Cover
Cover - USD ($) | 12 Months Ended | ||
May 31, 2022 | Sep. 13, 2022 | Nov. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K/A | ||
Amendment Flag | true | ||
Amendment Description | In accordance with Rule 12b-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), We are filing this Amendment No. 1 on Form 10-K/A (this “Form 10-K/A”) to our Annual Report on Form 10-K for the fiscal year ended May 31, 2022, originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on September 13, 2022 (the “Original Filing”), for the purpose of correcting a scrivener’s error in the date of the Report of Independent Registered Public Accounting Firm. In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications by our principal executive officer and principal financial officer are filed as exhibits to this 10-K/A. | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | May 31, 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Current Fiscal Year End Date | --05-31 | ||
Entity File Number | 000-50612 | ||
Entity Registrant Name | UNIQUE LOGISTICS INTERNATIONAL, INC. | ||
Entity Central Index Key | 0001281845 | ||
Entity Tax Identification Number | 01-0721929 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Address, Address Line One | 154-09 146th Ave | ||
Entity Address, City or Town | Jamaica | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 11434 | ||
City Area Code | (718) | ||
Local Phone Number | 978-2000 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 4,709,921 | ||
Entity Common Stock, Shares Outstanding | 799,141,770 | ||
Auditor Firm ID | 688 | ||
Auditor Name | Marcum LLP | ||
Auditor Location | New York, NY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | May 31, 2022 | May 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 1,422,393 | $ 252,615 |
Accounts receivable, net | 74,746,036 | 20,369,747 |
Contract assets | 30,970,581 | 23,423,314 |
Factoring reserve | 7,593,665 | |
Other prepaid expenses and current assets | 1,404,021 | 761,458 |
Total current assets | 108,543,031 | 52,400,799 |
Property and equipment, net | 188,889 | 192,092 |
Other long-term assets: | ||
Goodwill | 4,463,129 | 4,463,129 |
Intangible assets, net | 7,337,704 | 8,044,853 |
Operating lease right-of-use assets, net | 2,408,098 | 3,797,527 |
Deferred tax asset, net | 942,748 | 263,221 |
Deposits | 1,028,336 | 292,141 |
Other long-term assets | 16,180,015 | 16,860,871 |
Total assets | 124,911,935 | 69,453,762 |
Current Liabilities: | ||
Accounts payable | 49,028,862 | 38,992,846 |
Accrued expenses and other current liabilities | 5,666,159 | 2,383,915 |
Accrued freight | 9,240,650 | 10,403,430 |
Contract Liabilities | 468,209 | |
Revolving credit facility | 38,141,451 | |
Current portion of notes payable, net of discount | 608,333 | 2,285,367 |
Current portion of long-term debt due to related parties | 301,308 | 397,975 |
Current portion of operating lease liability | 912,618 | 1,466,409 |
Total current liabilities | 104,367,590 | 55,929,942 |
Other long-term liabilities | 282,666 | 565,338 |
Long-term-debt due to related parties, net of current portion | 397,968 | 715,948 |
Notes payable, net of current portion, net of discount | 3,193,306 | |
Derivative liabilities | 12,437,994 | |
Operating lease liability, net of current portion | 1,593,873 | 2,431,144 |
Total long-term liabilities | 14,712,501 | 6,905,736 |
Total liabilities | 119,080,091 | 62,835,678 |
Commitments and contingencies | ||
Stockholders’ Equity: | ||
Common stock, $0.001 par value; 800,000,000 shares authorized; 687,196,478 and 393,742,663 shares issued and outstanding as of May 31, 2022 and 2021, respectively. | 687,197 | 393,743 |
Additional paid-in capital | 292,155 | 4,906,384 |
Retained earnings | 4,851,541 | 1,316,987 |
Total Stockholders’ Equity | 5,831,844 | 6,618,084 |
Total Liabilities and Stockholders’ Equity | 124,911,935 | 69,453,762 |
Series A Preferred Stock [Member] | ||
Stockholders’ Equity: | ||
Preferred Stock, Value | 130 | 130 |
Series B Preferred Stock [Member] | ||
Stockholders’ Equity: | ||
Preferred Stock, Value | 821 | 840 |
Series C Preferred Stock [Member] | ||
Stockholders’ Equity: | ||
Preferred Stock, Value | ||
Series D Preferred Stock [Member] | ||
Stockholders’ Equity: | ||
Preferred Stock, Value |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) $ in Millions | May 31, 2022 USD ($) $ / shares shares |
Preferred stock, par value | $ / shares | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 |
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 |
Common Stock, Shares Authorized | 800,000,000 |
Common Stock, Shares, Outstanding | 687,196,478 |
Series A Convertible Preferred Stock [Member] | |
Preferred stock, par value | $ / shares | $ 0.001 |
Preferred stock, shares authorized | 130,000 |
Preferred stock, shares issued | 130,000 |
Preferred stock, shares outstanding | 130,000 |
Liquidation preference | $ | $ 13 |
Series B Convertible Preferred Stock [Member] | |
Preferred stock, par value | $ / shares | $ 0.001 |
Preferred stock, shares authorized | 870,000 |
Preferred stock, shares issued | 820,800 |
Preferred stock, shares outstanding | 820,800 |
Liquidation preference | $ | $ 82 |
Series C Convertible Preferred Stock [Member] | |
Preferred stock, shares authorized | 200 |
Preferred stock, shares issued | 195 |
Preferred stock, shares outstanding | 195 |
Liquidation preference | $ | $ 15.5 |
Series D Convertible Preferred Stock [Member] | |
Preferred stock, par value | $ / shares | $ 0.001 |
Preferred stock, shares authorized | 200 |
Preferred stock, shares issued | 187 |
Preferred stock, shares outstanding | 187 |
Liquidation preference | $ | $ 15.1 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Revenues: | ||
Total revenues | $ 1,014,486,680 | $ 371,887,272 |
Costs and operating expenses: | ||
Airfreight services | 496,918,427 | 130,564,578 |
Ocean freight and ocean services | 418,552,477 | 179,759,763 |
Contract logistics | 1,771,415 | 1,267,360 |
Customs brokerage and other services | 54,368,332 | 33,766,727 |
Salaries and related costs | 11,736,610 | 9,184,390 |
Professional fees | 1,079,819 | 1,350,369 |
Rent and occupancy | 2,022,396 | 1,815,194 |
Selling and promotion | 6,653,335 | 4,535,373 |
Depreciation and amortization | 782,351 | 765,532 |
Fees on factoring agreements | 27,000 | 4,471,540 |
Bad debt expense | 2,541,676 | 240,000 |
Other | 1,508,425 | 637,458 |
Total costs and operating expenses | 997,962,263 | 368,358,284 |
Income from operations | 16,524,417 | 3,528,988 |
Other income (expenses) | ||
Interest expense | (5,632,551) | (431,439) |
Amortization of debt discount | (776,515) | (1,350,389) |
Gain on forgiveness of promissory note | 358,236 | 1,646,062 |
Change in fair value of derivative liabilities | (4,020,698) | |
Loss on extinguishment of convertible note | (564,037) | (1,147,856) |
Other income | 60,000 | |
Total other income (expenses) | (10,575,565) | (1,283,622) |
Net income before income taxes | 5,948,852 | 2,245,366 |
Income tax expense | 2,414,298 | 519,869 |
Net income | 3,534,554 | 1,725,497 |
Deemed Dividend | (4,565,725) | |
Net (loss) income available for common shareholders | $ (1,031,171) | $ 1,725,497 |
Net (loss) income available for common shareholders per common share | ||
– basic | $ 0 | $ 0 |
– diluted | $ 0 | $ 0 |
Weighted average common shares outstanding | ||
– basic | 605,817,180 | 1,408,941,722 |
– diluted | 605,817,180 | 10,030,364,061 |
Airfreight Services [Member] | ||
Revenues: | ||
Total revenues | $ 499,024,643 | $ 137,055,903 |
Ocean Freight and Ocean Services [Member] | ||
Revenues: | ||
Total revenues | 446,977,162 | 196,041,832 |
Contract Logistics [Member] | ||
Revenues: | ||
Total revenues | 3,491,489 | 3,093,626 |
Customs Brokerage and Other Services [Member] | ||
Revenues: | ||
Total revenues | $ 64,993,386 | $ 35,695,911 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) | Preferred Stock [Member] Series A Preferred Stock [Member] | Preferred Stock [Member] Series B Preferred Stock [Member] | Preferred Stock [Member] Series C Preferred Stock [Member] | Preferred Stock [Member] Series D Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at May. 31, 2020 | $ 130 | $ 870 | $ 1,523,811 | $ (408,510) | $ 1,116,301 | |||
Balance, shares at May. 31, 2020 | 130,000 | 870,000 | ||||||
Issuance of Common Stock for services rendered | $ 28,291 | 63,375 | 91,666 | |||||
Issuance of Common Stock for services rendered, shares | 28,291,180 | |||||||
Conversion of Preferred B to Common Stock | $ (30) | $ 196,394 | (196,364) | |||||
Conversion of Preferred B to Common Stock, shares | (30,000) | 196,394,100 | ||||||
Recapitalization upon acquisition - net | $ 133,602 | (179,340) | (45,738) | |||||
Recapitalization upon acquisition - net, shares | 133,601,511 | |||||||
Warrants issued with convertible notes | 1,126,497 | 1,126,497 | ||||||
Beneficial conversion feature of convertible notes | 2,540,169 | 2,540,169 | ||||||
Issuance of Common Stock for the conversion of notes and accrued interest | $ 35,456 | 28,236 | 63,692 | |||||
Issuance of Common Stock for the conversion of notes and accrued interest, shares | 35,455,872 | |||||||
Net income | 1,725,497 | 1,725,497 | ||||||
Balance at May. 31, 2021 | $ 130 | $ 840 | $ 393,743 | 4,906,384 | 1,316,987 | 6,618,084 | ||
Balance, shares at May. 31, 2021 | 130,000 | 840,000 | 393,742,663 | |||||
Conversion of Preferred B to Common Stock | $ (19) | $ 125,692 | (125,673) | |||||
Conversion of Preferred B to Common Stock, shares | (19,200) | 125,692,224 | ||||||
Issuance of Common Stock for the conversion of notes and accrued interest | $ 136,347 | 108,584 | 244,931 | |||||
Issuance of Common Stock for the conversion of notes and accrued interest, shares | 136,346,191 | |||||||
Net income | 3,534,554 | 3,534,554 | ||||||
Conversion of debt to preferred C and D | ||||||||
Conversion of debt to preferred C and D, shares | 195 | 192 | ||||||
Conversion of Preferred D to Common Stock | $ 31,415 | (31,415) | ||||||
Conversion of Preferred D to Common Stock, shares | (5) | 31,415,400 | ||||||
Deemed Dividend | (4,565,725) | (4,565,725) | ||||||
Balance at May. 31, 2022 | $ 130 | $ 821 | $ 687,197 | $ 292,155 | $ 4,851,541 | $ 5,831,844 | ||
Balance, shares at May. 31, 2022 | 130,000 | 820,800 | 195 | 187 | 687,196,478 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 3,534,554 | $ 1,725,497 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 782,351 | 765,532 |
Amortization of debt discount | 776,515 | 1,350,389 |
Amortization of right of use assets | 1,389,429 | 1,195,995 |
Share-based compensation | 91,666 | |
Bad debt expense | 2,541,676 | 240,000 |
Gain on forgiveness of notes payable | (358,236) | (1,646,062) |
Loss on extinguishment of notes payable | 564,037 | 1,147,856 |
Change in deferred tax asset | (679,527) | (264,000) |
Change in fair value of derivative liabilities | 4,020,698 | |
Accretion of consulting agreement | (282,672) | (282,672) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (56,917,965) | (12,677,437) |
Contract assets | (7,547,267) | (18,586,306) |
Factoring reserve | 7,593,665 | (6,622,941) |
Other prepaid expenses and other current assets | (642,563) | (669,787) |
Deposits and other assets | (736,195) | 1,042 |
Accounts payable | 10,036,018 | 29,465,943 |
Accrued expenses and other current liabilities | 3,999,874 | (1,226,702) |
Accrued freight | (1,162,780) | 6,926,050 |
Contract liabilities | 468,209 | |
Operating lease liability | (1,391,062) | (1,095,969) |
Net Cash Used in Operating Activities | (34,011,241) | (161,906) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (72,001) | (51,489) |
Net Cash Used in Investing Activities | (72,001) | (51,489) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from notes payable | 2,000,000 | 5,174,902 |
Repayments of notes payable | (4,473,784) | (858,330) |
Repayments of long-term debt due to related parties | (414,647) | (5,149,925) |
Cash paid for debt issuance costs | (50,000) | |
Borrowings on line of credit, net | 38,141,451 | |
Net Cash Provided by (Used in) Financing Activities | 35,253,020 | (883,353) |
Net change in cash and cash equivalents | 1,169,778 | (1,096,748) |
Cash and cash equivalents - Beginning of year | 252,615 | 1,349,363 |
Cash and cash equivalents - End of year | 1,422,393 | 252,615 |
Cash Paid During the year for: | ||
Income taxes | 3,775,967 | 527,583 |
Interest | 5,632,551 | 66,717 |
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Operating lease asset and liability additions | 223,242 | |
Non-cash note forgiveness due to UL HK | 310,452 | |
Fair value of warrants issued with convertible notes | 1,126,497 | |
Beneficial conversion feature of convertible notes | 2,540,169 | |
Issuance of Common Stock - Conversions and Awards | 393,743 | |
Conversion of Preferred Stock Series B preferred to common | 125,673 | |
Conversion of Preferred Stock Series D preferred to common | 31,415 | |
Issuance of common stock for the conversion of principal net of accrued interest capitalized to principal to Notes Payable | 244,931 | |
Reduction of debt due to exchange of Convertible Notes for Preferred Stock Series C & D | 4,565,725 | |
Derivative liability recognized related to exchange of Convertible Notes for Preferred Stock Series C and D | $ 8,417,296 |
NATURE OF BUSINESS AND SUMMARY
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
May 31, 2022 | |
Accounting Policies [Abstract] | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business Unique Logistics International, Inc. (the “Company” or “Unique”) is a global logistics and freight forwarding company. The Company currently operates via its wholly owned subsidiaries, Unique Logistics International (NYC), LLC, a Delaware limited liability company (“UL NYC”) and Unique Logistics International (BOS) Inc, a Massachusetts corporation (“UL BOS”) and (collectively the “UL US Entities”). The Company provides a range of international logistics services that enable its customers to outsource sections of their supply chain process. This range of services can be categorized as follows: ● Air Freight services ● Ocean Freight services ● Customs Brokerage and Compliance services ● Warehousing and Distribution services ● Order Management On May 29, 2020, Unique Logistics Holdings, Inc., a privately held Delaware corporation headquartered in New York (“ULHI”), entered into a Securities Purchase Agreement with Unique Logistics Holdings Ltd, (“UL HK”), a Hong Kong company, (the “UL HK Transaction”). On October 8, 2020, Unique Logistics Holdings, Inc., Innocap, Inc., and Inno Acquisition Corp., a Delaware corporation and wholly owned subsidiary of Innocap Inc. (“Merger Sub”), entered into an Acquisition Agreement and Plan of Merger pursuant to which the Merger Sub was merged with and into ULHI, with ULHI surviving as a wholly owned subsidiary of Innocap, Inc. (the “Merger”). The transaction took place on October 8, 2020 (the “Closing”). Innocap, Inc. was incorporated under the laws of the State of Nevada on January 23, 2004. Effective January 11, 2021, the Company amended and restated its articles of incorporation with the office of the Secretary of State of Nevada to, among other things, change the Company’s name to Unique Logistics International, Inc. and increase the number of shares of common stock that the Company is authorized to issue from 500,000,000 800,000,000 On January 13, 2021, the Company received notice from the Financial Industry Regulation Authority (“FINRA”) that the above name change had been approved and took effect at the opening of trading on January 14, 2021. In connection with the name change, the Company changed its ticker symbol from “INNO” to “UNQL”. Liquidity The accompanying consolidated financial statements have been prepared on a going concern basis. Substantial doubt about an entity’s ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. As of May 31, 2022, the Company reported working capital of approximately $ 4.2 million compared with negative $ 3.5 million working capital as of May 31, 2021. The Company took the following steps to improve liquidity year over year: ● Strong operational performance resulted in increase in EBITDA from $ 8.9 17.3 ● The Company entered into Fourth Amendment to the TBK Loan Agreement to increase its credit facility from $ 47.5 57.5 ● The Company exchanged all of its Convertible Notes and associated Warrants into shares of Convertible Preferred Shares Series C and D Since its inception, the Company has experienced significant business growth. To fund such growth operating capital was initially provided by third party investors through Convertible Notes and on December 10, 2021 exchanged into Convertible Preferred Shares Series A, C and D with fixed ownership percentage of the company. Preferred shares are more beneficial to the company because they don’t require cash repayments. Due to the antidilution provision imbedded in the Convertible Preferred Shares, these provisions resulted in an embedded derivative and the company recorded a current liability during the quarter ended on February 28, 2022 in the amount of $ 12.7 The Company is also in process of potentially raising additional capital through the planned underwritten offering of securities that would provide funds for planned acquisitions and operating capital. While we continue to execute our strategic plan, we will be tightly managing our cash and monitoring our liquidity position. We have implemented a number of initiatives to conserve our liquidity position including activities such as raising additional capital, increasing credit facilities, reducing cost of debt, controlling general and administrative expenditures and improving collection processes. Many of the aspects of the plan involve management’s judgments and estimates that include factors that could be beyond our control and actual results could differ from our estimates. These and other factors could cause the strategic plan to be unsuccessful which could have a material adverse effect on our operating results, financial condition, and liquidity. Use of operating cash is an indicator that there could be a going concern issue, but based on our evaluation of the Company’s projected cash flows and business performance subsequent to the balance sheet date, management has concluded that the Company’s current cash and cash availability under the line of credit as of May 31, 2022, would be sufficient to alleviate a going concern issue for at least one year from the date these consolidated financial statements are issued. COVID-19 Covid-19 remains a threat and certain countries, such as China, are still subject to restrictions related to Covid-19. While the threat level has declined to a significant extent in the USA and globally, any resurgence could have a material adverse effect on our business operations, results of operations, cash flows and financial position. While we continue to execute our strategic plan, the Company is also in a process of evaluating several other liquidity-oriented options such as raising additional capital, increasing credit limits of the revolving credit facilities, reducing cost of debt, controlling expenditures, and improving its cash collection processes. While many of the aspects of the Company’s plan involve management’s judgments and estimates that include factors that could be beyond our control and actual results could differ from our estimates. These and other factors could cause the strategic plan to be unsuccessful which could have a material adverse effect on our operating results, financial condition, and liquidity. Basis of Presentation The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in accordance with the accounting principles generally accepted in the United States of America (“GAAP”). Principles of Consolidation The consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiaries stated in U.S. dollars, the Company’s functional currency. All intercompany transactions and balances have been eliminated in the consolidated financial statements. