Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
May 31, 2018 | Aug. 10, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Reviv3 Procare Co | |
Entity Central Index Key | 1,718,500 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --05-31 | |
Document Type | 10-K | |
Document Period End Date | May 31, 2018 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,018 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 40,505,047 | |
Entity Current Reporting Status | Yes | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | Yes | |
Entity Public Float | $ 0 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | May 31, 2018 | May 31, 2017 |
CURRENT ASSETS: | ||
Cash | $ 227,870 | $ 416,873 |
Accounts receivable, net | 29,991 | 32,703 |
Inventory | 321,537 | 129,794 |
Advance to suppliers | 3,413 | 16,135 |
Prepaid expenses and other current assets | 3,505 | 18,089 |
Total Current Assets | 586,316 | 613,594 |
OTHER ASSETS: | ||
Property and equipment, net | 8,349 | 7,255 |
Deposits | 14,849 | 14,849 |
Total Other Assets | 23,198 | 22,104 |
TOTAL ASSETS | 609,514 | 635,698 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 79,759 | 62,968 |
Customer deposits | 16,200 | 20,246 |
Due to related party | 210 | |
Total Current Liabilities | 96,169 | 83,214 |
Total Liabilities | 96,169 | 83,214 |
STOCKHOLDERS' EQUITY: | ||
Preferred stock, $0.0001 par value; 20,000,000 shares authorized; none issued and outstanding | ||
Common stock, $0.0001 par value: 100,000,000 shares authorized; 40,505,047 and 39,679,047 shares issued and outstanding as of May 31, 2018 and 2017, respectively | 4,051 | 3,968 |
Additional paid-in capital | 4,997,461 | 4,694,144 |
Accumulated deficit | (4,488,167) | (4,145,628) |
Total Stockholders' Equity | 513,345 | 552,484 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 609,514 | $ 635,698 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | May 31, 2018 | May 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 40,505,047 | 39,679,047 |
Common stock, shares outstanding | 40,505,047 | 39,679,047 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Income Statement [Abstract] | ||
Net revenues | $ 933,218 | $ 582,005 |
Cost of sales | 576,246 | 281,579 |
Gross profit | 356,972 | 300,426 |
OPERATING EXPENSES: | ||
Marketing and selling expenses | 91,198 | 103,602 |
Compensation and related taxes | 30,515 | 87,132 |
Professional and consulting expenses | 352,945 | 403,883 |
General and administrative | 221,159 | 244,015 |
Total Operating Expenses | 695,817 | 838,632 |
LOSS FROM OPERATIONS | (338,845) | (538,206) |
OTHER INCOME (EXPENSE): | ||
Interest income | 118 | 5 |
Interest expense and other finance charges | (3,812) | (576) |
Other Income (Expense), Net | (3,694) | (571) |
LOSS BEFORE PROVISION FOR INCOME TAXES | (342,539) | (538,777) |
Provision for income taxes | ||
NET LOSS | $ (342,539) | $ (538,777) |
NET LOSS PER COMMON SHARE - Basic and diluted | $ (0.01) | $ (0.01) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||
Basic and diluted | 40,257,592 | 38,402,291 |
STATEMENTS OF CHANGES IN STOCKH
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock | Preferred Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance at May. 31, 2016 | $ 3,815 | $ 4,235,077 | $ (3,606,851) | $ 632,041 | |
Beginning Balance, Shares at May. 31, 2016 | 38,150,981 | ||||
Issuance of common stock for cash | $ 142 | 422,359 | 422,501 | ||
Issuance of common stock for cash, Shares | 1,419,066 | ||||
Issuance of common stock for services | $ 11 | 36,609 | 36,620 | ||
Issuance of common stock for services, Shares | 109,000 | ||||
Capital contribution | 99 | 99 | |||
Net Loss | (538,777) | (538,777) | |||
Ending Balance at May. 31, 2017 | $ 3,968 | 4,694,144 | (4,145,628) | 552,484 | |
Ending Balance, Shares at May. 31, 2017 | 39,679,047 | ||||
Issuance of common stock for cash | $ 75 | 283,325 | 283,400 | ||
Issuance of common stock for cash, Shares | 746,000 | ||||
Issuance of common stock for services | $ 8 | 19,992 | 20,000 | ||
Issuance of common stock for services, Shares | 80,000 | ||||
Capital contribution | |||||
Net Loss | (342,539) | (342,539) | |||
Ending Balance at May. 31, 2018 | $ 4,051 | $ 4,997,461 | $ (4,488,167) | $ 513,345 | |
Ending Balance, Shares at May. 31, 2018 | 40,505,047 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (342,539) | $ (538,777) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 3,029 | 1,386 |
Bad debts | 1,962 | 810 |
Inventory obsolescence | 5,562 | 7,230 |
Stock based compensation | 32,089 | 131,342 |
Change in operating assets and liabilities: | ||
Accounts receivable | 750 | (4,441) |
Inventory | (197,305) | 11,695 |
Advance to suppliers | 12,722 | 14,213 |
Prepaid expenses and other current assets | 2,496 | (6,000) |
Deposits | (5,394) | |
Accounts payable and accrued expenses | 16,790 | 35,429 |
Customer deposits | (4,046) | (17,458) |
NET CASH USED IN OPERATING ACTIVITIES | (468,490) | (369,965) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment | (4,123) | (5,458) |
NET CASH USED IN INVESTING ACTIVITIES | (4,123) | (5,458) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Issuance of common stock for cash | 283,400 | 422,501 |
Note payable from related party | 675,000 | |
Repayment of note payable to related party | (675,000) | |
Capital contribution | 99 | |
Advances from a related party | 210 | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 283,610 | 422,600 |
NET (DECREASE) INCREASE IN CASH | (189,003) | 47,177 |
CASH - Beginning of period | 416,873 | 369,696 |
CASH - End of period | 227,870 | 416,873 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest | ||
Income taxes | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Issuance of common stock for prepaid services | $ 20,000 | $ 12,089 |
Organization
Organization | 12 Months Ended |
May 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Note 1 – Organization Reviv3 Procare Company (the “Company”) was incorporated in the State of Delaware on May 21, 2015 as a reorganization of Reviv3 Procare, LLC which was organized on July 31, 2013. The Company is engaged in the manufacturing, marketing, sale and distribution of professional quality hair and skin care products throughout the United States, Canada, Europe and Asia. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Basis of Presentation and Summary of Significant Accounting Policies Going Concern As reflected in the accompanying financial statements, the Company has a net loss and net cash used in operations of $342,539 and $468,490, respectively, for the year ended May 31, 2018. Additionally the Company has an accumulated deficit of $4,488,167 at May 31, 2018. