Cover
Cover - shares | 6 Months Ended | |
Nov. 30, 2022 | Jan. 17, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Nov. 30, 2022 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2023 | |
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 | 678 | |
Local Phone Number | 365-6004 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 799,141,770 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Nov. 30, 2022 | May 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 1,244,044 | $ 1,422,393 |
Accounts receivable, net | 51,348,532 | 74,746,036 |
Contract assets | 13,804,866 | 30,970,581 |
Other prepaid expenses and current assets | 2,260,969 | 1,404,021 |
Total current assets | 68,658,411 | 108,543,031 |
Property and equipment, net | 223,757 | 188,889 |
Long-term assets: | ||
Goodwill | 4,463,129 | 4,463,129 |
Intangible assets, net | 6,984,131 | 7,337,704 |
Operating lease right-of-use assets, net | 10,579,787 | 2,408,098 |
Deferred tax asset, net | 987,648 | 942,748 |
Deposits | 1,596,926 | 1,028,336 |
Total long-term assets | 24,611,621 | 16,180,015 |
Total assets | 93,493,789 | 124,911,935 |
Current Liabilities: | ||
Accounts payable | 30,955,523 | 49,028,862 |
Accrued expenses and other current liabilities | 4,898,633 | 5,666,159 |
Accrued freight | 1,195,946 | 9,240,650 |
Contract Liabilities | 468,209 | |
Revolving credit facility | 20,691,815 | 38,141,451 |
Current portion of notes payable, net of discount | 304,167 | 608,333 |
Current portion of long-term debt due to related parties | 349,631 | 301,308 |
Current portion of operating lease liability | 1,796,663 | 912,618 |
Total current liabilities | 60,192,378 | 104,367,590 |
Long-term liabilities | 141,330 | 282,666 |
Long-term-debt due to related parties, net of current portion | 150,655 | 397,968 |
Derivative liabilities | 11,693,338 | 12,437,994 |
Operating lease liability, net of current portion | 8,891,206 | 1,593,873 |
Total long-term liabilities | 20,876,529 | 14,712,501 |
Total liabilities | 81,068,907 | 119,080,091 |
Commitments and contingencies | ||
Stockholders’ Equity: | ||
Preferred stock, value | ||
Common stock $0.001 par value; 800,000,000 shares authorized. 799,141,770 and 687,196,478 common shares issued and outstanding as of November 30, 2022 and May 31, 2022, respectively | 799,142 | 687,197 |
Additional paid-in capital | 180,220 | 292,155 |
Retained earnings | 11,444,579 | 4,851,541 |
Total Stockholders’ Equity | 12,424,882 | 5,831,844 |
Total Liabilities and Stockholders’ Equity | 93,493,789 | 124,911,935 |
Series A Preferred Stock [Member] | ||
Stockholders’ Equity: | ||
Preferred stock, value | 120 | 130 |
Series B Preferred Stock [Member] | ||
Stockholders’ Equity: | ||
Preferred stock, value | 821 | 821 |
Series C Preferred Stock [Member] | ||
Stockholders’ Equity: | ||
Preferred stock, value | ||
Series D Preferred Stock [Member] | ||
Stockholders’ Equity: | ||
Preferred stock, value |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Nov. 30, 2022 | May 31, 2022 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 800,000,000 | 800,000,000 |
Common stock, shares issued | 799,141,770 | 687,196,478 |
Common stock, shares outstanding | 799,141,770 | 687,196,478 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 120,065 | 130,000 |
Preferred stock, shares outstanding | 120,065 | 130,000 |
Liquidation preference | $ 120 | |
Series B Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 820,800 | 820,800 |
Preferred stock, shares outstanding | 820,800 | 820,800 |
Liquidation preference | $ 821 | |
Series C Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | |
Preferred stock, shares outstanding | 195 | |
Series D Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | |
Preferred stock, shares outstanding | 180 | 187 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Revenues: | ||||
Total revenues | $ 88,837,233 | $ 405,430,689 | $ 225,346,105 | $ 595,202,549 |
Costs and operating expenses: | ||||
Airfreight services | 19,950,949 | 269,019,226 | 47,500,790 | 320,645,001 |
Ocean freight and ocean services | 41,145,915 | 107,173,955 | 123,083,775 | 223,761,697 |
Contract logistics | 318,089 | 679,426 | 630,981 | 1,069,826 |
Customs brokerage and other services | 16,731,183 | 12,393,603 | 33,375,926 | 25,318,695 |
Salaries and related costs | 3,675,597 | 2,817,938 | 6,959,979 | 5,569,318 |
Professional fees | 411,421 | 184,459 | 1,174,725 | 478,326 |
Rent and occupancy | 613,572 | 489,770 | 1,142,682 | 969,979 |
Selling and promotion | 461,578 | 2,659,490 | 562,432 | 3,692,618 |
Depreciation and amortization | 201,966 | 194,875 | 402,640 | 388,672 |
Other | 336,814 | 1,154,945 | 669,761 | 1,423,067 |
Total costs and operating expenses | 83,847,084 | 396,767,687 | 215,503,691 | 583,317,199 |
Income from operations | 4,990,149 | 8,663,002 | 9,842,414 | 11,858,350 |
Other income (expenses) | ||||
Interest expense | (972,300) | (1,881,201) | (2,329,985) | (3,198,480) |
Amortization of debt discount | (391,035) | (776,515) | ||
Gain on forgiveness of promissory note | 358,236 | |||
Change in fair value of derivative liabilities | 125,708 | 744,656 | ||
Gain on extinguishment of convertible note | 780,050 | |||
Total other income (expenses) | (846,592) | (2,272,236) | (1,585,329) | (2,836,709) |
Net income before income taxes | 4,143,557 | 6,390,766 | 8,257,085 | 9,048,641 |
Income tax expense | 871,860 | 1,902,541 | 1,664,047 | 2,537,000 |
Net income | $ 3,271,697 | $ 4,488,225 | $ 6,593,038 | $ 6,511,641 |
Net income available for common shareholders per common share | ||||
– basic | $ 0.01 | |||
– diluted | ||||
Weighted average common shares outstanding | ||||
– basic | 799,141,770 | 1,764,049,961 | 771,683,232 | 1,687,489,133 |
– diluted | 9,677,967,424 | 10,899,465,407 | 9,650,508,886 | 10,822,904,579 |
Airfreight Services [Member] | ||||
Revenues: | ||||
Total revenues | $ 21,581,667 | $ 275,070,204 | $ 51,515,704 | $ 327,232,845 |
Ocean Freight and Ocean Services [Member] | ||||
Revenues: | ||||
Total revenues | 47,930,347 | 115,421,970 | 136,185,077 | 238,722,728 |
Contract Logistics [Member] | ||||
Revenues: | ||||
Total revenues | 975,711 | 1,211,056 | 1,744,425 | 1,933,720 |
Customs Brokerage and Other Services [Member] | ||||
Revenues: | ||||
Total revenues | $ 18,349,508 | $ 13,727,459 | $ 35,900,899 | $ 27,313,256 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 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 |
Beginning balance, value at May. 31, 2021 | $ 130 | $ 840 | $ 393,743 | $ 4,906,384 | $ 1,316,987 | $ 6,618,084 | ||
Beginning balance, shares at May. 31, 2021 | 130,000 | 840,000 | 393,742,663 | |||||
Net income | 2,023,416 | 2,023,416 | ||||||
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 | $ 83,812 | 66,746 | 150,558 | |||||
Issuance of Common Stock for the conversion of notes and accrued interest, shares | 83,811,872 | |||||||
Ending balance, value at Aug. 31, 2021 | $ 130 | $ 821 | $ 603,247 | 4,847,457 | 3,340,403 | 8,792,058 | ||
Ending balance, shares at Aug. 31, 2021 | 130,000 | 820,800 | 603,246,759 | |||||
Beginning balance, value at May. 31, 2021 | $ 130 | $ 840 | $ 393,743 | 4,906,384 | 1,316,987 | 6,618,084 | ||
Beginning balance, shares at May. 31, 2021 | 130,000 | 840,000 | 393,742,663 | |||||
Net income | 6,511,641 | |||||||
Ending balance, value at Nov. 30, 2021 | $ 130 | $ 821 | $ 655,782 | 4,889,295 | 7,828,628 | 13,374,656 | ||
Ending balance, shares at Nov. 30, 2021 | 130,000 | 820,800 | 655,781,078 | |||||
Beginning balance, value at Aug. 31, 2021 | $ 130 | $ 821 | $ 603,247 | 4,847,457 | 3,340,403 | 8,792,058 | ||
Beginning balance, shares at Aug. 31, 2021 | 130,000 | 820,800 | 603,246,759 | |||||
Net income | 4,488,225 | 4,488,225 | ||||||
Issuance of Common Stock for the conversion of notes and accrued interest | $ 52,534 | 41,838 | 94,372 | |||||
Issuance of Common Stock for the conversion of notes and accrued interest, shares | 52,534,319 | |||||||
Ending balance, value at Nov. 30, 2021 | $ 130 | $ 821 | $ 655,782 | 4,889,295 | 7,828,628 | 13,374,656 | ||
Ending balance, shares at Nov. 30, 2021 | 130,000 | 820,800 | 655,781,078 | |||||
Beginning balance, value at May. 31, 2022 | $ 130 | $ 821 | $ 687,197 | 292,155 | 4,851,541 | 5,831,844 | ||
Beginning balance, shares at May. 31, 2022 | 130,000 | 820,800 | 195 | 187 | 687,196,478 | |||
