31-60 [Member] | |||
Payment Amount | 120% of Principal Amount so paid | 120% of Principal Amount so paid | |
Debt interest rate | 120.00% | 120.00% | |
61-90 [Member] | |||
Payment Amount | 125% of Principal Amount so paid | 125% of Principal Amount so paid | |
Debt interest rate | 125.00% | 125.00% | |
91-180 [Member] | |||
Payment Amount | 135% of Principal Amount so paid | 135% of Principal Amount so paid | |
Debt interest rate | 135.00% | 135.00% |
Debt - Schedule of Prepayment_2
Debt - Schedule of Prepayment of Debt Note (Details) (10-K) | 6 Months Ended | 12 Months Ended | |
Nov. 30, 2020 | May 31, 2020 | Jul. 02, 2020 | |
Debt interest rate | 10.00% | ||
Under 30 [Member] | |||
Payment Amount | 115% of Principal Amount (as hereinafter defined) so paid | 115% of Principal Amount (as hereinafter defined) so paid | |
Debt interest rate | 115.00% | 115.00% | |
31-60 [Member] | |||
Payment Amount | 120% of Principal Amount so paid | 120% of Principal Amount so paid | |
Debt interest rate | 120.00% | 120.00% | |
61-90 [Member] | |||
Payment Amount | 125% of Principal Amount so paid | 125% of Principal Amount so paid | |
Debt interest rate | 125.00% | 125.00% | |
91-180 [Member] | |||
Payment Amount | 135% of Principal Amount so paid | 135% of Principal Amount so paid | |
Debt interest rate | 135.00% | 135.00% |
Debt - Schedule of Amortization
Debt - Schedule of Amortization Payments (Details) - USD ($) | Nov. 30, 2020 | Aug. 07, 2020 | Jun. 18, 2020 | May 31, 2020 | May 31, 2019 |
Total | $ 2,100,129 | $ 1,192,048 | $ 1,093,761 | ||
Self-Amortization Promissory Notes [Member] | Holders [Member] | |||||
Total | $ 360,558 | $ 594,921 | |||
Self-Amortization Promissory Notes [Member] | 10/16/2020 [Member] | |||||
Total | 66,125 | ||||
Self-Amortization Promissory Notes [Member] | 11/16/2020 [Member] | |||||
Total | 66,125 | ||||
Self-Amortization Promissory Notes [Member] | 12/16/2020 [Member] | |||||
Total | 66,125 | ||||
Self-Amortization Promissory Notes [Member] | 01/18/2021 [Member] | |||||
Total | 66,125 | ||||
Self-Amortization Promissory Notes [Member] | 02/18/2021 [Member] | |||||
Total | 66,125 | ||||
Self-Amortization Promissory Notes [Member] | 03/18/2021 [Member] | |||||
Total | 66,125 | ||||
Self-Amortization Promissory Notes [Member] | 04/16/2021 [Member] | |||||
Total | 66,125 | ||||
Self-Amortization Promissory Notes [Member] | 05/18/2021 [Member] | |||||
Total | 66,125 | ||||
Self-Amortization Promissory Notes [Member] | 06/18/2021 [Member] | |||||
Total | $ 65,921 | ||||
Self-Amortization Promissory Notes [Member] | 12/07/2020 [Member] | |||||
Total | 40,076 | ||||
Self-Amortization Promissory Notes [Member] | 01/07/2021 [Member] | |||||
Total | 40,076 | ||||
Self-Amortization Promissory Notes [Member] | 02/08/2021 [Member] | |||||
Total | 40,076 | ||||
Self-Amortization Promissory Notes [Member] | 03/08/2021 [Member] | |||||
Total | 40,076 | ||||
Self-Amortization Promissory Notes [Member] | 04/07/2021 [Member] | |||||
Total | 40,076 | ||||
Self-Amortization Promissory Notes [Member] | 05/07/2021 [Member] | |||||
Total | 40,076 | ||||
Self-Amortization Promissory Notes [Member] | 06/07/2021 [Member] | |||||
Total | 40,076 | ||||
Self-Amortization Promissory Notes [Member] | 07/07/2021 [Member] | |||||
Total | 40,076 | ||||
Self-Amortization Promissory Notes [Member] | 08/07/2021 [Member] | |||||
Total | $ 39,952 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) (10-K) - USD ($) | Dec. 22, 2017 | Nov. 30, 2020 | Nov. 30, 2019 | Nov. 30, 2020 | Nov. 30, 2019 | May 31, 2020 | May 31, 2019 |
Income Tax Disclosure [Abstract] | |||||||
Income tax provisions | |||||||
Change in valuation allowance | $ 444,000 | ||||||
Corporate income tax rate | 35.00% | 21.00% | 21.00% | ||||
Federal net operating loss carry forwards | $ 3,029,000 | $ 1,474,000 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Deferred Tax Assets (Details) (10-K) - USD ($) | May 31, 2020 | May 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Net Operating Loss | $ 770,000 | $ 364,000 |
Impairment of cost method investment | 38,000 | |
Gross deferred tax asset | 770,000 | 402,000 |
Less: Valuation allowance | (825,000) | (381,000) |
Net deferred tax asset | 55,000 | 21,000 |
Amortization of intangible assets | (55,000) | (21,000) |
Net deferred assets/liabilities |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of the Statutory Federal Income Tax Rate (Details) (10-K) | Dec. 22, 2017 | May 31, 2020 | May 31, 2019 |
Income Tax Disclosure [Abstract] | |||
Expected provision (benefit) at statutory rate | (35.00%) | (21.00%) | (21.00%) |