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Significant estimates inherent in the preparation of the consolidated financial statements include determinations of the useful lives and expected future cash flows of long-lived assets, including intangibles, valuation of assets and liabilities acquired in business combinations, and estimates and assumptions in valuation of debt and equity instruments, including derivative liabilities. In addition, the Company makes significant judgments to recognize revenue – see policy note “ Revenue Recognition Fair Value Measurement The Company follows the authoritative guidance that establishes a formal framework for measuring fair values of assets and liabilities in the consolidated financial statements that are already required by generally accepted accounting principles to be measured at fair value. The guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The transaction is based on a hypothetical transaction in the principal or most advantageous market considered from the perspective of the market participant that holds the asset or owes the liability. The Company utilizes market data or assumptions that market participants who are independent, knowledgeable, and willing and able to transact would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. The Company attempts to utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The Company is able to classify fair value balances based on the observability of those inputs. The guidance establishes a formal fair value hierarchy based on the inputs used to measure fair value. The hierarchy gives the highest priority to Level 1 measurements and the lowest priority to level 3 measurements, and accordingly, Level 1 measurement should be used whenever possible. The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities or published net asset value for alternative investments with characteristics similar to a mutual fund. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 – Unobservable inputs for the asset or liability. The methods used may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while management believes its valuation methods are appropriate, the fair value of certain financial instruments could result in a difference fair value measurement at the reporting date. There were no changes in the Company’s valuation methodologies from the prior year. For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amounts for financial assets and liabilities such as cash and cash equivalents, accounts receivable - trade, contract assets, factoring reserve, other prepaid expenses and current assets, accounts payable – trade and other current liabilities, including contract liabilities, convertible notes, promissory notes, all approximate fair value due to their short-term nature as of May 31, 2022 and 2021. The carrying amount of the long-term debt approximates fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to the Company. Lease liabilities approximate fair value based on the incremental borrowing rate used to discount future cash flows. The Company had Level 3 liabilities (See Derivative Liabilities note) as of May 31, 2022. On May 31, 2021 Level 3 derivative liability balances were insignificant. There were no transfers between levels during the reporting period. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits. No loss had been experienced, and management believes it is not exposed to any significant risk on credit. Accounts Receivable – Trade Accounts receivable - trade from revenue transactions are based on invoiced prices which the Company expects to collect. In the normal course of business, the Company extends credit to customers that satisfy pre-defined credit criteria. The Company generally does not require collateral to support customer receivables. Accounts receivable - trade, as shown on the consolidated balance sheets, is net of allowances when applicable. An allowance for doubtful accounts is determined through analysis of the aging of accounts receivable at the date of the consolidated financial statements, assessments of collectability based on an evaluation of historic and anticipated trends, the financial condition of the Company’s customers, and an evaluation of the impact of economic conditions. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, net of allowance for doubtful accounts. As of May 31, 2022 and 2021, the Company recorded an allowance for doubtful accounts of approximately $ 2.7 0.2 Concentrations Revenue by three customers as a percentage of the Company’s total revenue was 48 35 7 6 21 Two customers accounted for 44 25 19 Off Balance Sheet Arrangements On August 30, 2021, the Company terminated its agreement with an unrelated third party (the “Factor”) for factoring of specific accounts receivable. The factoring under this agreement was treated as a sale in accordance with FASB ASC 860, Transfers and Servicing 31.7 31.6 1.4 During the factoring agreement in place, the Company acted as the agent on behalf of the Factor for the arrangements and had no significant retained interests or servicing liabilities related to the accounts receivable sold. The agreement provided the Factor with security interests in purchased accounts until the accounts have been repurchased by the Company or paid by the customer. In order to mitigate credit risk related to the Company’s factoring of accounts receivable, the Company may purchase credit insurance, from time to time, for certain factored accounts receivable, resulting in risk of loss being limited to the factored accounts receivable not covered by credit insurance, which the Company does not believe to be significant. During the years ended May 31, 2022 and 2021, the Company factored accounts receivable invoices totaling approximately Nil 233.4 4.5 27,000 Factoring Reserve When an invoice is sold to Factor, the amount received from the Factor is credited to accounts receivable – trade and a reserve is retained, less a fee, by Factor which is debited to “factoring reserve” on the consolidated balance sheets. Factor Recovery In certain instances, the Company receives payment for a factored reserve directly from the customer. In these cases, until the funds are paid to the factor, the Company records the payment as “factor recovery” which is in accrued expenses and other current liabilities on the consolidated balance sheets. Recourse Liability Company policy is to do a collectability review of uncollected factored receivables in conjunction with the Factor at each reporting date and assess the need to provide for risk of potential non-collection and resulting recourse. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation is provided for by the straight-line method over the estimated useful lives of the related assets. Estimated useful lives of property and equipment are as follows: SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT Software 3 Computer equipment 3 5 Furniture and fixtures 5 7 Leasehold improvements Shorter of estimated useful life or remaining term of the lease Both the useful life of an asset and its residual value, if any, are reviewed annually. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in income for the period. The Company did not record any impairment for the year ended May 21, 2022 or May 31, 2021. Goodwill and Other Intangibles The Company accounts for business acquisitions in accordance with GAAP. Goodwill in such acquisitions is determined as the excess of fair value over amounts attributable to specific tangible and intangible assets. GAAP specifies criteria to be used in determining whether intangible assets acquired in a business combination must be recognized and reported separately from goodwill. Amounts assigned to goodwill and other identifiable intangible assets are based on independent appraisals or internal estimates. In accordance with GAAP, the Company does not amortize goodwill or indefinite-lived intangible assets. Management evaluates the remaining useful life of an intangible asset that is not being amortized each reporting period to determine whether events and circumstances continue to support an indefinite useful life. If an intangible asset that is not being amortized is subsequently determined to have a finite useful life, it is amortized prospectively over its estimated remaining useful life. Amortizable intangible assets, including tradenames and non-compete agreements, are amortized on a straight-line basis over 3 10 12 15 The Company tests goodwill for impairment annually as of May 31 or if an event occurs or circumstances change that indicate that the fair value of the entity, or the reporting unit, may be below its carrying amount (a “triggering event”). Whenever events or circumstances change, entities have the option to first make a qualitative evaluation about the likelihood of goodwill impairment. If impairment is deemed more likely than not, management would perform the two-step goodwill impairment test. Otherwise, the two-step impairment test is not required. In assessing the qualitative factors, the Company assessed relevant events and circumstances that may impact the fair value and the carrying amount of the reporting unit. The identification of the relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgements and assumptions. The judgement and assumptions include the identification of macroeconomic conditions, industry and market considerations, overall financial performance, Company specific events and share price trends, an assessment of whether each relevant factor will impact the impairment test positively or negatively, and the magnitude of such impact. If a quantitative assessment is performed, a reporting unit’s fair value is compared to its carrying value. A reporting unit’s fair value is determined based upon consideration of various valuation methodologies, including the income approach, which utilizes projected future cash flows discounted at rates commensurate with the risks involved and multiples of current and future earnings. If the fair value of a reporting unit is less than its carrying amount, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. We test goodwill for impairment annually in the fiscal fourth quarter or whenever events or circumstances indicate the carrying value may not be recoverable. For the year ended May 31, 2022 and 2021 the Company conducted its annual review of impairment of goodwill and intangible assets and no impairment was identified. Impairment of Long-Lived Assets Long-lived assets are comprised of intangible assets and property and equipment. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. An estimate of undiscounted future cash flows produced by the asset, or the appropriate grouping of assets, is compared to the carrying value to determine whether an impairment exists, pursuant to the provisions of FASB ASC 360-10 “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of”. Derivative Liability On December 10, 2021, the Company entered into an amended securities exchange agreement with the holders of convertible notes to exchange all Convertible Notes of the Company into shares of the newly created Convertible Preferred Stock Series C and D. For additional information on the exchange agreement see Note 5, Financing Arrangements. Similar to the existing Convertible Preferred Stock Series A, these preferred stocks featured anti-dilution provision that expire on a certain date. Management has determined the anti-dilution provision embedded in preferred stock Series A, C and D is required to be accounted for separately from the preferred stock as a derivative liability and recorded at fair value. Separation of the anti-dilution option as a derivative liability is required because its economic characteristics are considered more akin to an equity instrument and therefore the anti-dilution option is not considered to be clearly and closely related to the economic characteristics of the preferred stock. The Company has identified and recorded derivative instruments arising from an anti-dilution provision in the Company’s Series A, Series C, and Series D Preferred Stock during the quarter ended February 28, 2022. The Company recorded $ 12.4 An embedded derivative liability is representing the rights of holders of Convertible Preferred Stock Series A, C and D to receive additional common stock of the Company upon issuance of any additional common stock by the Company prior to qualified financing event as defined in the agreement. Each reporting period, the embedded derivative liability, if material, would be adjusted to reflect fair value at each period end with changes in fair value recorded in the “Change in fair value of embedded derivative liability” financial statement line item of the company’s statements of operations. The Company recorded change in fair value of $ 4,020,698 SCHEDULE OF DERIVATIVE LIABILITIES Level 1 Level 2 Level 3 Derivative liabilities as June 1, 2021 $ - $ - $ - Addition - - 8,417,296 Changes in fair value - - 4,020,698 Derivative liabilities as May 31, 2022 $ - $ - $ 12,437,994 The underlying value of the anti-dilution provision is calculated from estimating the probability and value of a potential raise. The model used estimates the potential that the company completes a capital raise prior to the expiration of the anti-dilution feature and determines the value of the anti-dilution feature given these assumptions. The model requires the use of certain assumptions. These assumptions include probability a raise is completed, probability certain anti-dilution features are extended, estimated raise amount, term to a raise, and an appropriate risk-free interest rate. The key inputs into the model were as follows: SCHEDULE OF FAIR VALUE ASSUMPTION May 31, 2022 May 31, 2021 Risk-free interest rate 1.6 % 0.7 % Probability of capital raise 53.9 % 10 % Estimated capital raise amount $ 39,000,000 $ 2,400,000 Estimated time to capital raise 0.5 1.0 Income Taxes The Company files a consolidated income tax return for federal and most state purposes. Management has determined that there are no uncertain tax positions that would require recognition in the consolidated financial statements. If the Company were to incur an income tax liability in the future, interest and penalties on any income tax liability would be reported as interest expense. Management’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based on ongoing analysis of tax laws, regulations, and interpretations thereof as well as other factors. The Company uses the assets and liability method of accounting for deferred income taxes. Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the balance sheet carrying amounts of existing assets and liabilities and their respective tax basis. The Company regularly evaluates the need for a valuation allowance related to the deferred tax asset. Revenue Recognition The Company adopted ASC 606, Revenue from Contracts with Customers To determine revenue recognition, the Company applies the following five steps: 1. Identify the contract(s) with a customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to the performance obligations in the contract; and 5. Recognize revenue as or when the performance obligation is satisfied. Revenue is recognized as follows: i. Freight income - export sales Freight income from the provision of air, ocean, and land freight forwarding services are recognized over time based on a relative transit time basis thru the sail or departure from origin port. The Company is the principal in these transactions and recognizes revenue on a gross basis. ii. Freight income - import sales Freight income from the provision of air, ocean, and land freight forwarding services are recognized over time based on a relative transit time basis thru the delivery to the customer’s designated location. The Company is the principal in these transactions and recognizes revenue on a gross basis. iii. Customs brokerage and other service income Customs brokerage and other service income from the provision of other services are recognized at the point in time the performance obligation is met. The Company’s business practices require, for accurate and meaningful disclosure, that it recognizes revenue over time. The “over time” policy is the period from point of origin to arrival of the shipment at US Port of entry (or in the case when the customer requires delivery to a designated point, the arrival at that delivery point). This over time policy requires the Company to make significant judgements to recognize revenue over the estimated duration of time from port of origin to arrival at port of entry. The point in the process when the Company meets its obligation in the port of entry and the subsequent transfer of the goods to the customer is when the customer has the obligation to pay, has taken physical possession, has legal title, risk and awards (ownership) and has accepted the goods. The Company has elected to not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied as of the end of the period as the Company’s contracts with its customers have an expected duration of one year or less. The Company uses independent contractors and third-party carriers in the performance of its transportation services. The Company evaluates who controls the transportation services to determine whether its performance obligation is to transfer services to the customer or to arrange for services to be provided by another party. The Company determined it acts as the principal for its transportation services performance obligation since it is in control of establishing the prices for the specified services, managing all aspects of the shipments process and assuming the risk of loss for delivery and collection. Revenue billed prior to realization is recorded as contract liabilities on the consolidated balance sheets and contract costs incurred prior to revenue recognition are recorded as contract assets on the consolidated balance sheets. Contract Assets Contract assets represent amounts for which the Company has the right to consideration for the services provided while a shipment is still in-transit but for which it has not yet completed the performance obligation and has not yet invoiced the customer. Upon completion of the performance obligations, which can vary in duration based upon the method of transport and billing the customer, these