Conversion of Preferred A to Common Stock | $ (10) | $ 67,964 | $ (67,954) | |||||
Conversion of Preferred A to Common Stock, Shares | (9,935) | 67,963,732 | ||||||
Conversion of Preferred D to Common Stock | 43,981 | (43,981) | ||||||
Conversion of Preferred D to Common Stock, Shares | (7) | 43,981,560 | ||||||
Net income | $ 3,321,341 | $ 3,321,341 | ||||||
Ending balance, value at Aug. 31, 2022 | $ 120 | $ 821 | $ 799,142 | $ 180,220 | 8,172,882 | 9,153,185 | ||
Ending balance, shares at Aug. 31, 2022 | 120,065 | 820,800 | 195 | 180 | 799,141,770 | |||
Beginning balance, value at May. 31, 2022 | $ 130 | $ 821 | $ 687,197 | 292,155 | 4,851,541 | 5,831,844 | ||
Beginning balance, shares at May. 31, 2022 | 130,000 | 820,800 | 195 | 187 | 687,196,478 | |||
Conversion of Preferred A to Common Stock | 9,935 | |||||||
Net income | 6,593,038 | |||||||
Ending balance, value at Nov. 30, 2022 | $ 120 | $ 821 | $ 799,142 | 180,220 | 11,444,579 | 12,424,882 | ||
Ending balance, shares at Nov. 30, 2022 | 120,065 | 820,800 | 195 | 180 | 799,141,770 | |||
Beginning balance, value at Aug. 31, 2022 | $ 120 | $ 821 | $ 799,142 | 180,220 | 8,172,882 | 9,153,185 | ||
Beginning balance, shares at Aug. 31, 2022 | 120,065 | 820,800 | 195 | 180 | 799,141,770 | |||
Net income | 3,271,697 | 3,271,697 | ||||||
Ending balance, value at Nov. 30, 2022 | $ 120 | $ 821 | $ 799,142 | $ 180,220 | $ 11,444,579 | $ 12,424,882 | ||
Ending balance, shares at Nov. 30, 2022 | 120,065 | 820,800 | 195 | 180 | 799,141,770 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 6,593,038 | $ 6,511,641 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 402,640 | 388,672 |
Amortization of debt discount | 776,515 | |
Amortization of right of use assets | 719,517 | 710,140 |
Gain on forgiveness of promissory note | (358,236) | |
Gain on extinguishment of notes payable | (780,050) | |
Change in deferred tax asset, net | (44,900) | (304,000) |
Change in fair value of derivative liabilities | (744,656) | |
Bad debt expense | 850,000 | |
Accretion of consulting agreement | (141,336) | (141,336) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 23,397,504 | (123,057,802) |
Contract assets | 17,165,715 | (26,580,945) |
Factoring reserve | 7,593,665 | |
Other prepaid expenses and other current assets | (856,948) | (219,321) |
Deposits and other assets | (568,590) | (20,000) |
Accounts payable | (18,073,339) | 36,893,108 |
Accrued expenses and other current liabilities | (767,526) | 8,764,328 |
Accrued freight | (8,044,704) | 38,934,277 |
Contract liabilities | (468,209) | 20,331,879 |
Operating lease liability | (709,828) | (699,094) |
Net Cash Provided by (Used In) Operating Activities | 17,858,377 | (30,406,559) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (83,934) | (43,727) |
Net Cash Used in Investing Activities | (83,934) | (43,727) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from notes payable | 2,000,000 | |
Repayments of notes payable | (304,166) | (579,165) |
Repayments of long-term debt due to related parties | (198,990) | (215,656) |
Borrowings (repayments) line of credit, net | (17,449,636) | 29,833,248 |
Net Cash (Used in) Provided by Financing Activities | (17,952,792) | 31,038,427 |
Net change in cash and cash equivalents | (178,349) | 588,141 |
Cash and cash equivalents - Beginning of period | 1,422,393 | 252,615 |
Cash and cash equivalents - End of period | 1,244,044 | 840,756 |
Cash paid during the period for: | ||
Income taxes | 1,415,758 | 422,836 |
Interest | 2,184,260 | 601,377 |
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Operating lease asset and liability additions | 8,891,206 | |
Conversion of Preferred Stock Series A preferred to common | 67,954 | |
Conversion of Preferred Stock Series B preferred to common | 125,673 | |
Conversion of Preferred Stock Series D preferred to common | 43,981 | |
Issuance of Common Stock for the conversion of notes and accrued interest | $ 193,306 |
NATURE OF BUSINESS AND SUMMARY
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Nov. 30, 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 ● Ocean Freight ● Customs Brokerage and Compliance ● Warehousing and Distribution ● Order Management Liquidity The accompanying condensed 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 November 30, 2022, the Company reported working capital of approximately $ 8.5 million compared with $ 4.2 million working capital as of May 31, 2022. The Company has adequate cash availability through the TBK Facility. Since its inception, the Company has experienced significant business growth. To fund such growth, operating capital was initially provided by third party investors through the sale of Convertible Notes which were subsequently exchanged into convertible securities. Preferred shares are more beneficial to the Company because they do not require cash repayments. Due to the antidilution provision embedded in certain of the convertible securities, these provisions resulted in an embedded derivative and the Company recorded a long-term liability. As of the quarter ended November 30, 2022, and the year ended May 31, 2022, this liability was $ 11.7 12.4 To fund the pending acquisitions, as discussed in Note 6: Commitments and Contingencies, on December 18, 2022, the Company has entered into a commitment from a lender for a senior secured financing facility that will provide the necessary debt capital to execute the acquisitions. While we continue to execute our strategic plan, management is focused on managing cash and monitoring our liquidity position. We have implemented a number of initiatives to conserve our liquidity position including activities such as increasing credit facilities, when needed, 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 as of and subsequent to the balance sheet date, management has concluded that the Company’s current cash and cash availability under the TBK Facility as of November 30, 2022, would be sufficient to fund its planned operations 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. Basis of Presentation The condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The unaudited interim financial information furnished herein reflects all adjustments, consisting solely of normal recurring items, which in the opinion of management are necessary to fairly state the financial position of the Company and the results of its operations for the periods presented. This report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended May 31, 2022. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The condensed consolidated balance sheet on May 31, 2022 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. Principles of Consolidation The consolidated financial statements of the Company include the accounts of the Company and its majority 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 November 30, 2022 and May 31, 2022. 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 November 30, 2022. On November 30, 2021, Level 3 derivative liability balances were insignificant. There were no transfers between levels during the reporting period. Accounts Receivable Accounts receivable 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, 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 November 30, 2022 and May 31, 2022, the Company recorded an allowance for doubtful accounts of approximately $ 2.7 Concentrations Three major customers represented approximately 21.0 10.0 20.0 21.0 10.0 Three major customers represented approximately 21.0 % of all accounts receivable as of May 31, 2022 and no single customer represented more than 10.0 % of total accounts receivable. Same three customers accounted for 72.0 % and 56 54% and 40% respectively, and customers B and C were less than 10.0 % each for the three and six months ended November 30, 2021. 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 Convertible Preferred Stock Series C and D. Similar to the existing Convertible Preferred Stock Series A, these preferred stocks featured anti-dilution provision that expire on a specified 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, C and D Preferred Stock. 