State taxes, net of federal tax benefit | (4.40%) | (4.40%) | |
Change in federal rate | |||
Permanent differences-stock based compensation | 15.00% | 15.00% | |
Increase in valuation allowance | 10.40% | 10.40% | |
Total provision (benefit) for income taxes | 0.00% | 0.00% |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Nov. 23, 2020 | Oct. 30, 2020 | Oct. 12, 2020 | Oct. 01, 2020 | Sep. 23, 2020 | Sep. 22, 2020 | Sep. 16, 2020 | Aug. 10, 2020 | Aug. 01, 2020 | Jul. 29, 2020 | Jul. 01, 2020 | Jun. 30, 2020 | Jun. 18, 2020 | Jun. 04, 2020 | Jun. 02, 2020 | May 07, 2020 | May 04, 2020 | May 31, 2020 | Nov. 30, 2020 | Aug. 31, 2020 | Aug. 20, 2020 | Nov. 30, 2020 | Nov. 30, 2019 | May 31, 2020 | May 31, 2019 | Aug. 17, 2020 | Jul. 02, 2020 | Apr. 29, 2020 |
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Preferred stock, authorized | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||||||||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||||||||||||
Preferred stock, issued | ||||||||||||||||||||||||||||
Preferred stock, outstanding | ||||||||||||||||||||||||||||
Common stock, authorized | 20,000,000 | 36,000,000 | 36,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | ||||||||||||||||||||||
Common stock holders rights | One vote for each share. | One vote for each share. | ||||||||||||||||||||||||||
Common stock, issued | 7,988,975 | 1,217,376 | 1,217,376 | 7,988,975 | 7,003,975 | |||||||||||||||||||||||
Common stock, outstanding | 7,988,975 | 1,217,376 | 1,217,376 | 7,988,975 | 7,003,975 | |||||||||||||||||||||||
Number of common stock shares issued | 10,738 | 250,000 | ||||||||||||||||||||||||||
Number of shares of common stock restricted | 150,000 | |||||||||||||||||||||||||||
Share price | $ 9.28 | |||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ 100,000 | |||||||||||||||||||||||||||
Debt instrument, default interest rate | 10.00% | |||||||||||||||||||||||||||
Number of common stock issued, value | $ 25,000 | $ 216,625 | $ 87,700 | |||||||||||||||||||||||||
Stock issued during period, shares, acquisitions | 37,941 | |||||||||||||||||||||||||||
Value of shares issued for acquisition | $ 413,544 | $ 165,000 | $ 6,090,000 | |||||||||||||||||||||||||
Stock-based compensation | $ 241,557 | |||||||||||||||||||||||||||
Number of common stock shares issued for services | 5,899 | |||||||||||||||||||||||||||
Value of common stock shares issued for services | $ 2,125,000 | |||||||||||||||||||||||||||
Number of common stock shares issued stock based compensation | 757,000 | 95,700 | ||||||||||||||||||||||||||
Accrued compensation | $ 669,215 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Number of common stock shares issued | 4,167 | |||||||||||||||||||||||||||
Share price | $ 7.28 | |||||||||||||||||||||||||||
Debt instrument, default interest rate | 12.00% | |||||||||||||||||||||||||||
Debt instrument, face amount | $ 333,333 | |||||||||||||||||||||||||||
Issuance of warrants | 375,000 | |||||||||||||||||||||||||||
Warrants description | For purposes of this Warrant, the term "Exercise Price" shall mean 110% of the public offering price of the Company's common stock under the public offering contemplated by the registration statement on Form S-1 filed by the Company on October 23, 2020 (the "Uplist Offering"), provided, however, that if the Uplist Offering has not been consummated on or before May 23, 2021, then the Exercise Price shall mean the closing bid price of the Company's common stock on December 23, 2020, subject to adjustment as provided in the warrant (including but not limited to cashless exercise), and the term "Exercise Period" shall mean the period commencing on the earlier of (i) the date of the Company's consummation of the Uplist Offering or (ii) May 23, 2021, and ending on the five-year anniversary thereof. | |||||||||||||||||||||||||||
Fair value of warrants | $ 157,438 | |||||||||||||||||||||||||||
Marketing Agreement [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Number of common stock shares issued | 3,472 | |||||||||||||||||||||||||||
Share price | $ 1.10 | |||||||||||||||||||||||||||
Professional fees | $ 15,185 | |||||||||||||||||||||||||||
Prepaid expenses | $ 7,593 | |||||||||||||||||||||||||||
Fort Bliss U.S. Military Base [Member] | Restricted Shares [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Share price | $ 8.80 | |||||||||||||||||||||||||||
Stock issued during period, shares, acquisitions | 18,750 | |||||||||||||||||||||||||||
Value of shares issued for acquisition | $ 165,000 | |||||||||||||||||||||||||||
