Cover
Cover - shares | 6 Months Ended | |
Nov. 30, 2020 | Jan. 12, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | HYGGE INTEGRATED BRANDS CORP. | |
Entity Central Index Key | 0001803284 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --05-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Nov. 30, 2020 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Entity Ex Transition Period | true | |
Entity Common Stock Shares Outstanding | 2,471,000 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Nov. 30, 2020 | May 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 4,556 | $ 17,509 |
Accounts receivable | 0 | 1,399 |
Inventory | 1,226 | 2,583 |
Prepaids and other current assets | 242 | 306 |
Total current assets | 6,024 | 21,797 |
Total Assets | 6,024 | 21,797 |
Current Liabilities: | ||
Accounts payable and accrued liabilities | 1,076 | 969 |
Accounts payable - related party | 22,426 | 22,417 |
Loan payable - related party | 45,675 | 45,031 |
Total current liabilities | 69,177 | 68,417 |
Total Liabilities | 69,177 | 68,417 |
Commitments and Contingencies | 0 | 0 |
Stockholders' Deficit: | ||
Common stock, par value $0.001 per share, 75,000,000 shares authorized; 2,471,000 shares issued and outstanding as of November 30, 2020 and May 31, 2020, respectively | 2,471 | 2,471 |
Additional paid-in capital | 23,304 | 23,304 |
Accumulated deficit | (88,179) | (71,245) |
Accumulated other comprehensive loss | (749) | (1,150) |
Total stockholders' deficit | (63,153) | (46,620) |
Total Liabilities and Stockholders' Deficit | $ 6,024 | $ 21,797 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Nov. 30, 2020 | May 31, 2020 |
Stockholders' Deficit | ||
Common stock, shares par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 2,471,000 | 2,471,000 |
Common stock, shares outstanding | 2,471,000 | 2,471,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2020 | Nov. 30, 2019 | Nov. 30, 2020 | Nov. 30, 2019 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) | ||||
Revenue | $ 1,101 | $ 0 | $ 2,978 | $ 0 |
Cost of revenue | 741 | 0 | 2,083 | 0 |
Gross profit | 360 | 0 | 895 | 0 |
Operating Expenses: | ||||
Professional fees | 2,500 | 0 | 11,215 | 0 |
Executive compensation | 600 | 0 | 2,100 | 0 |
Travel and promotion | 716 | 8,291 | 1,243 | 8,921 |
General and administrative | 1,452 | 1,528 | 2,627 | 1,594 |
Total operating expenses | 5,268 | 9,819 | 17,185 | 9,885 |
Loss from Operations | (4,908) | (9,819) | (16,290) | (9,885) |
Other Expense | ||||
Interest expense | 320 | 263 | 644 | 526 |
Total Other Expense | (320) | (263) | (644) | (526) |
Loss Before Income Taxes | (5,228) | (10,082) | (16,934) | (10,411) |
Income tax provision | ||||
Net Loss | (5,228) | (10,082) | (16,934) | (10,411) |
Other Comprehensive Income (Loss) | ||||
Foreign currency translation gain (loss) | (83) | (158) | 401 | (196) |
Comprehensive Loss | $ (5,311) | $ (10,240) | $ (16,533) | $ (10,607) |
Net Loss Per Common Share: | ||||
Net loss per common share - Basic and Diluted | $ 0 | $ 0 | $ (0.01) | $ 0 |
Weighted Average Shares Outstanding - Basic and Diluted | 2,471,000 | 1,609,176 | 2,471,000 | 1,554,290 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Balance, shares at May. 31, 2019 | 1,500,000 | ||||
Balance, amount at May. 31, 2019 | $ (37,342) | $ 1,500 | $ 0 | $ (38,699) | $ (143) |
Common stock issued for cash, shares | 760,000 | ||||
Common stock issued for cash, amount | 19,000 | $ 760 | 18,240 | 0 | |
Net loss | (10,411) | 0 | 0 | (10,411) | 0 |
Foreign currency translation loss | (196) | $ 0 | 0 | 0 | (196) |
Balance, shares at Nov. 30, 2019 | 2,260,000 | ||||
Balance, amount at Nov. 30, 2019 | (28,949) | $ 2,260 | 18,240 | (49,110) | (339) |
Balance, shares at Aug. 31, 2019 | 1,500,000 | ||||
Balance, amount at Aug. 31, 2019 | (37,709) | $ 1,500 | 0 | (39,028) | (181) |
Common stock issued for cash, shares | 760,000 | ||||
Common stock issued for cash, amount | 19,000 | $ 760 | 18,240 | 0 | 0 |
Net loss | (10,082) | 0 | 0 | (10,082) | 0 |
Foreign currency translation loss | (158) | $ 0 | 0 | 0 | (158) |
Balance, shares at Nov. 30, 2019 | 2,260,000 | ||||
Balance, amount at Nov. 30, 2019 | (28,949) | $ 2,260 | 18,240 | (49,110) | (339) |
Balance, shares at May. 31, 2020 | 2,471,000 | ||||
Balance, amount at May. 31, 2020 | (46,620) | $ 2,471 | 23,304 | (71,245) | (1,150) |
Net loss | (16,934) | 0 | 0 | (16,934) | 0 |
Foreign currency translation gain | 401 | $ 0 | 0 | 0 | 401 |
Balance, shares at Nov. 30, 2020 | 2,471,000 | ||||
Balance, amount at Nov. 30, 2020 | (63,153) | $ 2,471 | 23,304 | (88,179) | (749) |
Balance, shares at Aug. 31, 2020 | 2,471,000 | ||||