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. During the three months ended November 30, 2022, the Company recorded a change in fair value of $ 0.7 SCHEDULE OF DERIVATIVE LIABILITIES Level 1 Level 2 Level 3 Derivative liabilities as June 1, 2022 $ - $ - $ 12,437,994 Addition - - - Change in fair value - - 744,656 Derivative liabilities as November 30, 2022 $ - $ - $ 11,693,338 The underlying value of the anti-dilution provision is calculated from estimating the probability and value of the provision assuming a near term financing event. For the period ended May 31, 2022, 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 required 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. For the period ended November 30, 2022, due to changes in the way antidilutive shares of Convertible Preferred Series A, C and D would be exchanged in the near future for common stock, and the fact that the antidilution provision of these shares was extended through March 31, 2023, the assumptions were changed to include probability of the financing event, estimated value of common stock at the exchange point and estimated time to financing event. The key inputs into the model were as follows: SCHEDULE OF FAIR VALUE ASSUMPTION November 30, 2022 May 31, 2022 Risk-free interest rate 4.4 % 1.6 % Probability of financing event or capital raise 90.0 % 50 % Debt Securities, measurement inputs Estimated capital raise - $ 39.0 million Estimated value of common stock $ 10.00 per share - Estimated time to financing event 0.25 0.5 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. 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 six months ended November 30, 2022: SCHEDULE OF CHANGES IN CONTRACT ASSET AND CONTRACT LIABILITY Contract Assets Increase (Decrease) Contract Liabilities (Increase) Decrease Reclassification of the beginning contract liabilities to revenue, as the result of performance obligation satisfied $ - $ 468,209 Cash Received in advance and not recognized as revenue - - Reclassification of the beginning contract assets to receivables, as the result of rights to consideration becoming unconditional (38,422,917 ) - Contract assets recognized 21,257,202 - Net Change $ (17,165,715 ) $ 468,209 There were no changes in contract assets or liabilities as of November 30, 2021. Disaggregation of Revenue from Contracts with Customers The following table disaggregates gross revenue from our clients (for the most part US based) by significant geographic area for the three and six months ended November 30, 2022 and 2021, based on origin of shipment (imports) or destination of shipment (exports): SCHEDULE OF DISAGGREGATION OF REVENUE For the For the China, Hong Kong & Taiwan $ 42,491,614 $ 125,312,137 Southeast Asia 21,132,687 164,883,397 United States 11,277,753 16,212,165 India Sub-continent 10,519,966 78,801,261 Other 3,415,213 20,221,729 Total revenue $ 88,837,233 $ 405,430,689 For the For the November 30, 2022 November 30, 2021 China, Hong Kong & Taiwan $ 106,549,769 $ 203,417,446 Southeast Asia 63,114,120 240,260,018 United States 21,677,175 23,204,268 India Sub-continent 29,316,674 99,449,575 Other 4,688,367 28,871,242 Total revenue $ 225,346,105 $ 595,202,549 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. SCHEDULE OF EARNING PER SHARE November 30, 2022 November 30, 2021 For the Three Months Ended November 30, 2022 November 30, 2021 Numerator: Net income attributable to common stockholders $ 3,271,697 $ 4,488,225 Effect of dilutive securities: 391,035 Diluted net income $ 3,271,697 $ 4,879,260 Denominator: Weighted average common shares outstanding – basic 799,141,770 1,764,049,961 Dilutive securities: Series A Preferred 1,168,177,320 1,316,157,000 Series B Preferred 5,373,342,576 5,499,034,800 Series C Preferred 1,206,351,359 - Series D Preferred 1,130,954,399 - Convertible notes - 2,320,223,646 Warrants - - Weighted average common shares outstanding and assumed conversion – diluted 9,677,967,424 10,899,465,407 Basic net income per common share $ 0.00 $ 0.00 Diluted net income per common share $ 0.00 $ 0.00 November 30, 2022 November 30, 2021 For the Six Months Ended November 30, 2022 November 30, 2021 Numerator: Net income attributable to common stockholders $ 6,593,038 $ 6,511,641 Effect of dilutive securities: - 776,515 Diluted net income $ 6,593,038 $ 7,288,156 Denominator: Weighted average common shares outstanding – basic 771,683,232 1,687,489,133 Dilutive securities: Series A Preferred 1,168,177,320 1,316,157,000 Series B Preferred 5,373,342,576 5,499,034,800 Series C Preferred 1,206,351,359 - Series D Preferred 1,130,954,399 - Convertible notes - 2,320,223,646 Warrants - - Weighted average common shares outstanding and assumed conversion – diluted 9,650,508,886 10,822,904,579 Basic net income per common share $ 0.01 $ 0.00 Diluted net income per common share $ 0.00 $ 0.00 Leases The Company recognizes a right of use (“ROU”) asset and liability in the consolidated balance sheet primarily related to its operating leases of office space, warehouse space and equipment. 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. 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” Reclassifications Certain prior year amounts have been reclassified for consistency with the current year presentation. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 6 Months Ended |
Nov. 30, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 2. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following on November 30, 2022, and May 31, 2022: SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES November 30, 2022 May 31, 2022 Accrued salaries and related expenses $ 926,245 $ 625,000 Accrued sales and marketing expense 1,052,455 2,383,500 Accrued professional fees 1,900,000 1,350,170 Accrued income tax 856,890 559,544 Accrued overdraft liabilities 160,376 681,058 Other accrued expenses and current liabilities 2,667 66,887 Accrued expenses and other current liabilities $ 4,898,633 $ 5,666,159 |
FINANCING ARRANGEMENTS
FINANCING ARRANGEMENTS | 6 Months Ended |
Nov. 30, 2022 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | 3. FINANCING ARRANGEMENTS Financing arrangements on the consolidated balance sheets consists of : SCHEDULE OF FINANCING ARRANGEMENT November 30, 2022 May 31, 2022 Revolving Credit Facility $ 20,691,815 $ 38,141,451 Notes payable 304,167 608,333 Long term, notes payable $ 20,995,982 $ 38,749,784 Revolving Credit Facility On June 1, 2021, the Company entered a Revolving Purchase, Loan and Security Agreement (the “TBK Agreement”) with TBK BANK, SSB, a Texas State Savings Bank (“TBK”), for a facility under which TBK will, from time to time, buy approved receivables from the Company. This line was subject to periodic increases and on April 14, 2022, the parties entered into a Fourth Amendment to temporarily increase the credit facility availability from $ 47.5 57.5 47.5 May 31, 2023 Notes Payable On May 29, 2020, as part of the acquisition of UL ATL the Company entered into a $ 1,825,000 May 29, 2023 The agreement calls for six semi-annual payments of $ 304,167 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Nov. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 4. RELATED PARTY TRANSACTIONS The Company has the following debt due to related parties: SCHEDULE OF RELATED PARTY TRANSACTIONS November 30, 2022 May 31, 2022 Due to Frangipani Trade Services (1) $ 451,964 $ 602,618 Due to employee (2) 15,000 30,000 Due to employee (3) 33,322 66,658 Due to related parties, gross 500,286 699,276 Less: current portion (349,631 ) (301,308 ) Long term, due to related parties $ 150,655 $ 397,968 (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 May 28, 2023 141,330 282,666 Accounts Receivable and Payable Transactions with related parties account for $ 1.1 13.1 3.0 15.2 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 three months ended November 30, 2022 and 2021 these transactions represented approximately $ 1.2 0.3 1.9 0.8 Direct costs are services billed to the Company by related parties for shipping activities. For the three months ended November 30, 2022 and 2021 these transactions represented approximately $ 13.1 29.3 39.0 101.2 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 6 Months Ended |