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of 12 months from the issuance date of this report. The ability of the Company to continue as a going concern is dependent on the Company’s ability to implement its business plan, raise capital, and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support its daily operations. Management intends to raise additional funds by way of a private or public offering. While the Company believes in the viability of its strategy to further implement its business plan and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The 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. Use of estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates made by management include, but are not limited to, the allowance for doubtful accounts, inventory valuations, the useful life of property and equipment, the valuation of deferred tax assets, the value of stock-based compensation, and the fair value of non-cash common stock issuances. Cash and cash equivalents The Company considers all highly liquid debt instruments and other short-term investments with maturities of three months or less, when purchased, to be cash equivalents. The Company maintains cash and cash equivalent balances at one financial institution that is insured by the Federal Deposit Insurance Corporation. Accounts receivable and allowance for doubtful accounts The Company has a policy of providing on allowance for doubtful accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to bad debt expense and included in the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Prepaid expenses and other current assets Prepaid expenses and other current assets of $3,505 and $18,089 at May 31, 2018 and 2017, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses at May 31, 2017 primarily included prepayments in common stock for consulting services which are being amortized over the terms of their respective agreements while prepayments at May 31, 2018 primarily included cash prepayment to vendors. Advances to suppliers Advances to a supplier represents the cash paid in advance for installment payments for the purchase of inventory. The advances to a supplier are interest free and unsecured. As of May 31, 2018 and 2017, advances to the Company’s major supplier amounted $3,413 and $16,135, respectively. Upon shipment of the purchase inventory, the Company reclassifies such advances to supplier into inventory. Inventory The Company values inventory, consisting of finished goods and raw materials, at the lower of cost and net realizable value. Cost is determined using an average cost method. The Company reduces inventory for the diminution of value, resulting from product obsolescence, damage or other issues affecting marketability, equal to the difference between the cost of the inventory and its net realizable value. The Company evaluates its current level of inventory considering historical sales and other factors and, based on this evaluation, classifies inventory markdowns in the statement of operations as a component of cost of goods sold. These markdowns are estimates, which could vary significantly from actual requirements if future economic conditions, customer demand or competition differ from expectations. Property and Equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed, and any resulting gains or losses are included in the statement of operations. Revenue recognition The Company followed paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. Consideration paid to promote and sell the Company’s products to customers is typically recorded as a reduction in revenues in accordance with Accounting Standard Codification (“ASC”) ASC 605-50-45-2, Revenue Recognition—Customer Payments and Incentives. The Company adopted Accounting Standards Update (“ASU”) ASU 2015-14 Revenue from Contracts with Customers for their fiscal year beginning June 1, 2018. The Company does not expect this ASU to have a material impact on its financial statements. Cost of Sales The primary components of cost of sales include the cost of the product and shipping fees. Shipping and Handling Costs The Company accounts for shipping and handling fees in accordance with paragraph 605-45-45-19 of the FASB Accounting Standards Codification. While amounts charged to customers for shipping products are included in revenues, the related costs of shipping products to customers are classified in marketing and selling expenses as incurred. Shipping costs included in marketing and selling expense were $37,423 and $41,834 for the year ended May 31, 2018 and 2017, respectively. Marketing, selling and advertising Marketing, selling and advertising costs are expensed as incurred. Customer Deposits Customer deposits consisted of prepayments from customers to the Company. The Company will recognize the prepayments as revenue upon delivery of products in compliance with its revenue recognition policy. Fair value measurements and fair value of financial instruments The Company adopted Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that requires the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures. ASC 820 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. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (“FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The estimated fair value of certain financial instruments, including prepaid expenses, deposits, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. Income Taxes The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more likely than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all more likely than not to be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed. Impairment of long-lived assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than 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. The Company did not record any impairment losses during the year ended May 31, 2018 and 2017. Stock-based compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718, “Compensation — Stock Compensation” (“ASC 718”), which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, “Equity Based Payments to Non-employees”, for share-based payments to consultants and other third-parties, compensation expense is determined at the measurement date. The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. Net loss per share of common stock Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares during the period. Diluted net loss per share is computed using the weighted average number of common shares and potentially dilutive securities outstanding during the period. At May 31, 2018 and 2017, the Company has none and 430,000, respectively, potentially dilutive securities outstanding related to common stock warrants. Those potentially dilutive common stock equivalents were excluded from the dilutive loss per share calculation as they would be antidilutive due to the net loss. Recently Issued Accounting Pronouncements In August 2015, the FASB issued ASU 2015-14 Revenue from Contracts with Customers. The ASU defers the effective date of previously issued ASU 2014-09 (the new revenue recognition standard) by one year for both public and private companies. The ASU requires public entities to apply the new revenue recognition guidance for annual reporting periods beginning after December 15, 2017, and interim reporting periods within annual reporting periods beginning after December 15, 2017. Both public and nonpublic entities will be permitted to apply the new revenue recognition standard as of the original effective date for public entities (annual periods beginning after December 15, 2016). The Company will adopt this standard for their fiscal year beginning June 1, 2018. The Company does not expect this ASU to have a material impact on its financial statements. In February 2016, FASB issued ASU 2016-02, “Leases” (Topic 842). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. The new guidance will be effective for fiscal years beginning after December 15, 2018, and interim periods within those annual periods and is applied retrospectively. Early adoption is permitted. The Company does not believe the guidance will have a material impact on its financial statements. In January 2017, the FASB issued ASU No. 2017-4, “Intangibles – Goodwill and Other” (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test. When an indication of impairment was identified after performing the first step of the goodwill impairment test, Step 2 required that an entity determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) using the same procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Under the amendments in ASU No. 2017-4, an entity would perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying value. An entity would recognize an impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value. In addition, an entity must consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. A public business entity that is a SEC filer should adopt the amendments in ASU No. 2017-4 for its annual, or any interim, good will impairment tests in fiscal years beginning after December 15, 2019. The Company does not believe the guidance will have a material impact on its financial statements. In May 2017, the FASB released ASU 2017-09, “Compensation - Stock Compensation”. The update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC Topic 718. An entity shall account for the effects of a modification described in ASC paragraphs 718-20-35-3 through 35-9, unless all the following are met: (1) The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; (2) The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (3) The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The provisions of this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. The Company does not believe the guidance will have a material impact on its financial statements. In July 2017, the FASB issued ASU 2017-11 “Earnings Per Share” (Topic 260). The amendments in the update change the classification of certain equity-linked financial instruments (or embedded features) with down round features. The amendments also clarify existing disclosure requirements for equity-classified instruments. For freestanding equity-classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with Topic 260, Earnings Per Share, to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features would be subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). For public business entities, the amendments in Part I of this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company does not believe the guidance will have a material impact on its financial statements. In June 2018, the FASB issued ASU No. 2018-07 “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. The guidance is effective for public companies for fiscal years, and interim fiscal periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, but no earlier than a company’s adoption date of Topic 606, Revenue from Contracts with Customers. The Company is assessing ASU 2018-07 and does not expect it to have a material impact on its accounting and disclosures. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
May 31, 2018 | |
Receivables [Abstract] | |
Accounts Receivable | Note 3 – Accounts Receivable Accounts receivable, consisted of the following: May 31, May 31, Accounts receivable $ 32,733 $ 33,513 Less: Allowance for bad debts (2,742 ) (810 ) $ 29,991 $ 32,703 The Company recorded bad debt expense of $1,962 and $810 during the years ended May 31, 2018 and 2017, respectively. |
Inventory
Inventory | 12 Months Ended |
May 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 4 – Inventory Inventory consisted of the following: May 31, May 31, Finished goods $ 113,134 $ 82,494 Raw materials 208,403 47,300 $ 321,537 $ 129,794 At May 31, 2018, inventory held at third party locations amounted to $64,485. During the year ended May 31, 2018, Management abandoned $3,285 of inventory held at a former distributor at a foreign location outside of the United States as it was not cost efficient to import the inventory back into the United States. The $3,285 is included in cost of sales for the year ended May 31, 2018. During fiscal 2018 and 2017, the Company wrote down inventory for obsolescence of $5,562 and $7,230 which is included in cost of sales. |
Property and Equipment
Property and Equipment | 12 Months Ended |
May 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 5 – Property and Equipment Property and equipment, stated at cost, consisted of the following: Estimated life May 31, May 31, Furniture and fixtures 5 years $ 5,759 $ 5,398 Computer equipment 3 years 7,495 3,733 Less: Accumulated depreciation (4,905 ) (1,876 ) $ 8,349 $ 7,255 Depreciation expense amounted to $3,029 and $1,386 for the years ended May 31, 2018 and 2017, respectively. |
Loan and Note Payable
Loan and Note Payable | 12 Months Ended |
May 31, 2018 | |
Debt Disclosure [Abstract] | |
Loan and Note Payable | Note 6 – Loan and Note Payable In August 2016, the Company received loan proceeds of $675,000 from a related party. The Company may prepay the loan in full during the first 60 days without incurring any interest on the balance. However interest-free period shall cease on October 1, 2016 at which time the note accrues interest at a rate of 8% per annum. The Company paid off this loan in September 2016 and the Company did not incur any interest charges. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
May 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Note 7 – Stockholders’ Equity Shares Authorized The authorized capital of the Company consists of 100,000,000 shares of common stock, par value $0.0001 per share and 20,000,000 shares of preferred stock, par value $0.0001 per share. Preferred Stock The preferred stock may be issued from time to time in one or more series. The Board of Directors of the Company is expressly authorized to provide for the issuance of all or any of the shares of the preferred stock in one or more series, and to fix the number of shares and to determine or alter, for each such series, such voting powers, full or limited, or no voting powers and such designations, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed until the resolution adopted by the Board of Directors providing the issuance of such shares. The Board of Directors is also expressly authorized to increase or decrease the number of shares of any series subsequent to the issue of shares of that series. In case the number of shares of any such series shall be so decreased, the decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series. Common Stock During the year ended May 31, 2016, the Company issued an aggregate of 19,249,500 shares of the Company’s common stock to