amounts become classified within accounts receivable - trade. Contract Liabilities Contract liabilities represent the amount of obligation to transfer goods or services to a customer for which consideration has been received. Significant Changes in Contract Asset and Contract Liability Balances for the year ended May 31, 2022: SCHEDULE OF CHANGES IN CONTRACT ASSET AND CONTRACT LIABILITY Contract Assets Increase Contract (Increase) Reclassification of the beginning contract liabilities to revenue, as the result of performance obligation satisfied $ - $ - Cash Received in advance and not recognized as revenue - 468,209 Reclassification of the beginning contract assets to receivables, as the result of rights to consideration becoming unconditional (10,491,045 ) - Contract assets recognized 18,038,312 - Net Change $ 7,547,267 $ 468,209 There were no changes in contract assets or liabilities as of May 31, 2021. Disaggregation of Revenue from Contracts with Customers The following table disaggregates gross revenue from our clients (all US based) by significant geographic area for the years ended May 31, 2022 and 2021, based on origin of shipment (imports) or destination of shipment (exports): SCHEDULE OF DISAGGREGATION OF REVENUE For the For the Year Ended China, Hong Kong & Taiwan $ 343,370,279 $ 186,932,382 Southeast Asia 422,869,068 104,475,697 United States 39,362,326 31,452,041 India Sub-continent 161,841,791 28,164,102 Other 47,043,216 20,863,050 Total revenue $ 1,014,486,680 $ 371,887,272 Segment Reporting Based on the guidance provided by ASC Topic 280, Segment Reporting Earnings per Share The Company adopted ASC 260, Earnings per share, The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share. The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share. SCHEDULE OF EARNING PER SHARE For the Year Ended May 31, 2022 May 31, 2021 Numerator: Net income (loss) available for common shareholders $ (1,031,171 ) 1,725,497 Effect of dilutive securities: - 1,350,389 Diluted net (loss) income available for common shareholders $ (1,031,171 ) $ 3,075,886 Denominator: Weighted average common shares outstanding – basic 605,817,180 1,408,941,722 Dilutive securities: Series A Preferred - 1,316,157,000 Series B Preferred - 5,499,034,800 Convertible notes - 1,806,230,539 Warrants - - Series C Preferred - - Series D Preferred - - Weighted average common shares outstanding and assumed conversion – diluted 605,817,180 10,030,364,061 Basic net (loss) income available for common shareholders per common share $ (0.00 ) $ 0.00 - Diluted net (loss)income available for common shareholders per common share $ (0.00 ) $ 0.00 The Company has excluded the following shares as of May 31, 2022, because they are antidilutive: SCHEDULE OF ANTI-DILUTIVE SHARES May 31, 2022 Weighted average common shares outstanding – basic 605,817,180 Series A Preferred 1,233,209,295 Series B Preferred 5,373,342,576 Series C Preferred 1,206,351,359 Series D Preferred 1,174,935,959 Weighted average common shares outstanding and assumed conversion – diluted 9,593,656,369 Leases In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02 “Leases” During the period ended May 31, 2020, the Company adopted ASC 842 upon inception and recognized a right of use (“ROU”) asset and liability in the consolidated balance sheet in the amount of $ 4,770,280 For leases in which the acquiree is a lessee, the Company shall measure the lease liability at the present value of the remaining lease payments, as if the acquired lease were a new lease of the Company at the acquisition date. The Company shall measure the right-of-use asset at the same amount as the lease liability as adjusted to reflect favorable and unfavorable terms of the lease when compared with market terms. The values of the leases acquired in the business acquisition discussed in Note 2 were representative of fair value at the acquisition date and no favorable or unfavorable terms were noted. The Company adopted the package of practical expedients that allows it to (i) not reassess whether an arrangement contains a lease, (ii) carry forward its lease classification as operating or capital leases, (iii) not to apply the recognition requirements in ASC 842 to short-term leases, (iv) not record a right of use asset or right of use liability for leases with an asset or liability balance that would be considered immaterial. and (v) not reassess its previously recorded initial direct cost |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
May 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 2. PROPERTY AND EQUIPMENT Major classifications of property and equipment are summarized below as of May 31, 2022 and 2021. SCHEDULE OF PROPERTY AND EQUIPMENT May 31, 2022 May 31, 2021 Furniture and fixtures $ 102,062 $ 84,085 Computer equipment 159,674 108,479 Software 30,609 27,780 Leasehold improvements 27,146 27,146 Property and equipment, gross 319,491 247,490 Less: accumulated depreciation (130,602 ) (55,398 ) Property and equipment, net $ 188,889 $ 192,092 Depreciation expense charged to income for the years ended May 31, 2022 and May 31, 2021 amounted to $ 75,204 58,384 |
GOODWILL
GOODWILL | 12 Months Ended |
May 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | 4. GOODWILL The carrying amount of goodwill was $ 4,463,129 at May 31, 2022 and 2021. On February 19, 2021, the Company and UL HK agreed to reduce an existing $ 325,000 note assumed by the Company in the May 29, 2020 as part of the acquisition. SCHEDULE OF GOODWILL Beginning balance June 1, 2020 $ 4,788,129 Measurement Period Adjustment (325,000 ) Ending balance May 31, 2021 and 2022 $ 4,463,129 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
May 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | 5. INTANGIBLE ASSETS Intangible assets consist of the following at May 31, 2022 and 2021: SCHEDULE OF INTANGIBLE ASSETS May 31, 2022 May 31, 2021 Trade names / trademarks $ 806,000 $ 806,000 Customer relationships 7,633,000 7,633,000 Non-compete agreements 313,000 313,000 Intangible assets, gross 8,752,000 8,752,000 Less: Accumulated amortization (1,414,296 ) (707,147 ) Intangible assets, net $ 7,337,704 $ 8,044,853 Amortizable intangible assets, including tradenames and non-compete agreements, are amortized on a straight-line basis over 3 10 12 15 707,149 707,147 7.33 Estimated amortization expense for the next five years and thereafter is as follows: SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE Twelve Months Ending May 31, 2023 637,592 2024 637,592 2025 637,591 2026 602,814 2027 602,814 Thereafter 4,219,301 Intangible assets, net $ 7,337,704 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
May 31, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 6. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following at May 31, 2022 and 2021: SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES May 31, 2022 May 31, 2021 Accrued salaries and related expenses $ 625,000 $ 672,455 Accrued sales and marketing expense 2,383,500 539,810 Accrued professional fees 1,350,170 75,000 Accrued income tax 559,544 256,286 Accrued overdraft liabilities 681,058 790,364 Other accrued expenses and current liabilities 66,887 50,000 Accrued expenses and other current liabilities $ 5,666,159 $ 2,383,915 |
FINANCING ARRANGEMENTS
FINANCING ARRANGEMENTS | 12 Months Ended |
May 31, 2022 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | 7. FINANCING ARRANGEMENTS Financing arrangements on the consolidated balance sheets consists of: SCHEDULE OF FINANCING ARRANGEMENT May 31, 2022 May 31, 2021 Revolving Credit Facility $ 38,141,451 $ - Promissory note (PPP) - 358,236 Promissory notes (EIDL) - 150,000 Notes payable 608,333 2,528,886 Convertible notes – net of discount - 2,441,551 Notes payable, gross 38,749,784 5,478,673 Less: current portion (38,749,784 ) (2,285,367 ) Long term, notes payable $ - $ 3,193,306 Revolving Credit Facility On June 1, 2021, the Company entered into a Revolving Purchase, Loan and Security Agreement (the “TBK Agreement”) with TBK BANK, SSB, a Texas State Savings Bank (“Purchaser”), for a facility under which Purchaser will, from time to time, buy approved receivables from the Seller. The TBK Agreement provides for Seller to have access to the lesser of (i) $ 30 25 The Core Facility provided Core with security interests in purchased accounts until the accounts have been repurchased by the Company or paid by the customer. As of June 1, 2021, the Core Facility has been terminated along with all security interests granted to Core and replaced with the TBK Agreement. This facility temporarily renewed on June 17, 2021, under the same terms and conditions as the original agreement and the credit line was set at $ 2.0 On August 4, 2021, the parties to the TBK Agreement entered into a First Amendment Agreement to increase the credit facility from $ 30.0 40.0 On September 17, 2021, the parties to the TBK Agreement entered into a Second Amendment to the TBK Agreement to temporarily increase the credit facility from $ 40.0 47.5 On January 31, 2022, the parties to the TBK Agreement entered into a Third Amendment to the TBK Agreement to permanently increase the credit facility from $ 40.0 47.5 On April 14, 2022, the parties to the TBK Loan Agreement entered into a Forth Amendment to temporarily increase the credit facility from $ 47.5 57.5 Purchase Money Financing On September 8, 2021 (the “Effective Date”), the Company entered into a Purchase Money Financing Agreement (the “Financing Agreement”) with Corefund Capital, LLC (“Corefund”) in order to enable the Company to finance additional cargo charter flights for the peak shipping season. Pursuant to the Financing Agreement, the Company may, from time to time, request financing from Corefund to enable the Company to engage Company’s suppliers to provide chartered cargo flights for the Company’s clients. The Company may also request that Corefund tender payments directly to a supplier. Corefund requires payments from a buyer to be made to a Deposit Account Control Agreement account at an agreed upon bank where Corefund is the sole director and accessor to the account for the term of the relationship. The fees and interest related to CoreFund purchase money financing are included in the interest expense on the statement of operations. The fee paid to CoreFund for the year ended May 31, 2022 were approximately $ 1.0 Promissory Note (PPP) The Company’s wholly-owned subsidiaries received proceeds under the Paycheck Protection Program (“PPP”). The PPP, established as part of the CARES Act, provided for loans to qualifying business for amounts up to 2.5 times the average monthly payroll expenses of the qualifying business. The PPP Loan (“Note”) and accrued interest are forgivable after twenty-four weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities and maintains its payroll levels. The amount of forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period. During April and May 2020, the UL US Entities received aggregate proceeds of $ 1,646,062 The promissory notes mature for dates ranging from April 2022 through May 2022 0 358,236 The interest rate on the above PPP notes is 1.0 As noted above, the principal and accrued interest under the Note evidencing the PPP Loans are forgivable after twenty-four weeks as long the Company has used the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the Company terminates employees or reduces salaries during the twenty-four-week period. The Company used the proceeds for purposes consistent with the PPP. In order to obtain full or partial forgiveness of the PPP Loan, the Company must request forgiveness and must provide satisfactory documentation in accordance with applicable Small Business Administration (“SBA”) guidelines. Interest payable on the Note may be forgiven only if the SBA agrees to pay such interest on the forgiven principal amount of the Note. The Company will be obligated to repay any portion of the principal amount of the Note that is not forgiven, together with interest accrued and accruing thereon at the rate set forth above, until such unforgiven portion is paid in full. Beginning one month following expiration of the Deferral Period and continuing monthly until 24 months from the date of the Note (the “Maturity Date”), the Company is obligated to make monthly payments of principal and interest to the Lender with respect to any unforgiven portion of the Note, in such equal amounts required to fully amortize the principal amount outstanding on the Note as of the last day of the Deferral Period by the Maturity Date. The Company is permitted to prepay the Note at any time without payment of any premium. During January 2021, the PPP notes, which were assumed without recourse in the May 2020 acquisition (see Note 2) were utilized for eligible purposes under the terms of the agreements and were forgiven after the expiration of the twenty four week period discussed above. The total amount forgiven was $ 1,646,062 On March 9, 2021, the Company was granted an SBA loan (the “Loan”) by Century Bank in the aggregate amount of $ 358,236 March 5, 2026 1 358,236 Promissory Note (EIDL) Pursuant to a certain Loan Authorization and Agreement (the “SBA Loan Agreement”) in June 2020, the Company securing a loan (the “EIDL Loan”) with a principal amount of the EIDL Loan of $ 150,000 3.75 150,000 Notes Payable On May 29, 2020, the Company entered into a $ 1,825,000 May 29, 2023 The agreement calls for six semi-annual payments of $ 304,166.67 608,333 1,216,667 On May 29, 2020, the Company entered into a non-compete, non-solicitation and non-disclosure agreement with a former owner of ATL. The amount payable under the agreement is $ 500,000 The agreement calls for twenty-four monthly non-interest bearing payments of $ 20,833.33 0 250,004 Promissory Note On March 19, 2021 (the “Effective Date”), Unique Logistics International, Inc. (the “Company”) issued to an accredited investor (the “Investor”) a 10 1,000,000 1,000,000 As of May 31, 2021, the outstanding balance due under the agreement was $ 1,062,215 Convertible Notes Payable Trillium SPA On October 8, 2020, the Company entered into a Securities Purchase Agreement (the “Trillium SPA”) with Trillium Partners (“Trillium”) pursuant to which the Company sold to Trillium (i) a 10 1,111,000 1,000,000 570,478,452 0.001946 The Company initially determined the fair value of the warrant and the beneficial conversion feature of the note using the Black-Scholes model and recorded an adjustment to the carrying value of the note liability with an equal and offsetting adjustment to Stockholders’ Equity. The note was amended on October 14, 2020, to adjust the conversion price to $ 0.00179638 On June 1, 2021, this Note maturity was extended to October 6, 2022 On August 19, 2021, Trillium entered into a Securities Exchange Agreement and on December 10, 2021 into an amended Securities Exchange Agreement, as discussed below. Upon effectiveness of these agreements, Trillium Note was exchanged for Preferred Stock Series D. During the year ended May 31, 2022, a noteholder converted $ 131,759 73,346,191 0.00179640 0 1,104,500 3a SPA On October 14, 2020, the Company entered into a Securities Purchase Agreement (the “3a SPA”) with 3a Capital Establishment (“3a”) pursuant to which the Company sold to 3a (i) a 10 1,111,000 1,000,000 570,478,452 0.001946 October 6, 2021 The Company determined the fair value of the warrant using the Black-Scholes model and recorded an adjustment to the carrying value of the note liability with an equal and offsetting adjustment to Stockholders Equity. The warrant had a grant date fair value of $ 563,156 436,844 On June 1, 2021, this Note maturity was extended to October 6, 2022 383,819 On August 19, 2021, 3A entered into a Securities Exchange Agreement and on December 10, 2021 into an amended Securities Exchange Agreement, as discussed below. Upon effectiveness of these agreements, 3A Note was exchanged for Preferred Stock Series C. As of May 31, 2022 and 2021 the total unamortized debt discount related to the 3a SPA was $ 0 391,757 285,048 During the year ended May 31, 2022, the noteholder converted $ 113,172 in convertible notes into 63,000,000 shares of the Company’s common stock at a rate of $ 0.00179638 per share. As of May 31, 2022 and 2021, the outstanding principal balance on the 3a Note was $ 0 and $ 1,111,000 , respectively. Trillium and 3a January Convertible Notes On January 28, 2021, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Trillium Partners LP (“Trillium”) and 3a Capital Establishment (“3a” together with Trillium, the “Investors”) pursuant to which the Company sold to each of the Investors (i) a 10 916,666 1,833,333 1,666,666 The Notes mature on January 28, 2022 (the “Maturity Date”) and are convertible at any time. The conversion price of the Note is $ 0.0032 1,666,666 On June 1, 2021, maturity of these Notes was extended to January 28, 2023 247,586 As of May 312021, the outstanding balance on these convertible notes was $ 1,833,334 On August 19, 2021, Investors entered into a Securities Exchange Agreement and on December 10, 2021 into an amended Securities Exchange Agreement, as discussed below. Upon effectiveness of these agreements, Trillium and 3a January Convertible Notes were exchanged for Preferred Stocks Series C and D. During the year ended May 31, 2022, the Company recorded amortization of debt discount totaling $ 491,467 Covenants As of May 31, 2022 the Company was in full compliance with all covenants and debt agreements. As of May 31, 2021, the Company was in compliance with all covenants and debt agreements, except for Trillium and 3a where the Company was deemed to be in default due to a violation of several covenants. On January 29, 2021, the Company and the investors (Trillium and 3a) entered into a waiver agreement which waived any and all defaults underlying the 3a, Trillium and 3a SPA’s and the Trillium and 3a Notes for a period of six months. Subsequently, the Company signed the Securities Exchange Agreement extending this waiver as described below. Securities Exchange Agreements On August 19, 2021, the Company entered into a securities exchange agreement (the “Exchange Agreement”) with the investors (Trillium and 3a) holding the above listed notes and warrants of the Company (each, including its successors and assigns, a “Holder” and collectively the “Holders”). Pursuant to the Exchange Agreement, the Company agreed to issue, and the Holders agreed to acquire the New Securities (as defined herein) in exchange for the Surrendered Securities (the “Old Notes” defined as October and January Notes and Warrants in the Exchange Agreement). “New Securities” means a number of Exchange Shares (as defined in the Exchange Agreement) determined by applying the Exchange Ratio (as defined in the Exchange Agreement) upon consummation of a registered public offering of shares of the Company’s Common Stock (and warrants if included in such financing), at a valuation of not less than $200,000,000.00 pre-money, pursuant to which the Company receives gross proceeds of not less than $ 20,000,000 In the event the number of Exchange Shares would result in the Holder beneficially owning more than the Beneficial Ownership Limitation (as defined in the Exchange Agreement), all such Exchange Shares in excess of the Beneficial Ownership Limitation shall be issued as a number of shares of newly created Series C Convertible Preferred Stock The closing will occur on the Trading Day on which all of the Transaction Documents (as defined in Exchange Agreement) have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Holders’ obligations to tender the Surrendered Securities at such Closing, and (ii) the Company’s obligations to deliver the New Securities, in each case, have been satisfied or waived (the “Closing Date”). Amended Securities Exchange Agreement On December 10, 2021, the Company entered into an amended securities exchange agreement Trillium and 3A (the “Holders”) holding convertible notes, issued by the Company, in the aggregate remaining principal amount of $ 3,861,160 1,140,956,904 0.001 0.001 In connection with the Amended Exchange Agreement, each of the Holders received that certain number of Preferred Stock equal to one share of Preferred Stock for every $ 10,000 195 192 Preferred may be converted up to an amount of common stock equal to 12.48% of the Company’s capital stock on a fully diluted basis Upon effectiveness of the Amended Exchange Agreement, the Company no longer has any outstanding convertible notes or warrants. Future maturities related to the above promissory notes, notes payable and convertible notes are $ 608,333 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