Balance, amount at Aug. 31, 2020 | (57,842) | $ 2,471 | 23,304 | (82,951) | (666) |
Net loss | (5,228) | 0 | 0 | (5,228) | 0 |
Foreign currency translation gain | (83) | $ 0 | 0 | 0 | (83) |
Balance, shares at Nov. 30, 2020 | 2,471,000 | ||||
Balance, amount at Nov. 30, 2020 | $ (63,153) | $ 2,471 | $ 23,304 | $ (88,179) | $ (749) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Operating Activities: | ||
Net loss | $ (16,934) | $ (10,411) |
Changes in Operating Assets and Liabilities- | ||
Accounts receivable | 1,399 | 0 |
Inventory | 1,357 | 0 |
Prepaids and other current assets | 64 | (5) |
Accounts payable and accrued liabilities | 107 | 151 |
Accounts payable - related party | 9 | 10,656 |
Interest on loan payable - related party | 644 | 526 |
Net Cash Provided by (Used in) Operating Activities | (13,354) | 917 |
Investing Activities | 0 | 0 |
Proceeds from issuance of common stock | 0 | 19,000 |
Net Cash Provided by Financing Activities | 0 | 19,000 |
Effects of exchange rates on cash | 401 | (196) |
Net Change in Cash | (12,953) | 19,721 |
Cash - Beginning of Period | 17,509 | 17 |
Cash - End of Period | 4,556 | 19,738 |
Cash paid during the period for: | ||
Interest | 0 | 0 |
Income tax paid | $ 0 | $ 0 |
Organization and Operations
Organization and Operations | 6 Months Ended |
Nov. 30, 2020 | |
Organization and Operations | |
Note 1 - Organization and Operations | Hygge Integrated Brands Corp., a Nevada corporation, (the “Company”) was formed under the laws of the State of Nevada on February 15, 2018. Hygge Integrated Brands Corp., operating as Hygge Hound, is a contemporary lifestyle brand for pet owners that embodies true Scandinavian minimalism combined with practical functionality. Our products, made with pets, humans and homes in mind, focuses on natural materials and clean, simple, minimalist design for pets. Hygge Hound produces a range of dog products, including dog beds and grooming products that embody the hygge philosophy - living in comfort, happiness and in complete absence of stress and nuisance. On May 4, 2018, the Company formed a wholly owned subsidiary, Hygge Integrated Brands Corp. (Canada), an Ontario, Canada Corporation (“HIBC CAD”). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Nov. 30, 2020 | |
Summary of Significant Accounting Policies | |
Note 2 - Summary of Significant Accounting Policies | Basis of Presentation The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the year ended May 31, 2020 and notes thereto included in the Company’s Annual Report on the Form 10-K filed with Securities and Exchange Commission on August 18, 2020. Principle of consolidation The accompanying consolidated financial statements include all of the accounts of the Company as of November 30, 2020 and 2019. All intercompany balances and transactions have been eliminated. Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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(s) of the financial statements and the reported amounts of revenues and expenses during the reporting period(s). Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were: (I) Assumption as a going concern (ii) Allowance for doubtful accounts (iii) Valuation allowance for deferred tax assets: (iv) Inventory reserve. These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Fair Value of Financial Instruments The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses, accounts payable and accrued expenses, approximate their fair value because of the short maturity of those instruments. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less to be cash and cash equivalents. Accounts Receivable The Company’s accounts receivable are comprised of customer receivables. The Company’s net customer receivables were $0 and $1,399 as of November 30, 2020 and May 31, 2020, respectively, and consist of credit and debit card receivables from online payment processor, which typically settle within five business days. The Company does not maintain an allowance for doubtful accounts as historical losses on customer and vendor receivables have not been significant. Inventory The Company’s inventories consist of raw materials and finished goods, which are products available for sale and are accounted for using the first-in, first-out (FIFO) method and valued at the lower of cost or net realizable value. Inventory costs consist of product manufacturing costs including materials and labor and inbound shipping and handling costs. Inventory valuation requires the Company to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers or returns to product vendors. Inventory valuation losses are recorded as cost of goods sold and