Ignatious O'Riley [Member] | Asset Purchase Agreement [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Share price | $ 9.84 | |||||||||||||||||||||||||||
Number of shares issued for exchange of acquisition asset | 2,989 | |||||||||||||||||||||||||||
Value of shares issued for exchange of acquisition asset | $ 29,416 | |||||||||||||||||||||||||||
Five Point Legacy Corp [Member] | Asset Purchase Agreement [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Share price | $ 9.76 | |||||||||||||||||||||||||||
Number of shares issued for exchange of acquisition asset | 4,506 | |||||||||||||||||||||||||||
Value of shares issued for exchange of acquisition asset | $ 43,974 | |||||||||||||||||||||||||||
Parryproject LLC [Member] | Asset Purchase Agreement [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Share price | $ 10.48 | |||||||||||||||||||||||||||
Number of shares issued for exchange of acquisition asset | 3,688 | |||||||||||||||||||||||||||
Value of shares issued for exchange of acquisition asset | $ 38,650 | |||||||||||||||||||||||||||
Centore Entertainment Corp [Member] | Asset Purchase Agreement [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Share price | $ 10.48 | |||||||||||||||||||||||||||
Number of shares issued for exchange of acquisition asset | 8,402 | |||||||||||||||||||||||||||
Value of shares issued for exchange of acquisition asset | $ 88,052 | |||||||||||||||||||||||||||
JAR Mathis Holdings [Member] | Asset Purchase Agreement [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Share price | $ 12 | |||||||||||||||||||||||||||
Number of shares issued for exchange of acquisition asset | 6,202 | |||||||||||||||||||||||||||
Value of shares issued for exchange of acquisition asset | $ 74,423 | |||||||||||||||||||||||||||
B&R Franchise Investments, LLC [Member] | Asset Purchase Agreement [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Share price | $ 11.44 | |||||||||||||||||||||||||||
Number of shares issued for exchange of acquisition asset | 4,202 | |||||||||||||||||||||||||||
Value of shares issued for exchange of acquisition asset | $ 46,068 | |||||||||||||||||||||||||||
Nextgen Gaming, LLC [Member] | Asset Purchase Agreement [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Share price | $ 11.44 | |||||||||||||||||||||||||||
Number of shares issued for exchange of acquisition asset | 3,255 | |||||||||||||||||||||||||||
Value of shares issued for exchange of acquisition asset | $ 37,237 | |||||||||||||||||||||||||||
10% Fixed Convertible Promissory Note [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Debt instrument, default interest rate | 10.00% | |||||||||||||||||||||||||||
Debt instrument, face amount | $ 152,500 | |||||||||||||||||||||||||||
10% Fixed Convertible Promissory Note [Member] | Harbor Gates Capital, LLC [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Number of common stock shares issued | 1,250 | |||||||||||||||||||||||||||
Number of shares of common stock restricted | 1,250 | 10,000 | ||||||||||||||||||||||||||
Share price | $ 7.92 | $ 0.99 | ||||||||||||||||||||||||||
Debt instrument, default interest rate | 10.00% | 10.00% | ||||||||||||||||||||||||||
Number of common stock issued, value | $ 9,900 | |||||||||||||||||||||||||||
Debt instrument, face amount | $ 152,000 | $ 152,500 | $ 152,000 | |||||||||||||||||||||||||
William H. Herrmann [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Number of shares of common stock restricted | 2,976 | |||||||||||||||||||||||||||
Share price | $ 8.72 | $ 8.72 | ||||||||||||||||||||||||||
Value shares of common stock restricted | $ 25,000 | |||||||||||||||||||||||||||
Stock-based compensation | $ 95,700 | |||||||||||||||||||||||||||
William H. Herrmann [Member] | Restricted Shares [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Number of shares of common stock restricted | 23,809 | 22,936 | ||||||||||||||||||||||||||
Value shares of common stock restricted | $ 25,000 | $ 25,000 | ||||||||||||||||||||||||||
William H. Herrmann [Member] | 10% Fixed Convertible Promissory Note [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Share price | $ 1.09 | |||||||||||||||||||||||||||
Accredited Investor [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Number of common stock shares issued | 6,875 | |||||||||||||||||||||||||||
Share price | $ 9.04 | |||||||||||||||||||||||||||
Number of common stock issued, value | $ 62,150 | |||||||||||||||||||||||||||
Accredited Investor [Member] | Convertible Notes Payable [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Number of common stock shares issued | 6,875 | |||||||||||||||||||||||||||