May 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 8. RELATED PARTY TRANSACTIONS As part of the UL HK Transaction and related transactions, the Company assumed the following debt due to related parties: SCHEDULE OF RELATED PARTY TRANSACTIONS May 31, 2022 May 31, 2021 Due to Frangipani Trade Services (1) $ 602,618 $ 903,927 Due to employee (2) 30,000 60,000 Due to employee (3) 66,658 149,996 Due to related parties, gross 699,276 1,113,923 Less: current portion (301,308 ) (397,975 ) Long term, due to related parties $ 397,968 $ 715,948 (1) Due to Frangipani Trade Services (“FTS”), an entity owned by the Company’s CEO, is due on demand and is non-interest bearing. The principal amount of this Promissory Note bears no interest; provided that any amount due under this Note which is not paid when due shall bear interest at an interest rate equal to six percent ( 6 150,655 (2) On May 29, 2020, the Company entered into a $ 90,000 2,500 (3) On May 29, 2020, the Company entered into a $ 200,000 5,556 Consulting Agreements Unique entered into a Consulting Services Agreement on May 29, 2020 for a term of three years with Great Eagle Freight Limited (“Great Eagle” or “GEFD”), a Hong Kong Company (the “Consulting Services Agreement”) where the Company pays $ 500,000 282,666 565,338 Accounts Receivable - trade and Accounts Payable - trade Transactions with related parties account for $ 3.0 15.2 1.3 10.8 Revenue and Expenses Revenue from related party transactions is for export services from related parties or for delivery at place imports nominated by such related parties. For the year ended May 31, 2022, these transactions represented approximately $ 3.9 Revenue from related party transactions is for export services from related parties or for delivery at place imports nominated by such related parties. For the year ended May 31, 2021 , 2.4 Direct costs are services billed to the Company by related parties for shipping activities. For the year May 31, 2022, these transactions represented approximately $ 192.8 Direct costs are services billed to the Company by related parties for shipping activities. For the year May 31, 2021, these transactions represented $ 54.9 |
RETIREMENT PLAN
RETIREMENT PLAN | 12 Months Ended |
May 31, 2022 | |
Retirement Benefits [Abstract] | |
RETIREMENT PLAN | 9. RETIREMENT PLAN We have two savings plans that qualify under Section 401(k) of the Internal Revenue Code legacy of the predecessor companies. Eligible employees may contribute a portion of their salary into the savings plans, subject to certain limitations. In one of which the Company has the discretionary option of matching employee contributions and in the other the Company matches 20% on the first 100% contribution. In either Plan, employees can contribute 1% to 98% of gross salary up to a maximum permitted by law 0.1 0.05 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
May 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | 10. STOCKHOLDERS’ EQUITY Common Stock The Company is authorized to issue 800,000,000 0.001 During the year ended May 31, 2021 - 28,291,180 91,666 - On October 9, 2020, the Company’s Chief Executive Officer converted 30,000 196,394,100 - On April 12, 2021, a noteholder converted $ 63,692.00 35,455,872 During the year ended May 31, 2022: On August 13, 2021 the Company issued 125,692,224 19,200 100 On April 5, 2022, a shareholder converted 5 31,415,400 On June 23, 2021, a noteholder converted $ 25,842.22 14,385,720 0.00179638 On June 28, 2021, a noteholder converted $ 71,855.20 40,000,000 0.00179638 On July 8, 2021, a noteholder converted $ 15,620.83 8,695,727 0.00179638 On August 3, 2021, a noteholder converted $ 24,418.89 13,593,388 0.00179638 On August 9, 2021, a noteholder converted $ 12,820.83 7,137,037 0.00179638 On September 28, 2021, a noteholder converted $ 53,054.86 29,534,319 0.00179638 On October 27, 2021, a noteholder converted $ 41,317 23,000,000 0.00179638 As of May 31, 2022 and 2021, there were 687,196,478 393,742,663 Preferred Shares The Company authorized to issue 5,000,000 0.001 Series A Convertible Preferred The Company has designated 130,000 130,000 Series B Convertible Preferred The Company has designated 870,000 820,800 840,000 Series C & D Convertible Preferred The Company has designated 200 195 187 none 12.48 Since the anti-dilution provisions exist in the Preferred Stock Series A, C and D, derivative liabilities were recorded on the balance sheet as of May 31, 2022, at fair value (see Note 1, Derivative Liability). As a result of the Company exchanging $ 3.9 4.6 4.3 Warrants The following is a summary of the Company’s warrant activity: SCHEDULE OF WARRANTS ACTIVITY Weighted Average Warrants Exercise Price Outstanding – May 31, 2021 1,140,956,904 $ 0.002 Exercisable – May 31, 2021 1,140,956,904 $ 0.002 Cancelled (1,140,956,904 ) $ - Outstanding – May 31, 2022 - $ - Exercisable – May 31, 2022 - $ - On December 10, 2021, the Company entered into an amended securities exchange with two investors holding convertible notes and warrants for Convertible Preferred Stock Series C and D. For additional information on the exchange agreement see Note 5, Financing Arrangements. Upon effectiveness of the amended exchange agreement, as of May 31, 2022 the Company no longer has any outstanding warrants. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
May 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 11. COMMITMENTS AND CONTINGENCIES Pending acquisitions On April 28, 2022, Unique Logistics International, Inc. (the “Company”) entered into a stock purchase agreement (the “Purchase Agreement”), by and between the Company and Unique Logistics Holdings Limited, a Hong Kong corporation (the “Seller”), whereby the Company acquired from the Seller all of Seller’s share capital (the “Purchased Shares”) in nine (9) of Seller’s subsidiaries (collectively the “Subsidiaries”) as listed in Schedule I of the Purchase Agreement. As consideration for the Purchased Shares, the Company agreed to (i) pay the Seller $ 21,000,000 1,000,000 In addition to the Purchase Price, Seller will be eligible for an additional one-time cash earn-out payment (the “Earn Out Payment”), in the amount of (i) $2,500,000, if the EBITDA of the Purchased Shares, in the aggregate, exceeds $5,000,000 for the one-year period beginning on July 1, 2022 and ending June 30, 2023 (the “Earn Out Period”), or (ii) $2,000,000, if the EBITDA of the Purchased Shares, in the aggregate is equal to or less than $5,000,000 but exceeds $4,500,000, for the Earn Out Period, in each case, to be paid by the Company within 90 days of June 30, 2023 The transactions contemplated by the Purchase Agreement shall be contingent upon and subject to successful completion of the Company’s anticipated public offering of securities (the “Financing”). If the Company is unable to obtain the Financing, the Company may provide written notice to Seller stating that the Company has been unable to obtain the Financing and notify Seller that the Company has elected to either (i) waive the condition of the Financing , in which event the Purchase Agreement will continue as if the Financing had been obtained or (ii) terminate the Purchase Agreement. Litigation From time to time, the Company may become involved in litigation relating to claims arising in the ordinary course of the business. There are no claims or actions pending or threatened against the Company that, if adversely determined, would in the Company’s management’s judgment have a material adverse effect on the Company. Leases The Company leases office space, warehouse facilities and equipment under non-cancellable lease agreements expiring on various dates through October 2028. Office leases contain provisions for future rent increases. The Company adopted ASC 842 from inception, requiring the Company to recognize an asset and liability on the consolidated balance sheets for lease arrangements with terms longer than 12 months. The Company has elected the practical expedient to not apply the recognition requirement to leases with a term of less than one year (short term leases). The Company uses its incremental borrowing rate to discount lease payments to present value. The incremental borrowing rate is based on the estimated interest rate the Company could obtain for borrowing over a similar term of the lease at commencement date. Rental escalations, renewal options and termination options, when applicable, have been factored into the Company’s determination of lease payments when appropriate. The Company does not separate lease and non-lease components of contracts. Variable payments related to pass-through costs for maintenance, taxes and insurance or adjustments based on an index such as Consumer Price Index are not included in the measurement of the lease liability or asset and are expensed as incurred. The components of lease expense were as follows: SCHEDULE OF COMPONENTS OF LEASE EXPENSE For the Year Ended For the Year Ended May 31, 2022 May 31, 2021 Operating lease $ 1,717,807 $ 1,506,090 Interest on operating lease liabilities 209,536 148,039 Total net lease cost $ 1,927,343 $ 1,654,129 Supplemental balance sheet information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION May 31, 2022 May 31, 2021 Operating leases: Operating lease ROU assets – net $ 2,408,098 $ 3,797,527 Current operating lease liabilities, included in current liabilities $ 912,618 $ 1,466,409 Noncurrent operating lease liabilities, included in long-term liabilities 1,593,873 2,431,144 Total operating lease liabilities $ 2,506,491 $ 3,897,553 Supplemental cash flow and other information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION For the Year Ended May 31, 2022 For the Year Ended May 31, 2021 ROU assets obtained in exchange for lease liabilities: Operating leases $ 1,805 $ 223,242 Weighted average remaining lease term (in years): Operating leases 3.88 4.04 Weighted average discount rate: Operating leases 4.02 % 4.25 % As of May 31, 2022, future minimum lease payments under noncancelable operating leases are as follows: SCHEDULE OF MINIMUM LEASE PAYMENTS Future Minimum Payments for the Twelve Months Ending May 31, 2023 $ 1,002,244 2024 573,301 2025 448,460 2026 260,309 2027 198,255 Thereafter 249,406 Total lease payments 2,731,975 Less: imputed interest (225,484 ) Total lease obligations $ 2,506,491 |
INCOME TAX PROVISION
INCOME TAX PROVISION | 12 Months Ended |
May 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX PROVISION | 12. INCOME TAX PROVISION The income tax provision consists of the following: SCHEDULE OF INCOME TAX EXPENSE May 31, 2022 May 31, 2021 Federal Current $ 2,052,526 $ 521,293 Deferred (554,294 ) (208,560 ) State and Local Current 1,041,298 262,576 Deferred (125,232 ) (55,440 ) Income tax expense $ 2,414,298 $ 519,869 The Company has U.S. federal net operating loss carryovers (NOLs) of approximately none, and $ 0.1 million as of May 31, 2022 and 2021, respectively, available to offset taxable income through 2021. The Company also had California State Net Operating Loss carry overs of $ 262,678 as of May 31, 2021 and 2022, available to offset future taxable income through 2041. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon future generation for taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. For the year ended May 31, 2022, there was no The Company evaluated the provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740 prescribes a comprehensive model for how a company should recognize, present, and disclose uncertain positions that the Company has taken or expects to take in its tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the net benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits.” A liability is recognized (or amount of net operating loss carry forward or amount of tax refundable is reduced) for unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740. If applicable, interest costs related to the unrecognized tax benefits are required to be calculated and would be classified as “Other expenses – Interest” in the statement of operations. Penalties would be recognized as a component of “General and administrative.” No The Company’s deferred tax assets (liabilities) consisted of the effects of temporary differences attributable to the following: SCHEDULE OF DEFERRED TAX ASSETS (LIABILITIES) Deferred Tax Assets For the Year Ended For the Year Ended May 31, 2021 Debt discount liability $ - $ 288,555 Allowance for doubtful accounts 733,139 39,414 Contract liability 230,263 - Lease liability 659,460 - Other 238,006 19,513 Total deferred tax assets 1,860,868 347,482 Valuation allowance - - Deferred tax asset, net of valuation allowance 1,860,868 347,482 Deferred Tax Liabilities Operating lease right-of-use assets (631,173 ) - Goodwill and intangibles (256,533 ) - Fixed assets (30,414 ) (84,261 ) Net deferred tax asset (liability) $ 942,748 $ 263,221 The expected tax expense (benefit) based on the statutory rate is reconciled with actual tax expense benefit as follows: SCHEDULE OF EXPECTED TAX EXPENSE (BENEFIT) For the Year Ended For the Year Ended May 31, 2021 US Federal statutory rate (%) 21.0 21.0 State income tax, net of federal benefit 16.4 8.4 Impact of debt exchange 18.9 - FDII deduction (10.1 ) - PPP Loan Forgiveness (1.3 ) - Change in valuation allowance - (1.7 ) Other permanent differences, net (4.3 ) (4.5 ) Income tax provision (benefit) (%) 40.6 23.2 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
May 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date the consolidated financial statements were available to be issued. Based on this evaluation, the Company has identified the following reportable subsequent events other than those disclosed elsewhere in these consolidated financial statements. Preferred Stock Conversions On June 21, 2022, a shareholder converted 3 18,849,240 On June 28, 2022, a shareholder converted 4 25,132,320 On July 29, 2022, a shareholder converted 9,935 67,963,732 |
NATURE OF BUSINESS AND SUMMAR_2
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
May 31, 2022 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business Unique Logistics International, Inc. (the “Company” or “Unique”) is a global logistics and freight forwarding company. The Company currently operates via its wholly owned subsidiaries, Unique Logistics International (NYC), LLC, a Delaware limited liability company (“UL NYC”) and Unique Logistics International (BOS) Inc, a Massachusetts corporation (“UL BOS”) and (collectively the “UL US Entities”). The Company provides a range of international logistics services that enable its customers to outsource sections of their supply chain process. This range of services can be categorized as follows: ● Air Freight services ● Ocean Freight services ● Customs Brokerage and Compliance services ● Warehousing and Distribution services ● Order Management On May 29, 2020, Unique Logistics Holdings, Inc., a privately held Delaware corporation headquartered in New York (“ULHI”), entered into a Securities Purchase Agreement with Unique Logistics Holdings Ltd, (“UL HK”), a Hong Kong company, (the “UL HK Transaction”). On October 8, 2020, Unique Logistics Holdings, Inc., Innocap, Inc., and Inno Acquisition Corp., a Delaware corporation and wholly owned subsidiary of Innocap Inc. (“Merger Sub”), entered into an Acquisition Agreement and Plan of Merger pursuant to which the Merger Sub was merged with and into ULHI, with ULHI surviving as a wholly owned subsidiary of Innocap, Inc. (the “Merger”). The transaction took place on October 8, 2020 (the “Closing”). Innocap, Inc. was incorporated under the laws of the State of Nevada on January 23, 2004. Effective January 11, 2021, the Company amended and restated its articles of incorporation with the office of the Secretary of State of Nevada to, among other things, change the Company’s name to Unique Logistics International, Inc. and increase the number of shares of common stock that the Company is authorized to issue from 500,000,000 800,000,000 On January 13, 2021, the Company received notice from the Financial Industry Regulation Authority (“FINRA”) that the above name change had been approved and took effect at the opening of trading on January 14, 2021. In connection with the name change, the Company changed its ticker symbol from “INNO” to “UNQL”. |