various consultants pursuant to consulting agreements related to marketing and business advisory services. The term of the consulting agreements ranges from 1 month to 12 months. The Company valued these common shares at the fair value of $577,485 based on the sale of common stock in the recent private placement at $0.03 per common share and recognized the expense over the service periods. In connection with the issuance of these common shares, the Company recorded stock based compensation of $106,811 for the year ended May 31, 2017. During the year ended May 31, 2017, the Company sold an aggregate of 1,419,066 shares of its common stock at prices ranging from $0.25 to $0.62 per common share for proceeds of $422,501. During the year ended May 31, 2017, the Company issued an aggregate of 109,000 shares of the Company’s common stock to various consultants pursuant to consulting agreements related to marketing and business advisory services. The term of the consulting agreements ranges from 1 month to 6 months. The Company valued these common shares at the fair value of $36,620 based on the sale of common stock in the recent private placements at prices ranging from $0.25 to $0.62 per common share. In connection with the issuance of these common shares, the Company recorded stock based compensation of $12,089 and $24,531 for the years ended May 31, 2018 and 2017, respectively. In June 2017, the Company issued an aggregate of 80,000 shares of the Company’s common stock to various consultants pursuant to consulting agreements related to marketing and business advisory services. The term of the consulting agreements ranges from 2 months to 6 months. The Company valued these common shares at the fair value of $20,000 based on the sale of common stock in the recent private placements at $0.25 per common share. In connection with the issuance of these common shares, the Company recorded stock based compensation of $20,000. On September 26, 2017, the Company sold 100,000 shares of its common stock at $0.25 per common share for proceeds of $25,000. Between September 27, 2017 and October 2, 2017, the Company sold an aggregate of 271,000 shares of its common stock at $0.40 per common share for proceeds of $108,400. On September 29, 2017, the Company sold 375,000 shares of its common stock to an affiliated company at $0.40 per common share for proceeds of $150,000. The affiliated company is managed by the brother of the Company’s Chief Executive Officer. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
May 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8 – Commitments and Contingencies In September 2016, the Company executed a lease agreement in connection with its office and warehouse facility in California under operating leases for a period of 37 months commencing in October 2016 and expiring in October 2019. The Company shall pay a monthly base rent starting at $6,782 plus a pro rata share of operating expenses. The base rent is subject to an annual increase beginning in October 2017 as defined in the lease agreement. Rent expense amounted to $78,503 and $69,467 for the years ended May 31, 2018 and 2017, respectively. Future minimum rental payments required under this operating lease are as follows: Total 1 Year 2-3 Year Thereafter Operating lease $ 121,929 $ 85,664 $ 36,265 $ — Total $ 121,929 $ 85,664 $ 36,265 $ — In November 2017, the Company had executed an Agreement with a third party located in Hong Kong, China, whereby the third party shall promote, market, distribute and resell the Company’s products to end-user consumers through direct online sales or third party e-commerce platforms in the following territories: Hong Kong, Macau, and the People’s Republic of China. The term of the agreement was for 36 months from the effective date. Parties shall have the right to terminate this agreement, with or without cause, upon 60 days prior written notice. For services provided in connection with this agreement, the Company shall pay the third party 16.5% of the gross revenues generated from sales channels initiated and subsequently maintained by the third party or $3,300 per month, whichever is greater. In February 2018, the Company terminated this Agreement. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
May 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 9 – Related Party Transactions In August 2016, the Company received loan proceeds of $675,000 from a related party. The Company may prepay the loan in full during the first 60 days without incurring any interest on the balance. However interest-free period shall cease on October 1, 2016 at which time the note accrues interest at a rate of 8% per annum. The Company paid off this loan in September 2016 and the Company did not incur any interest charges. The related party is an affiliated company managed by the brother of the Company’s Chief Executive Officer. During the year ended May 31, 2017, the Company sold 1,010,000 shares of its common stock to an affiliated company at $0.25 per common share for proceeds of approximately $253,000. The affiliated company is managed by the brother of the Company’s Chief Executive Officer. The Company’s Chief Executive Officer, from time to time, provided advances to the Company for working capital purposes. At May 31, 2018 and 2017, the Company had a payable to the officer of $210 and $0, respectively. These advances were short-term in nature and non-interest bearing. On September 29, 2017, the Company sold 375,000 shares of its common stock to an affiliated company at $0.40 per common share for proceeds of approximately $150,000. The affiliated company is managed by the brother of the Company’s Chief Executive Officer. During the year ended May 31, 2018, the Company paid $10,100 to an affiliated company for advisory services rendered. The affiliated company is managed by the Company’s Chief Executive Officer. During the year ended May 31, 2018, the Company paid a total of $15,430 to an affiliated company for advisory services rendered. The related party is an affiliated company managed by the brother of the Company’s Chief Executive Officer. |
Concentrations
Concentrations | 12 Months Ended |
