Cover
Cover - shares | 9 Months Ended | |
Oct. 31, 2020 | Dec. 08, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | 4Less Group, Inc. | |
Entity Central Index Key | 0001438901 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-31 | |
Document Type | 10-Q | |
Entity Incorporation State Country Code | NV | |
Entity File Number | 333-152444 | |
Document Period End Date | Oct. 31, 2020 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,180,963 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Oct. 31, 2020 | Jan. 31, 2020 | |
Current Assets | |||
Cash and Cash Equivalents | $ 261,072 | $ 162,124 | [1] |
Inventory | 299,628 | 371,896 | [1] |
Prepaid Expenses | 12,200 | 8,106 | [1] |
Other Current Assets | 8,445 | 1,059 | [1] |
Total Current Assets | 581,345 | 543,185 | [1] |
Operating Lease Assets | 368,605 | 483,193 | |
Property and Equipment, net of accumulated depreciation of $82,524, and $64,091 | 86,326 | 114,509 | [1] |
Total Assets | 1,036,276 | 1,140,887 | [1] |
Current Liabilities | |||
Accounts Payable | 556,828 | 534,442 | [1] |
Accrued Expenses | 1,229,541 | 1,709,797 | [1] |
Accrued Expenses - Related Party | 125,673 | 155,750 | [1] |
Short-Term Debt | 794,217 | 609,491 | [1] |
Current Operating Lease Liability | 91,638 | 101,984 | [1] |
Short-Term Convertible Debt, net of debt discount of $152,621 and $689,176 | 263,879 | 2,286,896 | [1] |
Derivative Liabilities | 229,895 | 2,611,125 | [1] |
PPP Loan-current portion | 17,293 | [1] | |
Current Portion - Long-Term Debt | 433,184 | 4,166 | [1] |
Total Current Liabilities | 3,742,148 | 8,013,651 | [1] |
Non-Current Lease Liability | 265,378 | 365,085 | [1] |
PPP Loan -long term portion | 192,154 | [1] | |
Long-Term Debt | 907,483 | 11,940 | [1] |
Total Liabilities | 5,107,163 | 8,390,676 | [1] |
Commitments and Contingencies | [1] | ||
Redeemable Preferred Stock Series D Preferred Stock, 0.001 par value, 870 shares authorized, 870 and 870 shares issued and outstanding | 870,000 | 870,000 | [1] |
Stockholders' Deficit | |||
Common Stock, $0.000001 par value, 15,000,000 shares authorized, 1,181,644 and 538,464 shares issued, issuable and outstanding | 1 | 1 | [1] |
Additional Paid In Capital | 13,946,305 | 13,449,336 | [1] |
Accumulated Deficit | (18,887,220) | (21,569,153) | |
Total Stockholders' Deficit | (4,940,887) | (8,119,789) | [1] |
Total Liabilities and Stockholders' Deficit | 1,036,276 | 1,140,887 | [1] |
Preferred Series A [Member] | |||
Stockholders' Deficit | |||
Preferred Stock | [1] | ||
Total Stockholders' Deficit | |||
Preferred Series B [Member] | |||
Stockholders' Deficit | |||
Preferred Stock | 20 | 20 | [1] |
Total Stockholders' Deficit | 20 | 20 | |
Preferred Series C [Member] | |||
Stockholders' Deficit | |||
Preferred Stock | 7 | 7 | [1] |
Total Stockholders' Deficit | $ 7 | $ 7 | |
[1] | Derived from audited information |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Oct. 31, 2020 | Jan. 31, 2020 |
Net of accumulated depreciation | $ 82,524 | $ 64,091 |
Net of debt discount | $ 152,621 | $ 689,176 |
Common Stock, par value (in dollars per share) | $ 0.000001 | $ 0.000001 |
Common Stock, shares authorized | 15,000,000 | 15,000,000 |
Common Stock, shares issued | 1,181,644 | 538,464 |
Common Stock, shares outstanding | 1,181,644 | 538,464 |
Series D Preferred Stock [Member] | ||
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 870 | 870 |
Preferred Stock, shares issued | 870 | 870 |
Preferred Stock, shares outstanding | 870 | 870 |
Preferred Series A [Member] | ||
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 330,000 | 330,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Preferred Series B [Member] | ||
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 20,000 | 20,000 |
Preferred Stock, shares issued | 20,000 | 20,000 |
Preferred Stock, shares outstanding | 20,000 | 20,000 |
Preferred Series C [Member] | ||
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 7,250 | 7,250 |
Preferred Stock, shares issued | 7,250 | 6,750 |
Preferred Stock, shares outstanding | 7,250 | 6,750 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
Income Statement [Abstract] | ||||
Revenue | $ 2,334,826 | $ 1,890,461 | $ 7,262,106 | $ 6,218,386 |
Cost of Revenue | 1,861,130 | 1,542,836 | 5,291,026 | 4,692,915 |
Gross Profit | 473,696 | 347,625 | 1,971,080 | 1,525,471 |
Operating Expenses: | ||||
Depreciation | 6,299 | 7,033 | 18,897 | 26,021 |
Postage, Shipping and Freight | 113,702 | 110,385 | 378,595 | 342,370 |
