Cover
Cover - shares | 9 Months Ended | |
Jan. 31, 2021 | Mar. 18, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jan. 31, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --04-30 | |
Entity File Number | 000-55554 | |
Entity Registrant Name | Lux Amber, Corp. | |
Entity Central Index Key | 0001740695 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 31,111,658 | |
Entity State of incorp | NV |
INTERIM CONDENSED CONSOLIDATED
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Jan. 31, 2021 | Apr. 30, 2020 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 0 | $ 49,185 |
Accounts receivable - trade | 39,274 | 106,876 |
Inventory | 156,618 | 131,205 |
Prepaid expenses | 2,000 | 8,711 |
Other current assets | 37,832 | 770 |
Total current assets | 235,724 | 296,747 |
GOODWILL | 2,294,952 | 2,294,952 |
OTHER INTANGIBLES | 15,000 | 15,000 |
OTHER LONG-TERM ASSETS | 35,165 | 12,700 |
FIXED ASSETS | ||
Furniture, fixtures, and office equipment | 36,385 | 26,191 |
Vehicles and trailers | 269,062 | 194,140 |
Equipment | 625,371 | 608,274 |
Leasehold improvements | 12,190 | 12,190 |
Assets in process | 45,402 | 44,551 |
Fixed assets, gross | 988,410 | 885,345 |
Accumulated depreciation | (430,677) | (316,086) |
Fixed assets, net | 557,733 | 569,259 |
RIGHT OF USE ASSETS | 296,618 | 423,815 |
TOTAL ASSETS | 3,435,192 | 3,612,474 |
CURRENT LIABILITIES | ||
Accounts payable | 461,811 | 288,864 |
Accrued expenses | 1,260,132 | 805,853 |
Related party payables | 60,820 | 85,603 |
Notes payable - current portion | 12,889 | 762,889 |
Right of use - current portion | 172,498 | 190,262 |
Total current liabilities | 1,968,150 | 2,133,471 |
NON-CURRENT LIABILITIES | ||
Notes payable | 18,731 | 27,585 |
Right of use liabilities | 137,501 | 236,782 |
TOTAL LIABILITIES | 2,124,382 | 2,397,838 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.0001 par value, 75,000,000 shares authorized: 31,091,658 issued and 29,441,708 issued | 3,088 | 2,943 |
Additional paid-in-capital | 15,705,896 | 14,095,093 |
Accumulated deficit | (14,398,174) | (12,884,427) |
Total Lux Amber, Corp. stockholders' equity | 1,310,810 | 1,213,609 |
Non-controlling interest | 0 | 1,027 |
Total equity | 1,310,810 | 1,214,636 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 3,435,192 | $ 3,612,474 |
INTERIM CONDENSED CONSOLIDATE_2
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Jan. 31, 2021 | Apr. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 31,091,658 | 29,441,708 |
Common stock, shares outstanding | 31,091,658 | 29,441,708 |
INTERIM CONDENSED CONSOLIDATE_3
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2021 | Jan. 31, 2020 | Jan. 31, 2021 | Jan. 31, 2020 | |
Income Statement [Abstract] | ||||
Revenues | $ 130,183 | $ 119,451 | $ 816,598 | $ 845,047 |
Cost of goods sold | 108,695 | 351,288 | 534,149 | 868,689 |
Gross profit (loss) | 21,488 | (231,837) | 282,449 | (23,642) |
Product delivery expenses | 103,629 | 113,794 | 404,895 | 252,230 |
General and administrative expenses | 10,547 | 1,757,511 | 1,038,304 | 2,577,870 |
Selling expenses | 34,695 | 31,547 | 70,450 | 114,220 |
Depreciation and amortization | 39,624 | 40,893 | 114,591 | 93,807 |
Total operating expenses | 188,495 | 1,943,745 | 1,628,240 | 3,038,127 |
Loss from operations | (167,007) | (2,175,582) | (1,345,791) | (3,061,769) |
Other (income)/expenses | ||||
Interest income | 0 | (58) | 0 | (208) |
Interest expense | 29,673 | 10,959 | 52,968 | 20,656 |
Other (income)/expense | 118,268 | (8,110) | 114,988 | 7,700 |
Total other (income) expense | 147,941 | 2,791 | 167,956 | 28,148 |
Net loss | (314,948) | (2,178,373) | (1,513,747) | (3,089,917) |
Less: net loss attributable to non-controlling interest | 0 | (256) | 0 | (898) |
Net loss attributable to Lux Amber Corp. | $ (314,948) | $ (2,178,117) | $ (1,513,747) | $ (3,089,019) |
Loss per common share: Basic and Diluted | $ (0.01) | $ (0.08) | $ (0.05) | $ (0.11) |
Weighted Average Number of Common Shares Outstanding: Basic and Diluted | 30,958,663 | 28,053,167 | 30,389,570 | 28,053,167 |
INTERIM CONDENSED CONSOLIDATE_4
INTERIM CONDENSED CONSOLIDATED STATEMENTS CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Noncontrolling Interest | Total |
Beginning balance, shares at Apr. 30, 2019 | 25,969,293 | ||||
Beginning balance, value at Apr. 30, 2019 | $ 2,597 | $ 10,767,919 | $ (8,461,391) | $ (27,918) | $ 2,281,207 |
Warrants exercised, share | 260,000 | ||||
Warrants exercised, value | $ 26 | 129,974 | 130,000 | ||
Common stock repurchased, shares | |||||
Common stock repurchased, value | $ (2) | (22,392) | (22,394) | ||
Common stock issued for cash, shares | 437,332 | ||||
Common stock issued for cash, value | $ 43 | 655,955 | 655,998 | ||
Notes payable converted to common stock, shares | 1,386,524 | ||||
Notes payable converted to common stock, value | $ 139 | 499,861 | 500,000 | ||
Share based compensation | 1,484,914 | 1,484,914 | |||
Net loss | (3,089,019) | (897) | (3,089,917) | ||
Ending balance, shares at Jan. 31, 2020 | 28,053,149 | ||||
Ending balance, value at Jan. 31, 2020 | $ 2,803 | 13,516,231 | (11,550,410) | (28,815) | 1,939,808 |
Beginning balance, shares at Oct. 31, 2019 | 26,229,292 | ||||
Beginning balance, value at Oct. 31, 2019 | $ 2,679 | 11,756,018 | (9,372,293) | (28,560) | 2,357,845 |
Common stock repurchased, shares | |||||
Common stock repurchased, value | $ (2) | (22,392) | (22,394) | ||
Common stock issued for cash, shares | 34,000 | ||||
Common stock issued for cash, value | $ 3 | 50,997 | 51,000 | ||
Notes payable converted to common stock, shares | 1,219,857 | ||||
Notes payable converted to common stock, value | $ 122 | 439,878 | 440,000 | ||
Share based compensation | 1,291,730 | 1,291,730 | |||
Net loss | (2,178,117) | (256) | (2,178,373) | ||
Ending balance, shares at Jan. 31, 2020 | 28,053,149 | ||||
Ending balance, value at Jan. 31, 2020 | $ 2,803 | 13,516,231 | (11,550,410) | (28,815) | 1,939,808 |
Beginning balance, shares at Apr. 30, 2020 | 29,441,708 | ||||
Beginning balance, value at Apr. 30, 2020 | $ 2,943 | 14,095,093 | (12,884,427) | 1,027 | 1,214,636 |
Common stock repurchased, shares | (36,250) | ||||
Common stock repurchased, value | $ (5) | (45,308) | (45,313) | ||
Notes payable with interest converted to common stock, shares | 1,686,467 | ||||
Notes payable with interest converted to common stock, value | $ 150 | 1,507,265 | 1,507,415 | ||
Dissolution of PCNM | (1,027) | (1,027) | |||
Share based compensation | 133,659 | 133,659 | |||
Adjustments, shares | (267) | ||||
Adjustments, value | 15,187 | 15,187 | |||
Net loss | (1,513,747) | (1,513,747) | |||
Ending balance, shares at Jan. 31, 2021 | 31,091,658 | ||||
Ending balance, value at Jan. 31, 2021 | $ 3,088 | 15,705,896 | (14,398,174) | 1,310,810 | |
Beginning balance, shares at Oct. 31, 2020 | 30,944,742 | ||||
Beginning balance, value at Oct. 31, 2020 | $ 3,073 | 15,477,714 | (14,083,226) | 1,397,561 | |
Common stock repurchased, value | |||||
Notes payable with interest converted to common stock, shares | 146,916 | ||||
Notes payable with interest converted to common stock, value | $ 15 | 183,629 | 183,644 | ||
Share based compensation | 44,553 | 44,553 | |||
Net loss | (314,948) | (314,948) | |||
Ending balance, shares at Jan. 31, 2021 | 31,091,658 | ||||
Ending balance, value at Jan. 31, 2021 | $ 3,088 | $ 15,705,896 | $ (14,398,174) | $ 1,310,810 |
INTERIM CONDENSED CONSOLIDATE_5
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
CASH FLOW FROM OPERATING ACTIVITIES | ||
Net loss | $ (1,513,747) | $ (3,089,917) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 241,788 | 151,445 |
Loss on sale of assets | 0 | 26,075 |
Share based compensation | 133,659 | 1,484,914 |
Right to use interest | 11,898 | 5,425 |
Accounts receivable - trade | 67,602 | 31,218 |
Inventory | (25,413) | 63,030 |
Prepaid expenses | 6,711 | 15,756 |
Other current assets | (37,062) | (90,168) |
Accounts payable | 172,947 | 0 |
Interest payable | 0 | 123,046 |
Accrued expenses | 476,001 | (216,681) |
Due to related parties | (37,542) | 0 |
Net cash used in operating activities | (503,158) | (1,495,857) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Deposit paid | 0 | (12,400) |
Expenditures for property and equipment | (103,065) | (170,032) |
Total cash used in investing activities | (103,065) | (182,432) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from convertible notes payable | 730,300 | 1,000,000 |