May 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Note 10 – Concentrations Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of trade accounts receivable and cash deposits, investments and cash equivalents instruments. The Company maintains its cash in bank deposits accounts. The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At May 31, 2018 and 2017, the Company held cash of approximately $0 and $167,000, respectively, in excess of federally insured limits. The Company has not experienced any losses in such accounts through May 31, 2018. Concentration of Revenue, Product Line, and Supplier During the year ended May 31, 2018 sales to three customers represented approximately 67% of the Company’s net sales at 45%, 11% and 11%. During the year ended May 31, 2017 sales to three customer represented approximately 48% of the Company’s net sales at 18%, 17% and 13%. During the year ended May 31, 2018 sales to customers outside the United States represented approximately 28% which consisted of 21% from Canada and 7% from Italy and for the year ended May 31, 2017, sales to customers outside the United States represented approximately 44% from Canada. During the year ended May 31, 2018, sales by product line which each represented over 10% of sales consisted of approximately 34% from sales of hair shampoo, 29% from sales of hair shampoo and conditioner, 13% from sale of hair treatment spray and repair products and 19% from sale of introductory kit (shampoo, conditioner and treatment spray). During the year ended May 31, 2017, sales by product line which each represented over 10% of sales consisted of approximately 22% from sales of hair shampoo, 17% from sales of hair shampoo and conditioner, 10% from sale of hair treatment and repair products and 41% from sale of introductory kit (shampoo, conditioner and treatment spray). As of May 31, 2018, accounts receivable from three customers represented approximately 60% at 34%, 14% and 12% and at May 31, 2017 from four customers represented approximately 89% at 18%, 30%, 10% and 31% of the accounts receivable, respectively. The Company purchased inventories and products from one vendor totaling approximately $412,000 (60% of the purchases) and two vendors totaling $184,000 (73% of the purchases at 61% and 12%) during the years ended May 31, 2018 and 2017, respectively. |
Income taxes
Income taxes | 12 Months Ended |
May 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Note 11 – Income taxes The Company has incurred aggregate net operating losses of approximately $965,200 for income tax purposes as of May 31, 2018. The net operating loss carries forward for United States income taxes, which may be available to reduce future years’ taxable income. These carry forwards will expire, if not utilized, through 2038. Management believes that the realization of the benefits from these losses appears not more than likely due to the Company’s limited operating history and continuing losses for United States income tax purposes. Accordingly, the Company has provided a 100% valuation allowance on the deferred tax asset to reduce the asset to zero. Management will review this valuation allowance periodically and make adjustments as necessary. The items accounting for the difference between income taxes at the effective statutory rate and the provision for income were as follows: For the Year Ended May 31, 2018 For the Year Ended May 31, 2017 Tax benefit computed at “expected” statutory rate of 34% $ (116,500 ) $ (183,200 ) State tax benefit of 9% (30,800 ) (48,500 ) Change in Federal tax rate at 21% 125,500 — Non-deductible expenses: Stock-based compensation 13,800 56,500 Increase in valuation allowance 8,000 175,200 Net income tax benefit $ — $ — The Company has a deferred tax asset which is summarized as follows at: Deferred tax assets: May 31, 2018 May 31, 2017 Net operating loss carryover $ 289,600 $ 281,600 Less: valuation allowance (289,600 ) (281,600 ) Net deferred tax asset $ — $ — On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. The Act decreases the U.S. corporate federal income tax rate from a maximum of 35% to a flat 21% effective January 1, 2018. The impact of the re-measurement on the Corporation’s net deferred tax asset, as of May 31, 2018, was an approximately $125,500 decrease in deferred tax assets, with a corresponding decrease in the Company’s valuation allowance, and no impact on income tax expense. The Act also includes a number of other provisions including, among others, the elimination of net operating loss carrybacks and limitations on the use of future losses, the repeal of the Alternative Minimum Tax regime and the repeal of the domestic production activities deduction. These provisions are not expected to have a material effect on the Corporation. Given the significant complexity of the Act and anticipated additional implementation guidance from the Internal Revenue Service, further implications of the Act may be identified in future periods. The Company provided a valuation allowance equal to the deferred income tax asset at May 31, 2018 and 2017 because it was not known whether future taxable income will be sufficient to utilize the loss carryforward. The increase in the allowance was $8,000 in fiscal 2018 and $175,200 in fiscal 2017. Additionally, the future utilization of the net operating loss carryforward to offset future taxable income may be subject to an annual limitation as a result of ownership changes that could occur in the future. If necessary, the deferred tax assets will be reduced by any carryforward that expires prior to utilization as a result of such limitations, with a corresponding reduction of the valuation allowance. The Company does not have any uncertain tax positions or events leading to uncertainty in a tax position. The Company’s 2015, 2016 and 2017 Corporate Income Tax Returns are subject to Internal Revenue Service examination. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
Going Concern | Going Concern As reflected in the accompanying financial statements, the Company has a net loss and net cash used in operations of $342,539 and $468,490, respectively, for the year ended May 31, 2018. Additionally the Company has an accumulated deficit of $4,488,167 at May 31, 2018. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of 12 months from the issuance date of this report. The ability of the Company to continue as a going concern is dependent on the Company’s ability to implement its business plan, raise capital, and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support its daily operations. Management intends to raise additional funds by way of a private or public offering. While the Company believes in the viability of its strategy to further implement its business plan and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The 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. |
Use of estimates | Use of estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates made by management include, but are not limited to, the allowance for doubtful accounts, inventory valuations, the useful life of property and equipment, the valuation of deferred tax assets, the value of stock-based compensation, and the fair value of non-cash common stock issuances. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid debt instruments and other short-term investments with maturities of three months or less, when purchased, to be cash equivalents. The Company maintains cash and cash equivalent balances at one financial institution that is insured by the Federal Deposit Insurance Corporation. |
Accounts receivable and allowance for doubtful accounts | Accounts receivable and allowance for doubtful accounts The Company has a policy of providing on allowance for doubtful accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to bad debt expense and included in the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. |