Marketing and Advertising | 25,497 | 23,827 | 49,347 | 145,206 |
E Commerce Services, Commissions and Fees | 222,425 | 163,002 | 641,692 | 551,943 |
Operating lease cost | 23,279 | 30,360 | 91,437 | 83,762 |
Personnel Costs | 330,184 | 251,923 | 829,788 | 902,592 |
General and Administrative | 263,619 | 230,583 | 598,484 | 725,116 |
Total Operating Expenses | 985,005 | 817,113 | 2,608,240 | 2,777,010 |
Net Operating Income (Loss) | (511,309) | (469,488) | (637,160) | (1,251,539) |
Other Income (Expense) | ||||
Gain (Loss) on Sale of Property and Equipment | 4,436 | 464 | 4,436 | |
Change in Fair Value on Derivative Liability | (939,873) | (196,303) | (507,674) | (107,953) |
Gain on Settlement of Debt | 2,845,742 | 5,018,388 | 67,623 | |
Amortization of Debt Discount | (67,357) | (212,004) | (694,168) | (462,175) |
Interest Expense | (227,130) | (121,601) | (497,917) | (804,902) |
Total Other Income (Expense) | 1,611,382 | (525,472) | 3,319,093 | (1,302,971) |
Net Income (Loss) | $ 1,100,073 | $ (994,960) | $ 2,681,933 | $ (2,554,510) |
Basic Weighted Average Shares Outstanding (in shares) | 1,067,074 | 20,683 | 797,126 | 7,613 |
Basic Income (Loss) per Share (in dollars per share) | $ 1.03 | $ (48.11) | $ 3.36 | $ (335.54) |
Diluted Weighted Average Shares Outstanding (in shares) | 5,268,957 | 20,683 | 4,999,009 | 7,613 |
Diluted Income (Loss) per Share (in dollars per share) | $ (0.13) | $ (48.11) | $ (0.13) | $ (335.54) |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Stockholders' Deficit (Unaudited) - USD ($) | Preferred Series A [Member] | Preferred Series B [Member] | Preferred Series C [Member] | Common Stock [Member] | Paid in Capital [Member] | Retained Earnings [Member] | Total | |
Balance at beginning at Jan. 31, 2019 | $ 20 | $ 7 | $ 11,694,325 | $ (17,689,307) | $ (5,994,955) | |||
Balance at beginning (in shares) at Jan. 31, 2019 | 20,000 | 6,750 | 151 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Conversion of Notes Payable and Accrued Interest to Common Stock | 258,594 | 258,594 | ||||||
Conversion of Notes Payable and Accrued Interest to Common Stock (in shares) | 303 | |||||||
Derivative Liability Reclassified as Equity Upon Conversion of notes | 237,500 | 237,500 | ||||||
Common Stock Adjustments for Reverse Splits | 11,115 | 11,115 | ||||||
Common Stock Adjustments for Reverse Splits (in shares) | 1 | |||||||
Net (Loss) | (1,813,076) | (1,813,076) | ||||||
Balance at ending at Apr. 30, 2019 | $ 20 | $ 7 | 12,201,534 | (19,502,383) | (7,300,822) | |||
Balance at ending (in shares) at Apr. 30, 2019 | 20,000 | 6,750 | 455 | |||||
Balance at beginning at Jan. 31, 2019 | $ 20 | $ 7 | 11,694,325 | (17,689,307) | (5,994,955) | |||
Balance at beginning (in shares) at Jan. 31, 2019 | 20,000 | 6,750 | 151 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net (Loss) | (2,554,510) | |||||||
Balance at ending at Oct. 31, 2019 | $ 20 | $ 7 | 13,204,652 | (20,243,817) | (7,039,138) | |||
Balance at ending (in shares) at Oct. 31, 2019 | 20,000 | 6,750 | 66,346 | |||||
Balance at beginning at Apr. 30, 2019 | $ 20 | $ 7 | 12,201,534 | (19,502,383) | (7,300,822) | |||
Balance at beginning (in shares) at Apr. 30, 2019 | 20,000 | 6,750 | 455 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Conversion of Notes Payable and Accrued Interest to Common Stock | 357,419 | 357,419 | ||||||
Conversion of Notes Payable and Accrued Interest to Common Stock (in shares) | 4,027 | |||||||
Derivative Liability Reclassified as Equity Upon Conversion of notes | 281,621 | 281,621 | ||||||
Common Stock Adjustments for Reverse Splits | (11,419) | $ (11,419) | ||||||
Common Stock Adjustments for Reverse Splits (in shares) | 246,579 | 246,579 | ||||||
Balance at ending at Jul. 31, 2019 | $ 20 | $ 7 | 12,829,155 | $ (19,255,804) | $ (6,426,622) | |||
Balance at ending (in shares) at Jul. 31, 2019 | 20,000 | 6,750 | 4,482 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Conversion of Notes Payable and Accrued Interest to Common Stock | 245,497 | 245,497 | ||||||
Conversion of Notes Payable and Accrued Interest to Common Stock (in shares) | 61,864 | |||||||
Derivative Liability Reclassified as Equity Upon Conversion of notes | 150,231 | 150,231 | ||||||
Common Stock Adjustments for Reverse Splits | (20,231) | (20,231) | ||||||
Common Stock Adjustments for Reverse Splits (in shares) | ||||||||
Net (Loss) | (988,013) | (994,960) | ||||||
Balance at ending at Oct. 31, 2019 | $ 20 | $ 7 | 13,204,652 | (20,243,817) | (7,039,138) | |||