Nov. 30, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | 5. STOCKHOLDERS’ EQUITY Common Stock The Company is authorized to issue 800,000,000 0.001 During the three months ended November 30, 2022 there was no Preferred Shares The Company authorized to issue 5,000,000 0.001 Series A Convertible Preferred The holders of Series A Preferred. subject to the rights of holders of shares of the Company’s Series B Preferred which shares will be pari passu with Series B Preferred in terms of liquidation preference and dividend rights and are subject to an anti-dilution provision, making the holders subject to an adjustment necessary to maintain their agreed upon fully diluted ownership percentage. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the stockholders of record of shares of Series A Preferred shall be entitled to receive, at their option, immediately prior and in preference to any distribution to the holders of the Company’s common stock, $ 0.001 During the six months ended November 30, 2022, a shareholder converted 9,935 67,963,732 shares of the Company’s common stock. Series B Convertible Preferred The holders of Series B Preferred, subject to the rights of holders of shares of the Company’s Series A Preferred Stock which shares will be pari passu with the Series B Preferred in terms of liquidation preference and dividend rights, shall be entitled to receive, at their option, immediately prior an in preference to any distribution to the holders of the Company’s common stock. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the stockholders of record of shares of Series B Preferred shall be entitled to receive, at their option, immediately prior and in preference to any distribution to the holders of the Company’s common stock, $ 0.001 Series C & D Convertible Preferred The holders of the Preferred Stock shall be entitled to receive, upon liquidation, dissolution or winding up of the Company, the amount of cash, securities or other property to which such holder would be entitled to receive with respect to such shares of Preferred Stock if such shares had been converted to common stock immediately prior to such liquidation. During the six months ended November 30, 2022, a shareholder converted 7 43,981,560 no |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Nov. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 6. 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 The transactions contemplated by the Purchase Agreement shall be contingent upon and subject to successful Financing and shell be completed prior to February 15, 2023. 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 For the November 30, 2022 November 30, 2021 Operating lease $ 328,217 $ 430,483 Interest on lease liabilities 101,413 34,948 Total net lease cost $ 429,630 $ 465,431 For the For the November 30, 2022 November 30, 2021 Operating lease $ 815,034 $ 792,684 Interest on lease liabilities 160,513 87,332 Total net lease cost $ 975,547 $ 880,016 Supplemental balance sheet information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION November 30, 2022 May 31, 2022 Operating leases: Operating lease ROU assets – net $ 10,579,787 $ 2,408,098 Current operating lease liabilities, included in current liabilities 1,796,663 912,618 Noncurrent operating lease liabilities, included in long-term liabilities 8,891,206 1,593,873 Total operating lease liabilities $ 10,687,869 $ 2,506,491 The operating lease right of use asset and corresponding lease liabilities were significantly impacted during the six month ended November 30, 2022, by a renewal of a warehouse lease located in in Santa Fe Springs, CA with a term of 5 years 5 years 3 years 10.0 Supplemental cash flow and other information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION RELATED TO LEASES For Three Months For Three Months Ended Ended November 30, 2022 November 30, 2021 ROU assets obtained in exchange for lease liabilities: Operating leases $ 8,533,906 $ - Weighted average remaining lease term (in years): Operating leases 4.0 3.9 Weighted average discount rate: Operating leases 9.0 % 4.3 % For Six Months For Six Months Ended Ended November 30, 2022 November 30, 2021 ROU assets obtained in exchange for lease liabilities: Operating leases $ 8,817,803 $ - Weighted average remaining lease term (in years): Operating leases 4.9 3.9 Weighted average discount rate: Operating leases 9.0 % 4.3 % As of November 30, 2022, future minimum lease payments under noncancelable operating leases are as follows: SCHEDULE OF MINIMUM LEASE PAYMENTS For the Twelve Months Ending November 30, 2023 $ 2,679,795 2024 2,724,369 2025 2,663,290 2026 2,527,983 2027 2,575,994 Thereafter 180,789 Total lease payments 13,348,739 Less: imputed interest (2,664,351 ) Total lease obligations $ 10,687,869 |
INCOME TAX PROVISION
INCOME TAX PROVISION | 6 Months Ended |
Nov. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX PROVISION | 7. INCOME TAX PROVISION The income tax provision consists of the following: SCHEDULE OF INCOME TAX EXPENSE For the For the Federal provision (benefit) Current $ 767,010 $ 1,931,000 Deferred (70,634 ) (325,027 ) State and Local provision (benefit) Current 198,010 351,000 Deferred (22,526 ) (54,432 ) Total provision $ 871,860 $ 1,902,541 For the For the Federal provision (benefit) Current $ 1,329,597 $ 2,388,000 Deferred (52,959 ) (259,579 ) State and Local provision (benefit) Current 403,480 453,000 Deferred (16,071 ) (44,421 ) Total provision $ 1,664,047 $ 2,537,000 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 three or six months ended November 30, 2022 and 2021, 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 November 30, 2022 May 31, 2022 Allowance for doubtful accounts $ 693,684 $ 733,139 Consulting contract liability 217,871 230,263 Lease liability 2,502,494 659,460 Other 427,519 238,006 Total deferred tax assets 3,841,567 1,860,868 Valuation allowance - - Deferred tax asset, net of valuation allowance $ 3,841,567 $ 1,860,868 Deferred Tax Liabilities Operating lease right-of-use assets $ (2,496,850 ) $ (631,173 ) Goodwill and intangibles (321,344 ) (256,533 ) Fixed assets (35,726 ) (30,414 ) Net deferred tax asset (liability) $ 987,648 $ 942,748 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 For the US Federal statutory rate 21.0 % 21.0 % State income tax, net of federal benefit 3.5 % 4.0 % FDII deduction (4.0 )% (3.0 )% Other permanent differences, net (0.5 )% 6.0 % Income tax provision 20.0 % 28.0 % |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Nov. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 8. 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 no reportable subsequent events other than those disclosed elsewhere in these consolidated financial statements. On December 18, 2022, the Company entered into an Agreement and Plan of Merger by and among Edify Acquisition Corp., a Delaware corporation (“Edify”), Edify Merger Sub, Inc., a Nevada corporation, and a wholly owned subsidiary of Edify (“Merger Sub”), a Special Purpose Acquisition Corp., and the Company. The Merger Agreement and the transactions contemplated thereby (the “Transactions”) were approved by the board of directors of each of the Company, Edify, and Merger Sub. The proposed Merger is expected to be consummated after receipt of the required approvals from the stockholders of Edify and the Company and the satisfaction of certain conditions. |
NATURE OF BUSINESS AND SUMMAR_2
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Nov. 30, 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 ● Ocean Freight ● Customs Brokerage and Compliance ● Warehousing and Distribution ● Order Management |