historical losses have not been significant. Revenue Recognition In May 2014, FASB issued an update Accounting Standards Update (“ASU”) (“ASU 2014-09”) establishing Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASU 2014-09, as amended by subsequent ASUs on the topic, establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. This standard, which is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017, requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. The Company adopted this standard June 1, 2019, using the modified retrospective approach, which requires applying the new standard to all existing contracts not yet completed as of the effective date and recording a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: - identify the contract with a customer; - identify the performance obligations in the contract; - determine the transaction price; - allocate the transaction price to performance obligations in the contract; and - recognize revenue as the performance obligation is satisfied. The Company recognizes revenues from product sales when the customer orders an item through the Hygge Hound’s website or mobile applications via the electronic shopping cart, funds are collected from the customer and the item is delivered to the local customer, or shipped from the Company’s facilities and delivered to the carrier. Revenue is recognized on a gross basis as the Company is (i) the primary entity responsible for fulfilling the promise to provide the specified products in the arrangement with the customer and provides the primary customer service for all products sold on Company’s website or mobile applications, (ii) has inventory risk before the products have been transferred to a customer and maintains inventory risk upon accepting returns, and (iii) has discretion in establishing the price for the specified products sold on Company’s website or mobile applications. The Company generates net sales from sales of pet grooming products and pet accessories, and related shipping fees. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. To encourage customers to purchase its products, the Company periodically provides incentive offers. Generally, these promotions include current discount offers, such as percentage discounts off current purchases and other similar offers. These offers, when accepted by customers, are treated as a reduction to the transaction price. Revenue typically consists of the consideration received from the customer when the order is executed less a refund allowance, which is estimated using historical experience. Taxes collected from customers for remittance to governmental authorities are excluded from net sales. The following table presents our revenues disaggregated by products for the three and six months ended November 30, 2020 and 2019, respectively. Sales and other similar taxes are excluded from revenues. Three Months Three Months Six Months Six Months Ended November 30, Ended November 30, Ended November 30, Ended November 30, 2020 2019 2020 2019 Dog beds $ - $ - $ 1,756 $ - Pet Shampoo 1,101 - 1,222 - Total revenue: $ 1,101 $ - $ 2,978 $ - Cost of Sales Cost of goods sold includes the purchase price, or manufacturing cost, of inventory sold, freight costs associated with inventory, shipping supply costs, inventory shrinkage costs and valuation adjustments and reductions for promotions and discounts offered by the Company’s third-party manufacturers and suppliers of raw materials. Related Parties The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the related parties include: a. affiliates of the Company; b. entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. Commitments and Contingencies The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. Income Tax Provision The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date. The Company adopted the provisions of paragraph 740-10-25-13 of the FASB Accounting Standards Codification. Paragraph 740-10-25-13 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. Uncertain Tax Positions The Company did not take any uncertain tax positions and had no unrecognized tax liabilities or benefits in accordance with the provisions of Section 740-10-25 at November 30, 2020 and 2019. Foreign currency transactions The Company applies the guidelines as set out in Section 830-20-35 of the FASB Accounting Standards Codification (“Section 830-20-35”) for foreign currency transactions. Pursuant to Section 830-20-35 of the FASB Accounting Standards Codification, foreign currency transactions are transactions denominated in currencies other than U.S. Dollar, the Company’s reporting currency. Foreign