Prepaid expenses and other current assets | Prepaid expenses and other current assets Prepaid expenses and other current assets of $3,505 and $18,089 at May 31, 2018 and 2017, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses at May 31, 2017 primarily included prepayments in common stock for consulting services which are being amortized over the terms of their respective agreements while prepayments at May 31, 2018 primarily included cash prepayment to vendors. |
Advances to suppliers | Advances to suppliers Advances to a supplier represents the cash paid in advance for installment payments for the purchase of inventory. The advances to a supplier are interest free and unsecured. As of May 31, 2018 and 2017, advances to the Company’s major supplier amounted $3,413 and $16,135, respectively. Upon shipment of the purchase inventory, the Company reclassifies such advances to supplier into inventory. |
Inventory | Inventory The Company values inventory, consisting of finished goods and raw materials, at the lower of cost and net realizable value. Cost is determined using an average cost method. The Company reduces inventory for the diminution of value, resulting from product obsolescence, damage or other issues affecting marketability, equal to the difference between the cost of the inventory and its net realizable value. The Company evaluates its current level of inventory considering historical sales and other factors and, based on this evaluation, classifies inventory markdowns in the statement of operations as a component of cost of goods sold. These markdowns are estimates, which could vary significantly from actual requirements if future economic conditions, customer demand or competition differ from expectations. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed, and any resulting gains or losses are included in the statement of operations. |
Revenue recognition | Revenue recognition The Company followed paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. Consideration paid to promote and sell the Company’s products to customers is typically recorded as a reduction in revenues in accordance with Accounting Standard Codification (“ASC”) ASC 605-50-45-2, Revenue Recognition—Customer Payments and Incentives. The Company adopted Accounting Standards Update (“ASU”) ASU 2015-14 Revenue from Contracts with Customers for their fiscal year beginning June 1, 2018. The Company does not expect this ASU to have a material impact on its financial statements. |
Cost of Sales | Cost of Sales The primary components of cost of sales include the cost of the product and shipping fees. |
Shipping and Handling Costs | Shipping and Handling Costs The Company accounts for shipping and handling fees in accordance with paragraph 605-45-45-19 of the FASB Accounting Standards Codification. While amounts charged to customers for shipping products are included in revenues, the related costs of shipping products to customers are classified in marketing and selling expenses as incurred. Shipping costs included in marketing and selling expense were $37,423 and $41,834 for the year ended May 31, 2018 and 2017, respectively. |
Marketing, selling and advertising | Marketing, selling and advertising Marketing, selling and advertising costs are expensed as incurred. |
Customer Deposits | Customer Deposits Customer deposits consisted of prepayments from customers to the Company. The Company will recognize the prepayments as revenue upon delivery of products in compliance with its revenue recognition policy. |
Fair value measurements and fair value of financial instruments | Fair value measurements and fair value of financial instruments The Company adopted Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that requires the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures. ASC 820 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. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (“FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The estimated fair value of certain financial instruments, including prepaid expenses, deposits, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. |
Income Taxes | Income Taxes The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more likely than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all more likely than not to be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed. |
Impairment of long-lived assets | Impairment of long-lived assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than 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. The Company did not record any impairment losses during the year ended May 31, 2018 and 2017. |
Stock-based compensation | Stock-based compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718, “Compensation — Stock Compensation” (“ASC 718”), which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, “Equity Based Payments to Non-employees”, for share-based payments to consultants and other third-parties, compensation expense is determined at the measurement date. The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. |
Net loss per share of common stock | Net loss per share of common stock Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares during the period. Diluted net loss per share is computed using the weighted average number of common shares and potentially dilutive securities outstanding during the period. At May 31, 2018 and 2017, the Company has none and 430,000, respectively, potentially dilutive securities outstanding related to common stock warrants. Those potentially dilutive common stock equivalents were excluded from the dilutive loss per share calculation as they would be antidilutive due to the net loss. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2015, the FASB issued ASU 2015-14 Revenue from Contracts with Customers. The ASU defers the effective date of previously issued ASU 2014-09 (the new revenue recognition standard) by one year for both public and private companies. The ASU requires public entities to apply the new revenue recognition guidance for annual reporting periods beginning after December 15, 2017, and interim reporting periods within annual reporting periods beginning after December 15, 2017. Both public and nonpublic entities will be permitted to apply the new revenue recognition standard as of the original effective date for public entities (annual periods beginning after December 15, 2016). The Company will adopt this standard for their fiscal year beginning June 1, 2018. The Company does not expect this ASU to have a material impact on its financial statements. In February 2016, FASB issued ASU 2016-02, “Leases” (Topic 842). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. The new guidance will be effective for fiscal years beginning after December 15, 2018, and interim periods within those annual periods and is applied retrospectively. Early adoption is permitted. The Company does not believe the guidance will have a material impact on its financial statements. In January 2017, the FASB issued ASU No. 2017-4, “Intangibles – Goodwill and Other” (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test. When an indication of impairment was identified after performing the first step of the goodwill impairment test, Step 2 required that an entity determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) using the same procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Under the amendments in ASU No. 2017-4, an entity would perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying value. An entity would recognize an impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value. In addition, an entity must consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. A public business entity that is a SEC filer should adopt the amendments in ASU No. 2017-4 for its annual, or any interim, good will impairment tests in fiscal years beginning after December 15, 2019. The Company does not believe the guidance will have a material impact on its financial statements. In May 2017, the FASB released ASU 2017-09, “Compensation - Stock Compensation”. The update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC Topic 718. An entity shall account for the effects of a modification described in ASC paragraphs 718-20-35-3 through 35-9, unless all the following are met: (1) The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; (2) The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (3) The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The provisions of this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. The Company does not believe the guidance will have a material impact on its financial statements. In July 2017, the FASB issued ASU 2017-11 “Earnings Per Share” (Topic 260). The amendments in the update change the classification of certain equity-linked financial instruments (or embedded features) with down round features. The amendments also clarify existing disclosure requirements for equity-classified instruments. For freestanding equity-classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with Topic 260, Earnings Per Share, to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features would be subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). For public business entities, the amendments in Part I of this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company does not believe the guidance will have a material impact on its financial statements. In June 2018, the FASB issued ASU No. 2018-07 “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. The guidance is effective for public companies for fiscal years, and interim fiscal periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, but no earlier than a company’s adoption date of Topic 606, Revenue from Contracts with Customers. The Company is assessing ASU 2018-07 and does not expect it to have a material impact on its accounting and disclosures. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
May 31, 2018 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Accounts receivable, consisted of the following: May 31, May 31, Accounts receivable $ 32,733 $ 33,513 Less: Allowance for bad debts (2,742 ) (810 ) $ 29,991 $ 32,703 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
May 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventory consisted of the following: May 31, May 31, Finished goods $ 113,134 $ 82,494 Raw materials 208,403 47,300 $ 321,537 $ 129,794 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
May 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment, stated at cost, consisted of the following: Estimated life May 31, May 31, Furniture and fixtures 5 years $ 5,759 $ 5,398 Computer equipment 3 years 7,495 3,733 Less: Accumulated depreciation (4,905 ) (1,876 ) $ 8,349 $ 7,255 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
May 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments required under operating lease | Future minimum rental payments required under this operating lease are as follows: Total 1 Year 2-3 Year Thereafter Operating lease $ 121,929 $ 85,664 $ 36,265 $ — Total $ 121,929 $ 85,664 $ 36,265 $ — |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
May 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Statutory Rate and Provision for Income | For the Year Ended May 31, 2018 For the Year Ended May 31, 2017 Tax benefit computed at “expected” statutory rate of 34% $ (116,500 ) $ (183,200 ) State tax benefit of 9% (30,800 ) (48,500 ) Change in Federal tax rate at 21% 125,500 — Non-deductible expenses: Stock-based compensation 13,800 56,500 Increase in valuation allowance 8,000 175,200 Net income tax benefit $ — $ — |
Schedule of Deferred Tax Asset | May 31, 2018 May 31, 2017 Net operating loss carryover $ 289,600 $ 281,600 Less: valuation allowance (289,600 ) (281,600 ) Net deferred tax asset $ — $ — |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Summary of Significant Accounting Policies (Textual) | ||
Net loss | $ (342,539) | $ (538,777) |
Net cash used in operations | (468,490) | (369,965) |
Accumulated deficit | (4,488,167) | (4,145,628) |
Prepaid expenses and other current assets | 3,505 | 18,089 |
Advances to major supplier | 3,413 | 16,135 |
Shipping costs | $ 37,423 | $ 41,834 |
Potentially dilutive securities outstanding, shares | 430,000 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | May 31, 2018 | May 31, 2017 |
Receivables [Abstract] | ||
Accounts receivable | $ 32,733 | $ 33,513 |
Less: Allowance for bad debts | (2,742) | (810) |
Accounts receivable, net | $ 29,991 | $ 32,703 |
Accounts Receivable (Details Na
Accounts Receivable (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Accounts Receivable (Textual) | ||
Bad debt expense | $ 1,962 | $ 810 |
Inventory (Details)
Inventory (Details) - USD ($) | May 31, 2018 | May 31, 2017 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 113,134 | $ 82,494 |
Raw materials | 208,403 | 47,300 |
Inventory, net | $ 321,537 | $ 129,794 |
Inventory (Details Narrative)
Inventory (Details Narrative) | 12 Months Ended |
May 31, 2018USD ($) | |
Inventory (Textual) | |
Inventory held at third party locations | $ 64,485 |
Inventory held management abandoned | 3,285 |
Inventory held included cost of sales | $ 3,285 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Furniture and fixtures | $ 5,759 | $ 5,398 |
Computer equipment | 7,495 | 3,733 |
Less: Accumulated depreciation | (4,905) | (1,876) |
Property and equipment net | $ 8,349 | $ 7,255 |
Computer Equipment [Member] | ||
Estimated life | 3 years | |
Furniture and Fixtures [Member] | ||
Estimated life | 5 years |
Property and Equipment (Detai30
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Property and Equipment (Textual) | ||
Depreciation expense | $ 3,029 | $ 1,386 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Oct. 02, 2017 | Sep. 26, 2017 | Sep. 29, 2017 | Jun. 30, 2017 | May 31, 2018 | May 31, 2017 |
Stockholders' Equity (Textual) | ||||||
Shares of common stock | 100,000,000 | 100,000,000 | ||||
Shares of common stock, par value | $ 0.0001 | $ 0.0001 | ||||
Shares of preferred stock | 20,000,000 | 20,000,000 | ||||
Shares of preferred stock, par value | $ 0.0001 | $ 0.0001 | ||||
Shares issued for common stock | 375,000 | |||||
Share price | $ 0.25 | $ 0.40 | ||||
Proceeds of common stock | $ 25,000 | $ 150,000 | $ 283,400 | $ 422,501 | ||
Stock issued an aggregate of common stock value | 20,000 | 36,620 | ||||