Balance at ending (in shares) at Oct. 31, 2019 | 20,000 | 6,750 | 66,346 | |||||
Balance at beginning at Jan. 31, 2020 | $ 20 | $ 7 | $ 1 | 13,449,336 | (21,569,153) | (8,119,789) | [1] | |
Balance at beginning (in shares) at Jan. 31, 2020 | 20,000 | 6,750 | 538,464 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Conversion of Notes Payable and Accrued Interest to Common Stock | 3,399 | 3,399 | ||||||
Conversion of Notes Payable and Accrued Interest to Common Stock (in shares) | 82,361 | |||||||
Derivative Liability Reclassified as Equity Upon Conversion of notes | 8,104 | 8,104 | ||||||
Exchange of Debt | 9,105 | 9,105 | ||||||
Exchange of Debt (in shares) | 250 | |||||||
Net (Loss) | 1,186,898 | 1,186,898 | ||||||
Balance at ending at Apr. 30, 2020 | $ 20 | $ 7 | $ 1 | 13,469,944 | (20,382,255) | (6,912,283) | ||
Balance at ending (in shares) at Apr. 30, 2020 | 20,000 | 7,000 | 620,825 | |||||
Balance at beginning at Jan. 31, 2020 | $ 20 | $ 7 | $ 1 | 13,449,336 | (21,569,153) | (8,119,789) | [1] | |
Balance at beginning (in shares) at Jan. 31, 2020 | 20,000 | 6,750 | 538,464 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net (Loss) | 2,681,933 | |||||||
Balance at ending at Oct. 31, 2020 | $ 20 | $ 7 | $ 1 | 13,946,305 | (18,887,220) | (4,940,887) | ||
Balance at ending (in shares) at Oct. 31, 2020 | 20,000 | 7,250 | 1,181,644 | |||||
Balance at beginning at Apr. 30, 2020 | $ 20 | $ 7 | $ 1 | 13,469,944 | (20,382,255) | (6,912,283) | ||
Balance at beginning (in shares) at Apr. 30, 2020 | 20,000 | 7,000 | 620,825 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Conversion of Notes Payable and Accrued Interest to Common Stock | 7,656 | 7,656 | ||||||
Conversion of Notes Payable and Accrued Interest to Common Stock (in shares) | 284,147 | |||||||
Derivative Liability Reclassified as Equity Upon Conversion of notes | 12,081 | 12,081 | ||||||
Net (Loss) | 394,962 | 394,962 | ||||||
Balance at ending at Jul. 31, 2020 | $ 20 | $ 7 | $ 1 | 13,489,681 | (19,987,293) | (6,497,584) | ||
Balance at ending (in shares) at Jul. 31, 2020 | 20,000 | 7,000 | 904,972 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Conversion of Notes Payable and Accrued Interest to Common Stock | 4,757 | 4,757 | ||||||
Conversion of Notes Payable and Accrued Interest to Common Stock (in shares) | 211,987 | |||||||
Issuance of Shares as Commitment Fee for Loan | 50,000 | 50,000 | ||||||
Issuance of Shares as Commitment Fee for Loan (in shares) | 19,685 | |||||||
Issuance of Shares to Repay Accrued Expense Related Party | 18,900 | 18,900 | ||||||
Issuance of Shares to Repay Accrued Expense Related Party (in shares) | 45,000 | |||||||
Issuance of Class C Shares as Part of Debt Settlement | 20,290 | 20,290 | ||||||
Issuance of Class C Shares as Part of Debt Settlement (in shares) | 150 | |||||||
Issuance of Class C Shares Repay Accrued Expense Related Party | 11,177 | 11,177 | ||||||
Issuance of Class C Shares Repay Accrued Expense Related Party (in shares) | 100 | |||||||
Issuance of 950,000 Warrants as Part of Debt Settlement | 351,500 | 351,500 | ||||||
Issuance of 950,000 Warrants as Part of Debt Settlement (in shares) | ||||||||
Net (Loss) | 1,100,073 | 1,100,073 | ||||||
Balance at ending at Oct. 31, 2020 | $ 20 | $ 7 | $ 1 | $ 13,946,305 | $ (18,887,220) | $ (4,940,887) | ||
Balance at ending (in shares) at Oct. 31, 2020 | 20,000 | 7,250 | 1,181,644 | |||||
[1] | Derived from audited information |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Changes in Stockholders' Deficit (Parenthetical) | 3 Months Ended |
Oct. 31, 2020shares | |
Statement of Stockholders' Equity [Abstract] | |
Number of warrants issued | 950,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | ||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net Income (Loss) | $ 2,681,933 | $ (2,554,510) | |
Adjustments to reconcile net loss to cash used by operating activities: | |||
Depreciation | 18,897 | 26,021 | |
Stock Based Compensation | 50,000 | ||
Change in Fair Value on Derivative Liabilities | 507,674 | 107,953 | |
Amortization of Debt Discount | 694,168 | 462,175 | |
Interest Expense related to Derivative Liability in Excess of Fair Value | 84,940 | ||
Original Issue Discount on Notes to Interest Expense | 69,750 | ||
Loan Penalties Capitalized to Loan Included in Interest Expense | 3,394 | 298,478 | |
(Gain) Loss on Sale of Property and Equipment | (464) | (4,436) | |
Gain on Settlement of Debt | (5,018,388) | (67,623) | |
Change in Operating Assets and Liabilities: | |||