currency transactions may produce receivables or payables that are fixed in terms of the amount of foreign currency that will be received or paid. A change in exchange rates between the reporting currency and the currency in which a transaction is denominated increases or decreases the expected amount of reporting currency cash flows upon settlement of the transaction. That increase or decrease in expected reporting currency cash flows is a foreign currency transaction gain or loss that generally shall be included in determining net income for the period in which the exchange rate changes. Likewise, a transaction gain or loss (measured from the transaction date or the most recent intervening balance sheet date, whichever is later) realized upon settlement of a foreign currency transaction generally shall be included in determining net income for the period in which the transaction is settled. The exceptions to this requirement for inclusion in net income of transaction gains and losses pertain to certain intercompany transactions and to transactions that are designated as, and effective as, economic hedges of net investments and foreign currency commitments. Pursuant to Section 830-20-25 of the FASB Accounting Standards Codification, the following shall apply to all foreign currency transactions of an enterprise and its investees: (a) at the date the transaction is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction shall be measured and recorded in the functional currency of the recording entity by use of the exchange rate in effect at that date as defined in section 830-10-20 of the FASB Accounting Standards Codification; and (b) at each balance sheet date, recorded balances that are denominated in currencies other than the functional currency or reporting currency of the recording entity shall be adjusted to reflect the current exchange rate. The Company’s wholly owned Canadian subsidiary uses the CAD Dollar as its reporting currency as well as its functional currency. The change in exchange rates between the U.S. Dollar, the Company’s reporting and functional currency and the Canadian Dollar, the currency in which a transaction is denominated increases or decreases the expected amount of reporting currency cash flows upon settlement of the transaction. That increase or decrease in expected reporting currency cash flows is a foreign currency transaction gain or loss that generally is included in determining net income (loss) for the period in which the exchange rate changes. Translation The adjustments resulting from the translation process of the Company’s Canadian subsidiary accounts are reported in other comprehensive income. The cumulative foreign currency translation adjustments are only reclassified to net income when the gains or losses are realized upon sale or upon complete (or substantially complete) liquidation in the foreign subsidiary. These translation adjustments impact the subsidiary’s net assets and the Company’s net investment in the subsidiary. Earnings per Share Earnings Per Share is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. Earnings per share (“EPS”) is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16 Basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. Pursuant to ASC Paragraphs 260-10-45-45-21 through 260-10-45-45-23 Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint of the security holder. The dilutive effect of outstanding call options and warrants (and their equivalents) issued by the reporting entity shall be reflected in diluted EPS by application of the treasury stock method unless the provisions of paragraphs 260-10-45-35 through 45-36 and 260-10-55-8 through 55-11 require that another method be applied. Equivalents of options and warrants include non-vested stock granted to employees, stock purchase contracts, and partially paid stock subscriptions (see paragraph 260–10–55–23). Anti-dilutive contracts, such as purchased put options and purchased call options, shall be excluded from diluted EPS. Under the treasury stock method: a. Exercise of options and warrants shall be assumed at the beginning of the period (or at time of issuance, if later) and common shares shall be assumed to be issued. b. The proceeds from exercise shall be assumed to be used to purchase common stock at the average market price during the period. (See paragraphs 260-10-45-29 and 260-10-55-4 through 55-5.) c. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) shall be included in the denominator of the diluted EPS computation. There were no potentially dilutive debt or equity instruments issued and outstanding at any time during the three-month periods ended November 30, 2020 and 2019. Subsequent Events The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Recently Issued Accounting Pronouncements Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, will have a material effect on the accompanying financial statements. |