Payments on notes payable | (8,854) | (8,081) |
Payments on right of use liabilities | (119,097) | (86,496) |
Payments for the repurchase of common stock | (45,313) | (22,394) |
Proceeds from the sale of common stock | 0 | 655,998 |
Proceeds from execution of warrants | 0 | 130,000 |
Net cash provided by financing activities | 557,036 | 1,669,027 |
Net change in cash and cash equivalents | (49,185) | (9,262) |
Cash at beginning of period | 49,185 | 251,454 |
Cash at end of period | 0 | 242,192 |
Cash paid during period for: | ||
Interest | 32,057 | 15,070 |
Taxes | 0 | 0 |
Noncash Financing Activities | ||
Convertible notes and accrued interest converted to common stock | $ (1,507,415) | $ (500,000) |
NATURE OF BUSINESS
NATURE OF BUSINESS | 9 Months Ended |
Jan. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | NATURE OF BUSINESS Lux Amber, Corp. (the “Company”) a Nevada corporation, is an international specialty chemical company. Its principal executive offices are located at 145 Rose Lane, Suite 102, Frisco, Texas 75036. The Company has three (3) wholly owned subsidiaries: Worldwide Specialty Chemicals, Inc. (“WSCI”), Industrial Chem Solutions, Inc. (“ICS”), and Safeway Pest Elimination, LLC, (“SPE”). Each of ICS and SPE serves as both a producer and distributor of environmentally safe, specialty chemicals. The Company and its subsidiaries are located at 145 Rose Lane, Suite 102, Frisco, TX 75036. The products sold by the Company and its subsidiaries utilize all-natural and renewable resources, contain no dangerous chemicals or additives, and offer “green” solutions to its customers. ICS’ product line includes asphalt release agents, industrial cleaners, environmental remediation gels, odor control agents, and consumer friendly cleaners for a wide range of uses, including construction, environmental remediation, hazardous materials clean-up, nuclear decommissioning, industrial cleaning, and odor control. SPE products are designed for the elimination and control of pests. |
1. SUMMARY OF SIGNIFICANT ACCOU
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Jan. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting polices consistently applied in the preparation of the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) is as follows. Basis of Consolidation The consolidated financial statements include the accounts of Worldwide Specialty Chemicals, Inc. (WSCI), Industrial Chem Solutions, Inc. (ICS), and Safeway Pest Elimination, LLC (SPE). All significant intercompany accounts and transactions have been eliminated in consolidation. Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial reporting and the instructions for Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they include all information and footnote disclosures necessary for a complete presentation of the financial position, results of operations, cash flows, and stockholder’s equity in conformity with GAAP. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. The unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s most recently filed Form 10-KT (as amended) as of and for the transitional period ended April 30, 2020 that was filed on August 18, 2020. Operating results for the nine-months ended January 31, 2021, are not necessarily indicative of the results that can be expected for the year ending April 30, 2021. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires 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. Fair Value of Financial Instruments FASB ASC 825-10, Recognition and Measurement of Financial Assets and Financial Liabilities, requires disclosure of fair value information about certain financial instruments, including, but not limited to, cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable, accrued expenses and notes payable. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management on January 31, 2021 and April 30, 2020. The carrying value of the financial instruments included in the Company’s financial statements approximated their fair values. The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are carried at, or approximate, fair value as of the reporting date because of their short-term nature. The carrying value of the notes payable approximates fair value as they bear market rates of interest. Basic and Diluted Net Loss Per Share Basic net loss per share is computed using the weighted average number of common shares outstanding. Diluted loss per share has not been presented because there are no dilutive items. Diluted earnings loss per share is based on the assumption that all dilutive stock options, warrants, and convertible debt are converted or exercised by applying the treasury stock method. Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Options, warrants and/or convertible debt will have a dilutive effect, during periods of net profit, only when the average market price of the common stock during the period exceeds the exercise or conversion price of the items. For the nine months ended January 31, 2021 and 2020, approximately 82,668 and 82,668 common stock warrants, respectively, and 6,569,750 and 6,433,083 common stock options, respectively, were not added to the diluted average shares because inclusion of such warrants and options would be antidilutive. For the three months ended January 31, 2021 and 2020, approximately 82,668 and 82,668 common stock warrants, respectively, and 6,569,750 and 6,433,083 common stock options, respectively, were not added to the diluted average shares because inclusion of such warrants and options would be antidilutive. Cash and Cash Equivalents The Company considers all highly liquid investments with an initial maturity of three months or less, when purchased, to be cash equivalents. The Company maintains cash balances at several financial institutions located throughout the United States, which at times may exceed insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are trade receivables from product sales recorded at invoiced amount and generally do not bear interest. An allowance for doubtful accounts is established, as necessary, based on past experience and other factors which, in management's judgment, deserve current recognition in estimating bad debts. Such factors include growth and composition of accounts receivable, the relationship of the allowance for doubtful accounts to accounts receivable, and current economic conditions. The determination of the collectability of amounts due requires the Company to make judgments regarding future events and trends. Allowances for doubtful accounts are determined based on assessing the Company’s portfolio on an individual customer and on an overall basis. This process consists of a review of historical collection experience, current aging status of the customer account, and the financial condition of the Company’s customers. Based on a review of these factors, the Company establishes or adjusts the allowance for specific customers and the accounts receivable portfolio as a whole. On January 31, 2020 and April 30, 2020, the allowance for doubtful accounts was $0. Revenue Recognition On January 1, 2018, we adopted Accounting Standards Committee 606 (“ASC 606”), Revenue from Contracts with Customers, which provides guidance on how revenue with customers should be recognized. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing service. Revenue from product sold is recognized when obligations with the customer are satisfied, which generally occurs with the transfer or delivery of the product, signifying the point in time when the customer obtains control of the promised goods. Our performance obligation is delivering the product to the customer; and therefore, the transaction price, which is stated on the invoice, is allocated 100% to the sole performance obligation of product delivery. Revenue from service, if applicable, would be recognized when the services are provided, or the customer receives the benefit, which is over time. For the period ended January 31, 2021 and 2020, all revenue was from products sold. Our sales policies do not provide for general rights of return, and payment is due net of 15 days. We do not record estimated reductions to revenue for customer programs and incentive offerings including pricing arrangements, promotions and other volume-based incentives at the time of the sale. We also do not record estimated reserves for product returns and credits at the time of sale and anticipated uncollectible accounts. Inventory Inventory is stated at the lower of cost or net realizable value, with cost determined on a first-in first-out basis. The carrying value of inventory is reduced for estimated obsolescence. The Company evaluates the inventory carrying value for potential excess and obsolete inventory exposures by analyzing historical and anticipated demand. The following table sets forth the components of the Company’s inventory balances as of: January 31, April 30, Finished goods $ 123,259 $ 92,568 Raw materials 50,649 55,927 Obsolescence (17,290 ) (17,290 ) $ 156,618 $ 131,205 Fixed Assets Fixed assets consist of furniture, fixtures and office equipment, vehicles and trailers, equipment and leasehold improvements that are stated at cost, less accumulated depreciation. Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to earnings over their estimated service lives (3 – 10 years) under the straight-line method. Maintenance and repairs are charged to expenses as incurred; major repairs and replacements are capitalized. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Goodwill Goodwill represents the excess of the value of the purchase price and related costs over the identifiable assets from business acquisitions. The Company conducts an annual impairment assessment, at the reporting unit level, of its recorded goodwill. The Company assesses qualitative factors in order to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount. The qualitative factors evaluated by the Company include macro-economic conditions of the local business environment, overall financial performance, and other entity specific factors as deemed appropriate. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than the carrying amount, management determines if the reporting unit’s carrying value exceeds its fair value and records an impairment for such amounts. Management determined, by assessing the qualitative factors, that it is more likely than not that the fair value of the reporting unit is greater than the carrying value. Management does not consider the value of goodwill recorded for ICS in the accompanying consolidated balance sheet to be impaired as of January 31, 2021 and April 30, 2020. License Fee ICS pays 10% of the net selling price to CBI Polymers, Inc., as a mutually acceptable license fee. E. Thomas Layton, Chairman and CEO of the Company, is also the Chairman and CEO and controlling shareholder of CBI Polymers, Inc. See discussion of expenses incurred at Note 7. Share-Based Compensation The Company recognizes compensation expense for all share-based payments in accordance with FASB Codification Topic 718, Compensation — Stock Compensation, (ASC 718). Under the fair value recognition provisions of ASC 718, the Company recognizes share-based compensation expense, net of an estimated forfeiture rate, over the requisite service period of the award. The fair value at the measurement date of stock options is estimated using the Black-Scholes option-pricing model. Compensation expense is recognized on a straight-line basis over the vesting period based on the estimated number of stock options that are expected to vest. The Company estimates forfeitures to be 50% for options that vest over time. Income Taxes The Company accounts for Federal and state income taxes using the asset and liability approach for financial accounting and reporting for income taxes based on tax effects of differences between the financial statement and tax basis of assets and liabilities. The Company accounts for all uncertain tax positions in accordance with ASC Topic 740 – Income Taxes From time to time, the Company may be audited by taxing authorities. These audits could result in proposed assessments of additional taxes. The Company believes that its tax positions comply in all material respects with applicable tax law. However, tax law is subject to interpretation, and interpretations by taxing authorities could be different from those of the Company, which could result in the imposition of additional taxes. The Company’s federal returns since 2016 are still subject to examination by taxing authorities. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred substantial operating losses resulting in an accumulated deficit of $14,398,174 and $12,884,427 on January 31, 2021 and April 30, 2020, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are being issued. As such, the Company will need to arrange for additional financing to fully implement its business plan, including continued growth and establishment of a stronger brand. The Company is actively seeking growth of its service offerings, both organically and via new client relationships. In the ordinary course of the Company’s business, management is trying to raise additional capital through sales of common stock as well as seeking debt financing from third parties. There are current indications that additional financing will be available on favorable terms. In addition, the company is working to establish creditworthiness by establishing a line-of-credit and entering into a sale-lease back on certain assets. If additional financing is not available, the Company will need to reduce salaries, defer or cancel development programs, planned initiatives and overhead expenditures. The failure to adequately fund its capital requirements could have a material adverse effect on the Company’s business, financial condition and results of operations, including potential discontinuance of operations. Moreover, the sale of additional equity securities to raise financing will result in additional dilution to the Company’s stockholders. Additionally, incurring additional indebtedness could involve an increased debt service cash obligation, as well as the imposition of covenants that restrict the Company’s operations or the Company’s ability to perform on its current debt service requirements. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. While the company recognizes the significant impact of additional financing, the company is an emerging growth company serving large and growing markets and it will continue to sell securities and enter into financing programs which are deemed to be prudent. Recently Issued Accounting Pronouncements Pronouncements Recently Adopted In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill impairment Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13 Financial Instruments-Credit Losses |
2. ACCOUNTS RECEIVABLE
2. ACCOUNTS RECEIVABLE | 9 Months Ended |
Jan. 31, 2021 | |
Receivables [Abstract] | |
Accounts Receivable | 2. ACCOUNTS RECEIVABLE Accounts receivables relate to trade receivables from product sales made by the Company. Accounts receivables consist of the following on January 31, 2021 and April 30, 2020: January 31, April 30, Trade receivables $ 39,274 $ 106,876 |
3. NOTES PAYABLE
3. NOTES PAYABLE | 9 Months Ended |
Jan. 31, 2021 | |
Debt Disclosure [Abstract] | |
Notes Payable | 3. NOTES PAYABLE Convertible Promissory Notes Payable During the year ended April 30, 2020, the Company issued a round of convertible debentures worth $750,000. The debentures are convertible into shares of the Company's common stock at the maturity date of June 15, 2020 and pay any unpaid interest at a rate of 8%. As of July 31, 2020, this round of debentures has been converted into 872,093 shares of common stock at a price of $0.86 per share and the accrued interest unpaid amount of $13,326 was converted into 15,765 shares of common stock at a price of $0.86 per share. The remaining $1,666 of accrued interest was paid as of August 11, 2020. During the three-month period ending July 31, 2020, the Company began offering a round of convertible debentures worth $1,000,000. During the first quarter $551,300 were issued. This round of debentures has been converted into 641,048 shares of common stock at a price of $0.86 per share and the accrued interest unpaid amount of $16,459 was converted into 10,645 shares of common stock at a price of $0.86 per share. During the three-month period ending October 31, 2020, the Company began offering a round of convertible debentures worth $1,000,000. During the period $20,000 were issued. This amount was converted into 16,000 shares of common