Liquidity | Liquidity The accompanying condensed 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 November 30, 2022, the Company reported working capital of approximately $ 8.5 million compared with $ 4.2 million working capital as of May 31, 2022. The Company has adequate cash availability through the TBK Facility. Since its inception, the Company has experienced significant business growth. To fund such growth, operating capital was initially provided by third party investors through the sale of Convertible Notes which were subsequently exchanged into convertible securities. Preferred shares are more beneficial to the Company because they do not require cash repayments. Due to the antidilution provision embedded in certain of the convertible securities, these provisions resulted in an embedded derivative and the Company recorded a long-term liability. As of the quarter ended November 30, 2022, and the year ended May 31, 2022, this liability was $ 11.7 12.4 To fund the pending acquisitions, as discussed in Note 6: Commitments and Contingencies, on December 18, 2022, the Company has entered into a commitment from a lender for a senior secured financing facility that will provide the necessary debt capital to execute the acquisitions. While we continue to execute our strategic plan, management is focused on managing cash and monitoring our liquidity position. We have implemented a number of initiatives to conserve our liquidity position including activities such as increasing credit facilities, when needed, 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 as of and subsequent to the balance sheet date, management has concluded that the Company’s current cash and cash availability under the TBK Facility as of November 30, 2022, would be sufficient to fund its planned operations 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. |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The unaudited interim financial information furnished herein reflects all adjustments, consisting solely of normal recurring items, which in the opinion of management are necessary to fairly state the financial position of the Company and the results of its operations for the periods presented. This report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended May 31, 2022. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The condensed consolidated balance sheet on May 31, 2022 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements of the Company include the accounts of the Company and its majority 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 November 30, 2022 and May 31, 2022. 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 November 30, 2022. On November 30, 2021, Level 3 derivative liability balances were insignificant. There were no transfers between levels during the reporting period. |
Accounts Receivable | Accounts Receivable Accounts receivable 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, 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 November 30, 2022 and May 31, 2022, the Company recorded an allowance for doubtful accounts of approximately $ 2.7 Concentrations Three major customers represented approximately 21.0 10.0 20.0 21.0 10.0 Three major customers represented approximately 21.0 % of all accounts receivable as of May 31, 2022 and no single customer represented more than 10.0 % of total accounts receivable. Same three customers accounted for 72.0 % and 56 54% and 40% respectively, and customers B and C were less than 10.0 % each for the three and six months ended November 30, 2021. |
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 Convertible Preferred Stock Series C and D. Similar to the existing Convertible Preferred Stock Series A, these preferred stocks featured anti-dilution provision that expire on a specified 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, C and D Preferred Stock. 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. During the three months ended November 30, 2022, the Company recorded a change in fair value of $ 0.7 SCHEDULE OF DERIVATIVE LIABILITIES Level 1 Level 2 Level 3 Derivative liabilities as June 1, 2022 $ - $ - $ 12,437,994 Addition - - - Change in fair value - - 744,656 Derivative liabilities as November 30, 2022 $ - $ - $ 11,693,338 The underlying value of the anti-dilution provision is calculated from estimating the probability and value of the provision assuming a near term financing event. For the period ended May 31, 2022, 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 required 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. For the period ended November 30, 2022, due to changes in the way antidilutive shares of Convertible Preferred Series A, C and D would be exchanged in the near future for common stock, and the fact that the antidilution provision of these shares was extended through March 31, 2023, the assumptions were changed to include probability of the financing event, estimated value of common stock at the exchange point and estimated time to financing event. The key inputs into the model were as follows: SCHEDULE OF FAIR VALUE ASSUMPTION November 30, 2022 May 31, 2022 Risk-free interest rate 4.4 % 1.6 % Probability of financing event or capital raise 90.0 % 50 % Debt Securities, measurement inputs Estimated capital raise - $ 39.0 million Estimated value of common stock $ 10.00 per share - Estimated time to financing event 0.25 0.5 |
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. 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 six months ended November 30, 2022: SCHEDULE OF CHANGES IN CONTRACT ASSET AND CONTRACT LIABILITY Contract Assets Increase (Decrease) Contract Liabilities (Increase) Decrease Reclassification of the beginning contract liabilities to revenue, as the result of performance obligation satisfied $ - $ 468,209 Cash Received in advance and not recognized as revenue - - Reclassification of the beginning contract assets to receivables, as the result of rights to consideration becoming unconditional (38,422,917 ) - Contract assets recognized 21,257,202 - Net Change $ (17,165,715 ) $ 468,209 There were no changes in contract assets or liabilities as of November 30, 2021. Disaggregation of Revenue from Contracts with Customers The following table disaggregates gross revenue from our clients (for the most part US based) by significant geographic area for the three and six months ended November 30, 2022 and 2021, based on origin of shipment (imports) or destination of shipment (exports): SCHEDULE OF DISAGGREGATION OF REVENUE For the For the China, Hong Kong & Taiwan $ 42,491,614 $ 125,312,137 Southeast Asia 21,132,687 164,883,397 United States 11,277,753 16,212,165 India Sub-continent 10,519,966 78,801,261 Other 3,415,213 20,221,729 Total revenue $ 88,837,233 $ 405,430,689 For the For the November 30, 2022 November 30, 2021 China, Hong Kong & Taiwan $ 106,549,769 $ 203,417,446 Southeast Asia 63,114,120 240,260,018 United States 21,677,175 23,204,268 India Sub-continent 29,316,674 99,449,575 Other 4,688,367 28,871,242 Total revenue $ 225,346,105 $ 595,202,549 |
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. SCHEDULE OF EARNING PER SHARE November 30, 2022 November 30, 2021 For the Three Months Ended November 30, 2022 November 30, 2021 Numerator: Net income attributable to common stockholders $ 3,271,697 $ 4,488,225 Effect of dilutive securities: 391,035 Diluted net income $ 3,271,697 $ 4,879,260 Denominator: Weighted average common shares outstanding – basic 799,141,770 1,764,049,961 Dilutive securities: Series A Preferred 1,168,177,320 1,316,157,000 Series B Preferred 5,373,342,576 5,499,034,800 Series C Preferred 1,206,351,359 - Series D Preferred 1,130,954,399 - Convertible notes - 2,320,223,646 Warrants - - Weighted average common shares outstanding and assumed conversion – diluted 9,677,967,424 10,899,465,407 Basic net income per common share $ 0.00 $ 0.00 Diluted net income per common share $ 0.00 $ 0.00 November 30, 2022 November 30, 2021 For the Six Months Ended November 30, 2022 November 30, 2021 Numerator: Net income attributable to common stockholders $ 6,593,038 $ 6,511,641 Effect of dilutive securities: - 776,515 Diluted net income $ 6,593,038 $ 7,288,156 Denominator: Weighted average common shares outstanding – basic 771,683,232 1,687,489,133 Dilutive securities: Series A Preferred 1,168,177,320 1,316,157,000 Series B Preferred 5,373,342,576 5,499,034,800 Series C Preferred 1,206,351,359 - Series D Preferred 1,130,954,399 - Convertible notes - 2,320,223,646 Warrants - - Weighted average common shares outstanding and assumed conversion – diluted 9,650,508,886 10,822,904,579 Basic net income per common share $ 0.01 $ 0.00 Diluted net income per common share $ 0.00 $ 0.00 |
Leases | Leases The Company recognizes a right of use (“ROU”) asset and liability in the consolidated balance sheet primarily related to its operating leases of office space, warehouse space and equipment. 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. |
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” |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified for consistency with the current year presentation. |