Liquidity | Liquidity The accompanying consolidated financial statements have been prepared on a going concern basis. Substantial doubt about an entity’s ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. As of May 31, 2022, the Company reported working capital of approximately $ 4.2 million compared with negative $ 3.5 million working capital as of May 31, 2021. The Company took the following steps to improve liquidity year over year: ● Strong operational performance resulted in increase in EBITDA from $ 8.9 17.3 ● The Company entered into Fourth Amendment to the TBK Loan Agreement to increase its credit facility from $ 47.5 57.5 ● The Company exchanged all of its Convertible Notes and associated Warrants into shares of Convertible Preferred Shares Series C and D Since its inception, the Company has experienced significant business growth. To fund such growth operating capital was initially provided by third party investors through Convertible Notes and on December 10, 2021 exchanged into Convertible Preferred Shares Series A, C and D with fixed ownership percentage of the company. Preferred shares are more beneficial to the company because they don’t require cash repayments. Due to the antidilution provision imbedded in the Convertible Preferred Shares, these provisions resulted in an embedded derivative and the company recorded a current liability during the quarter ended on February 28, 2022 in the amount of $ 12.7 The Company is also in process of potentially raising additional capital through the planned underwritten offering of securities that would provide funds for planned acquisitions and operating capital. While we continue to execute our strategic plan, we will be tightly managing our cash and monitoring our liquidity position. We have implemented a number of initiatives to conserve our liquidity position including activities such as raising additional capital, increasing credit facilities, reducing cost of debt, controlling general and administrative expenditures and improving collection processes. Many of the aspects of the plan involve management’s judgments and estimates that include factors that could be beyond our control and actual results could differ from our estimates. These and other factors could cause the strategic plan to be unsuccessful which could have a material adverse effect on our operating results, financial condition, and liquidity. Use of operating cash is an indicator that there could be a going concern issue, but based on our evaluation of the Company’s projected cash flows and business performance subsequent to the balance sheet date, management has concluded that the Company’s current cash and cash availability under the line of credit as of May 31, 2022, would be sufficient to alleviate a going concern issue for at least one year from the date these consolidated financial statements are issued. |
COVID-19 | COVID-19 Covid-19 remains a threat and certain countries, such as China, are still subject to restrictions related to Covid-19. While the threat level has declined to a significant extent in the USA and globally, any resurgence could have a material adverse effect on our business operations, results of operations, cash flows and financial position. While we continue to execute our strategic plan, the Company is also in a process of evaluating several other liquidity-oriented options such as raising additional capital, increasing credit limits of the revolving credit facilities, reducing cost of debt, controlling expenditures, and improving its cash collection processes. While many of the aspects of the Company’s plan involve management’s judgments and estimates that include factors that could be beyond our control and actual results could differ from our estimates. These and other factors could cause the strategic plan to be unsuccessful which could have a material adverse effect on our operating results, financial condition, and liquidity. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in accordance with the accounting principles generally accepted in the United States of America (“GAAP”). |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiaries stated in U.S. dollars, the Company’s functional currency. All intercompany transactions and balances have been eliminated in the consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Significant estimates inherent in the preparation of the consolidated financial statements include determinations of the useful lives and expected future cash flows of long-lived assets, including intangibles, valuation of assets and liabilities acquired in business combinations, and estimates and assumptions in valuation of debt and equity instruments, including derivative liabilities. In addition, the Company makes significant judgments to recognize revenue – see policy note “ Revenue Recognition |
Fair Value Measurement | Fair Value Measurement The Company follows the authoritative guidance that establishes a formal framework for measuring fair values of assets and liabilities in the consolidated financial statements that are already required by generally accepted accounting principles to be measured at fair value. The guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The transaction is based on a hypothetical transaction in the principal or most advantageous market considered from the perspective of the market participant that holds the asset or owes the liability. The Company utilizes market data or assumptions that market participants who are independent, knowledgeable, and willing and able to transact would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. The Company attempts to utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The Company is able to classify fair value balances based on the observability of those inputs. The guidance establishes a formal fair value hierarchy based on the inputs used to measure fair value. The hierarchy gives the highest priority to Level 1 measurements and the lowest priority to level 3 measurements, and accordingly, Level 1 measurement should be used whenever possible. The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities or published net asset value for alternative investments with characteristics similar to a mutual fund. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 – Unobservable inputs for the asset or liability. The methods used may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while management believes its valuation methods are appropriate, the fair value of certain financial instruments could result in a difference fair value measurement at the reporting date. There were no changes in the Company’s valuation methodologies from the prior year. For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amounts for financial assets and liabilities such as cash and cash equivalents, accounts receivable - trade, contract assets, factoring reserve, other prepaid expenses and current assets, accounts payable – trade and other current liabilities, including contract liabilities, convertible notes, promissory notes, all approximate fair value due to their short-term nature as of May 31, 2022 and 2021. The carrying amount of the long-term debt approximates fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to the Company. Lease liabilities approximate fair value based on the incremental borrowing rate used to discount future cash flows. The Company had Level 3 liabilities (See Derivative Liabilities note) as of May 31, 2022. On May 31, 2021 Level 3 derivative liability balances were insignificant. There were no transfers between levels during the reporting period. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits. No loss had been experienced, and management believes it is not exposed to any significant risk on credit. |
Accounts Receivable – Trade | Accounts Receivable – Trade Accounts receivable - trade from revenue transactions are based on invoiced prices which the Company expects to collect. In the normal course of business, the Company extends credit to customers that satisfy pre-defined credit criteria. The Company generally does not require collateral to support customer receivables. Accounts receivable - trade, as shown on the consolidated balance sheets, is net of allowances when applicable. An allowance for doubtful accounts is determined through analysis of the aging of accounts receivable at the date of the consolidated financial statements, assessments of collectability based on an evaluation of historic and anticipated trends, the financial condition of the Company’s customers, and an evaluation of the impact of economic conditions. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, net of allowance for doubtful accounts. As of May 31, 2022 and 2021, the Company recorded an allowance for doubtful accounts of approximately $ 2.7 0.2 Concentrations Revenue by three customers as a percentage of the Company’s total revenue was 48 35 7 6 21 Two customers accounted for 44 25 19 Off Balance Sheet Arrangements On August 30, 2021, the Company terminated its agreement with an unrelated third party (the “Factor”) for factoring of specific accounts receivable. The factoring under this agreement was treated as a sale in accordance with FASB ASC 860, Transfers and Servicing 31.7 31.6 1.4 During the factoring agreement in place, the Company acted as the agent on behalf of the Factor for the arrangements and had no significant retained interests or servicing liabilities related to the accounts receivable sold. The agreement provided the Factor with security interests in purchased accounts until the accounts have been repurchased by the Company or paid by the customer. In order to mitigate credit risk related to the Company’s factoring of accounts receivable, the Company may purchase credit insurance, from time to time, for certain factored accounts receivable, resulting in risk of loss being limited to the factored accounts receivable not covered by credit insurance, which the Company does not believe to be significant. During the years ended May 31, 2022 and 2021, the Company factored accounts receivable invoices totaling approximately Nil 233.4 4.5 27,000 Factoring Reserve When an invoice is sold to Factor, the amount received from the Factor is credited to accounts receivable – trade and a reserve is retained, less a fee, by Factor which is debited to “factoring reserve” on the consolidated balance sheets. Factor Recovery In certain instances, the Company receives payment for a factored reserve directly from the customer. In these cases, until the funds are paid to the factor, the Company records the payment as “factor recovery” which is in accrued expenses and other current liabilities on the consolidated balance sheets. Recourse Liability Company policy is to do a collectability review of uncollected factored receivables in conjunction with the Factor at each reporting date and assess the need to provide for risk of potential non-collection and resulting recourse. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation is provided for by the straight-line method over the estimated useful lives of the related assets. Estimated useful lives of property and equipment are as follows: SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT Software 3 Computer equipment 3 5 Furniture and fixtures 5 7 Leasehold improvements Shorter of estimated useful life or remaining term of the lease Both the useful life of an asset and its residual value, if any, are reviewed annually. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in income for the period. The Company did not record any impairment for the year ended May 21, 2022 or May 31, 2021. |
Goodwill and Other Intangibles | Goodwill and Other Intangibles The Company accounts for business acquisitions in accordance with GAAP. Goodwill in such acquisitions is determined as the excess of fair value over amounts attributable to specific tangible and intangible assets. GAAP specifies criteria to be used in determining whether intangible assets acquired in a business combination must be recognized and reported separately from goodwill. Amounts assigned to goodwill and other identifiable intangible assets are based on independent appraisals or internal estimates. In accordance with GAAP, the Company does not amortize goodwill or indefinite-lived intangible assets. Management evaluates the remaining useful life of an intangible asset that is not being amortized each reporting period to determine whether events and circumstances continue to support an indefinite useful life. If an intangible asset that is not being amortized is subsequently determined to have a finite useful life, it is amortized prospectively over its estimated remaining useful life. Amortizable intangible assets, including tradenames and non-compete agreements, are amortized on a straight-line basis over 3 10 12 15 The Company tests goodwill for impairment annually as of May 31 or if an event occurs or circumstances change that indicate that the fair value of the entity, or the reporting unit, may be below its carrying amount (a “triggering event”). Whenever events or circumstances change, entities have the option to first make a qualitative evaluation about the likelihood of goodwill impairment. If impairment is deemed more likely than not, management would perform the two-step goodwill impairment test. Otherwise, the two-step impairment test is not required. In assessing the qualitative factors, the Company assessed relevant events and circumstances that may impact the fair value and the carrying amount of the reporting unit. The identification of the relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgements and assumptions. The judgement and assumptions include the identification of macroeconomic conditions, industry and market considerations, overall financial performance, Company specific events and share price trends, an assessment of whether each relevant factor will impact the impairment test positively or negatively, and the magnitude of such impact. If a quantitative assessment is performed, a reporting unit’s fair value is compared to its carrying value. A reporting unit’s fair value is determined based upon consideration of various valuation methodologies, including the income approach, which utilizes projected future cash flows discounted at rates commensurate with the risks involved and multiples of current and future earnings. If the fair value of a reporting unit is less than its carrying amount, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. We test goodwill for impairment annually in the fiscal fourth quarter or whenever events or circumstances indicate the carrying value may not be recoverable. For the year ended May 31, 2022 and 2021 the Company conducted its annual review of impairment of goodwill and intangible assets and no impairment was identified. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets are comprised of intangible assets and property and equipment. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. An estimate of undiscounted future cash flows produced by the asset, or the appropriate grouping of assets, is compared to the carrying value to determine whether an impairment exists, pursuant to the provisions of FASB ASC 360-10 “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of”. |
Derivative Liability | Derivative Liability On December 10, 2021, the Company entered into an amended securities exchange agreement with the holders of convertible notes to exchange all Convertible Notes of the Company into shares of the newly created Convertible Preferred Stock Series C and D. For additional information on the exchange agreement see Note 5, Financing Arrangements. Similar to the existing Convertible Preferred Stock Series A, these preferred stocks featured anti-dilution provision that expire on a certain date. Management has determined the anti-dilution provision embedded in preferred stock Series A, C and D is required to be accounted for separately from the preferred stock as a derivative liability and recorded at fair value. Separation of the anti-dilution option as a derivative liability is required because its economic characteristics are considered more akin to an equity instrument and therefore the anti-dilution option is not considered to be clearly and closely related to the economic characteristics of the preferred stock. The Company has identified and recorded derivative instruments arising from an anti-dilution provision in the Company’s Series A, Series C, and Series D Preferred Stock during the quarter ended February 28, 2022. The Company recorded $ 12.4 An embedded derivative liability is representing the rights of holders of Convertible Preferred Stock Series A, C and D to receive additional common stock of the Company upon issuance of any additional common stock by the Company prior to qualified financing event as defined in the agreement. Each reporting period, the embedded derivative liability, if material, would be adjusted to reflect fair value at each period end with changes in fair value recorded in the “Change in fair value of embedded derivative liability” financial statement line item of the company’s statements of operations. The Company recorded change in fair value of $ 4,020,698 SCHEDULE OF DERIVATIVE LIABILITIES Level 1 Level 2 Level 3 Derivative liabilities as June 1, 2021 $ - $ - $ - Addition - - 8,417,296 Changes in fair value - - 4,020,698 Derivative liabilities as May 31, 2022 $ - $ - $ 12,437,994 The underlying value of the anti-dilution provision is calculated from estimating the probability and value of a potential raise. The model used estimates the potential that the company completes a capital raise prior to the expiration of the anti-dilution feature and determines the value of the anti-dilution feature given these assumptions. The model requires the use of certain assumptions. These assumptions include probability a raise is completed, probability certain anti-dilution features are extended, estimated raise amount, term to a raise, and an appropriate risk-free interest rate. The key inputs into the model were as follows: SCHEDULE OF FAIR VALUE ASSUMPTION May 31, 2022 May 31, 2021 Risk-free interest rate 1.6 % 0.7 % Probability of capital raise 53.9 % 10 % Estimated capital raise amount $ 39,000,000 $ 2,400,000 Estimated time to capital raise 0.5 1.0 |
Income Taxes | Income Taxes The Company files a consolidated income tax return for federal and most state purposes. Management has determined that there are no uncertain tax positions that would require recognition in the consolidated financial statements. If the Company were to incur an income tax liability in the future, interest and penalties on any income tax liability would be reported as interest expense. Management’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based on ongoing analysis of tax laws, regulations, and interpretations thereof as well as other factors. The Company uses the assets and liability method of accounting for deferred income taxes. Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the balance sheet carrying amounts of existing assets and liabilities and their respective tax basis. The Company regularly evaluates the need for a valuation allowance related to the deferred tax asset. |