Going Concern
Going Concern | 6 Months Ended |
Nov. 30, 2020 | |
Going Concern | |
Note 3 - Going Concern | The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the accompanying financial statements, the Company had an accumulated deficit at November 30, 2020 and 2019, which raises substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. The Company is generating revenue; however, the Company’s cash position may not be sufficient to support the Company’s daily operations. While the Company believes in the viability of its strategy to continue operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering. 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 if the Company is unable to continue as a going concern. |
Inventory
Inventory | 6 Months Ended |
Nov. 30, 2020 | |
Inventory | |
Note 4 - Inventory | Inventory consisted of the following at November 30, 2020 and May 31, 2020: November 30, 2020 May 31, 2020 Inventory – finished goods $ 682 $ 2,023 Inventory – raw materials 544 560 Less: Inventory impairment allowance - - Total $ 1,226 $ 2,583 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Nov. 30, 2020 | |
Related Party Transactions | |
Note 5 - Related Party Transactions | On January 1, 2020, the Company entered into a Management Consultant Agreement with our President and CEO. The term of the agreement is two years and either party can terminate it unilaterally with 60 days’ notice. During the term of this agreement, the Company shall pay the Consultant a consultant fee in consideration of the provision of the consulting services equal to USD $500 per month. The Board of Directors may increase or decrease the amount of compensation paid to our President and CEO from time to time. Accounts Payable – Related Party As of November 30, 2020 and May 31, 2020 the Company owed its director and officer $22,426 and $22,417, respectively. These amounts are comprised of cash advances, accrued management consulting fees, and unpaid expenses incurred on behalf of the Company as of the end of the reporting period. Loan Payable – Related Party The loans provided by the Company’s CEO are payable on demand, unsecured, and bear interest at 3.0% per annum. As at November 30, 2020 and May 31, 2020, the Company had accrued $2,835 and $2,192 respectively in interest expense related to these loans. During the six-month periods ended November 30, 2020 and 2019 the Company incurred interest expense of $644 and $527, respectively. As of November 30, 2020 and May 31, 2020 the Company owed its officer $45,675 and $45,031 for loan principle and accrued interest. |
Stockholders Deficiency
Stockholders Deficiency | 6 Months Ended |
Nov. 30, 2020 | |
Stockholders Deficiency | |
Note 6 - Stockholders' Deficiency | Shares authorized Upon formation the total number of shares of all classes of stock which the Company is authorized to issue is seventy-five million (75,000,000) shares of common stock, par value $0.001 per share. Registered shares of common stock In April of 2020, the Company filed a Form S-1 Registration Statement with the Securities and Exchange Commission to register previously issued 971,000 shares of common stock. This Registration Statement was declared effective on July 2, 2020. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Nov. 30, 2020 | |
Subsequent Events | |
Note 7 - Subsequent Events | The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Nov. 30, 2020 | |
Summary of Significant Accounting Policies | |
Basis of presentation | The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the year ended May 31, 2020 and notes thereto included in the Company’s Annual Report on the Form 10-K filed with Securities and Exchange Commission on August 18, 2020. |
Principle of consolidation | The accompanying consolidated financial statements include all of the accounts of the Company as of November 30, 2020 and 2019. All intercompany balances and transactions have been eliminated. |
Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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(s) of the financial statements and the reported amounts of revenues and expenses during the reporting period(s). Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were: (I) Assumption as a going concern (ii) Allowance for doubtful accounts (iii) Valuation allowance for deferred tax assets: (iv) Inventory reserve. These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. |