Share price | $ 9.04 | |||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ 550,000 | |||||||||||||||||||||||||||
Debt instrument, default interest rate | 12.00% | |||||||||||||||||||||||||||
Vendor [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Accounts payable | $ 33,865 | |||||||||||||||||||||||||||
Vendor [Member] | Accounts Payable [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Number of common stock shares issued | 3,125 | |||||||||||||||||||||||||||
Share price | $ 14.72 | |||||||||||||||||||||||||||
Number of common stock issued, value | $ 46,000 | |||||||||||||||||||||||||||
Debt settlement expense | $ 12,135 | |||||||||||||||||||||||||||
Various Employees [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Share price | $ 7.76 | |||||||||||||||||||||||||||
Number of common stock shares issued stock based compensation | 12,334 | |||||||||||||||||||||||||||
Officers [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Number of shares of common stock restricted | 9,844 | |||||||||||||||||||||||||||
Value shares of common stock restricted | $ 119,632 | |||||||||||||||||||||||||||
Stock-based compensation | $ 119,632 | |||||||||||||||||||||||||||
Number of common stock shares issued for services | 84,062 | |||||||||||||||||||||||||||
Employee [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Number of common stock shares issued for services | 19,779 | |||||||||||||||||||||||||||
Officer and Employees [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Number of shares of common stock restricted | 2,813 | |||||||||||||||||||||||||||
Share price | $ 9.04 | |||||||||||||||||||||||||||
Value shares of common stock restricted | $ 25,420 | |||||||||||||||||||||||||||
Professional fees | $ 25,420 | |||||||||||||||||||||||||||
Minimum [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Common stock, authorized | 20,000,000 | |||||||||||||||||||||||||||
Share price | $ 6.56 | |||||||||||||||||||||||||||
Minimum [Member] | Officers [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Share price | $ 9.04 | $ 9.04 | ||||||||||||||||||||||||||
Maximum [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Common stock, authorized | 36,000,000 | |||||||||||||||||||||||||||
Share price | $ 14.72 | |||||||||||||||||||||||||||
Maximum [Member] | Officers [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||
Share price | $ 11.44 | $ 11.44 |
Stockholders' Equity (Details_2
Stockholders' Equity (Details Narrative) (10-K) - USD ($) | Dec. 03, 2020 | Jul. 29, 2020 | Jul. 29, 2020 | Jul. 01, 2020 | Jun. 04, 2020 | Jun. 04, 2020 | Jun. 02, 2020 | May 07, 2020 | May 07, 2020 | May 04, 2020 | Apr. 09, 2020 | Mar. 11, 2020 | Sep. 16, 2019 | Jul. 30, 2019 | Mar. 27, 2019 | Sep. 13, 2017 | Aug. 22, 2017 | Jun. 18, 2020 | Jun. 15, 2020 | May 31, 2020 | Aug. 07, 2020 | Jul. 31, 2020 | Jul. 29, 2020 | Sep. 02, 2020 | Aug. 20, 2020 | May 31, 2019 | Nov. 30, 2020 | Nov. 30, 2019 | May 31, 2020 | May 31, 2019 | Aug. 31, 2020 | Aug. 17, 2020 | Aug. 10, 2020 | Aug. 01, 2020 | Jul. 02, 2020 | Apr. 29, 2020 | Feb. 28, 2019 | Nov. 09, 2018 |
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Preferred stock, authorized | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||||||||||||||||||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||||||||||||||||||||||
Preferred stock, issued | ||||||||||||||||||||||||||||||||||||||
Preferred stock, outstanding | ||||||||||||||||||||||||||||||||||||||
Common stock, authorized | 20,000,000 | 20,000,000 | 36,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | ||||||||||||||||||||||||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||||||||||||||||||||||
Common stock holders rights | One vote for each share. | One vote for each share. | ||||||||||||||||||||||||||||||||||||
Common stock, issued | 7,988,975 | 7,003,975 | 1,217,376 | 7,988,975 | 7,003,975 | |||||||||||||||||||||||||||||||||
Common stock, outstanding | 7,988,975 | 7,003,975 | 1,217,376 | 7,988,975 | 7,003,975 | |||||||||||||||||||||||||||||||||
Stock issued during period, shares, acquisitions | 37,941 | |||||||||||||||||||||||||||||||||||||
Number of shares of common stock restricted | 150,000 | |||||||||||||||||||||||||||||||||||||
Share price | $ 9.28 | $ 9.28 | ||||||||||||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ 100,000 | |||||||||||||||||||||||||||||||||||||
Number of common stock shares issued | 757,000 | 95,700 | ||||||||||||||||||||||||||||||||||||