Revenue Recognition | Revenue Recognition The Company adopted ASC 606, Revenue from Contracts with Customers To determine revenue recognition, the Company applies the following five steps: 1. Identify the contract(s) with a customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to the performance obligations in the contract; and 5. Recognize revenue as or when the performance obligation is satisfied. Revenue is recognized as follows: i. Freight income - export sales Freight income from the provision of air, ocean, and land freight forwarding services are recognized over time based on a relative transit time basis thru the sail or departure from origin port. The Company is the principal in these transactions and recognizes revenue on a gross basis. ii. Freight income - import sales Freight income from the provision of air, ocean, and land freight forwarding services are recognized over time based on a relative transit time basis thru the delivery to the customer’s designated location. The Company is the principal in these transactions and recognizes revenue on a gross basis. iii. Customs brokerage and other service income Customs brokerage and other service income from the provision of other services are recognized at the point in time the performance obligation is met. The Company’s business practices require, for accurate and meaningful disclosure, that it recognizes revenue over time. The “over time” policy is the period from point of origin to arrival of the shipment at US Port of entry (or in the case when the customer requires delivery to a designated point, the arrival at that delivery point). This over time policy requires the Company to make significant judgements to recognize revenue over the estimated duration of time from port of origin to arrival at port of entry. The point in the process when the Company meets its obligation in the port of entry and the subsequent transfer of the goods to the customer is when the customer has the obligation to pay, has taken physical possession, has legal title, risk and awards (ownership) and has accepted the goods. The Company has elected to not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied as of the end of the period as the Company’s contracts with its customers have an expected duration of one year or less. The Company uses independent contractors and third-party carriers in the performance of its transportation services. The Company evaluates who controls the transportation services to determine whether its performance obligation is to transfer services to the customer or to arrange for services to be provided by another party. The Company determined it acts as the principal for its transportation services performance obligation since it is in control of establishing the prices for the specified services, managing all aspects of the shipments process and assuming the risk of loss for delivery and collection. Revenue billed prior to realization is recorded as contract liabilities on the consolidated balance sheets and contract costs incurred prior to revenue recognition are recorded as contract assets on the consolidated balance sheets. Contract Assets Contract assets represent amounts for which the Company has the right to consideration for the services provided while a shipment is still in-transit but for which it has not yet completed the performance obligation and has not yet invoiced the customer. Upon completion of the performance obligations, which can vary in duration based upon the method of transport and billing the customer, these amounts become classified within accounts receivable - trade. Contract Liabilities Contract liabilities represent the amount of obligation to transfer goods or services to a customer for which consideration has been received. Significant Changes in Contract Asset and Contract Liability Balances for the year ended May 31, 2022: SCHEDULE OF CHANGES IN CONTRACT ASSET AND CONTRACT LIABILITY Contract Assets Increase Contract (Increase) Reclassification of the beginning contract liabilities to revenue, as the result of performance obligation satisfied $ - $ - Cash Received in advance and not recognized as revenue - 468,209 Reclassification of the beginning contract assets to receivables, as the result of rights to consideration becoming unconditional (10,491,045 ) - Contract assets recognized 18,038,312 - Net Change $ 7,547,267 $ 468,209 There were no changes in contract assets or liabilities as of May 31, 2021. Disaggregation of Revenue from Contracts with Customers The following table disaggregates gross revenue from our clients (all US based) by significant geographic area for the years ended May 31, 2022 and 2021, based on origin of shipment (imports) or destination of shipment (exports): SCHEDULE OF DISAGGREGATION OF REVENUE For the For the Year Ended China, Hong Kong & Taiwan $ 343,370,279 $ 186,932,382 Southeast Asia 422,869,068 104,475,697 United States 39,362,326 31,452,041 India Sub-continent 161,841,791 28,164,102 Other 47,043,216 20,863,050 Total revenue $ 1,014,486,680 $ 371,887,272 |
Segment Reporting | Segment Reporting Based on the guidance provided by ASC Topic 280, Segment Reporting |
Earnings per Share | Earnings per Share The Company adopted ASC 260, Earnings per share, The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share. The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share. SCHEDULE OF EARNING PER SHARE For the Year Ended May 31, 2022 May 31, 2021 Numerator: Net income (loss) available for common shareholders $ (1,031,171 ) 1,725,497 Effect of dilutive securities: - 1,350,389 Diluted net (loss) income available for common shareholders $ (1,031,171 ) $ 3,075,886 Denominator: Weighted average common shares outstanding – basic 605,817,180 1,408,941,722 Dilutive securities: Series A Preferred - 1,316,157,000 Series B Preferred - 5,499,034,800 Convertible notes - 1,806,230,539 Warrants - - Series C Preferred - - Series D Preferred - - Weighted average common shares outstanding and assumed conversion – diluted 605,817,180 10,030,364,061 Basic net (loss) income available for common shareholders per common share $ (0.00 ) $ 0.00 - Diluted net (loss)income available for common shareholders per common share $ (0.00 ) $ 0.00 The Company has excluded the following shares as of May 31, 2022, because they are antidilutive: SCHEDULE OF ANTI-DILUTIVE SHARES May 31, 2022 Weighted average common shares outstanding – basic 605,817,180 Series A Preferred 1,233,209,295 Series B Preferred 5,373,342,576 Series C Preferred 1,206,351,359 Series D Preferred 1,174,935,959 Weighted average common shares outstanding and assumed conversion – diluted 9,593,656,369 |
Leases | Leases In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02 “Leases” During the period ended May 31, 2020, the Company adopted ASC 842 upon inception and recognized a right of use (“ROU”) asset and liability in the consolidated balance sheet in the amount of $ 4,770,280 For leases in which the acquiree is a lessee, the Company shall measure the lease liability at the present value of the remaining lease payments, as if the acquired lease were a new lease of the Company at the acquisition date. The Company shall measure the right-of-use asset at the same amount as the lease liability as adjusted to reflect favorable and unfavorable terms of the lease when compared with market terms. The values of the leases acquired in the business acquisition discussed in Note 2 were representative of fair value at the acquisition date and no favorable or unfavorable terms were noted. The Company adopted the package of practical expedients that allows it to (i) not reassess whether an arrangement contains a lease, (ii) carry forward its lease classification as operating or capital leases, (iii) not to apply the recognition requirements in ASC 842 to short-term leases, (iv) not record a right of use asset or right of use liability for leases with an asset or liability balance that would be considered immaterial. and (v) not reassess its previously recorded initial direct costs. In addition, the Company elected the practical expedient to not separate lease and non-lease components, and therefore both components are accounted for and recognized as lease components. The Company determines if an arrangement is a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. All ROU assets and lease liabilities are recognized at the commencement date at the present value of lease payments over the lease term. ROU assets are adjusted for lease incentives and initial direct costs. The lease term includes renewal options exercisable at the Company’s sole discretion when the Company is reasonably certain to exercise that option. As the Company’s leases generally do not have an implicit rate, the Company uses an estimated incremental borrowing rate based on borrowing rates available to them at the commencement date to determine the present value. Certain of our leases include variable payments, which may vary based upon changes in facts or circumstances after the start of the lease. The Company excludes variable payments from ROU assets and lease liabilities, to the extent not considered fixed, and instead expenses variable payments as incurred. Lease expense is recognized on a straight-line basis over the lease term and is included in rent and occupancy expenses in the consolidated statements of operations. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC Topic 718, “ Compensation – Stock Compensation” “ASC 718” The Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest. Share-based payments, excluding restricted stock, are valued using a Black-Scholes option pricing model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment, which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock-based compensation expenses are included in costs and operating expenses depending on the nature of the services provided in the consolidated statements of operations. For the year ended May 31, 2022 and May 2021, share-based compensation amounted to $ 0 91,666 |
Advertising and Marketing | Advertising and Marketing All costs associated with advertising and marketing of the Company products are expensed during the period when the activities take place and are included in selling and promotion on the consolidated statements of operations. |
Convertible Debt | Convertible Debt The Company accounts for Convertible Debt based on the guidance in ASC 470, “Debt with Conversion and Other Options” |
Sequencing Policy | Sequencing Policy Under ASC 815-40-35, “Derivatives and Hedging – Contracts in Entity’s Own Equity” |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current year’s presentation. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt—” Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” |
NATURE OF BUSINESS AND SUMMAR_3
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
May 31, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT | Estimated useful lives of property and equipment are as follows: SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT Software 3 Computer equipment 3 5 Furniture and fixtures 5 7 Leasehold improvements Shorter of estimated useful life or remaining term of the lease |
SCHEDULE OF DERIVATIVE LIABILITIES | SCHEDULE OF DERIVATIVE LIABILITIES Level 1 Level 2 Level 3 Derivative liabilities as June 1, 2021 $ - $ - $ - Addition - - 8,417,296 Changes in fair value - - 4,020,698 Derivative liabilities as May 31, 2022 $ - $ - $ 12,437,994 |
SCHEDULE OF FAIR VALUE ASSUMPTION | The key inputs into the model were as follows: SCHEDULE OF FAIR VALUE ASSUMPTION May 31, 2022 May 31, 2021 Risk-free interest rate 1.6 % 0.7 % Probability of capital raise 53.9 % 10 % Estimated capital raise amount $ 39,000,000 $ 2,400,000 Estimated time to capital raise 0.5 1.0 |
SCHEDULE OF CHANGES IN CONTRACT ASSET AND CONTRACT LIABILITY | Significant Changes in Contract Asset and Contract Liability Balances for the year ended May 31, 2022: SCHEDULE OF CHANGES IN CONTRACT ASSET AND CONTRACT LIABILITY Contract Assets Increase Contract (Increase) Reclassification of the beginning contract liabilities to revenue, as the result of performance obligation satisfied $ - $ - Cash Received in advance and not recognized as revenue - 468,209 Reclassification of the beginning contract assets to receivables, as the result of rights to consideration becoming unconditional (10,491,045 ) - Contract assets recognized 18,038,312 - Net Change $ 7,547,267 $ 468,209 |
SCHEDULE OF DISAGGREGATION OF REVENUE | The following table disaggregates gross revenue from our clients (all US based) by significant geographic area for the years ended May 31, 2022 and 2021, based on origin of shipment (imports) or destination of shipment (exports): SCHEDULE OF DISAGGREGATION OF REVENUE For the For the Year Ended China, Hong Kong & Taiwan $ 343,370,279 $ 186,932,382 Southeast Asia 422,869,068 104,475,697 United States 39,362,326 31,452,041 India Sub-continent 161,841,791 28,164,102 Other 47,043,216 20,863,050 Total revenue $ 1,014,486,680 $ 371,887,272 |
SCHEDULE OF EARNING PER SHARE | The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share. SCHEDULE OF EARNING PER SHARE For the Year Ended May 31, 2022 May 31, 2021 Numerator: Net income (loss) available for common shareholders $ (1,031,171 ) 1,725,497 Effect of dilutive securities: - 1,350,389 Diluted net (loss) income available for common shareholders $ (1,031,171 ) $ 3,075,886 Denominator: Weighted average common shares outstanding – basic 605,817,180 1,408,941,722 Dilutive securities: Series A Preferred - 1,316,157,000 Series B Preferred - 5,499,034,800 Convertible notes - 1,806,230,539 Warrants - - Series C Preferred - - Series D Preferred - - Weighted average common shares outstanding and assumed conversion – diluted 605,817,180 10,030,364,061 Basic net (loss) income available for common shareholders per common share $ (0.00 ) $ 0.00 - Diluted net (loss)income available for common shareholders per common share $ (0.00 ) $ 0.00 |
SCHEDULE OF ANTI-DILUTIVE SHARES | The Company has excluded the following shares as of May 31, 2022, because they are antidilutive: SCHEDULE OF ANTI-DILUTIVE SHARES May 31, 2022 Weighted average common shares outstanding – basic 605,817,180 Series A Preferred 1,233,209,295 Series B Preferred 5,373,342,576 Series C Preferred 1,206,351,359 Series D Preferred 1,174,935,959 Weighted average common shares outstanding and assumed conversion – diluted 9,593,656,369 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
May 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Major classifications of property and equipment are summarized below as of May 31, 2022 and 2021. SCHEDULE OF PROPERTY AND EQUIPMENT May 31, 2022 May 31, 2021 Furniture and fixtures $ 102,062 $ 84,085 Computer equipment 159,674 108,479 Software 30,609 27,780 Leasehold improvements 27,146 27,146 Property and equipment, gross 319,491 247,490 Less: accumulated depreciation (130,602 ) (55,398 ) Property and equipment, net $ 188,889 $ 192,092 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
May 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF GOODWILL | SCHEDULE OF GOODWILL Beginning balance June 1, 2020 $ 4,788,129 Measurement Period Adjustment (325,000 ) Ending balance May 31, 2021 and 2022 $ 4,463,129 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
May 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | Intangible assets consist of the following at May 31, 2022 and 2021: SCHEDULE OF INTANGIBLE ASSETS May 31, 2022 May 31, 2021 Trade names / trademarks $ 806,000 $ 806,000 Customer relationships 7,633,000 7,633,000 Non-compete agreements 313,000 313,000 Intangible assets, gross 8,752,000 8,752,000 Less: Accumulated amortization (1,414,296 ) (707,147 ) Intangible assets, net $ 7,337,704 $ 8,044,853 |
SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE | Estimated amortization expense for the next five years and thereafter is as follows: SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE Twelve Months Ending May 31, 2023 637,592 2024 637,592 2025 637,591 2026 602,814 2027 602,814 Thereafter 4,219,301 Intangible assets, net $ 7,337,704 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
May 31, 2022 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | Accrued expenses and other current liabilities consisted of the following at May 31, 2022 and 2021: SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES May 31, 2022 May 31, 2021 Accrued salaries and related expenses $ 625,000 $ 672,455 Accrued sales and marketing expense 2,383,500 539,810 Accrued professional fees 1,350,170 75,000 Accrued income tax 559,544 256,286 Accrued overdraft liabilities 681,058 790,364 Other accrued expenses and current liabilities 66,887 50,000 Accrued expenses and other current liabilities $ 5,666,159 $ 2,383,915 |
FINANCING ARRANGEMENTS (Tables)
FINANCING ARRANGEMENTS (Tables) | 12 Months Ended |
May 31, 2022 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF FINANCING ARRANGEMENT | Financing arrangements on the consolidated balance sheets consists of: SCHEDULE OF FINANCING ARRANGEMENT May 31, 2022 May 31, 2021 Revolving Credit Facility $ 38,141,451 $ - Promissory note (PPP) - 358,236 Promissory notes (EIDL) - 150,000 Notes payable 608,333 2,528,886 Convertible notes – net of discount - 2,441,551 Notes payable, gross 38,749,784 5,478,673 Less: current portion (38,749,784 ) (2,285,367 ) Long term, notes payable $ - $ 3,193,306 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
May 31, 2022 | |
Related Party Transactions [Abstract] | |
SCHEDULE OF RELATED PARTY TRANSACTIONS | As part of the UL HK Transaction and related transactions, the Company assumed the following debt due to related parties: SCHEDULE OF RELATED PARTY TRANSACTIONS May 31, 2022 May 31, 2021 Due to Frangipani Trade Services (1) $ 602,618 $ 903,927 Due to employee (2) 30,000 60,000 Due to employee (3) 66,658 149,996 Due to related parties, gross 699,276 1,113,923 Less: current portion (301,308 ) (397,975 ) Long term, due to related parties $ 397,968 $ 715,948 (1) Due to Frangipani Trade Services (“FTS”), an entity owned by the Company’s CEO, is due on demand and is non-interest bearing. The principal amount of this Promissory Note bears no interest; provided that any amount due under this Note which is not paid when due shall bear interest at an interest rate equal to six percent ( 6 150,655 (2) On May 29, 2020, the Company entered into a $ 90,000 2,500 (3) On May 29, 2020, the Company entered into a $ 200,000 5,556 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 12 Months Ended |
May 31, 2022 | |
Equity [Abstract] | |
SCHEDULE OF WARRANTS ACTIVITY | The following is a summary of the Company’s warrant activity: SCHEDULE OF WARRANTS ACTIVITY Weighted Average Warrants Exercise Price Outstanding – May 31, 2021 1,140,956,904 $ 0.002 Exercisable – May 31, 2021 1,140,956,904 $ 0.002 Cancelled (1,140,956,904 ) $ - Outstanding – May 31, 2022 - $ - Exercisable – May 31, 2022 - $ - |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
May 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
SCHEDULE OF COMPONENTS OF LEASE EXPENSE | The components of lease expense were as follows: SCHEDULE OF COMPONENTS OF LEASE EXPENSE For the Year Ended For the Year Ended May 31, 2022 May 31, 2021 Operating lease $ 1,717,807 $ 1,506,090 Interest on operating lease liabilities 209,536 148,039 Total net lease cost $ 1,927,343 $ 1,654,129 |
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION | Supplemental balance sheet information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION May 31, 2022 May 31, 2021 Operating leases: Operating lease ROU assets – net $ 2,408,098 $ 3,797,527 Current operating lease liabilities, included in current liabilities $ 912,618 $ 1,466,409 Noncurrent operating lease liabilities, included in long-term liabilities 1,593,873 2,431,144 Total operating lease liabilities $ 2,506,491 $ 3,897,553 |
SCHEDULE OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION | Supplemental cash flow and other information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION For the Year Ended May 31, 2022 For the Year Ended May 31, 2021 ROU assets obtained in exchange for lease liabilities: Operating leases $ 1,805 $ 223,242 Weighted average remaining lease term (in years): Operating leases 3.88 4.04 Weighted average discount rate: Operating leases 4.02 % 4.25 % |