Fair Value of Financial Instruments | The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses, accounts payable and accrued expenses, approximate their fair value because of the short maturity of those instruments. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. |
Cash and Cash Equivalents | The Company considers all highly liquid investments with a maturity of three months or less to be cash and cash equivalents. |
Accounts Receivable | The Company’s accounts receivable are comprised of customer receivables. The Company’s net customer receivables were $0 and $1,399 as of November 30, 2020 and May 31, 2020, respectively, and consist of credit and debit card receivables from online payment processor, which typically settle within five business days. The Company does not maintain an allowance for doubtful accounts as historical losses on customer and vendor receivables have not been significant. |
Inventory | The Company’s inventories consist of raw materials and finished goods, which are products available for sale and are accounted for using the first-in, first-out (FIFO) method and valued at the lower of cost or net realizable value. Inventory costs consist of product manufacturing costs including materials and labor and inbound shipping and handling costs. Inventory valuation requires the Company to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers or returns to product vendors. Inventory valuation losses are recorded as cost of goods sold and historical losses have not been significant. |
Revenue Recognition | In May 2014, FASB issued an update Accounting Standards Update (“ASU”) (“ASU 2014-09”) establishing Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASU 2014-09, as amended by subsequent ASUs on the topic, establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. This standard, which is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017, requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. The Company adopted this standard June 1, 2019, using the modified retrospective approach, which requires applying the new standard to all existing contracts not yet completed as of the effective date and recording a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: - identify the contract with a customer; - identify the performance obligations in the contract; - determine the transaction price; - allocate the transaction price to performance obligations in the contract; and - recognize revenue as the performance obligation is satisfied. The Company recognizes revenues from product sales when the customer orders an item through the Hygge Hound’s website or mobile applications via the electronic shopping cart, funds are collected from the customer and the item is delivered to the local customer, or shipped from the Company’s facilities and delivered to the carrier. Revenue is recognized on a gross basis as the Company is (i) the primary entity responsible for fulfilling the promise to provide the specified products in the arrangement with the customer and provides the primary customer service for all products sold on Company’s website or mobile applications, (ii) has inventory risk before the products have been transferred to a customer and maintains inventory risk upon accepting returns, and (iii) has discretion in establishing the price for the specified products sold on Company’s website or mobile applications. The Company generates net sales from sales of pet grooming products and pet accessories, and related shipping fees. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. To encourage customers to purchase its products, the Company periodically provides incentive offers. Generally, these promotions include current discount offers, such as percentage discounts off current purchases and other similar offers. These offers, when accepted by customers, are treated as a reduction to the transaction price. Revenue typically consists of the consideration received from the customer when the order is executed less a refund allowance, which is estimated using historical experience. Taxes collected from customers for remittance to governmental authorities are excluded from net sales. The following table presents our revenues disaggregated by products for the three and six months ended November 30, 2020 and 2019, respectively. Sales and other similar taxes are excluded from revenues. Three Months Three Months Six Months Six Months Ended November 30, Ended November 30, Ended November 30, Ended November 30, 2020 2019 2020 2019 Dog beds $ - $ - $ 1,756 $ - Pet Shampoo 1,101 - 1,222 - Total revenue: $ 1,101 $ - $ 2,978 $ - |