Debt instrument, default interest rate | 10.00% | |||||||||||||||||||||||||||||||||||||
Number of common stock not issued yet | $ 75,000 | $ 75,000 | ||||||||||||||||||||||||||||||||||||
Stock-based compensation | $ 241,557 | |||||||||||||||||||||||||||||||||||||
Maximum [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Common stock, authorized | 36,000,000 | |||||||||||||||||||||||||||||||||||||
Share price | $ 14.72 | |||||||||||||||||||||||||||||||||||||
Private Placement [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Number of shares purchased | 7,000 | 254,500 | ||||||||||||||||||||||||||||||||||||
Warrants exercise price per share | $ 4 | $ 4 | ||||||||||||||||||||||||||||||||||||
Warrant term | 5 years | 5 years | ||||||||||||||||||||||||||||||||||||
Warrants issued | 962,500 | 962,500 | ||||||||||||||||||||||||||||||||||||
Private Placement [Member] | Accredited Investors [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Number of shares purchased | 962,500 | |||||||||||||||||||||||||||||||||||||
Number of sale of stock, value | $ 1,925,000 | |||||||||||||||||||||||||||||||||||||
Number of common stock not issued yet | $ 50,000 | |||||||||||||||||||||||||||||||||||||
Common stock exchanged for warrants description | (i) one share of common stock, par value $0.0001 per share of the Company (the "Common Stock") and (ii) a warrant to purchase one share of common Stock, exercisable at a price of $4.00 per share, exercisable at any time within five years of issuance (each, a "Warrant") as provided for in the Company's Term Sheet for Unit Offering dated February 6, 2019 (the "Term Sheet"). | |||||||||||||||||||||||||||||||||||||
Warrants exercise price per share | $ 4 | |||||||||||||||||||||||||||||||||||||
Warrant term | 5 years | |||||||||||||||||||||||||||||||||||||
Private Placement [Member] | Maximum [Member] | Accredited Investors [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Number of shares of common stock restricted | 5,000 | |||||||||||||||||||||||||||||||||||||
Share price | $ 2 | |||||||||||||||||||||||||||||||||||||
Number of shares purchased | 1,000,000 | |||||||||||||||||||||||||||||||||||||
Number of sale of stock, value | $ 2,000,000 | |||||||||||||||||||||||||||||||||||||
Initial Public Offering [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Number of shares purchased | 5,000,000 | 250,000 | ||||||||||||||||||||||||||||||||||||
Number of sale of stock, value | $ 100 | |||||||||||||||||||||||||||||||||||||
Warrants exercise price per share | $ 0.01 | $ 11.50 | $ 11.50 | |||||||||||||||||||||||||||||||||||
Warrant term | 5 years | 5 years | ||||||||||||||||||||||||||||||||||||
Warrants issued | 5,461,500 | 5,461,500 | 5,461,500 | |||||||||||||||||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Common stock, par value | $ 16 | |||||||||||||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ 80,000 | |||||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 100,000 | $ 100,000 | ||||||||||||||||||||||||||||||||||||
Number of common stock shares issued | 85,905 | 25,000 | ||||||||||||||||||||||||||||||||||||
Debt conversion, principal amount | $ 100,000 | |||||||||||||||||||||||||||||||||||||
Subsequent Event [Member] | Restricted Stock [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Number of common stock shares issued | 150,000 | |||||||||||||||||||||||||||||||||||||
10% Fixed Convertible Promissory Note [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 152,500 | |||||||||||||||||||||||||||||||||||||
Debt instrument, default interest rate | 10.00% | |||||||||||||||||||||||||||||||||||||
Harbor Gates Capital, LLC [Member] | 10% Fixed Convertible Promissory Note [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Number of shares of common stock restricted | 1,250 | 10,000 | ||||||||||||||||||||||||||||||||||||
Share price | $ 7.92 | $ 0.99 | ||||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 152,000 | $ 152,500 | $ 152,000 | |||||||||||||||||||||||||||||||||||
Debt instrument, default interest rate | 10.00% | 10.00% | ||||||||||||||||||||||||||||||||||||
Common Stock Purchase Agreement [Member] | Triton Funds LP [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Stock issued during period, shares, acquisitions | 125,000 | |||||||||||||||||||||||||||||||||||||
Number of shares of common stock restricted | 125,000 | 5,000 | ||||||||||||||||||||||||||||||||||||
Share price | $ 0.70 | $ 1.18 | ||||||||||||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ 87,700 | |||||||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Share price | $ 7.28 | |||||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 333,333 | |||||||||||||||||||||||||||||||||||||