SCHEDULE OF MINIMUM LEASE PAYMENTS | As of May 31, 2022, future minimum lease payments under noncancelable operating leases are as follows: SCHEDULE OF MINIMUM LEASE PAYMENTS Future Minimum Payments for the Twelve Months Ending May 31, 2023 $ 1,002,244 2024 573,301 2025 448,460 2026 260,309 2027 198,255 Thereafter 249,406 Total lease payments 2,731,975 Less: imputed interest (225,484 ) Total lease obligations $ 2,506,491 |
INCOME TAX PROVISION (Tables)
INCOME TAX PROVISION (Tables) | 12 Months Ended |
May 31, 2022 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF INCOME TAX EXPENSE | The income tax provision consists of the following: SCHEDULE OF INCOME TAX EXPENSE May 31, 2022 May 31, 2021 Federal Current $ 2,052,526 $ 521,293 Deferred (554,294 ) (208,560 ) State and Local Current 1,041,298 262,576 Deferred (125,232 ) (55,440 ) Income tax expense $ 2,414,298 $ 519,869 |
SCHEDULE OF DEFERRED TAX ASSETS (LIABILITIES) | The Company’s deferred tax assets (liabilities) consisted of the effects of temporary differences attributable to the following: SCHEDULE OF DEFERRED TAX ASSETS (LIABILITIES) Deferred Tax Assets For the Year Ended For the Year Ended May 31, 2021 Debt discount liability $ - $ 288,555 Allowance for doubtful accounts 733,139 39,414 Contract liability 230,263 - Lease liability 659,460 - Other 238,006 19,513 Total deferred tax assets 1,860,868 347,482 Valuation allowance - - Deferred tax asset, net of valuation allowance 1,860,868 347,482 Deferred Tax Liabilities Operating lease right-of-use assets (631,173 ) - Goodwill and intangibles (256,533 ) - Fixed assets (30,414 ) (84,261 ) Net deferred tax asset (liability) $ 942,748 $ 263,221 |
SCHEDULE OF EXPECTED TAX EXPENSE (BENEFIT) | The expected tax expense (benefit) based on the statutory rate is reconciled with actual tax expense benefit as follows: SCHEDULE OF EXPECTED TAX EXPENSE (BENEFIT) For the Year Ended For the Year Ended May 31, 2021 US Federal statutory rate (%) 21.0 21.0 State income tax, net of federal benefit 16.4 8.4 Impact of debt exchange 18.9 - FDII deduction (10.1 ) - PPP Loan Forgiveness (1.3 ) - Change in valuation allowance - (1.7 ) Other permanent differences, net (4.3 ) (4.5 ) Income tax provision (benefit) (%) 40.6 23.2 |
SCHEDULE OF ESTIMATED USEFUL LI
SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT (Details) | 12 Months Ended |
May 31, 2022 | |
Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 3 years |
Computer Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 3 years |
Computer Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 5 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 5 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 7 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | Shorter of estimated useful life or remaining term of the lease |
SCHEDULE OF DERIVATIVE LIABILIT
SCHEDULE OF DERIVATIVE LIABILITIES (Details) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Changes in fair value | $ (4,020,698) | |
Derivative liabilities as May 31, 2022 | 12,400,000 | |
Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Derivative liabilities as June 1, 2021 | ||
Addition | ||
Changes in fair value | ||
Derivative liabilities as May 31, 2022 | ||
Fair Value, Inputs, Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Derivative liabilities as June 1, 2021 | ||
Addition | ||
Changes in fair value | ||
Derivative liabilities as May 31, 2022 | ||
Fair Value, Inputs, Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Derivative liabilities as June 1, 2021 | ||
Addition | 8,417,296 | |
Changes in fair value | 4,020,698 | |
Derivative liabilities as May 31, 2022 | $ 12,437,994 |
SCHEDULE OF FAIR VALUE ASSUMPTI
SCHEDULE OF FAIR VALUE ASSUMPTION (Details) | 12 Months Ended | |
May 31, 2022 USD ($) | May 31, 2021 USD ($) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Estimated capital raise amount | $ 39,000,000 | $ 2,400,000 |
Estimated time to capital raise | 6 months | 1 year |
Measurement Input, Risk Free Interest Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Probability of capital raise | 0.016 | 0.007 |
Measurement Input Probability Of Capital Raise Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Probability of capital raise | 0.539 | 0.10 |
SCHEDULE OF CHANGES IN CONTRACT
SCHEDULE OF CHANGES IN CONTRACT ASSET AND CONTRACT LIABILITY (Details) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Accounting Policies [Abstract] | ||
Contract assets increase (decrease) reclassification of the beginning contract liabilities to revenue, as the result of performance obligation satisfied | ||
Contract liabilities (increase) decrease reclassification of the beginning contract liabilities to revenue, as the result of performance obligation satisfied | ||
Contract assets increase (decrease) cash received in advance and not recognized as revenue | ||
Contract liabilities (increase) decrease cash received in advance and not recognized as revenue | 468,209 | |
Contract assets increase (decrease) reclassification of the beginning contract assets to receivables, as the result of rights to consideration becoming unconditional | (10,491,045) | |
Contract liabilities (increase) decrease reclassification of the beginning contract assets to receivables, as the result of rights to consideration becoming unconditional | ||
Contract assets recognized | 18,038,312 | |
Contract assets recognized | ||
Contract assets increase (decrease) net change | 7,547,267 | $ 18,586,306 |
Contract liabilities (increase) decrease net change | $ 468,209 |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUE (Details) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Total revenue | $ 1,014,486,680 | $ 371,887,272 |
China, Hong Kong and Taiwan [Member] | ||
Total revenue | 343,370,279 | 186,932,382 |
Southeast Asia [Member] | ||
Total revenue | 422,869,068 | 104,475,697 |
UNITED STATES | ||
Total revenue | 39,362,326 | 31,452,041 |
INDIA | ||
Total revenue | 161,841,791 | 28,164,102 |
Other [Member] | ||
Total revenue | $ 47,043,216 | $ 20,863,050 |
SCHEDULE OF EARNING PER SHARE (
SCHEDULE OF EARNING PER SHARE (Details) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Accounting Policies [Abstract] | ||
Net income (loss) available for common shareholders | $ (1,031,171) | $ 1,725,497 |
Effect of dilutive securities: | 1,350,389 | |
Diluted net (loss) income available for common shareholders | $ (1,031,171) | $ 3,075,886 |
Weighted average common shares outstanding – basic | 605,817,180 | 1,408,941,722 |
Series A Preferred | $ 1,316,157,000 | |
Series B Preferred | 5,499,034,800 | |
Convertible notes | 1,806,230,539 | |
Warrants | ||
Series C Preferred | ||
Series D Preferred | ||
Weighted average common shares outstanding and assumed conversion – diluted | 605,817,180 | 10,030,364,061 |
Basic net (loss) income available for common shareholders per common share | $ 0 | $ 0 |
Diluted net (loss)income available for common shareholders per common share | $ 0 | $ 0 |
SCHEDULE OF ANTI-DILUTIVE SHARE
SCHEDULE OF ANTI-DILUTIVE SHARES (Details) - shares | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Accounting Policies [Abstract] | ||
Weighted average common shares outstanding – basic | 605,817,180 | 1,408,941,722 |
Series A Preferred | 1,233,209,295 | |
Series B Preferred | 5,373,342,576 | |
Series C Preferred | 1,206,351,359 | |
Series D Preferred | 1,174,935,959 | |
Weighted average common shares outstanding and assumed conversion – diluted | 9,593,656,369 |
NATURE OF BUSINESS AND SUMMAR_4
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |||||||||
May 31, 2022 | May 31, 2021 | Feb. 28, 2022 | Jan. 31, 2022 | Sep. 17, 2021 | Aug. 30, 2021 | Aug. 04, 2021 | Jun. 02, 2021 | Jan. 11, 2021 | May 31, 2020 | |
Product Information [Line Items] | ||||||||||
Common stock, shares authorized | 800,000,000 | 800,000,000 | 500,000,000 | |||||||
[custom:WorkingCapitalDeficit-0] | $ 4,200,000 | $ 3,500,000 | ||||||||
Depreciation and amortization | 782,351 | 765,532 | ||||||||
Derivative liability | 12,437,994 | $ 12,700,000 | ||||||||
Allowance for doubtful accounts | 2,700,000 | 200,000 | ||||||||
Accounts receivable outstanding | 233,400,000 | |||||||||
Factoring expenses | 27,000 | 4,500,000 | ||||||||
Derivative liabilities | 12,400,000 | |||||||||
Derivative, Gain (Loss) on Derivative, Net | 4,020,698 | |||||||||
Operating lease right of use asset | 2,408,098 | 3,797,527 | $ 4,770,280 | |||||||
Share-based compensation | $ 91,666 | |||||||||
Tradenames and Non-Compete Agreements [Member] | Minimum [Member] | ||||||||||
Product Information [Line Items] | ||||||||||
Finite lived assets amortization period | 3 years | |||||||||
Tradenames and Non-Compete Agreements [Member] | Maximum [Member] | ||||||||||
Product Information [Line Items] | ||||||||||
Finite lived assets amortization period | 10 years | |||||||||
Customer Relationships [Member] | Minimum [Member] | ||||||||||
Product Information [Line Items] | ||||||||||
Finite lived assets amortization period | 12 years | |||||||||
Customer Relationships [Member] | Maximum [Member] | ||||||||||
Product Information [Line Items] | ||||||||||
Finite lived assets amortization period | 15 years | |||||||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Three Customers [Member] | ||||||||||
Product Information [Line Items] | ||||||||||
Concentration risk percentage | 48% | |||||||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer A [Member] | ||||||||||
Product Information [Line Items] | ||||||||||
Concentration risk percentage | 35% | 25% | ||||||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer B [Member] | ||||||||||
Product Information [Line Items] | ||||||||||
Concentration risk percentage | 7% | 19% | ||||||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer C [Member] | ||||||||||
Product Information [Line Items] | ||||||||||
Concentration risk percentage | 6% | |||||||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Two Customers [Member] | ||||||||||
Product Information [Line Items] | ||||||||||
Concentration risk percentage | 44% | |||||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Three Customers [Member] | ||||||||||
Product Information [Line Items] | ||||||||||
Concentration risk percentage | 21% | |||||||||
TBK Agreement [Member] | ||||||||||
Product Information [Line Items] | ||||||||||
Credit facility current borrowing capacity | $ 47,500,000 | |||||||||
Credit facility borrowing capacity increased | 57,500,000 | |||||||||
TBK Agreement [Member] | Minimum [Member] | ||||||||||
Product Information [Line Items] | ||||||||||
Credit facility borrowing capacity increased | $ 40,000,000 | $ 40,000,000 | $ 30,000,000 | |||||||
TBK Agreement [Member] | Maximum [Member] | ||||||||||
Product Information [Line Items] | ||||||||||
Credit facility borrowing capacity increased | $ 47,500,000 | $ 47,500,000 | $ 40,000,000 | |||||||
Factoring Agreement [Member] | ||||||||||
Product Information [Line Items] | ||||||||||
Accounts receivable outstanding | $ 31,700,000 | |||||||||
Repurchase of trade accounts receivable | $ 1,400,000 | $ 31,600,000 | ||||||||
Measurement Input, EBITDA Multiple [Member] | ||||||||||
Product Information [Line Items] | ||||||||||
Depreciation and amortization | $ 17,300,000 | $ 8,900,000 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | May 31, 2022 | May 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 319,491 | $ 247,490 |
Less: accumulated depreciation | (130,602) | (55,398) |
Property and equipment, net | 188,889 | 192,092 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 102,062 | 84,085 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 159,674 | 108,479 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 30,609 | 27,780 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 27,146 | $ 27,146 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 75,204 | $ 58,384 |
SCHEDULE OF GOODWILL (Details)
SCHEDULE OF GOODWILL (Details) | 12 Months Ended |
May 31, 2021 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Beginning balance June 1, 2020 | $ 4,788,129 |
Measurement Period Adjustment | (325,000) |
Ending balance May 31, 2021 and 2022 | $ 4,463,129 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | May 31, 2022 | May 31, 2021 |
Indefinite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 8,752,000 | $ 8,752,000 |
Less: Accumulated amortization | (1,414,296) | (707,147) |
Intangible assets, net | 7,337,704 | 8,044,853 |
Trademarks and Trade Names [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 806,000 | 806,000 |
Customer Relationships [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 7,633,000 | 7,633,000 |
Noncompete Agreements [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 313,000 | $ 313,000 |
GOODWILL (Details Narrative)
GOODWILL (Details Narrative) - USD ($) | Feb. 19, 2021 | May 31, 2022 | May 31, 2021 | May 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Goodwill | $ 4,463,129 | $ 4,463,129 | $ 4,788,129 | |
[custom:ExistingNoteReducedValueAssumed] | $ 325,000 |
SCHEDULE OF ESTIMATED AMORTIZAT
SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE (Details) - USD ($) | May 31, 2022 | May 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 637,592 | |
2024 | 637,592 | |
2025 | 637,591 | |
2026 | 602,814 | |
2027 | 602,814 | |
Thereafter | 4,219,301 | |
Intangible assets, net | $ 7,337,704 | $ 8,044,853 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Indefinite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 707,149 | $ 707,147 |
Finite-lived intangible assets, weighted average useful life | 7 years 3 months 29 days | |
Tradenames and Non-Compete Agreements [Member] | Minimum [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 3 years | |
Trade Names and Non-Compete Agreements [Member] | Maximum [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 10 years | |
Customer Relationships [Member] | Minimum [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 12 years | |
Customer Relationships [Member] | Maximum [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 15 years |
SCHEDULE OF ACCRUED EXPENSES AN
SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | May 31, 2022 | May 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued salaries and related expenses | $ 625,000 | $ 672,455 |
Accrued sales and marketing expense | 2,383,500 | 539,810 |
Accrued professional fees | 1,350,170 | 75,000 |
Accrued income tax | 559,544 | 256,286 |
Accrued overdraft liabilities | 681,058 | 790,364 |
Other accrued expenses and current liabilities | 66,887 | 50,000 |
Accrued expenses and other current liabilities | $ 5,666,159 | $ 2,383,915 |
SCHEDULE OF FINANCING ARRANGEME
SCHEDULE OF FINANCING ARRANGEMENT (Details) - USD ($) | May 31, 2022 | May 31, 2021 |
Short-Term Debt [Line Items] | ||
Notes payable, gross | $ 38,749,784 | $ 5,478,673 |
Less: current portion | (38,749,784) | (2,285,367) |
Long term, notes payable | 3,193,306 | |
Revolving Credit Facility [Member] | ||
Short-Term Debt [Line Items] | ||
Notes payable, gross | 38,141,451 | |
Promissory Note (PPP) [Member] | ||
Short-Term Debt [Line Items] | ||
Notes payable, gross | 358,236 | |
Promissory Notes (EIDL) [Member] | ||
Short-Term Debt [Line Items] | ||
Notes payable, gross | 150,000 | |
Notes Payable [Member] | ||
Short-Term Debt [Line Items] | ||
Notes payable, gross | 608,333 | 2,528,886 |
Convertible Notes - Net of Discount [Member] | ||
Short-Term Debt [Line Items] | ||
Notes payable, gross | $ 2,441,551 |
FINANCING ARRANGEMENTS (Details
FINANCING ARRANGEMENTS (Details Narrative) - USD ($) | 1 Months Ended | 2 Months Ended | 12 Months Ended | |||||||||||||||||||
Dec. 10, 2021 | Nov. 30, 2021 | Oct. 14, 2021 | Aug. 19, 2021 | Jun. 02, 2021 | Mar. 19, 2021 | Mar. 09, 2021 | Jan. 28, 2021 | Oct. 14, 2020 | Oct. 08, 2020 | May 29, 2020 | Jan. 31, 2021 | Jun. 30, 2020 | May 31, 2020 | May 31, 2022 | May 31, 2021 | Apr. 14, 2022 | Feb. 28, 2022 | Jan. 31, 2022 | Sep. 17, 2021 | Aug. 04, 2021 | Jun. 17, 2021 | |
Debt Instrument [Line Items] | ||||||||||||||||||||||
Accounts receivables net | $ 74,746,036 | $ 20,369,747 | ||||||||||||||||||||
Notes payable | 38,749,784 | 5,478,673 | ||||||||||||||||||||
Proceeds from notes payable | 2,000,000 | 5,174,902 | ||||||||||||||||||||
Gain loss on debt extinguishment | (564,037) | (1,147,856) | ||||||||||||||||||||
Amortization of Debt Discount (Premium) | $ 776,515 | $ 1,350,389 | ||||||||||||||||||||
Preferred stock par value | $ 0.001 | $ 0.001 | ||||||||||||||||||||
2023 | $ 608,333 | |||||||||||||||||||||
Notes Payable [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Notes payable | 608,333 | $ 2,528,886 | ||||||||||||||||||||
Promissory Note [Member] | Accredited Investor [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt, interest rate | 10% | |||||||||||||||||||||
Convertible Notes Payable [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt Conversion, Converted Instrument, Amount | 3,900,000 | |||||||||||||||||||||
UL ATL [Member] | Notes Payable [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt, maturity date | May 29, 2023 | |||||||||||||||||||||
Notes payable | $ 1,825,000 | 608,333 | 1,216,667 | |||||||||||||||||||
Debt, periodic payment description | The agreement calls for six semi-annual payments of $304,166.67, for which the first payment was due on November 29, 2020 | |||||||||||||||||||||
Debt, periodic payments | $ 304,166.67 | |||||||||||||||||||||
Unique Logistics International, Inc.[Member] | Promissory Note [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Notes payable | $ 1,000,000 | 1,062,215 | ||||||||||||||||||||
Proceeds from notes payable | $ 1,000,000 | |||||||||||||||||||||
TBK Agreement [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt Instrument, Unused Borrowing Capacity, Amount | $ 30,000,000 | |||||||||||||||||||||
Line of credit | 57,500,000 | |||||||||||||||||||||
TBK Agreement [Member] | Corefund Capital, LLC [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Accounts receivables net | $ 2,000,000 | |||||||||||||||||||||
TBK Agreement [Member] | Maximum [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Line of credit | $ 47,500,000 | $ 47,500,000 | $ 40,000,000 | |||||||||||||||||||
TBK Agreement [Member] | Maximum [Member] | Corefund Capital, LLC [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Accounts receivables net | 25,000,000 | |||||||||||||||||||||
TBK Agreement [Member] | Minimum [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Line of credit | $ 40,000,000 | $ 40,000,000 | $ 30,000,000 | |||||||||||||||||||
TBK Loan Agreement [Member] | Maximum [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Credit facility | $ 57,500,000 | |||||||||||||||||||||
TBK Loan Agreement [Member] | Minimum [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Credit facility | $ 47,500,000 | |||||||||||||||||||||
Purchase Money Financing Agreement [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Liquidation premium amount | 1,000,000 | |||||||||||||||||||||
Paycheck Protection Program Loans [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt, interest rate | 1% | |||||||||||||||||||||
Debt, outstanding balance | $ 358,236 | |||||||||||||||||||||
Debt, maturity date | Mar. 05, 2026 | |||||||||||||||||||||
Paycheck Protection Program Loans [Member] | UL US Entities [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Proceeds from loan | $ 1,646,062 | |||||||||||||||||||||