Cost of Sales | Cost of goods sold includes the purchase price, or manufacturing cost, of inventory sold, freight costs associated with inventory, shipping supply costs, inventory shrinkage costs and valuation adjustments and reductions for promotions and discounts offered by the Company’s third-party manufacturers and suppliers of raw materials. |
Related Parties | The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the related parties include: a. affiliates of the Company; b. entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. |
Commitments and Contingencies | The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. |
Income Tax Provision | The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date. The Company adopted the provisions of paragraph 740-10-25-13 of the FASB Accounting Standards Codification. Paragraph 740-10-25-13 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. |
Uncertain Tax Positions | The Company did not take any uncertain tax positions and had no unrecognized tax liabilities or benefits in accordance with the provisions of Section 740-10-25 at November 30, 2020 and 2019. |
Foreign currency transactions | The Company applies the guidelines as set out in Section 830-20-35 of the FASB Accounting Standards Codification (“Section 830-20-35”) for foreign currency transactions. Pursuant to Section 830-20-35 of the FASB Accounting Standards Codification, foreign currency transactions are transactions denominated in currencies other than U.S. Dollar, the Company’s reporting currency. Foreign currency transactions may produce receivables or payables that are fixed in terms of the amount of foreign currency that will be received or paid. A change in exchange rates between the reporting currency and the currency in which a transaction is denominated increases or decreases the expected amount of reporting currency cash flows upon settlement of the transaction. That increase or decrease in expected reporting currency cash flows is a foreign currency transaction gain or loss that generally shall be included in determining net income for the period in which the exchange rate changes. Likewise, a transaction gain or loss (measured from the transaction date or the most recent intervening balance sheet date, whichever is later) realized upon settlement of a foreign currency transaction generally shall be included in determining net income for the period in which the transaction is settled. The exceptions to this requirement for inclusion in net income of transaction gains and losses pertain to certain intercompany transactions and to transactions that are designated as, and effective as, economic hedges of net investments and foreign currency commitments. Pursuant to Section 830-20-25 of the FASB Accounting Standards Codification, the following shall apply to all foreign currency transactions of an enterprise and its investees: (a) at the date the transaction is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction shall be measured and recorded in the functional currency of the recording entity by use of the exchange rate in effect at that date as defined in section 830-10-20 of the FASB Accounting Standards Codification; and (b) at each balance sheet date, recorded balances that are denominated in currencies other than the functional currency or reporting currency of the recording entity shall be adjusted to reflect the current exchange rate. The Company’s wholly owned Canadian subsidiary uses the CAD Dollar as its reporting currency as well as its functional currency. The change in exchange rates between the U.S. Dollar, the Company’s reporting and functional currency and the Canadian Dollar, the currency in which a transaction is denominated increases or decreases the expected amount of reporting currency cash flows upon settlement of the transaction. That increase or decrease in expected reporting currency cash flows is a foreign currency transaction gain or loss that generally is included in determining net income (loss) for the period in which the exchange rate changes. |
Translation | The adjustments resulting from the translation process of the Company’s Canadian subsidiary accounts are reported in other comprehensive income. The cumulative foreign currency translation adjustments are only reclassified to net income when the gains or losses are realized upon sale or upon complete (or substantially complete) liquidation in the foreign subsidiary. These translation adjustments impact the subsidiary’s net assets and the Company’s net investment in the subsidiary. |