stock at a price of $1.25 per share and the accrued interest unpaid amount of $430 was converted into 344 shares of common stock at a price of $1.25 per share on January 15 th During the three-month period ending January 31, 2021, the Company continued offering a round of convertible debentures worth $1,000,000. During the three-month period ended January 31, 2021, $159,000 were issued. The debentures are convertible into shares of the Company's common stock at the maturity date of January 15, 2021 and pay any unpaid interest at a rate of 8%. As of January 31, 2021, this round of debentures was converted 127,200 shares of common stock at a price of $1.25 per share and accrued interest of $1,644 was converted into 1,316 shares of common stock at a price of $1.25 per share. Vehicles and Equipment Notes Payable The Company has one note payable relating to the purchase of a Company vehicle as of January 31, 2021. The balance outstanding under the note payable was $31,620 as of January 31, 2021. The note payable bears interest of 5.99% with principal and interest due monthly. The note matures in September 2023. The Company had the same note payable relating to the purchase of a Company vehicle as of April 30, 2020 with a balance outstanding of $40,474. The Company’s future minimum principal payments as of January 31, 2021 are as follows: 2021 $ 2,888 2022 15,285 2023 13,447 $ 31,620 |
4. ACCRUED EXPENSES
4. ACCRUED EXPENSES | 9 Months Ended |
Jan. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 4. ACCRUED EXPENSES Accrued expenses primarily, consisting of accrued salaries for officers and executive management, include the following balance on January 31, 2021 and April 30, 2020: January 31, April 30, Accrued Compensation $ 933,362 $ 469,004 Other Accrued Expenses 326,770 336,849 $ 1,260,132 $ 805,853 |
5. COMMITMENTS, CONTINGENCIES A
5. COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS | 9 Months Ended |
Jan. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Concentrations | 5. COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS Leases The Company adopted the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) ASU 2016-02, Leases on January 1, 2019 on a modified retrospective basis. The initial adoption of the standard recognized right-of-use assets of $493,832 and lease liabilities of $498,361 on the Company’s consolidated balance sheet with no impact on the Company's results of operations. The Company elected the hindsight practical expedient and the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs for all leases. As of January 31, 2021, the weighted average remaining lease term and weighted average discount rate for financing leases was 2.2 years and 3.5%, respectively. The Company's future financing lease obligations that have not yet commenced are immaterial. For nine months ending January 31, 2021 and 2020, the Company's cash paid for financing leases was $119,097 and $42,202, and short-term lease costs were $0 and $4,464, respectively. For three months ending January 31, 2021 and 2020, the Company's cash paid for financing leases was $38,476 and $31,200, and short-term lease costs were $0 and $3,336, respectively. The Company’s undiscounted annual future minimum lease payments as of January 31, 2021 consist of: 2021 $ 43,828 2022 169,607 2023 88,298 2024 12,590 2025 10,884 Total lease payments 325,207 Interest (15,208 ) Present value of lease liabilities $ 309,999 Concentrations For the nine months ended January 31, 2021, the Company had four customers which made up 63% of the outstanding accounts receivable balance. For the nine months ended January 31, 2020, the Company had two customers which made up 45% of the outstanding accounts receivable balance. For the nine months ended January 31, 2021, the Company had two customers which made up 45% of total revenues. For the nine months ended January 31, 2020, the Company had two customers which made up 41% of total revenues. For the three months ended January 31, 2021, the Company had two customers which made up 48% of total revenues. For the three months ended January 31, 2019, the Company had two customers which made up 51% of total revenues. |
6. STOCKHOLDERS' EQUITY
6. STOCKHOLDERS' EQUITY | 9 Months Ended |
Jan. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | 6. STOCKHOLDERS’ EQUITY Common Stock and Preferred Stock As of January 31, 2021, and 2020, the authorized share capital of the Company consisted of 75,000,000 shares of common stock, $0.0001 par value. No other classes of stock are authorized. Common Stock During the nine months ended January 31, 2021, the Company has 36,250 common shares repurchased at $1.25 per share for a total cash payment amount of $45,313 including interest. For the nine months ended January 31, 2020, the Company repurchased common stock, though the shares were not returned, worth $22,394 including interest. For the three months ended January 31, 2021, the Company had no sale or repurchase of common stock. For the three months ended January 31, 2020, the Company repurchased common stock, though the shares were not returned, worth $22,394 including interest. Warrants During the nine months ended January 31, 2021 and 2020, there were 0 and 260,000 warrants exercised at $.50 per share for a total cash amount of $0 and $130,000, respectively. For the three months ended January 31, 2021, the Company had no sale or repurchase of warrants. As of January 31, 2021, and 2020, there were 82,668 and 82,668 common stock warrants outstanding, respectively, with an exercise price of $0.50. Stock option plan On the effective date of the March 23, 2020 merger transaction, the Company assumed all of WSCI’s rights and obligations under WSCI’s Second Amended Stock Option Plan (the “Plan”), as well as WSCI’s obligations under the stock options granted on or prior to March 23, 2020. The Board of Directors of the Company has the authority and discretion to grant stock options. The maximum number of shares of stock that may be issued pursuant to the exercise of options under the Plan is 10,000,000. Eligible individuals include any employee or director of the Company and any consultant providing services to the Company. The expiration date and exercise price for each stock option grant are as established by the Board of Directors of the Company. No option may be issued under the Plan after February 1, 2027. During the nine months ended January 31, 2021 and 2020, there were 0 and 2,150,000 common stock options granted. The options granted have an exercise price of $1.50 and 1,350,000 vested immediately. The remaining 800,000 vest over a four-year period with the first quarter vesting immediately and the balance vesting one quarter per year for three years. Stock option activity during the nine-month period ended January 31, 2021 is summarized as follows: Shares Under Option Price Per Share Weighted Average Exercise Price Weighted Average Remaining Contractual Life Outstanding - beginning of period 7,309,750 $ 0.00 - 1.50 $ 1.18 113 months Granted – $ – $ – – Exercised – $ – $ – – Canceled or expired – $ – $ – – Outstanding - end of period 7,309,750 $ 0.00 - 1.50 $ 1.12 99 months Exercisable - end of period 6,569,750 $ 0.92 86 months Stock option activity during the nine-month period ended January 31, 2020 is summarized as follows: Shares Under Option Price Per Share Weighted Average Exercise Price Weighted Average Remaining Contractual Life Outstanding - beginning of period 5,386,418 $ 0.00 - 1.50 $ 0.79 98 months Granted 2,150,000 $ 1.50 $ 1.50 – Exercised – $ – $ – – Canceled or expired – $ – $ – – Outstanding - end of period 7,686,418 $ 0.00 - 1.50 $ 0.98 99 months Exercisable - end of period 6,433,083 $ 1.16 125 months The fair value of each option grant is calculated using the following assumptions: January 31, January 31, Expected life – years NA 5 Interest rate NA 1.78-2.03% Volatility NA 71.70% Dividend yield –% –% Total share-based compensation expense (including stock grants) included in salaries and wages was $133,659 and $1,484,914 for the nine months ended January 31, 2021 and 2020, respectively. Total share-based compensation expense (including stock grants) included in salaries and wages was $44,553 and $1,291,730 for the three months ended January 31, 2021 and 2020, respectively. Unamortized share-based compensation expense amounted to $326,722, which is expected to be recognized over the next 22 months as of January 31, 2021. |