Debt maturity description | The promissory notes mature for dates ranging from April 2022 through May 2022 | |||||||||||||||||||||
Debt, outstanding balance | $ 0 | 358,236 | ||||||||||||||||||||
Debt, interest rate | 1% | |||||||||||||||||||||
Debt, forgiven value | $ 1,646,062 | |||||||||||||||||||||
SBA Loans [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt, outstanding balance | 358,236 | |||||||||||||||||||||
Economic Injury Disaster Loan [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Proceeds from loan | $ 150,000 | |||||||||||||||||||||
Debt, outstanding balance | 150,000 | |||||||||||||||||||||
Debt, interest rate | 3.75% | |||||||||||||||||||||
Non-Compete, Non-Solicitation and Non-Disclosure Agreement [Member] | ATL [Member] | Notes Payable [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Notes payable | $ 500,000 | $ 0 | 250,004 | |||||||||||||||||||
Debt, periodic payment description | The agreement calls for twenty-four monthly non-interest bearing payments of $20,833.33 with the first payment on June 29, 2020 | |||||||||||||||||||||
Debt, periodic payments | $ 20,833.33 | |||||||||||||||||||||
Trillium SPA [Member] | Convertible Notes Payable [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt, interest rate | 10% | |||||||||||||||||||||
Debt, maturity date | Oct. 06, 2022 | |||||||||||||||||||||
Notes payable | $ 1,111,000 | $ 0 | 1,104,500 | |||||||||||||||||||
Proceeds from notes payable | $ 1,000,000 | |||||||||||||||||||||
Number of warrants to purchase common stock | 570,478,452 | |||||||||||||||||||||
Warrants exercise price, per share | $ 0.001946 | |||||||||||||||||||||
Debt, conversion price per share | $ 0.00179638 | $ 0.00179640 | ||||||||||||||||||||
Debt Conversion, Converted Instrument, Amount | $ 131,759 | |||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 73,346,191 | |||||||||||||||||||||
Three ASPA [Member] | Convertible Notes Payable [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt, interest rate | 10% | |||||||||||||||||||||
Debt, maturity date | Oct. 06, 2021 | Oct. 06, 2022 | ||||||||||||||||||||
Notes payable | $ 1,111,000 | $ 0 | 1,111,000 | |||||||||||||||||||
Proceeds from notes payable | $ 1,000,000 | |||||||||||||||||||||
Number of warrants to purchase common stock | 570,478,452 | |||||||||||||||||||||
Warrants exercise price, per share | $ 0.001946 | |||||||||||||||||||||
Debt, conversion price per share | $ 0.00179638 | |||||||||||||||||||||
Debt Conversion, Converted Instrument, Amount | $ 113,172 | |||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 63,000,000 | |||||||||||||||||||||
Warrants, value | $ 563,156 | |||||||||||||||||||||
Debt, beneficial conversion feature | $ 436,844 | |||||||||||||||||||||
Gain loss on debt extinguishment | $ 383,819 | |||||||||||||||||||||
Unamortized debt discount | $ 0 | 391,757 | ||||||||||||||||||||
Amortization of Debt Discount (Premium) | 285,048 | |||||||||||||||||||||
Trillium and 3a SPA [Member] | Convertible Notes Payable [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt, interest rate | 10% | |||||||||||||||||||||
Debt, maturity date | Jan. 28, 2023 | |||||||||||||||||||||
Debt, conversion price per share | $ 0.0032 | |||||||||||||||||||||
Debt, beneficial conversion feature | $ 1,666,666 | |||||||||||||||||||||
Gain loss on debt extinguishment | $ 247,586 | |||||||||||||||||||||
Unamortized debt discount | $ 1,833,334 | |||||||||||||||||||||
Amortization of Debt Discount (Premium) | $ 491,467 | |||||||||||||||||||||
Trillium and 3a SPA [Member] | Convertible Notes Payable One [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Notes payable | 916,666 | |||||||||||||||||||||
Trillium and 3a SPA [Member] | Convertible Notes Payable Two [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Notes payable | $ 1,833,333 | |||||||||||||||||||||
Exchange Agreement [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Agreement description | the Company (each, including its successors and assigns, a “Holder” and collectively the “Holders”). Pursuant to the Exchange Agreement, the Company agreed to issue, and the Holders agreed to acquire the New Securities (as defined herein) in exchange for the Surrendered Securities (the “Old Notes” defined as October and January Notes and Warrants in the Exchange Agreement). “New Securities” means a number of Exchange Shares (as defined in the Exchange Agreement) determined by applying the Exchange Ratio (as defined in the Exchange Agreement) upon consummation of a registered public offering of shares of the Company’s Common Stock (and warrants if included in such financing), at a valuation of not less than $200,000,000.00 pre-money, pursuant to which the Company receives gross proceeds of not less than $20,000,000 and the Company’s Trading Market is a National Securities Exchange (the “Qualified Financing”). | |||||||||||||||||||||
Proceeds from public offering | $ 20,000,000 | |||||||||||||||||||||
Amended Securities Exchange Agreement [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Preferred Stock, Value, Outstanding | $ 10,000 | |||||||||||||||||||||
Preferred stock, conversion basis | Preferred may be converted up to an amount of common stock equal to 12.48% of the Company’s capital stock on a fully diluted basis | |||||||||||||||||||||
Amended Securities Exchange Agreement [Member] | Series C Preferred Stock [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Preferred stock par value | $ 0.001 | |||||||||||||||||||||
Preferred stock, shares issued | 195 | |||||||||||||||||||||
Amended Securities Exchange Agreement [Member] | Series D Preferred Stock [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Preferred stock par value | $ 0.001 | |||||||||||||||||||||
Preferred stock, shares issued | 192 | |||||||||||||||||||||
Amended Securities Exchange Agreement [Member] | Notes Payable [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Notes payable | $ 3,861,160 | |||||||||||||||||||||
Warrants to purchase of common stock | 1,140,956,904 |
SCHEDULE OF RELATED PARTY TRANS
SCHEDULE OF RELATED PARTY TRANSACTIONS (Details) - USD ($) | May 31, 2022 | May 31, 2021 | |
Related Party Transaction [Line Items] | |||
Due to related parties, gross | $ 699,276 | $ 1,113,923 | |
Less: current portion | (301,308) | (397,975) | |
Long term, due to related parties | 397,968 | 715,948 | |
Due to Frangipani Trade Services [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties, gross | [1] | 602,618 | 903,927 |
Due to Employee One [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties, gross | [2] | 30,000 | 60,000 |
Due to Employee Two [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties, gross | [3] | $ 66,658 | $ 149,996 |
[1]Due to Frangipani Trade Services (“FTS”), an entity owned by the Company’s CEO, is due on demand and is non-interest bearing. The principal amount of this Promissory Note bears no interest; provided that any amount due under this Note which is not paid when due shall bear interest at an interest rate equal to six percent ( 6 150,655 90,000 2,500 200,000 5,556 |
SCHEDULE OF RELATED PARTY TRA_2
SCHEDULE OF RELATED PARTY TRANSACTIONS (Details) (Parenthetical) - USD ($) | 12 Months Ended | ||
May 29, 2020 | May 31, 2022 | May 31, 2021 | |
Related Party Transaction [Line Items] | |||
Notes payable | $ 38,749,784 | $ 5,478,673 | |
Due to Frangipani Trade Services [Member] | |||
Related Party Transaction [Line Items] | |||
Debt, interest rate | 6% | ||
Debt, periodic payments | $ 150,655 | ||
Due to Employee One [Member] | |||
Related Party Transaction [Line Items] | |||
Debt, periodic payments | $ 2,500 | ||
Notes payable | 90,000 | ||
Due to Employee Two [Member] | |||
Related Party Transaction [Line Items] | |||
Debt, periodic payments | 5,556 | ||
Notes payable | $ 200,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | ||
May 29, 2020 | May 31, 2022 | May 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Amortized balances | $ 776,515 | $ 1,350,389 | |
Accounts receivable, trade related parties | 3,000,000 | 1,300,000 | |
Accounts payable, trade related parties | 15,200,000 | 10,800,000 | |
Revenue from related party transactions | 3,900,000 | 2,400,000 | |
Direct Operating Costs | 192,800,000 | 54,900,000 | |
Consulting Services Agreement [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Payment for consulting agreement | $ 500,000 | ||
Amortized balances | $ 282,666 | $ 565,338 |
RETIREMENT PLAN (Details Narrat
RETIREMENT PLAN (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Retirement Benefits [Abstract] | ||
Retirment plan, description | In one of which the Company has the discretionary option of matching employee contributions and in the other the Company matches 20% on the first 100% contribution. In either Plan, employees can contribute 1% to 98% of gross salary up to a maximum permitted by law | |
Retirement expense | $ 100 | $ 50 |
SCHEDULE OF WARRANTS ACTIVITY (
SCHEDULE OF WARRANTS ACTIVITY (Details) - Warrant [Member] | 12 Months Ended |
May 31, 2022 $ / shares shares | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Number of warrants outstanding, beginning | shares | 1,140,956,904 |
Warrants, weighted average exercise price, beginning | $ / shares | $ 0.002 |
Number of warrants exercisable , beginning | shares | 1,140,956,904 |
Warrants, weighted average exercise price exercisable, beginning | $ / shares | $ 0.002 |
Number of warrants, granted | shares | (1,140,956,904) |
Warrants, weighted average exercise price, granted | $ / shares | |
Number of warrants outstanding, ending | shares | |
Warrants, weighted average exercise price, ending | $ / shares | |
Number of warrants exercisable, ending | shares | |
Warrants, weighted average exercise price exercisable, ending | $ / shares |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 12 Months Ended | |||||||||||||
Apr. 05, 2022 | Oct. 27, 2021 | Sep. 28, 2021 | Aug. 13, 2021 | Aug. 09, 2021 | Aug. 03, 2021 | Jul. 08, 2021 | Jun. 28, 2021 | Jun. 23, 2021 | Apr. 12, 2021 | Oct. 09, 2020 | May 31, 2022 | May 31, 2021 | Jan. 11, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Common stock, shares authorized | 800,000,000 | 800,000,000 | 500,000,000 | |||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||||||||||
Common stock, shares issued | 687,196,478 | 393,742,663 | ||||||||||||
Common stock, shares outstanding | 687,196,478 | 393,742,663 | ||||||||||||
Preferred stock, shares designated | 5,000,000 | 5,000,000 | ||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||||||||
Common stock conversion percentage | 12.48% | |||||||||||||
Deemed dividends | $ 4,300,000 | |||||||||||||
Convertible Notes Payable [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Debt conversion amount | $ 3,900,000 | |||||||||||||
Series D Convertible Preferred Stock [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Preferred stock, shares designated | 200 | 200 | ||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||||||||
Preferred stock, shares issued | 187 | 0 | ||||||||||||
Preferred stock, shares outstanding | 187 | 0 | ||||||||||||
Series A Convertible Preferred Stock [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Preferred stock, shares designated | 130,000 | 130,000 | ||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||||||||
Preferred stock, shares issued | 130,000 | 130,000 | ||||||||||||
Preferred stock, shares outstanding | 130,000 | 130,000 | ||||||||||||
Series B Convertible Preferred Stock [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Preferred stock, shares designated | 870,000 | 870,000 | ||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||||||||
Preferred stock, shares issued | 820,800 | 840,000 | ||||||||||||
Preferred stock, shares outstanding | 820,800 | 840,000 | ||||||||||||
Series C Convertible Preferred Stock [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Preferred stock, shares designated | 200 | 200 | ||||||||||||
Preferred stock, par value | $ 0.001 | |||||||||||||
Preferred stock, shares issued | 195 | |||||||||||||
Preferred stock, shares outstanding | 195 | 0 | ||||||||||||
Common Stock [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Common stock issued in conversion | 125,692,224 | |||||||||||||
Series B Convertible Preferred Stock [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Number of shares converted | 19,200 | |||||||||||||
Warrant [Member] | Series D Preferred Stock [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Net loss on extinguishment of debt | $ 4,600,000 | |||||||||||||
Consultant [Member] | Common Stock [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Number of shares issued | 28,291,180 | |||||||||||||
Number of shares issued, value | $ 91,666 | |||||||||||||
Chief Executive Officer [Member] | Series B Preferred Stock [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Number of shares converted | 30,000 | |||||||||||||
Chief Executive Officer [Member] | Common Stock [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Number of shares converted | 196,394,100 | |||||||||||||
Chief Executive Officer [Member] | Series B Convertible Preferred Stock [Member] | Frangipani Trade Services Inc [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Ownership percentage | 100% | |||||||||||||
Noteholder [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Debt conversion amount | $ 41,317 | $ 53,054.86 | $ 12,820.83 | $ 24,418.89 | $ 15,620.83 | $ 71,855.20 | $ 25,842.22 | $ 63,692 | ||||||
Debt, conversion of shares | 23,000,000 | 29,534,319 | 7,137,037 | 13,593,388 | 8,695,727 | 40,000,000 | 14,385,720 | 35,455,872 | ||||||
Common stock per share | $ 0.00179638 | $ 0.00179638 | $ 0.00179638 | $ 0.00179638 | $ 0.00179638 | $ 0.00179638 | $ 0.00179638 | |||||||
Shareholder [Member] | Series D Convertible Preferred Stock [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Common stock issued in conversion | 31,415,400 | |||||||||||||
Number of shares converted | 5 |
SCHEDULE OF COMPONENTS OF LEASE
SCHEDULE OF COMPONENTS OF LEASE EXPENSE (Details) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease | $ 1,717,807 | $ 1,506,090 |
Interest on operating lease liabilities | 209,536 | 148,039 |
Total net lease cost | $ 1,927,343 | $ 1,654,129 |
SCHEDULE OF SUPPLEMENTAL BALANC
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) - USD ($) | May 31, 2022 | May 31, 2021 | May 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease ROU assets – net | $ 2,408,098 | $ 3,797,527 | $ 4,770,280 |
Current operating lease liabilities, included in current liabilities | 912,618 | 1,466,409 | |
Noncurrent operating lease liabilities, included in long-term liabilities | 1,593,873 | 2,431,144 | |
Total operating lease liabilities | $ 2,506,491 | $ 3,897,553 |
SCHEDULE OF SUPPLEMENTAL CASH F
SCHEDULE OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION (Details) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
ROU assets obtained in exchange for lease liabilities: Operating leases | $ 1,805 | $ 223,242 |
Weighted average remaining lease term (in years): Operating leases | 3 years 10 months 17 days | 4 years 14 days |
Weighted average discount rate | 4.02% | 4.25% |
SCHEDULE OF MINIMUM LEASE PAYME
SCHEDULE OF MINIMUM LEASE PAYMENTS (Details) - USD ($) | May 31, 2022 | May 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
2023 | $ 1,002,244 | |
2024 | 573,301 | |
2025 | 448,460 | |
2026 | 260,309 | |
2027 | 198,255 | |
Thereafter | 249,406 | |
Total lease payments | 2,731,975 | |
Less: imputed interest | (225,484) | |
Total lease obligations | $ 2,506,491 | $ 3,897,553 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - Unique Logistics Holdings Limited [Member] - Securities Purchase Agreement [Member] | Apr. 28, 2022 USD ($) |
Restructuring Cost and Reserve [Line Items] | |
Cash Consideration | $ 21,000,000 |
Promissory note consideration | $ 1,000,000 |
Consideration description | Seller will be eligible for an additional one-time cash earn-out payment (the “Earn Out Payment”), in the amount of (i) $2,500,000, if the EBITDA of the Purchased Shares, in the aggregate, exceeds $5,000,000 for the one-year period beginning on July 1, 2022 and ending June 30, 2023 (the “Earn Out Period”), or (ii) $2,000,000, if the EBITDA of the Purchased Shares, in the aggregate is equal to or less than $5,000,000 but exceeds $4,500,000, for the Earn Out Period, in each case, to be paid by the Company within 90 days of June 30, 2023 |
SCHEDULE OF INCOME TAX EXPENSE
SCHEDULE OF INCOME TAX EXPENSE (Details) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Federal | ||
Current | $ 2,052,526 | $ 521,293 |
Deferred | (554,294) | (208,560) |
State and Local | ||
Current | 1,041,298 | 262,576 |
Deferred | (125,232) | (55,440) |
Income tax expense | $ 2,414,298 | $ 519,869 |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS (LIABILITIES) (Details) - USD ($) | May 31, 2022 | May 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Debt discount liability | $ 288,555 | |
Allowance for doubtful accounts | 733,139 | 39,414 |
Contract liability | 230,263 | |
Lease liability | 659,460 | |
Other | 238,006 | 19,513 |
Total deferred tax assets | 1,860,868 | 347,482 |
Valuation allowance | ||
Deferred tax asset, net of valuation allowance | 1,860,868 | 347,482 |
Deferred Tax Liabilities | ||
Operating lease right-of-use assets | (631,173) | |
Goodwill and intangibles | (256,533) | |
Fixed assets | (30,414) | (84,261) |
Net deferred tax asset (liability) | $ 942,748 | $ 263,221 |
SCHEDULE OF EXPECTED TAX EXPENS
SCHEDULE OF EXPECTED TAX EXPENSE (BENEFIT) (Details) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
US Federal statutory rate (%) | 21% | 21% |
State income tax, net of federal benefit | 16.40% | 8.40% |
Impact of debt exchange | 18.90% | |
FDII deduction | (10.10%) | |
PPP Loan Forgiveness | (1.30%) | |
Change in valuation allowance | (1.70%) | |
Other permanent differences, net | (4.30%) | (4.50%) |
Income tax provision (benefit) (%) | 40.60% | 23.20% |
INCOME TAX PROVISION (Details N
INCOME TAX PROVISION (Details Narrative) - USD ($) | May 31, 2022 | May 31, 2021 |
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | $ 288,555 | |
Valuation allowance | 0 | |
Interest or penalties related to unrecognized tax benefits | 0 | |
California Franchise Tax Board [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | 262,678 | 262,678 |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | $ 100,000 | $ 100,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Shareholder [Member] - shares | Jul. 29, 2022 | Jun. 28, 2022 | Jun. 21, 2022 | Apr. 05, 2022 |
Series D Convertible Preferred Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of shares converted | 5 | |||
Common stock issued in conversion | 31,415,400 | |||
Subsequent Event [Member] | Series D Convertible Preferred Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of shares converted | 4 | 3 | ||
Common stock issued in conversion | 25,132,320 | 18,849,240 | ||
Subsequent Event [Member] | Series A Convertible Preferred Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of shares converted | 9,935 | |||
Common stock issued in conversion | 67,963,732 |