Earnings per Share | Earnings Per Share is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. Earnings per share (“EPS”) is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16 Basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. Pursuant to ASC Paragraphs 260-10-45-45-21 through 260-10-45-45-23 Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint of the security holder. The dilutive effect of outstanding call options and warrants (and their equivalents) issued by the reporting entity shall be reflected in diluted EPS by application of the treasury stock method unless the provisions of paragraphs 260-10-45-35 through 45-36 and 260-10-55-8 through 55-11 require that another method be applied. Equivalents of options and warrants include non-vested stock granted to employees, stock purchase contracts, and partially paid stock subscriptions (see paragraph 260–10–55–23). Anti-dilutive contracts, such as purchased put options and purchased call options, shall be excluded from diluted EPS. Under the treasury stock method: a. Exercise of options and warrants shall be assumed at the beginning of the period (or at time of issuance, if later) and common shares shall be assumed to be issued. b. The proceeds from exercise shall be assumed to be used to purchase common stock at the average market price during the period. (See paragraphs 260-10-45-29 and 260-10-55-4 through 55-5.) c. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) shall be included in the denominator of the diluted EPS computation. There were no potentially dilutive debt or equity instruments issued and outstanding at any time during the three-month periods ended November 30, 2020 and 2019. |
Subsequent Events | The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. |
Recent Accounting Pronouncements | Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, will have a material effect on the accompanying financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Nov. 30, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of revenue recognition disaggeration by products | Three Months Three Months Six Months Six Months Ended November 30, Ended November 30, Ended November 30, Ended November 30, 2020 2019 2020 2019 Dog beds $ - $ - $ 1,756 $ - Pet Shampoo 1,101 - 1,222 - Total revenue: $ 1,101 $ - $ 2,978 $ - |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Nov. 30, 2020 | |
Inventory | |
Schedule of inventory | November 30, 2020 May 31, 2020 Inventory – finished goods $ 682 $ 2,023 Inventory – raw materials 544 560 Less: Inventory impairment allowance - - Total $ 1,226 $ 2,583 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2020 | Nov. 30, 2019 | Nov. 30, 2020 | Nov. 30, 2019 | |
Total Revenue | $ 1,101 | $ 0 | $ 2,978 | $ 0 |
Dog beds [Member] | ||||
Total Revenue | 0 | 0 | 1,756 | 0 |
Pet shampoo [Member] | ||||
Total Revenue | $ 1,101 | $ 0 | $ 1,222 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Nov. 30, 2020 | May 31, 2020 |
Summary of Significant Accounting Policies | ||
Accounts receivable | $ 0 | $ 1,399 |
Inventory (Details)
Inventory (Details) - USD ($) | Nov. 30, 2020 | May 31, 2020 | Nov. 30, 2019 |
Inventory | |||
Inventory - finished goods | $ 682 | $ 2,023 | |
Inventory - raw materials | 544 | 560 | |
Less: Inventory impairment allowance | 0 | 0 | |
Inventory | $ 1,226 | $ 2,583 | $ 2,583 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Nov. 30, 2020 | Nov. 30, 2019 | Nov. 30, 2020 | Nov. 30, 2019 | May 31, 2020 | |
Interest expense | $ (320) | $ (263) | $ (644) | $ (526) | |
Accounts payable - related party | 22,426 | 22,426 | $ 22,417 | ||
Loan payable - related party | 45,675 | 45,675 | 45,031 | ||
Director and Officer [Member] | |||||
Accounts payable - related party | 22,426 | 22,426 | 22,417 | ||
Officer [Member] | |||||
Loan payable - related party | 45,675 | $ 45,675 | 45,031 | ||
President and CEO [Member] | Management Consultant Agreement [Member] | January 1, 2020 [Member] | |||||
Term of agreement | 2 years | ||||
Frequency of periodic payments | Monthly | ||||
Notice period to terminate agreement | 60 days | ||||
Consulting fees payable periodically | $ 500 | $ 500 | |||
Chief Executive Officer [Member] | |||||
Interest rate | 3.00% | 3.00% | |||
Accrued interest | $ 2,835 | $ 2,835 | $ 2,192 |
Stockholders Deficiency (Detail
Stockholders Deficiency (Details Narrative) - $ / shares | 6 Months Ended | |
Nov. 30, 2020 | May 31, 2020 | |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares par value | $ 0.001 | $ 0.001 |
Common stock, shares issued | 2,471,000 | 2,471,000 |
Registered common stock [Member] | April of 2020 [Member] | ||
Common stock, shares issued | 971,000 | |
Shares registration date | Jul. 2, 2020 |