Decrease (Increase) in Inventory | 72,268 | (56,727) | |
Decrease in Prepaid Expenses | 21,606 | 53,891 | |
(Increase) in Other Current Assets | (2,853) | (403) | |
Increase (Decrease) in Accounts Payable | 31,236 | (17,167) | |
Increase in Accrued Expenses | 293,289 | 811,287 | |
CASH FLOWS (USED IN) PROVIDED BY OPERATING ACTIVITIES | (577,490) | (856,121) | |
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES | |||
Purchase of Property and Equipment | (3,948) | ||
Proceeds from Disposal of Property and Equipment | 9,750 | 137,035 | |
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES | 9,750 | 133,087 | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from Short Term Debt | 635,000 | 1,160,000 | |
Payments on Short Term Debt | (370,824) | (1,090,869) | |
Proceeds from PPP Loan | 209,447 | ||
Payments on Long Term Debt | (2,856) | (40,470) | |
Due to/from Officer | (24,250) | ||
Payments on Convertible Notes Payable | (14,329) | ||
Proceeds from Convertible Notes Payable | 210,250 | 787,250 | |
CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES | 666,688 | 791,661 | |
NET INCREASE IN CASH | 98,948 | 68,627 | |
CASH AT BEGINNING OF PERIOD | 162,124 | [1] | 59,401 |
CASH AT END OF PERIOD | 261,072 | 128,028 | |
Supplemental Disclosure of Cash Flows Information: | |||
Cash Paid for Interest | 49,638 | 51,294 | |
Cash Paid for Income Taxes | |||
Convertible Notes Interest and Derivatives Converted to Common Stock | 35,997 | 1,530,862 | |
Derivative Debt Discount | 990,358 | ||
Stock issued to Related Party in Payment of Accrued Expenses | 30,077 | ||
Operating Lease Asset to Operating Lease Liability | 39,494 | ||
Operating Lease Liability to Operating Lease Asset | $ 89,942 | ||
[1] | Derived from audited information |
NATURE OF BUSINESS AND SIGNIFIC
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Oct. 31, 2020 | |
Accounting Policies [Abstract] | |
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Business: Nature of Business – On November 29, 2018, the Company entered into a transaction (the “Share Exchange”), pursuant to which the Company acquired 100% of the issued and outstanding equity securities of The 4LESS Corp. (“4LESS”), in exchange for the issuance of (i) nineteen thousand (19,000) shares of Series B Preferred Stock, (ii) six thousand seven hundred fifty (6,750) shares of Series C Preferred Stock, and (iii) 870 shares of Series D Preferred Stock. The Series C Preferred Shares have a right to convert into common stock of the Company by multiplying the number of issued and outstanding shares of common stock by 2.63 on the conversion date. The Share Exchange closed on November 29, 2018. As a result of the Share Exchange, the former shareholders of 4LESS became the controlling shareholders of the Company. The Share Exchange was accounted for as a reverse takeover/recapitalization effected by a share exchange, wherein 4LESS is considered the acquirer for accounting and financial reporting purposes. The capital, share price, and earnings per share amount in these consolidated financial statements for the period prior to the reverse merger were restated to reflect the recapitalization in accordance with the shares issued as a result of the reverse merger except otherwise noted. 4LESS was formed as Vegas Suspension & Offroad, LLC on October 24, 2013 as a Nevada limited liability company and converted to a Nevada corporation with the same name on May 8, 2017. On April 2, 2018, the Company changed its name to The 4LESS Corp. The Corporation had S Corporation status. The Corporation operates as an e-commerce auto and truck parts sales company. As a result of the share exchange, the 4LESS Group, Inc. is now a holding company operating through 4LESS and offers products including exhaust systems, suspension systems, wheels, tires, stereo systems, truck bed covers, and shocks. On December 30, 2019 4LESS changed its name to Auto Parts 4Less, Inc. Significant Accounting Policies: The Company’s management selects accounting principles generally accepted in the United States of America and adopts methods for their application. The application of accounting principles requires the estimating, matching and timing of revenue and expense. The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these condensed financial statements. Basis of Presentation: The Company prepares its financial statements on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States. The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim unaudited consolidated financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete consolidated financial statements. Certain information and footnote disclosure normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the SEC. The unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended January 31, 2020 and notes thereto contained in the Company’s Annual Report on Form 10-K filed on May 6, 2020. Principles of Consolidation: The condensed financial statements include the accounts of The 4LESS Group, Inc. as well as The Auto Parts 4Less, Inc., and JBJ Wholesale LLC. All significant inter-company transactions have been eliminated. All amounts are presented in U.S. Dollars unless otherwise stated. Use of Estimates: In order to prepare financial statements in conformity with accounting principles generally accepted in the United States, management must make estimates, judgments and assumptions that affect the amounts reported in the financial statements and determine whether contingent assets and liabilities, if any, are disclosed in the financial statements. The ultimate resolution of issues requiring these estimates and assumptions could differ significantly from resolution currently anticipated by management and on which the financial statements are based. The most significant estimates included in these consolidated financial statements are those associated with the assumptions used to value derivative liabilities. Reclassifications Certain amounts in the Company’s condensed consolidated financial statements for prior periods have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. Cash and Cash Equivalents: The Company considers all highly liquid instruments with a maturity of three months or less to be cash equivalents. At times, cash balances may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The carrying amount of cash and cash equivalents approximates fair market value. Inventory Valuation Inventories are stated at the lower of cost or net realizable value. Inventories are valued on a first-in, first-out (FIFO) basis. Inventory is comprised of finished goods. Concentrations Cost of Goods Sold For the nine months ended October 31, 2020 the Company purchased approximately 55% of its inventory and items available for sale from third parties from three vendors. As of October 31, 2020, the net amount due to those vendors included in accounts payable was $393,729. For the nine months ended October 31, 2019, the Company purchased from three vendors approximately 53% of its inventory and items available for sale from third parties. As of October 31, 2019, the net amount due to those vendors included in accounts payable was $128,461. The Company believes there are numerous other suppliers that could be substituted should a supplier become unavailable or non-competitive. Leases We adopted ASU No. 2016-02— Leases (Topic 842) In addition, we elected the hindsight practical expedient to determine the lease term for existing leases. Our election of the hindsight practical expedient resulted in the shortening of lease terms for certain existing leases and the useful lives of corresponding leasehold improvements. In our application of hindsight, we evaluated the performance of the leased stores and the associated markets in relation to our overall real estate strategies, which resulted in the determination that most renewal options would not be reasonably certain in determining the expected lease term. Adoption of the new standard resulted in the recording of additional net lease assets and lease liabilities of $454,087 and $454,087 respectively, as of February 1, 2019. The standard did not materially impact our consolidated net earnings, retained earnings and had no impact on cash flows. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized when items of income and expense are recognized in the financial statements in different periods than when recognized in the tax return. Deferred tax assets arise when expenses are recognized in the financial statements before the tax returns or when income items are recognized in the tax return prior to the financial statements. Deferred tax assets also arise when operating losses or tax credits are available to offset tax payments due in future years. Deferred tax liabilities arise when income items are recognized in the financial statements before the tax returns or when expenses are recognized in the tax return prior to the financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was signed into law. ASC 740, Accounting