7. RELATED PARTY TRANSACTIONS
7. RELATED PARTY TRANSACTIONS | 9 Months Ended |
Jan. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 7. RELATED PARTY TRANSACTIONS During the nine months ended January 31, 2021 and 2020, the Company incurred consulting fees of $214,487 and $276,464 to five separate entities owned by five current shareholders. An additional $74,000 and $34,000 in consulting fees were incurred by the Company from an entity owned by the spouse of the CEO during the nine months ended January 31, 2021 and 2020, respectively. The total related party consulting fees unpaid balance due was $62,693 and $38,608 as of January 31, 2021 and 2020, respectively, and is included in accounts payable in the accompanying consolidated financial statements. During the three months ended January 31, 2021 and 2020, the Company incurred consulting fees of $62,693 and $37,495 to four separate entities owned by four current shareholders. The total related party consulting fees unpaid balance due was $30,741 and $24,272 as of January 31, 2021 and 2020, respectively, and is included in accounts payable in the accompanying consolidated financial statements. The Company is in effect a sales representative of CBI Polymers, Inc. pursuant to the Exclusive Patent License Agreement between the Company and CBI Polymers. CBI Polymers and the Company are companies under the common control of E. Thomas Layton, the Company’s chairman and chief executive officer. There are no other transactions or contracts between CBI Polymers and the Company other than those discussed in this report. There was $615 and $0 due to CBI Polymers as of January 31, 2021 and April 30, 2020, respectively. In fiscal year April 2020, the Company received $35,000 from a related party, Maine Consultants, Inc. and in exchange therefor, issued a promissory note to Maine Consultants. On May 13, 2020, the promissory note was paid in full. Two separate related parties are allowing the Company to rent vehicles for a monthly fee of $1,650 and $2,957. During the three-month period ended January 31, 2021, the $2,957 lease payment was reduced to $957 for the remainder of the lease term. For the nine months ended January 31, 2021, the Company paid a total of $7,269 and $24,093. For the three months ended January 31, 2021, the Company paid a total of $4,622 and $11,010. For the three and nine-month periods ended January 31, 2020, the Company had not yet entered into these agreements, thus $0 and $0 was paid. |
8. INCOME TAXES
8. INCOME TAXES | 9 Months Ended |
Jan. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. INCOME TAXES For the nine-months ended January 31, 2021 and 2020, the effective tax rate of 0% varies from the U.S. federal statutory rate primarily due to net losses and the valuation allowance associated with the net operating loss carryforwards. The Company continually reviews the realizability of its deferred tax assets, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies. The Company continues to record a full valuation allowance against its net deferred tax assets. The Company assessed whether a valuation allowance should be established against its deferred tax assets based on consideration of all available evidence, using a “more likely than not” standard. In assessing the need for a valuation allowance, the Company considered both positive and negative evidence related to the likelihood of realization of deferred tax assets. In making such assessment, more weight was given to evidence that could be objectively verified, including recent cumulative losses. Future sources of taxable income were also considered in determining the amount of the recorded valuation allowance. Based on the Company’s review of this evidence on January 31, 2021, management determined that a full valuation allowance against all of the Company’s deferred tax assets on January 31, 2021 was appropriate. The following table summarizes the difference between the actual tax provision and the amounts obtained by applying the statutory tax rates to the income or loss before income taxes for the period ending January 31, 2021 and 2020: January 31, January 31, Tax benefit calculated at statutory rate 21.00% 21.00% Expense not deductible (0.06 ) (0.03 ) Changes to valuation allowance (20.94 ) (20.97 ) Provision for income taxes 0% 0% |
9. VARIABLE INTEREST ENTITIES
9. VARIABLE INTEREST ENTITIES | 9 Months Ended |
Jan. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | 9. VARIABLE INTEREST ENTITIES As of April 30, 2020, the Company owned 49% of the entity PCNM. As the Company was directly involved with the management of the entity, the Company considered itself to be the primary beneficiary, thus requiring consolidation. On June 15, 2020, PCNM was legally dissolved. |
10. CORONA VIRUS
10. CORONA VIRUS | 9 Months Ended |
Jan. 31, 2021 | |
Corona Virus | |
Corona Virus | 10. CORONA VIRUS During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus ("COVID-19"). The pandemic has significantly impacted the economic conditions in the U.S., accelerating during the first half of March, as federal, state and local governments react to the public health crisis, creating significant uncertainties in the U.S. economy. In March 2020, we noticed a strong decline in orders from our customers, as businesses around the country began to cease their operations due to COVID-19. In an attempt to mitigate the ongoing impact of the pandemic on our cash flows certain actions were taken. The actions include targeted reductions in discretionary operating expenses such as advertising and payroll expenses, reducing capital expenditures, and reducing travel for business development purposes. As of January 31, 2021, we have noticed a decrease in monthly orders as the spring/summer construction season has ended. We have begun to increase our associated expenses including business travel and development. The Paycheck Protection Program (“PPP”) provides loans from the U.S. Small Business Administration (“SBA”) to help businesses keep their workforce employed during the Coronavirus (COVID-19) crisis. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. On May 8, 2020, the Company received a PPP loan in the amount of $100,344. The loan was fully forgiven in November of 2020. Continued impacts of the pandemic have had a material adverse impact on our revenues, earnings, liquidity and cash flows, and may require additional actions in response, including, but not limited to, employee layoffs, reduced production, or further expense reductions, all in an effort to mitigate such impacts. The extent of the impact of the pandemic on our business and financial results will depend largely on future developments, including the duration of the spread of the outbreak within the U.S., and the related /impact on consumer confidence and spending, all of which are highly uncertain and cannot be predicted. This situation is rapidly changing and additional impacts to the business may arise that we are not aware of currently. While the disruption is currently expected to be temporary, there is uncertainty around the duration. The ultimate impact of the pandemic on the Company’s results of operations, financial position, liquidity or capital resources cannot be reasonably estimated at this time. |
11. SUBSEQUENT EVENTS
11. SUBSEQUENT EVENTS | 9 Months Ended |
Jan. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. SUBSEQUENT EVENTS As of February 1 st th As of February 10 th st As of February 18 th As of February 26 th As of March 3 rd As of March 8th, a shareholder exercised stock options in a cashless transaction for 20,000 shares of stock. Throughout the fourth quarter, the Company has received a total of $84,400 of promissory notes from a related party with various due dates and an 8% interest rate. |
1. SUMMARY OF SIGNIFICANT ACC_2