NATURE OF BUSINESS AND SUMMAR_3
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Nov. 30, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF DERIVATIVE LIABILITIES | SCHEDULE OF DERIVATIVE LIABILITIES Level 1 Level 2 Level 3 Derivative liabilities as June 1, 2022 $ - $ - $ 12,437,994 Addition - - - Change in fair value - - 744,656 Derivative liabilities as November 30, 2022 $ - $ - $ 11,693,338 |
SCHEDULE OF FAIR VALUE ASSUMPTION | The key inputs into the model were as follows: SCHEDULE OF FAIR VALUE ASSUMPTION November 30, 2022 May 31, 2022 Risk-free interest rate 4.4 % 1.6 % Probability of financing event or capital raise 90.0 % 50 % Debt Securities, measurement inputs Estimated capital raise - $ 39.0 million Estimated value of common stock $ 10.00 per share - Estimated time to financing event 0.25 0.5 |
SCHEDULE OF CHANGES IN CONTRACT ASSET AND CONTRACT LIABILITY | Significant Changes in Contract Asset and Contract Liability Balances for the six months ended November 30, 2022: SCHEDULE OF CHANGES IN CONTRACT ASSET AND CONTRACT LIABILITY Contract Assets Increase (Decrease) Contract Liabilities (Increase) Decrease Reclassification of the beginning contract liabilities to revenue, as the result of performance obligation satisfied $ - $ 468,209 Cash Received in advance and not recognized as revenue - - Reclassification of the beginning contract assets to receivables, as the result of rights to consideration becoming unconditional (38,422,917 ) - Contract assets recognized 21,257,202 - Net Change $ (17,165,715 ) $ 468,209 |
SCHEDULE OF DISAGGREGATION OF REVENUE | The following table disaggregates gross revenue from our clients (for the most part US based) by significant geographic area for the three and six months ended November 30, 2022 and 2021, based on origin of shipment (imports) or destination of shipment (exports): SCHEDULE OF DISAGGREGATION OF REVENUE For the For the China, Hong Kong & Taiwan $ 42,491,614 $ 125,312,137 Southeast Asia 21,132,687 164,883,397 United States 11,277,753 16,212,165 India Sub-continent 10,519,966 78,801,261 Other 3,415,213 20,221,729 Total revenue $ 88,837,233 $ 405,430,689 For the For the November 30, 2022 November 30, 2021 China, Hong Kong & Taiwan $ 106,549,769 $ 203,417,446 Southeast Asia 63,114,120 240,260,018 United States 21,677,175 23,204,268 India Sub-continent 29,316,674 99,449,575 Other 4,688,367 28,871,242 Total revenue $ 225,346,105 $ 595,202,549 |
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 November 30, 2022 November 30, 2021 For the Three Months Ended November 30, 2022 November 30, 2021 Numerator: Net income attributable to common stockholders $ 3,271,697 $ 4,488,225 Effect of dilutive securities: 391,035 Diluted net income $ 3,271,697 $ 4,879,260 Denominator: Weighted average common shares outstanding – basic 799,141,770 1,764,049,961 Dilutive securities: Series A Preferred 1,168,177,320 1,316,157,000 Series B Preferred 5,373,342,576 5,499,034,800 Series C Preferred 1,206,351,359 - Series D Preferred 1,130,954,399 - Convertible notes - 2,320,223,646 Warrants - - Weighted average common shares outstanding and assumed conversion – diluted 9,677,967,424 10,899,465,407 Basic net income per common share $ 0.00 $ 0.00 Diluted net income per common share $ 0.00 $ 0.00 November 30, 2022 November 30, 2021 For the Six Months Ended November 30, 2022 November 30, 2021 Numerator: Net income attributable to common stockholders $ 6,593,038 $ 6,511,641 Effect of dilutive securities: - 776,515 Diluted net income $ 6,593,038 $ 7,288,156 Denominator: Weighted average common shares outstanding – basic 771,683,232 1,687,489,133 Dilutive securities: Series A Preferred 1,168,177,320 1,316,157,000 Series B Preferred 5,373,342,576 5,499,034,800 Series C Preferred 1,206,351,359 - Series D Preferred 1,130,954,399 - Convertible notes - 2,320,223,646 Warrants - - Weighted average common shares outstanding and assumed conversion – diluted 9,650,508,886 10,822,904,579 Basic net income per common share $ 0.01 $ 0.00 Diluted net income per common share $ 0.00 $ 0.00 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended |
Nov. 30, 2022 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | Accrued expenses and other current liabilities consisted of the following on November 30, 2022, and May 31, 2022: SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES November 30, 2022 May 31, 2022 Accrued salaries and related expenses $ 926,245 $ 625,000 Accrued sales and marketing expense 1,052,455 2,383,500 Accrued professional fees 1,900,000 1,350,170 Accrued income tax 856,890 559,544 Accrued overdraft liabilities 160,376 681,058 Other accrued expenses and current liabilities 2,667 66,887 Accrued expenses and other current liabilities $ 4,898,633 $ 5,666,159 |
FINANCING ARRANGEMENTS (Tables)
FINANCING ARRANGEMENTS (Tables) | 6 Months Ended |
Nov. 30, 2022 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF FINANCING ARRANGEMENT | Financing arrangements on the consolidated balance sheets consists of : SCHEDULE OF FINANCING ARRANGEMENT November 30, 2022 May 31, 2022 Revolving Credit Facility $ 20,691,815 $ 38,141,451 Notes payable 304,167 608,333 Long term, notes payable $ 20,995,982 $ 38,749,784 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Nov. 30, 2022 | |
Related Party Transactions [Abstract] | |
SCHEDULE OF RELATED PARTY TRANSACTIONS | The Company has the following debt due to related parties: SCHEDULE OF RELATED PARTY TRANSACTIONS November 30, 2022 May 31, 2022 Due to Frangipani Trade Services (1) $ 451,964 $ 602,618 Due to employee (2) 15,000 30,000 Due to employee (3) 33,322 66,658 Due to related parties, gross 500,286 699,276 Less: current portion (349,631 ) (301,308 ) Long term, due to related parties $ 150,655 $ 397,968 (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 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Nov. 30, 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 For the November 30, 2022 November 30, 2021 Operating lease $ 328,217 $ 430,483 Interest on lease liabilities 101,413 34,948 Total net lease cost $ 429,630 $ 465,431 For the For the November 30, 2022 November 30, 2021 Operating lease $ 815,034 $ 792,684 Interest on lease liabilities 160,513 87,332 Total net lease cost $ 975,547 $ 880,016 |
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION | Supplemental balance sheet information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION November 30, 2022 May 31, 2022 Operating leases: Operating lease ROU assets – net $ 10,579,787 $ 2,408,098 Current operating lease liabilities, included in current liabilities 1,796,663 912,618 Noncurrent operating lease liabilities, included in long-term liabilities 8,891,206 1,593,873 Total operating lease liabilities $ 10,687,869 $ 2,506,491 |
SCHEDULE OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION RELATED TO LEASES | Supplemental cash flow and other information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION RELATED TO LEASES For Three Months For Three Months Ended Ended November 30, 2022 November 30, 2021 ROU assets obtained in exchange for lease liabilities: Operating leases $ 8,533,906 $ - Weighted average remaining lease term (in years): Operating leases 4.0 3.9 Weighted average discount rate: Operating leases 9.0 % 4.3 % For Six Months For Six Months Ended Ended November 30, 2022 November 30, 2021 ROU assets obtained in exchange for lease liabilities: Operating leases $ 8,817,803 $ - Weighted average remaining lease term (in years): Operating leases 4.9 3.9 Weighted average discount rate: Operating leases 9.0 % 4.3 % |
SCHEDULE OF MINIMUM LEASE PAYMENTS | As of November 30, 2022, future minimum lease payments under noncancelable operating leases are as follows: SCHEDULE OF MINIMUM LEASE PAYMENTS For the Twelve Months Ending November 30, 2023 $ 2,679,795 2024 2,724,369 2025 2,663,290 2026 2,527,983 2027 2,575,994 Thereafter 180,789 Total lease payments 13,348,739 Less: imputed interest (2,664,351 ) Total lease obligations $ 10,687,869 |
INCOME TAX PROVISION (Tables)
INCOME TAX PROVISION (Tables) | 6 Months Ended |