for Income Taxes requires companies to recognize the effects of changes in tax laws and rates on deferred tax assets and liabilities and the retroactive effects of changes in tax laws in the period in which the new legislation is enacted. The Company’s gross deferred tax assets were revalued based on the reduction in the federal statutory tax rate from 35% to 21%. A corresponding offset has been made to the valuation allowance, and any potential other taxes arising due to the Tax Act will result in reductions to the Company’s net operating loss carryforward and valuation allowance. The Company will continue to analyze the Tax Act to assess its full effects on the Company’s financial results, including disclosures, for the Company’s fiscal year ending January 31, 2020, but the Company does not expect the Tax Act to have a material impact on the Company’s consolidated financial statements. On November 29, 2018, the Company completed a reverse merger with The 4 Less Corp. At such time that there was a change in control, all net operating losses for tax purposes of the parent were no longer available for carry-forward and the parent started to accumulate profits or losses from that point forward. Fair Value of Financial Instruments: The Company’s financial instruments consist of cash, accounts payable, advances and notes payable. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of these financial instruments. Derivatives are recorded at fair value at each period end. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The ASC guidance for fair value measurements and disclosure establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 Inputs Level 2 Inputs Level 3 Inputs The following table sets forth, by level within the fair value hierarchy, the Company’s financial liabilities that were accounted for at fair value on a recurring basis as of October 31, 2020: October 31, 2020 Quoted Prices in Significant Significant Liabilities: Derivative Liabilities – embedded redemption feature $ 229,895 $ — $ — $ 229,895 Totals $ 229,895 $ — $ — $ 229,895 Related Party Transactions: The Company has a verbal policy that includes procedures intended to ensure compliance with the related party provisions in common practice for public companies. For purposes of the policy, a “related party transaction” is a transaction in which the Company or any one of its subsidiaries participates and in which a related party has a direct or indirect material interest, other than ordinary course, arms-length transactions of less than 1% of the revenue of the counterparty. Any transaction exceeding the 1% threshold, and any transaction involving consulting, financial advisory, legal or accounting services that could impair a director’s independence, must be approved by the CEO. Any related party transaction in which an executive officer or a Director has a personal interest, or which could present a possible conflict under the Guide to Ethical Conduct, must be approved by Board of Directors, following appropriate disclosure of all material aspects of the transaction. Derivative Liability The derivative liabilities are valued as a level 3 input under the fair value hierarchy for valuing financial instruments. The derivatives arise from convertible debt where the debt and accrued interest is convertible into common stock at variable conversion prices and reclassification of equity instrument to liability due to insufficient shares for issuance. As the price of the common stock varies, it triggers a gain or loss based upon the discount to market assuming the debt was converted at the balance sheet date. When evaluating the effect of the issuance of new equity-linked or equity-settled instruments on previously issued instruments, the Company uses first-in, first-out method (“FIFO”) where authorized and unused shares would first be used to satisfy the earliest issued equity-linked instruments. As of October 31, 2020, warrants to purchase 0 common shares (583 shares before the reverse split of 2/25/2020 referred to in Note 6) issued in July 2014 were not classified as derivative liability while the remaining warrants outstanding were classified as derivative liability based on the FIFO method. The fair value of the derivative liability is determined using a lattice model, is re-measured on the Company’s reporting dates, and is affected by changes in inputs to that model including our stock price, historical stock price volatility, the expected term, and both high risk