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Jan. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the accounts of Worldwide Specialty Chemicals, Inc. (WSCI), Industrial Chem Solutions, Inc. (ICS), and Safeway Pest Elimination, LLC (SPE). All significant intercompany accounts and transactions have been eliminated in consolidation. |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial reporting and the instructions for Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they include all information and footnote disclosures necessary for a complete presentation of the financial position, results of operations, cash flows, and stockholder’s equity in conformity with GAAP. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. The unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s most recently filed Form 10-KT (as amended) as of and for the transitional period ended April 30, 2020 that was filed on August 18, 2020. Operating results for the nine-months ended January 31, 2021, are not necessarily indicative of the results that can be expected for the year ending April 30, 2021. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires 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. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments FASB ASC 825-10, Recognition and Measurement of Financial Assets and Financial Liabilities, requires disclosure of fair value information about certain financial instruments, including, but not limited to, cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable, accrued expenses and notes payable. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management on January 31, 2021 and April 30, 2020. The carrying value of the financial instruments included in the Company’s financial statements approximated their fair values. The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are carried at, or approximate, fair value as of the reporting date because of their short-term nature. The carrying value of the notes payable approximates fair value as they bear market rates of interest. |
Basic and Diluted Net Loss Per Share | Basic and Diluted Net Loss Per Share Basic net loss per share is computed using the weighted average number of common shares outstanding. Diluted loss per share has not been presented because there are no dilutive items. Diluted earnings loss per share is based on the assumption that all dilutive stock options, warrants, and convertible debt are converted or exercised by applying the treasury stock method. Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Options, warrants and/or convertible debt will have a dilutive effect, during periods of net profit, only when the average market price of the common stock during the period exceeds the exercise or conversion price of the items. For the nine months ended January 31, 2021 and 2020, approximately 82,668 and 82,668 common stock warrants, respectively, and 6,569,750 and 6,433,083 common stock options, respectively, were not added to the diluted average shares because inclusion of such warrants and options would be antidilutive. For the three months ended January 31, 2021 and 2020, approximately 82,668 and 82,668 common stock warrants, respectively, and 6,569,750 and 6,433,083 common stock options, respectively, were not added to the diluted average shares because inclusion of such warrants and options would be antidilutive. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an initial maturity of three months or less, when purchased, to be cash equivalents. The Company maintains cash balances at several financial institutions located throughout the United States, which at times may exceed insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are trade receivables from product sales recorded at invoiced amount and generally do not bear interest. An allowance for doubtful accounts is established, as necessary, based on past experience and other factors which, in management's judgment, deserve current recognition in estimating bad debts. Such factors include growth and composition of accounts receivable, the relationship of the allowance for doubtful accounts to accounts receivable, and current economic conditions. The determination of the collectability of amounts due requires the Company to make judgments regarding future events and trends. Allowances for doubtful accounts are determined based on assessing the Company’s portfolio on an individual customer and on an overall basis. This process consists of a review of historical collection experience, current aging status of the customer account, and the financial condition of the Company’s customers. Based on a review of these factors, the Company establishes or adjusts the allowance for specific customers and the accounts receivable portfolio as a whole. On January 31, 2020 and April 30, 2020, the allowance for doubtful accounts was $0. |
Revenue Recognition | Revenue Recognition On January 1, 2018, we adopted Accounting Standards Committee 606 (“ASC 606”), Revenue from Contracts with Customers, which provides guidance on how revenue with customers should be recognized. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing service. Revenue from product sold is recognized when obligations with the customer are satisfied, which generally occurs with the transfer or delivery of the product, signifying the point in time when the customer obtains control of the promised goods. Our performance obligation is delivering the product to the customer; and therefore, the transaction price, which is stated on the invoice, is allocated 100% to the sole performance obligation of product delivery. Revenue from service, if applicable, would be recognized when the services are provided, or the customer receives the benefit, which is over time. For the period ended January 31, 2021 and 2020, all revenue was from products sold. Our sales policies do not provide for general rights of return, and payment is due net of 15 days. We do not record estimated reductions to revenue for customer programs and incentive offerings including pricing arrangements, promotions and other volume-based incentives at the time of the sale. We also do not record estimated reserves for product returns and credits at the time of sale and anticipated uncollectible accounts. |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value, with cost determined on a first-in first-out basis. The carrying value of inventory is reduced for estimated obsolescence. The Company evaluates the inventory carrying value for potential excess and obsolete inventory exposures by analyzing historical and anticipated demand. The following table sets forth the components of the Company’s inventory balances as of: January 31, April 30, Finished goods $ 123,259 $ 92,568 Raw materials 50,649 55,927 Obsolescence (17,290 ) (17,290 ) $ 156,618 $ 131,205 |
Fixed Assets | Fixed Assets Fixed assets consist of furniture, fixtures and office equipment, vehicles and trailers, equipment and leasehold improvements that are stated at cost, less accumulated depreciation. Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to earnings over their estimated service lives (3 – 10 years) under the straight-line method. Maintenance and repairs are charged to expenses as incurred; major repairs and replacements are capitalized. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in operations. |
Goodwill | Goodwill Goodwill represents the excess of the value of the purchase price and related costs over the identifiable assets from business acquisitions. The Company conducts an annual impairment assessment, at the reporting unit level, of its recorded goodwill. The Company assesses qualitative factors in order to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount. The qualitative factors evaluated by the Company include macro-economic conditions of the local business environment, overall financial performance, and other entity specific factors as deemed appropriate. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than the carrying amount, management determines if the reporting unit’s carrying value exceeds its fair value and records an impairment for such amounts. Management determined, by assessing the qualitative factors, that it is more likely than not that the fair value of the reporting unit is greater than the carrying value. Management does not consider the value of goodwill recorded for ICS in the accompanying consolidated balance sheet to be impaired as of January 31, 2021 and April 30, 2020. |
License Fee | License Fee ICS pays 10% of the net selling price to CBI Polymers, Inc., as a mutually acceptable license fee. E. Thomas Layton, Chairman and CEO of the Company, is also the Chairman and CEO and controlling shareholder of CBI Polymers, Inc. See discussion of expenses incurred at Note 7. |