Nov. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF INCOME TAX EXPENSE | The income tax provision consists of the following: SCHEDULE OF INCOME TAX EXPENSE For the For the Federal provision (benefit) Current $ 767,010 $ 1,931,000 Deferred (70,634 ) (325,027 ) State and Local provision (benefit) Current 198,010 351,000 Deferred (22,526 ) (54,432 ) Total provision $ 871,860 $ 1,902,541 For the For the Federal provision (benefit) Current $ 1,329,597 $ 2,388,000 Deferred (52,959 ) (259,579 ) State and Local provision (benefit) Current 403,480 453,000 Deferred (16,071 ) (44,421 ) Total provision $ 1,664,047 $ 2,537,000 |
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 November 30, 2022 May 31, 2022 Allowance for doubtful accounts $ 693,684 $ 733,139 Consulting contract liability 217,871 230,263 Lease liability 2,502,494 659,460 Other 427,519 238,006 Total deferred tax assets 3,841,567 1,860,868 Valuation allowance - - Deferred tax asset, net of valuation allowance $ 3,841,567 $ 1,860,868 Deferred Tax Liabilities Operating lease right-of-use assets $ (2,496,850 ) $ (631,173 ) Goodwill and intangibles (321,344 ) (256,533 ) Fixed assets (35,726 ) (30,414 ) Net deferred tax asset (liability) $ 987,648 $ 942,748 |
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 For the US Federal statutory rate 21.0 % 21.0 % State income tax, net of federal benefit 3.5 % 4.0 % FDII deduction (4.0 )% (3.0 )% Other permanent differences, net (0.5 )% 6.0 % Income tax provision 20.0 % 28.0 % |
SCHEDULE OF DERIVATIVE LIABILIT
SCHEDULE OF DERIVATIVE LIABILITIES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Change in fair value | $ 125,708 | $ 744,656 | ||
Fair Value, Inputs, Level 1 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Derivative liabilities as June 1, 2022 | ||||
Addition | ||||
Change in fair value | ||||
Derivative liabilities as November 30, 2022 | ||||
Fair Value, Inputs, Level 2 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Derivative liabilities as June 1, 2022 | ||||
Addition | ||||
Change in fair value | ||||
Derivative liabilities as November 30, 2022 | ||||
Fair Value, Inputs, Level 3 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Derivative liabilities as June 1, 2022 | 12,437,994 | |||
Addition | ||||
Change in fair value | 744,656 | |||
Derivative liabilities as November 30, 2022 | $ 11,693,338 | $ 11,693,338 |
SCHEDULE OF FAIR VALUE ASSUMPTI
SCHEDULE OF FAIR VALUE ASSUMPTION (Details) $ / shares in Units, $ in Millions | 6 Months Ended | 12 Months Ended |
Nov. 30, 2022 USD ($) $ / shares | May 31, 2022 USD ($) $ / shares | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Estimated capital raise | $ | $ 39 | |
Estimated value of common stock | $ / shares | $ 10 | |
Estimated time to financing event | 3 months | 6 months |
Measurement Input, Risk Free Interest Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt Securities, measurement inputs | 4.4 | 1.6 |
Measurement Input Probability of Probability of Financing Event [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt Securities, measurement inputs | 90 | 50 |
SCHEDULE OF CHANGES IN CONTRACT
SCHEDULE OF CHANGES IN CONTRACT ASSET AND CONTRACT LIABILITY (Details) - USD ($) | 6 Months Ended | |
Nov. 30, 2022 | Nov. 30, 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 | 468,209 | |
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 | ||
Contract assets increase (decrease) reclassification of the beginning contract assets to receivables, as the result of rights to consideration becoming unconditional | (38,422,917) | |
Contract liabilities (increase) decrease reclassification of the beginning contract assets to receivables, as the result of rights to consideration becoming unconditional | ||
Contract assets increase (decrease), contract assets recognized | 21,257,202 | |
Contract liabilities (increase) decrease, contract assets recognized | ||
Contract assets increase (decrease) net change | (17,165,715) | $ 26,580,945 |
Contract liabilities (increase) decrease, net change | $ 468,209 | $ (20,331,879) |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Total revenue | $ 88,837,233 | $ 405,430,689 | $ 225,346,105 | $ 595,202,549 |
China, Hong Kong & Taiwan [Member] | ||||
Total revenue | 42,491,614 | 125,312,137 | 106,549,769 | 203,417,446 |
Southeast Asia [Member] | ||||
Total revenue | 21,132,687 | 164,883,397 | 63,114,120 | 240,260,018 |
UNITED STATES | ||||
Total revenue | 11,277,753 | 16,212,165 | 21,677,175 | 23,204,268 |
INDIA | ||||
Total revenue | 10,519,966 | 78,801,261 | 29,316,674 | 99,449,575 |
Other [Member] | ||||
Total revenue | $ 3,415,213 | $ 20,221,729 | $ 4,688,367 | $ 28,871,242 |
SCHEDULE OF EARNING PER SHARE (
SCHEDULE OF EARNING PER SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Accounting Policies [Abstract] | ||||
Net income attributable to common stockholders | $ 3,271,697 | $ 4,488,225 | $ 6,593,038 | $ 6,511,641 |
Effect of dilutive securities: | 391,035 | 776,515 | ||
Diluted net income | $ 3,271,697 | $ 4,879,260 | $ 6,593,038 | $ 7,288,156 |
Weighted average common shares outstanding – basic | 799,141,770 | 1,764,049,961 | 771,683,232 | 1,687,489,133 |
Series A Preferred | $ 1,168,177,320 | $ 1,316,157,000 | $ 1,168,177,320 | $ 1,316,157,000 |
Series B Preferred | 5,373,342,576 | 5,499,034,800 | 5,373,342,576 | 5,499,034,800 |
Series C Preferred | 1,206,351,359 | 1,206,351,359 | ||
Series D Preferred | 1,130,954,399 | 1,130,954,399 | ||
Convertible notes | 2,320,223,646 | 2,320,223,646 | ||
Warrants | ||||
Weighted average common shares outstanding and assumed conversion – diluted | 9,677,967,424 | 10,899,465,407 | 9,650,508,886 | 10,822,904,579 |
Earnings Per Share, Basic | $ 0.01 | |||
Earnings Per Share, Diluted |
NATURE OF BUSINESS AND SUMMAR_4
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | May 31, 2022 | |
Product Information [Line Items] | |||||
Working capital deficit | $ 8,500,000 | $ 8,500,000 | $ 4,200,000 | ||
Derivative liability | 11,693,338 | 11,693,338 | 12,437,994 | ||
Allowance for doubtful accounts | 2,700,000 | 2,700,000 | $ 2,700,000 | ||
Derivative liabilities | $ 125,708 | $ 744,656 | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Three Major Customers [Member] | |||||
Product Information [Line Items] | |||||
Concentration Risk, Percentage | 21% | 21% | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | No Customers [Member] | |||||
Product Information [Line Items] | |||||
Concentration Risk, Percentage | 10% | 10% | |||
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Three Major Customers [Member] | |||||
Product Information [Line Items] | |||||
Concentration Risk, Percentage | 20% | 21% | |||
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | No Customers [Member] | |||||
Product Information [Line Items] | |||||
Concentration Risk, Percentage | 10% | ||||
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Three Customers [Member] | |||||
Product Information [Line Items] | |||||
Concentration Risk, Percentage | 72% | 56% | |||
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer A [Member] | |||||
Product Information [Line Items] | |||||
Concentration Risk, Percentage | 54% | ||||
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer B and C [Member] | |||||
Product Information [Line Items] | |||||
Concentration Risk, Percentage | 10% | 10% |
SCHEDULE OF ACCRUED EXPENSES AN
SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Nov. 30, 2022 | May 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued salaries and related expenses | $ 926,245 | $ 625,000 |
Accrued sales and marketing expense | 1,052,455 | 2,383,500 |
Accrued professional fees | 1,900,000 | 1,350,170 |
Accrued income tax | 856,890 | 559,544 |
Accrued overdraft liabilities | 160,376 | 681,058 |
Other accrued expenses and current liabilities | 2,667 | 66,887 |
Accrued expenses and other current liabilities | $ 4,898,633 | $ 5,666,159 |
SCHEDULE OF FINANCING ARRANGEME
SCHEDULE OF FINANCING ARRANGEMENT (Details) - USD ($) | Nov. 30, 2022 | May 31, 2022 |
Debt Disclosure [Abstract] | ||
Revolving Credit Facility | $ 20,691,815 | $ 38,141,451 |
Notes payable | 304,167 | 608,333 |
Long term, notes payable | $ 20,995,982 | $ 38,749,784 |
FINANCING ARRANGEMENTS (Details
FINANCING ARRANGEMENTS (Details Narrative) - USD ($) | Jun. 01, 2021 | May 29, 2020 | Nov. 30, 2022 | May 31, 2022 |
Debt Instrument [Line Items] | ||||
Line of credit | $ 47,500,000 | |||
Notes payable | $ 304,167 | $ 608,333 | ||