Debt instrument, default interest rate | 12.00% | |||||||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 550,000 | |||||||||||||||||||||||||||||||||||||
Number of common stock shares issued | 55,000 | |||||||||||||||||||||||||||||||||||||
Debt instrument, default interest rate | 12.00% | |||||||||||||||||||||||||||||||||||||
Marketing Agreement [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Share price | $ 1.10 | |||||||||||||||||||||||||||||||||||||
Marketing Agreement [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Number of common stock shares issued | 27,778 | |||||||||||||||||||||||||||||||||||||
Employment Agreements [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Number of shares vested | 180,000 | |||||||||||||||||||||||||||||||||||||
Stock-based compensation | $ 669,215 | |||||||||||||||||||||||||||||||||||||
Unrecognized compensation cost | ||||||||||||||||||||||||||||||||||||||
Employment Agreements [Member] | Vested Ratably Through December 31, 2019 [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Number of shares vested | 105,000 | |||||||||||||||||||||||||||||||||||||
Jed Kaplan [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Number of shares of common stock restricted | 70,000 | |||||||||||||||||||||||||||||||||||||
Jed Kaplan [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Number of common stock shares issued | 300,000 | |||||||||||||||||||||||||||||||||||||
Roman Franklin [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Number of shares of common stock restricted | 21,000 | |||||||||||||||||||||||||||||||||||||
Steven Grossman [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Number of shares of common stock restricted | 14,000 | |||||||||||||||||||||||||||||||||||||
William H. Herrmann [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Number of shares of common stock restricted | 2,976 | |||||||||||||||||||||||||||||||||||||
Share price | $ 8.72 | $ 8.72 | ||||||||||||||||||||||||||||||||||||
Stock-based compensation | $ 95,700 | |||||||||||||||||||||||||||||||||||||
William H. Herrmann [Member] | Restricted Stock [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Number of shares of common stock restricted | 23,809 | 22,936 | ||||||||||||||||||||||||||||||||||||
William H. Herrmann [Member] | 10% Fixed Convertible Promissory Note [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Share price | $ 1.09 | $ 1.09 | ||||||||||||||||||||||||||||||||||||
Number of shares purchased | 22,936 | |||||||||||||||||||||||||||||||||||||
Number of sale of stock, value | $ 25,000 | |||||||||||||||||||||||||||||||||||||
Mr. Franklin [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Number of common stock shares issued | 265,000 | |||||||||||||||||||||||||||||||||||||
Employee and Directors [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Number of common stock shares issued | 192,000 | |||||||||||||||||||||||||||||||||||||
Accredited Investor [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Share price | $ 9.04 | |||||||||||||||||||||||||||||||||||||
Accredited Investor [Member] | Securities Purchase Agreement [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 333,333 | |||||||||||||||||||||||||||||||||||||
Number of common stock shares issued | 33,333 | |||||||||||||||||||||||||||||||||||||
Three Employees [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Share price | $ 0.60 | |||||||||||||||||||||||||||||||||||||
Number of common stock shares issued | 180,000 | |||||||||||||||||||||||||||||||||||||
Three Employees [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Share price | $ 1.02 | $ 1.02 | $ 1.02 | |||||||||||||||||||||||||||||||||||
Number of common stock shares issued | 67,000 | |||||||||||||||||||||||||||||||||||||
Executive Officer [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Share price | $ 0.87 | $ 0.87 | $ 0.87 | |||||||||||||||||||||||||||||||||||
Number of common stock shares issued | 690,000 | |||||||||||||||||||||||||||||||||||||
PLAYLive Nation, Inc [Member] | ||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||||
Stock issued during period, shares, acquisitions | 750,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Outstanding Stock Warrants (Details) - Stock Warrants [Member] - USD ($) | 6 Months Ended | 12 Months Ended | |
Nov. 30, 2020 | May 31, 2020 | May 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares stock warrants outstanding, Beginning balance | 803,000 | 6,424,000 | 5,461,500 |