Share-Based Compensation | Share-Based Compensation The Company recognizes compensation expense for all share-based payments in accordance with FASB Codification Topic 718, Compensation — Stock Compensation, (ASC 718). Under the fair value recognition provisions of ASC 718, the Company recognizes share-based compensation expense, net of an estimated forfeiture rate, over the requisite service period of the award. The fair value at the measurement date of stock options is estimated using the Black-Scholes option-pricing model. Compensation expense is recognized on a straight-line basis over the vesting period based on the estimated number of stock options that are expected to vest. The Company estimates forfeitures to be 50% for options that vest over time. |
Income Taxes | Income Taxes The Company accounts for Federal and state income taxes using the asset and liability approach for financial accounting and reporting for income taxes based on tax effects of differences between the financial statement and tax basis of assets and liabilities. The Company accounts for all uncertain tax positions in accordance with ASC Topic 740 – Income Taxes From time to time, the Company may be audited by taxing authorities. These audits could result in proposed assessments of additional taxes. The Company believes that its tax positions comply in all material respects with applicable tax law. However, tax law is subject to interpretation, and interpretations by taxing authorities could be different from those of the Company, which could result in the imposition of additional taxes. The Company’s federal returns since 2016 are still subject to examination by taxing authorities. |
Going Concern | Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred substantial operating losses resulting in an accumulated deficit of $14,398,174 and $12,884,427 on January 31, 2021 and April 30, 2020, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are being issued. As such, the Company will need to arrange for additional financing to fully implement its business plan, including continued growth and establishment of a stronger brand. The Company is actively seeking growth of its service offerings, both organically and via new client relationships. In the ordinary course of the Company’s business, management is trying to raise additional capital through sales of common stock as well as seeking debt financing from third parties. There are current indications that additional financing will be available on favorable terms. In addition, the company is working to establish creditworthiness by establishing a line-of-credit and entering into a sale-lease back on certain assets. If additional financing is not available, the Company will need to reduce salaries, defer or cancel development programs, planned initiatives and overhead expenditures. The failure to adequately fund its capital requirements could have a material adverse effect on the Company’s business, financial condition and results of operations, including potential discontinuance of operations. Moreover, the sale of additional equity securities to raise financing will result in additional dilution to the Company’s stockholders. Additionally, incurring additional indebtedness could involve an increased debt service cash obligation, as well as the imposition of covenants that restrict the Company’s operations or the Company’s ability to perform on its current debt service requirements. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. While the company recognizes the significant impact of additional financing, the company is an emerging growth company serving large and growing markets and it will continue to sell securities and enter into financing programs which are deemed to be prudent. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Pronouncements Recently Adopted In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill impairment |
Pronouncements Not Yet Adopted | Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13 Financial Instruments-Credit Losses |
1. SUMMARY OF SIGNIFICANT ACC_3
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Jan. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of property and equipment | The following table sets forth the components of the Company’s inventory balances as of: January 31, April 30, Finished goods $ 123,259 $ 92,568 Raw materials 50,649 55,927 Obsolescence (17,290 ) (17,290 ) $ 156,618 $ 131,205 |
2. ACCOUNTS RECEIVABLE (Tables)
2. ACCOUNTS RECEIVABLE (Tables) | 9 Months Ended |
Jan. 31, 2021 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Accounts receivables consist of the following on January 31, 2021 and April 30, 2020: January 31, April 30, Trade receivables $ 39,274 $ 106,876 |
3. NOTES PAYABLE (Tables)
3. NOTES PAYABLE (Tables) | 9 Months Ended |
Jan. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of future minimum debt payments | The Company’s future minimum principal payments as of January 31, 2021 are as follows: 2021 $ 2,888 2022 15,285 2023 13,447 $ 31,620 |
4. ACCRUED EXPENSES (Tables)
4. ACCRUED EXPENSES (Tables) | 9 Months Ended |
Jan. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | Accrued expenses primarily, consisting of accrued salaries for officers and executive management, include the following balance on January 31, 2021 and April 30, 2020: January 31, April 30, Accrued Compensation $ 933,362 $ 469,004 Other Accrued Expenses 326,770 336,849 $ 1,260,132 $ 805,853 |
5. COMMITMENTS, CONTINGENCIES_2
5. COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Tables) | 9 Months Ended |
Jan. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments | The Company’s undiscounted annual future minimum lease payments as of January 31, 2021 consist of: 2021 $ 43,828 2022 169,607 2023 88,298 2024 12,590 2025 10,884 Total lease payments 325,207 Interest (15,208 ) Present value of lease liabilities $ 309,999 |
6. STOCKHOLDERS' EQUITY (Tables
6. STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Jan. 31, 2021 | |
Equity [Abstract] | |
Schedule of option activity | Stock option activity during the nine-month period ended January 31, 2021 is summarized as follows: Shares Under Option Price Per Share Weighted Average Exercise Price Weighted Average Remaining Contractual Life Outstanding - beginning of period 7,309,750 $ 0.00 - 1.50 $ 1.18 113 months Granted – $ – $ – – Exercised – $ – $ – – Canceled or expired – $ – $ – – Outstanding - end of period 7,309,750 $ 0.00 - 1.50 $ 1.12 99 months Exercisable - end of period 6,569,750 $ 0.92 86 months Stock option activity during the nine-month period ended January 31, 2020 is summarized as follows: Shares Under Option Price Per Share Weighted Average Exercise Price Weighted Average Remaining Contractual Life Outstanding - beginning of period 5,386,418 $ 0.00 - 1.50 $ 0.79 98 months Granted 2,150,000 $ 1.50 $ 1.50 – Exercised – $ – $ – – Canceled or expired – $ – $ – – Outstanding - end of period 7,686,418 $ 0.00 - 1.50 $ 0.98 99 months Exercisable - end of period 6,433,083 $ 1.16 125 months |
Schedule of assumptions | The fair value of each option grant is calculated using the following assumptions: January 31, January 31, Expected life – years NA 5 Interest rate NA 1.78-2.03% Volatility NA 71.70% Dividend yield –% –% |
8. INCOME TAXES (Tables)
8. INCOME TAXES (Tables) | 9 Months Ended |
Jan. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax reconciliation | The following table summarizes the difference between the actual tax provision and the amounts obtained by applying the statutory tax rates to the income or loss before income taxes for the period ending January 31, 2021 and 2020: January 31, January 31, Tax benefit calculated at statutory rate 21.00% 21.00% Expense not deductible (0.06 ) (0.03 ) Changes to valuation allowance (20.94 ) (20.97 ) Provision for income taxes 0% 0% |
1. Summary of Significant Acc_4
1. Summary of Significant Accounting Policies (Details - Inventory) - USD ($) | Jan. 31, 2021 | Apr. 30, 2020 |
Accounting Policies [Abstract] | ||
Finished goods, gross | $ 123,259 | $ 92,568 |
Raw materials, gross | 50,649 | 55,927 |
Inventory obsolescence | (17,290) | (17,290) |
Inventory, net | $ 156,618 | $ 131,205 |
1. Summary of Significant Acc_5
1. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jan. 31, 2021 | Jan. 31, 2020 | Jan. 31, 2021 | Jan. 31, 2020 | Apr. 30, 2020 | |