Notes Payable [Member] | UL ATL [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 1,825,000 | |||
Debt, maturity date | May 29, 2023 | |||
Debt, periodic payment description | The agreement calls for six semi-annual payments of $304,167, for which the first payment was due on November 29, 2020 | |||
Debt, periodic payments | $ 304,167 | |||
TBK Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit maturity date | May 31, 2023 | |||
Minimum [Member] | TBK Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit | $ 47,500,000 | |||
Maximum [Member] | TBK Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit | $ 57,500,000 |
SCHEDULE OF RELATED PARTY TRANS
SCHEDULE OF RELATED PARTY TRANSACTIONS (Details) - USD ($) | Nov. 30, 2022 | May 31, 2022 | |
Related Party Transaction [Line Items] | |||
Due to related parties, gross | $ 500,286 | $ 699,276 | |
Less: current portion | (349,631) | (301,308) | |
Long term, due to related parties | 150,655 | 397,968 | |
Due to Frangipani Trade Services [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties, gross | [1] | 451,964 | 602,618 |
Due to Employee One [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties, gross | [2] | 15,000 | 30,000 |
Due to Employee Two [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties, gross | [3] | $ 33,322 | $ 66,658 |
[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 ($) | 6 Months Ended | ||
May 29, 2020 | Nov. 30, 2022 | May 31, 2022 | |
Related Party Transaction [Line Items] | |||
Notes payable | $ 304,167 | $ 608,333 | |
Due to Frangipani Trade Services [Member] | |||
Related Party Transaction [Line Items] | |||
Interest rate | 6% | ||
Debt instrument periodic payment | $ 150,655 | ||
Due to Employee One [Member] | |||
Related Party Transaction [Line Items] | |||
Debt instrument periodic payment | $ 2,500 | ||
Notes payable | 90,000 | ||
Due to Employee Two [Member] | |||
Related Party Transaction [Line Items] | |||
Debt instrument periodic payment | 5,556 | ||
Notes payable | $ 200,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
May 29, 2020 | Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | May 31, 2022 | |
Related Party Transaction [Line Items] | ||||||
Payment for consuting agreement | $ 198,990 | $ 215,656 | ||||
Unamortized balances of debt | $ 141,330 | 141,330 | $ 282,666 | |||
Accounts receivable, trade related parties | 1,100,000 | 1,100,000 | 3,000,000 | |||
Accounts payable, trade related parties | 13,100,000 | 13,100,000 | 15,200,000 | |||
Revenue and expenses | 1,200,000 | $ 300,000 | 1,900,000 | 800,000 | ||
Direct operating costs | 13,100,000 | $ 29,300,000 | 39,000,000 | $ 101,200,000 | ||
Consulting Services Agreement [Member] | Great Eagle Freight Limited [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Payment for consuting agreement | $ 500,000 | |||||
Related party maturity date | May 28, 2023 | |||||
Unamortized balances of debt | $ 141,330 | $ 141,330 | $ 282,666 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Nov. 30, 2022 | Aug. 31, 2022 | Nov. 30, 2022 | Nov. 30, 2021 | May 31, 2022 | |
Class of Stock [Line Items] | |||||
Common stock, shares authorized | 800,000,000 | 800,000,000 | 800,000,000 | ||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||
Issuance of common stock | $ 0 | ||||
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 | 5,000,000 | ||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||
Convertible preferred stock, shares | $ 9,935 | ||||
Series A Convertible Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, par value | 0.001 | $ 0.001 | 0.001 | ||
Common stock, shares | 67,963,732 | ||||
Series B Convertible Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, par value | $ 0.001 | $ 0.001 | 0.001 | ||
Series D Convertible Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, par value | $ 0.001 | ||||
Common stock, shares | 43,981,560 | ||||
Number of shares converted | 7 | ||||
Series C Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Number of shares converted | 0 | 0 | |||
Series D Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Number of shares converted | 0 | 0 |
SCHEDULE OF COMPONENTS OF LEASE
SCHEDULE OF COMPONENTS OF LEASE EXPENSE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease | $ 328,217 | $ 430,483 | $ 815,034 | $ 792,684 |
Interest on lease liabilities | 101,413 | 34,948 | 160,513 | 87,332 |
Total net lease cost | $ 429,630 | $ 465,431 | $ 975,547 | $ 880,016 |
SCHEDULE OF SUPPLEMENTAL BALANC
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) - USD ($) | Nov. 30, 2022 | May 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease ROU assets – net | $ 10,579,787 | $ 2,408,098 |
Current operating lease liabilities, included in current liabilities | 1,796,663 | 912,618 |
Noncurrent operating lease liabilities, included in long-term liabilities | 8,891,206 | 1,593,873 |
Total operating lease liabilities | $ 10,687,869 | $ 2,506,491 |
SCHEDULE OF SUPPLEMENTAL CASH F
SCHEDULE OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION RELATED TO LEASES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 8,533,906 | $ 8,817,803 | ||
[custom:OperatingLeaseWeightedAverageRemainingLeaseTerm] | 4 years | 4 years 10 months 24 days | ||
Operating Lease, Weighted Average Remaining Lease Term | 3 years 10 months 24 days | 3 years 10 months 24 days | ||
Operating Lease, Weighted Average Discount Rate, Percent | 9% | 4.30% | 9% | 4.30% |
SCHEDULE OF MINIMUM LEASE PAYME
SCHEDULE OF MINIMUM LEASE PAYMENTS (Details) - USD ($) | Nov. 30, 2022 | May 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
2023 | $ 2,679,795 | |
2024 | 2,724,369 | |
2025 | 2,663,290 | |
2026 | 2,527,983 | |
2027 | 2,575,994 | |
Thereafter | 180,789 | |
Total lease payments | 13,348,739 | |
Less: imputed interest | (2,664,351) | |
Total lease obligations | $ 10,687,869 | $ 2,506,491 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Apr. 28, 2022 | Nov. 30, 2022 |
Product Liability Contingency [Line Items] | ||
Operating lease discount rate | 10% | |
CALIFORNIA | ||
Product Liability Contingency [Line Items] | ||
Lease renewal term | 5 years | |
NEW YORK | Maximum [Member] | ||
Product Liability Contingency [Line Items] | ||
Lease renewal term | 5 years | |
NEW YORK | Minimum [Member] | ||
Product Liability Contingency [Line Items] | ||
Lease renewal term | 3 years | |
Unique Logistics Holdings Limited [Member] | Securities Purchase Agreement [Member] | ||
Product Liability Contingency [Line Items] | ||
Cash consideration | $ 21,000,000 | |
Promissory note consideration | $ 1,000,000 |
SCHEDULE OF INCOME TAX EXPENSE
SCHEDULE OF INCOME TAX EXPENSE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Federal provision (benefit) | ||||
Current | $ 767,010 | $ 1,931,000 | $ 1,329,597 | $ 2,388,000 |
Deferred | (70,634) | (325,027) | (52,959) | (259,579) |
State and Local provision (benefit) | ||||
Current | 198,010 | 351,000 | 403,480 | 453,000 |
Deferred | (22,526) | (54,432) | (16,071) | (44,421) |
Total provision | $ 871,860 | $ 1,902,541 | $ 1,664,047 | $ 2,537,000 |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS (LIABILITIES) (Details) - USD ($) | Nov. 30, 2022 | May 31, 2022 |
Deferred Tax Assets | ||
Allowance for doubtful accounts | $ 693,684 | $ 733,139 |
Consulting contract liability | 217,871 | 230,263 |
Lease liability | 2,502,494 | 659,460 |
Other | 427,519 | 238,006 |
Total deferred tax assets | 3,841,567 | 1,860,868 |
Valuation allowance | ||
Deferred tax asset, net of valuation allowance | 3,841,567 | 1,860,868 |
Deferred Tax Liabilities | ||
Operating lease right-of-use assets | (2,496,850) | (631,173) |
Goodwill and intangibles | (321,344) | (256,533) |
Fixed assets | (35,726) | (30,414) |
Net deferred tax asset (liability) | $ 987,648 | $ 942,748 |
SCHEDULE OF EXPECTED TAX EXPENS
SCHEDULE OF EXPECTED TAX EXPENSE (BENEFIT) (Details) | 6 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
US Federal statutory rate | 21% | 21% |
State income tax, net of federal benefit | 3.50% | 4% |
FDII deduction | (4.00%) | (3.00%) |
Other permanent differences, net | (0.50%) | 6% |
Income tax provision | 20% | 28% |
INCOME TAX PROVISION (Details N
INCOME TAX PROVISION (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Valuation allowance | $ 0 | $ 0 | $ 0 | $ 0 |
Interest or penalties on unpaid tax | $ 0 | $ 0 |