Number of shares stock warrants, Granted | 17,054 | 962,500 | |
Number of shares stock warrants, Cancelled | |||
Number of shares stock warrants outstanding, Ending balance | 820,054 | 803,000 | 6,424,000 |
Number of shares stock warrants, exercisable, Ending | 820,054 | 6,424,000 | |
Average exercise price stock warrants, Beginning balance | $ 83.04 | $ 10.38 | $ 11.50 |
Average exercise price stock warrants, Granted | 21.99 | 4 | |
Average exercise price stock warrants, Cancelled | |||
Average exercise price stock warrants, Ending balance | 81.74 | $ 83.04 | $ 10.38 |
Average exercise price stock warrants Exercisable, Ending balance | $ 81.74 | ||
Weighted Average Remaining Contractual Term (Years), Outstanding, Ending balance | 3 years 1 month 6 days | ||
Weighted Average Remaining Contractual Term (Years), Exercisable, Ending balance | 3 years 1 month 6 days | ||
Aggregate Intrinsic Value, Outstanding, Beginning balance | |||
Aggregate Intrinsic Value, Outstanding, Ending balance | |||
Aggregate Intrinsic Value, Exercisable, Ending balance |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Outstanding Stock Warrants (Details) (10-K) - Warrant [Member] - $ / shares | 6 Months Ended | 12 Months Ended | |
Nov. 30, 2020 | May 31, 2020 | May 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares stock warrants outstanding, Beginning balance | 803,000 | 6,424,000 | 5,461,500 |
Number of shares stock warrants, Granted | 17,054 | 962,500 | |
Number of shares stock warrants outstanding, Ending balance | 820,054 | 803,000 | 6,424,000 |
Number of shares stock warrants, exercisable, Ending | 820,054 | 6,424,000 | |
Average exercise price stock warrants, Beginning balance | $ 83.04 | $ 10.38 | $ 11.50 |
Average exercise price stock warrants, Granted | 21.99 | 4 | |
Average exercise price stock warrants, Ending balance | $ 81.74 | $ 83.04 | $ 10.38 |
Stock warrants outstanding shares, Expiration Date | Nov 2023 | ||
Stock warrants granted shares, Expiration Date | May 2024 |
Segment and Related Informati_3
Segment and Related Information (Details Narrative) (10-K) | 12 Months Ended |
May 31, 2020Integer | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Segment and Related Informati_4
Segment and Related Information - Schedule of Segment Reporting Information (Details) (10-K) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Nov. 30, 2020 | Nov. 30, 2019 | Nov. 30, 2020 | Nov. 30, 2019 | May 31, 2020 | May 31, 2019 | |
Revenues | $ 296,546 | $ 245,498 | $ 497,147 | $ 319,991 | $ 861,410 | $ 37,995 |
Net Income (loss) | (1,013,693) | $ (571,502) | (1,684,793) | $ (854,894) | (2,665,779) | (3,565,272) |
Depreciation and Amortization | 269,000 | |||||
Capital Expenditures | 151,000 | |||||
Goodwill | 5,180,141 | 5,180,141 | 5,155,141 | 4,456,250 | ||
Total Assets | $ 10,416,782 | $ 10,416,782 | 8,591,774 | $ 7,754,543 | ||
Franchise Royalties and Fees [Member] | ||||||
Revenues | 523,000 | |||||
Net Income (loss) | (124,000) | |||||
Depreciation and Amortization | ||||||
Capital Expenditures | ||||||
Goodwill | 699,000 | |||||
Total Assets | 1,610,000 | |||||
Company Owned Stores [Member] | ||||||
Revenues | 174,000 | |||||
Net Income (loss) | (330,000) | |||||
Depreciation and Amortization | 54,000 | |||||
Capital Expenditures | 142,000 | |||||
Goodwill | ||||||
Total Assets | 1,124,000 | |||||
Esports Revenue [Member] | ||||||
Revenues | 165,000 | |||||
Net Income (loss) | (345,000) | |||||
Depreciation and Amortization | 215,000 | |||||
Capital Expenditures | 9,000 | |||||
Goodwill | 4,456,000 | |||||
Total Assets | 5,750,000 | |||||
Corporates [Member] | ||||||
Revenues | ||||||
Net Income (loss) | (1,856,000) | |||||
Depreciation and Amortization | ||||||
Capital Expenditures | ||||||
Goodwill | ||||||
Total Assets | $ 108,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Dec. 18, 2020 | Dec. 04, 2020 | Dec. 03, 2020 | Jul. 29, 2020 | Jun. 04, 2020 | Jun. 04, 2020 | Jun. 15, 2020 | Nov. 30, 2020 | Aug. 31, 2020 | Nov. 30, 2020 | Nov. 30, 2019 | May 31, 2020 | May 31, 2019 |
Number of common stock shares issued | 10,738 | 250,000 | |||||||||||
Proceeds from issuance of common stock | $ 100,000 | ||||||||||||
Common stock price per share | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||
Reduced accounts payable | $ 110,595 | $ 13,658 | $ 123,142 | ||||||||||
Number of common stock shares issued stock based compensation | 757,000 | 95,700 | |||||||||||
Common stock shares issued stock based compensation, value | $ 119,633 | $ 819,309 | $ 5,900 | ||||||||||