Allowance for doubtful accounts | $ 0 | $ 0 | $ 0 | ||
Accumulated deficit | $ (14,398,174) | $ (14,398,174) | $ (12,884,427) | ||
Warrants [Member] | |||||
Antidilutive shares | 82,668 | 82,668 | 82,668 | 82,668 | |
Options [Member] | |||||
Antidilutive shares | 6,569,750 | 6,433,083 | 6,569,750 | 6,433,083 |
2. Accounts Receivable (Details
2. Accounts Receivable (Details) - USD ($) | Jan. 31, 2021 | Apr. 30, 2020 |
Receivables [Abstract] | ||
Trade receivables | $ 39,274 | $ 106,876 |
3. Notes Payable (Details - Min
3. Notes Payable (Details - Minimum debt payments) | Jan. 31, 2021USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 2,888 |
2022 | 15,285 |
2023 | 13,447 |
Total future minimum payments | $ 31,620 |
3. Notes Payable (Details Narra
3. Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jan. 31, 2021 | Oct. 31, 2020 | Aug. 11, 2020 | Jul. 31, 2020 | Jan. 31, 2021 | Apr. 30, 2020 | |
Share price | $ 1.25 | $ 1.25 | ||||
Convertible Debentures [Member] | ||||||
Convertible debt issued | $ 750,000 | |||||
Debt maturity date | Jun. 15, 2020 | |||||
Debt interest rate | 8.00% | |||||
Debt converted, shares issued | 872,093 | |||||
Share price | $ 0.86 | |||||
Accrued interest | $ 13,326 | |||||
Shares issued for accrued interest | 15,765 | |||||
Interest expense paid | $ 1,666 | |||||
Convertible Debentures [Member] | ||||||
Convertible debt issued | $ 20,000 | $ 551,300 | ||||
Debt converted, shares issued | 16,000 | 641,048 | ||||
Share price | $ 1.25 | $ 0.86 | ||||
Accrued interest | $ 430 | $ 16,459 | ||||
Shares issued for accrued interest | 344 | 10,645 | ||||
Convertible Debentures [Member] | ||||||
Convertible debt issued | $ 159,000 | $ 159,000 | ||||
Debt maturity date | Jan. 15, 2021 | |||||
Debt interest rate | 8.00% | 8.00% | ||||
Debt converted, shares issued | 127,200 | |||||
Share price | $ 1.25 | $ 1.25 | ||||
Accrued interest | $ 1,644 | $ 1,644 | ||||
Shares issued for accrued interest | 1,316 | |||||
Vehicle Note Payable [Member] | ||||||
Debt maturity date | Sep. 30, 2023 | |||||
Debt interest rate | 5.99% | 5.99% | ||||
Note payable outstanding | $ 31,620 | $ 31,620 | $ 40,474 |
4. Accrued Expenses (Details)
4. Accrued Expenses (Details) - USD ($) | Jan. 31, 2021 | Apr. 30, 2020 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 933,362 | $ 469,004 |
Other accrued expenses | 326,770 | 336,849 |
Accrued expenses | $ 1,260,132 | $ 805,853 |
5. Commitments, Contingencies_3
5. Commitments, Contingencies and Concentrations (Details - Minimum Lease payments) - USD ($) | Jan. 31, 2021 | Jan. 02, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
2021 | $ 43,828 | |
2022 | 169,607 | |
2023 | 88,298 | |
2024 | 12,590 | |
2025 | 10,884 | |
Total lease payments | 325,207 | |
Interest | (15,208) | |
Present value of lease liabilities | $ 309,999 | $ 498,361 |
5. Commitments, Contingencies_4
5. Commitments, Contingencies and Concentrations (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Jan. 31, 2021 | Jan. 31, 2020 | Jan. 31, 2021 | Jan. 31, 2020 | Apr. 30, 2020 | Jan. 02, 2019 | |
Right to use asset | $ 296,618 | $ 296,618 | $ 423,815 | $ 493,832 | ||
Right to use liability | $ 309,999 | $ 309,999 | $ 498,361 | |||
Weighted average remaining lease term | 2 years 2 months 12 days | 2 years 2 months 12 days | ||||
Weighted average discount rate | 3.50% | 3.50% | ||||
Finance lease cost | $ 38,476 | $ 31,200 | $ 119,097 | $ 42,202 | ||
Short term lease cost | $ 0 | $ 3,336 | $ 0 | $ 4,464 | ||
Accounts Receivable [Member] | Four Customers [Member] | ||||||
Concentration risk percentage | 63.00% | |||||
Accounts Receivable [Member] | Two Customers [Member] | ||||||
Concentration risk percentage | 45.00% | |||||
Sales Revenue Net [Member] | Two Customers [Member] | ||||||
Concentration risk percentage | 48.00% | 51.00% | 45.00% | 41.00% |
6. Stockholders' Equity (Detail
6. Stockholders' Equity (Details - Option activity) - Options [Member] - $ / shares | 9 Months Ended | 12 Months Ended | ||
Jan. 31, 2021 | Jan. 31, 2020 | Apr. 30, 2020 | Apr. 30, 2019 | |
Number of Options | ||||
Number of Options Outstanding, Beginning | 7,309,750 | 5,386,418 | 5,386,418 | |
Number of Options Granted | 0 | 2,150,000 | ||
Number of Options Exercised | 0 | 0 | ||
Number of Options Canceled or expired | 0 | 0 | ||
Number of Options Outstanding, Ending | 7,309,750 | 7,686,418 | 7,309,750 | 5,386,418 |
Number of Options Exercisable, Ending | 6,569,750 | 6,433,083 | ||
Weighted Average Exercise Price | ||||
Weighted Average Exercise Price Outstanding, Beginning | $ 1.18 | $ 0.79 | $ 0.79 | |
Weighted Average Exercise Price Granted | 0 | 1.50 | ||
Weighted Average Exercise Price Exercised | 0 | 0 | ||
Weighted Average Exercise Price Canceled or expired | 0 | 0 | ||
Weighted Average Exercise Price Outstanding, Ending | 1.12 | 0.98 | $ 1.18 | $ 0.79 |
Weighted Average Exercise Price Exercisable, Ending | $ 0.92 | $ 1.16 | ||
Weighted Average Remaining Contractual Term | ||||
Weighted Average Remaining Contractual Term Outstanding | 99 months | 99 months | 113 months | 98 months |
Weighted Average Remaining Contractual Term Exercisable | 86 months | 125 months |
6. Stockholders' Equity (Deta_2
6. Stockholders' Equity (Details - Assumptions) | 9 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Equity [Abstract] | ||
Expected life - years | NA | 5 years |
Interest rate - minimum | 1.78% | |
Interest rate - maximum | 2.03% | |
Volatility | 71.70% | |
Dividend yield | 0.00% | 0.00% |
6. Stockholders' Equity (Deta_3
6. Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jan. 31, 2021 | Jan. 31, 2020 | Jan. 31, 2021 | Jan. 31, 2020 | Apr. 30, 2020 | |
Common stock, shares authorized | 75,000,000 | 75,000,000 | 75,000,000 | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Common stock repurchased, shares | 36,250 | ||||
Share Price | $ 1.25 | $ 1.25 | |||
Common stock repurchased, value | $ 22,394 | $ 45,313 | $ 22,394 | ||
Warrants exercised | 0 | 260,000 | |||
Warrant price | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | |
Proceeds from warrant exercises | $ 0 | $ 130,000 | |||
Warrants outstanding | 82,668 | 82,668 | 82,668 | 82,668 | |
Option granted exercise price | $ 1.50 | ||||
Share based compensation | $ 44,553 | $ 1,291,730 | $ 133,659 | $ 1,484,914 | |
Unamortized share-based compensation expense | $ 326,722 | $ 326,722 | |||
Options [Member] | |||||
Share Price | $ 1.50 | $ 1.50 | |||
Options granted | 0 | 2,150,000 | |||
Stock options vested | 1,350,000 | ||||
2016 Stock Option Plan [Member] | |||||
Stock authorized under the plan | 10,000,000 | 10,000,000 |
7. Related Party Transactions (
7. Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jan. 31, 2021 | Jan. 31, 2020 | Jan. 31, 2021 | Jan. 31, 2020 | Apr. 30, 2020 | |
Due to related parties | $ 60,820 | $ 60,820 | $ 85,603 | ||
Operating lease payments | 119,097 | $ 86,496 | |||
Vehicle Rental [Member] | |||||
Operating lease payments | 957 | ||||
Lease expense | 4,622 | $ 0 | 7,269 | 0 | |
Vehicle Rental [Member] | |||||
Lease expense | 11,010 | 24,093 | |||
Five Shareholders [Member] | |||||
Consulting fees | 214,487 | 276,464 | |||
Due to related parties | 62,693 | 38,608 | 62,693 | 38,608 | |
CEO [Member] | |||||
Consulting fees | 74,000 | 34,000 | |||
Four Shareholders [Member] | |||||
Consulting fees | 62,693 | 37,495 | |||
Due to related parties | 30,741 | $ 24,272 | 30,741 | $ 24,272 | |
CBI [Member] | |||||
Due to related parties | $ 615 | $ 615 | 0 | ||
Maine Consultants [Member] | |||||
Proceeds from related party | 35,000 | ||||
Repayment to related party | $ 35,000 |
8. Income Taxes (Details - Inco
8. Income Taxes (Details - Income tax reconciliation) | 9 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit calculated at statutory rate | 21.00% | 21.00% |
Expense not deductible | (0.06%) | (0.03%) |
Changes to valuation allowance | 20.94% | 20.97% |
Provision for income taxes | 0.00% | 0.00% |
8. Income Taxes (Details Narrat
8. Income Taxes (Details Narrative) | 9 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 0.00% | 0.00% |
9. Variable Interest Entities (
9. Variable Interest Entities (Details Narrative) | 12 Months Ended |
Apr. 30, 2020 | |
PCNM [Member] | |
Ownership Percentage | 49.00% |
10. Corona Virus (Details Narra
10. Corona Virus (Details Narrative) | 9 Months Ended |
Jan. 31, 2021USD ($) | |
Corona Virus | |
Proceeds from loans | $ 100,344 |