Stock based compensation | $ 32,089 | $ 131,342 | ||||
Sale of common stock shares | 100,000 | |||||
Common Stock [Member] | ||||||
Stockholders' Equity (Textual) | ||||||
Shares issued for common stock | 271,000 | |||||
Share price | $ 0.40 | |||||
Proceeds of common stock | $ 108,400 | |||||
Stock issued an aggregate of common stock value | ||||||
Common Stock [Member] | Consulting Agreements [Member] | ||||||
Stockholders' Equity (Textual) | ||||||
Shares issued for common stock | 80,000 | |||||
Share price | $ 0.25 | |||||
Stock issued an aggregate of common stock value | $ 20,000 | |||||
Minimum [Member] | Consulting Agreements [Member] | ||||||
Stockholders' Equity (Textual) | ||||||
Consulting agreements term | 2 months | |||||
Stock based compensation | $ 20,000 | |||||
Maximum [Member] | Consulting Agreements [Member] | ||||||
Stockholders' Equity (Textual) | ||||||
Consulting agreements term | 6 months |
Commitments and Contingencies32
Commitments and Contingencies (Details) | May 31, 2018USD ($) |
Schedule of Future minimum rental payments for operating lease | |
1 Year | $ 85,664 |
2-3 Year | 36,265 |
Thereafter | |
Total | 121,929 |
Lease Agreements [Member] | |
Schedule of Future minimum rental payments for operating lease | |
1 Year | 85,664 |
2-3 Year | 36,265 |
Thereafter | |
Total | $ 121,929 |
Commitments and Contingencies33
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Commitments and Contingencies (Textual) | ||
Lease agreement, description | In September 2016, the Company executed a lease agreement in connection with its office and warehouse facility in California under operating leases for a period of 37 months commencing in October 2016 and expiring in October 2019. The Company shall pay a monthly base rent starting at $6,782 plus a pro rata share of operating expenses. The base rent is subject to an annual increase beginning in October 2017 as defined in the lease agreement. | |
Lease agreement period | 37 months | |
Lease expiration date | Oct. 31, 2019 | |
Monthly base rent | $ 6,782 | |
Lease rent expense | $ 78,503 | $ 69,467 |
Agreement with third party, description | In November 2017, the Company had executed an Agreement with a third party located in Hong Kong, China, whereby the third party shall promote, market, distribute and resell the Company’s products to end-user consumers through direct online sales or third party e-commerce platforms in the following territories: Hong Kong, Macau, and the People’s Republic of China. The term of the agreement was for 36 months from the effective date. Parties shall have the right to terminate this agreement, with or without cause, upon 60 days prior written notice. For services provided in connection with this agreement, the Company shall pay the third party 16.5% of the gross revenues generated from sales channel initiated and subsequently maintained by the third party or $3,300 per month, whichever is greater. | |
Inventory held in consignment | $ 6,782 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | ||
Sep. 29, 2017 | May 31, 2018 | May 31, 2017 | |
Related Party Transactions (Textual) | |||
Amount payable to officers | $ 210 | ||
Share sold to an affiliated company | 375,000 | ||
Price per share | $ 0.40 | ||
Proceeds from issuance of shares | $ 150,000 |
Concentrations (Details Narrati
Concentrations (Details Narrative) | 12 Months Ended | |
May 31, 2018USD ($)CustomerVendor | May 31, 2017USD ($)CustomerVendor | |
Concentrations (Textual) | ||
Amount of FDIC | $ 250,000 | |
Held in cash | $ 0 | $ 167,000 |
Sales Revenue, Net [Member] | ||
Concentrations (Textual) | ||
Number of customers | 3 | 3 |
Concentration risk percentage | 67.00% | 48.00% |
Sales Revenue, Net [Member] | UNITED STATES [Member] | ||
Concentrations (Textual) | ||
Concentration risk percentage | 62.00% | |
Sales Revenue, Net [Member] | CANADA [Member] | ||
Concentrations (Textual) | ||
Concentration risk percentage | 21.00% | 44.00% |
Sales Revenue, Net [Member] | ITALY [Member] | ||
Concentrations (Textual) | ||
Concentration risk percentage | 7.00% | |
Sales Revenue, Net [Member] | Product [Member] | ||
Concentrations (Textual) | ||
Concentration risk percentage | 10.00% | 10.00% |
Sales Revenue, Net [Member] | Hair Shampoo [Member] | ||
Concentrations (Textual) | ||
Concentration risk percentage | 34.00% | 22.00% |
Sales Revenue, Net [Member] | Hair Shampoo And Conditioner [Member] | ||
Concentrations (Textual) | ||
Concentration risk percentage | 29.00% | 17.00% |
Sales Revenue, Net [Member] | Hair Treatment And Repair Products [Member] | ||
Concentrations (Textual) | ||
Concentration risk percentage | 13.00% | 10.00% |
Sales Revenue, Net [Member] | Introductory Kit [Member] | ||
Concentrations (Textual) | ||
Concentration risk percentage | 19.00% | 41.00% |
Sales Revenue, Net [Member] | Customer One [Member] | ||
Concentrations (Textual) | ||
Concentration risk percentage | 45.00% | 18.00% |
Sales Revenue, Net [Member] | Customer Two [Member] | ||
Concentrations (Textual) | ||
Concentration risk percentage | 11.00% | 17.00% |
Sales Revenue, Net [Member] | Customer Three [Member] | ||
Concentrations (Textual) | ||
Concentration risk percentage | 11.00% | 13.00% |
Accounts Receivable [Member] | ||
Concentrations (Textual) | ||
Number of customers | Customer | 3 | 4 |
Concentration risk percentage | 60.00% | 89.00% |
Accounts Receivable [Member] | Customer One [Member] | ||
Concentrations (Textual) | ||
Concentration risk percentage | 34.00% | 18.00% |
Accounts Receivable [Member] | Customer Two [Member] | ||
Concentrations (Textual) | ||
Concentration risk percentage | 14.00% | 30.00% |
Accounts Receivable [Member] | Customer Three [Member] | ||
Concentrations (Textual) | ||
Concentration risk percentage | 12.00% | 10.00% |
Accounts Receivable [Member] | Customer Four [Member] | ||
Concentrations (Textual) | ||
Concentration risk percentage | 31.00% | |
Vendors [Member] | ||
Concentrations (Textual) | ||
Number of vendors | Vendor | 1 | 2 |
Purchased inventories and products | $ 412,000 | $ 184,000 |
Percentage of purchases | 60.00% | 73.00% |
Vendor One [Member] | ||
Concentrations (Textual) | ||
Percentage of purchases | 61.00% | |
Vendor Two [Member] | ||
Concentrations (Textual) | ||
Percentage of purchases | 12.00% |
Income taxes (Details)
Income taxes (Details) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit at statutory rate | $ (116,500) | $ (183,200) |
State tax benefit | (30,800) | (48,500) |
Change in Federal tax rate | 125,500 | |
Non-deductible expenses: Stock-based compensation | 13,800 | 56,500 |
Increase in valuation allowance | 8,000 | 175,200 |
Net income tax benefit |
Income taxes (Details) (Parenth
Income taxes (Details) (Parenthetical) | 12 Months Ended |
May 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Tax benefit statutory rate | 34.00% |
State tax benefit rate | 9.00% |
Change in Federal tax rate | 21.00% |
Income taxes (Details 2)
Income taxes (Details 2) - USD ($) | May 31, 2018 | May 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryover | $ 289,600 | $ 281,600 |
Less: valuation allowance | (289,600) | (281,600) |
Net deferred tax asset |