Share-based compensation | $ 241,557 | ||||||||||||
Subsequent Event [Member] | |||||||||||||
Number of common stock shares issued | 5,000 | ||||||||||||
Legal fees | $ 30,000 | $ 50,000 | |||||||||||
Proceeds from issuance of common stock | $ 80,000 | ||||||||||||
Common stock price per share | $ 16 | ||||||||||||
Reduced accounts payable | $ 50,000 | ||||||||||||
Number of common stock shares issued stock based compensation | 85,905 | 25,000 | |||||||||||
Subsequent Event [Member] | Two Executive Officers [Member] | |||||||||||||
Common stock price per share | $ 14.10 | ||||||||||||
Number of common stock shares issued stock based compensation | 100,000 | ||||||||||||
Common stock shares issued stock based compensation, value | $ 1,410,000 | ||||||||||||
Share-based compensation | 1,410,000 | ||||||||||||
Cash bonus | $ 125,000 |
Subsequent Events (Details Na_2
Subsequent Events (Details Narrative) (10-K) - USD ($) | Aug. 10, 2020 | Aug. 07, 2020 | Jul. 29, 2020 | Jul. 02, 2020 | Jun. 23, 2020 | Jun. 18, 2020 | Jun. 04, 2020 | Sep. 16, 2019 | Aug. 20, 2020 | Nov. 30, 2020 | Aug. 17, 2020 | May 31, 2020 | Apr. 22, 2020 | May 31, 2019 |
Repayment of debt | $ 152,500 | |||||||||||||
Debt instrument, default interest rate | 10.00% | |||||||||||||
Number of common stock issued | 10,738 | 250,000 | ||||||||||||
Outstanding shares of common stock description | The Company's outstanding shares of common stock, at a ratio of no less than 1-for-2 and no more than 1-for-10, with such ratio to be determined by the sole discretion of the Board of Directors, with any fractional shares being rounded up to the next higher whole shares (the "Reverse Split"). | |||||||||||||
Common stock, authorized | 36,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | ||||||||||
Number of shares of common stock restricted | 150,000 | |||||||||||||
Cash | $ 150,000 | |||||||||||||
Accrued interest | $ 150,000 | $ 15,000 | ||||||||||||
Number of common stock shares issued | 757,000 | 95,700 | ||||||||||||
Minimum [Member] | ||||||||||||||
Common stock, authorized | 20,000,000 | |||||||||||||
Maximum [Member] | ||||||||||||||
Common stock, authorized | 36,000,000 | |||||||||||||
2020 Plan [Member] | ||||||||||||||
Common stock, authorized | 1,000,000 | 1,000,000 | ||||||||||||
Award available shares | 1,000,000 | |||||||||||||
Accredited Investor [Member] | ||||||||||||||
Number of common stock issued | 6,875 | |||||||||||||
Jed Kaplan [Member] | ||||||||||||||
Contribution funded | 25,272 | |||||||||||||
Principal balances outstanding | $ 90,000 | |||||||||||||
Number of shares of common stock restricted | 70,000 | |||||||||||||
Accrued interest | $ 75,000 | $ 75,000 | ||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||
Principal amount of debt instrument | $ 333,333 | |||||||||||||
Debt instrument, default interest rate | 12.00% | |||||||||||||
Number of common stock issued | 4,167 | |||||||||||||
Delaware Corporation [Member] | Securities Purchase Agreement [Member] | Self-Amortization Note [Member] | ||||||||||||||
Original issue discount | $ 144,500 | |||||||||||||
Delaware Corporation [Member] | Securities Purchase Agreement [Member] | Accredited Investor [Member] | Self-Amortization Note [Member] | ||||||||||||||
Debt maturity date | Jun. 18, 2021 | |||||||||||||
Principal amount of debt instrument | $ 550,000 | |||||||||||||
Repayment of debt | $ 550,000 | |||||||||||||
Debt instrument, default interest rate | 12.00% | |||||||||||||
Original issue discount | $ 55,000 | |||||||||||||
Debt description | The Holder paid the purchase price of $495,000 in exchange for the Amortization Note. In addition, pursuant to the terms of the SPA, the Company agreed to issue 55,000 shares of the Company's common stock to the Holder as additional consideration. | |||||||||||||
Number of common stock issued | 55,000 | |||||||||||||
FirstFire Global Oppurtunities Fund, LLC [Member] | Securities Purchase Agreement [Member] | Accredited Investor [Member] | ||||||||||||||
Debt maturity date | Aug. 7, 2021 | |||||||||||||
Principal amount of debt instrument | $ 333,333 | |||||||||||||
Repayment of debt | $ 333,333 | |||||||||||||
Debt instrument, default interest rate | 12.00% | 12.00% | ||||||||||||
Original issue discount | $ 33,333 | |||||||||||||
Number of common stock issued | 4,167 | 4,167 | ||||||||||||
FirstFire Global Oppurtunities Fund, LLC [Member] | Securities Purchase Agreement [Member] | Accredited Investor [Member] | Paid the Purchase Price In Exchange Of Amortization of Notes [Member] | ||||||||||||||
Repayment of debt | $ 300,000 |