and the risk-free interest rate. The most sensitive inputs to the model are for expected time for the holder to convert or be repaid and the estimated historical volatility of the Company’s common stock. However, because the historical volatility of the Company’s common stock is so high (see Note 7), the sensitivity required to change the liability by 1% as of October 31, 2020 is greater than 25% change in historical volatility as of that date. The other inputs, such as risk free rate, high yield cash rate and stock price all have a sensitivity for a 1% change in the input variable results in a significantly less than 1% change in the calculated derivative liability. Revenue Recognition The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when the company satisfies a performance obligation Because the Company’s sales agreements generally have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations. Disaggregation of Revenue: Channel Revenue The following table shows revenue split between proprietary and third party website revenue for the nine months ended October 31, 2020 and 2019: Change 2020 2019 $ % Proprietary website revenue $ 3,704,215 $ 2,572,137 $ 1,132,078 44% Third party website revenue 3,557,891 3,646,249 (88,358 ) (2% ) Total revenue $ 7,262,106 $ 6,218,386 $ 1,043,720 17% The Company’s performance obligations are satisfied at the point in time when products are received by the customer, which is when the customer has title and obtained the significant risks and rewards of ownership. Therefore, the Company’s contracts have a single performance obligation (shipment of product). The Company primarily receives fixed consideration for sales of product. Shipping and handling amounts paid by customers are primarily for online orders, and are included in revenue. Sales tax and other similar taxes are excluded from revenue. Stock-Based Compensation: The Company accounts for stock options at fair value. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model and provides for expense recognition over the service period, if any, of the stock option. Earnings (Loss) Per Common Share: Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS give effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used to determine the number of shares assumed to be purchased from the exercise of stock options and/or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive. Basic loss per common share is computed based on the weighted average number of shares outstanding during the period. Diluted loss per share is computed in a manner similar to the basic loss per share, except the weighted-average number of shares outstanding is increased to include all common shares, including those with the potential to be issued by virtue of convertible debt and other such convertible instruments. Diluted loss per share contemplates a complete conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share. Recently Issued Accounting Standards: In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) which simplifies goodwill impairment testing by requiring that such periodic testing be performed by comparing the fair value of a reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The policy is effective for fiscal years, including interim periods, beginning after December 15, 2019. We adopted on February 1, 2020 and the adoption had no impact. Fair Value Measurement In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvement to Nonemployee Share-Based Payment Accounting, which is part of the FASB’s simplification initiative to maintain or improve the usefulness of the information provided to the users of financial statements while reducing cost and complexity in financial reporting. This update provides consistency in the accounting for share-based payments to nonemployees with that of employees. The updated guidance had no impact on the Company’s consolidated financial position, results of operations or cash flows. In addition to the above, the Company has reviewed all other recently issued, but not yet effective, accounting pronouncements, and does not believe the future adoption of any such pronouncements will have a material impact on its financial condition or the results of its operations. There were various other accounting standards and interpretations issued recently, none of which are expected to a have a material impact on our financial position, operations or cash flows. |
GOING CONCERN AND FINANCIAL POS
GOING CONCERN AND FINANCIAL POSITION | 9 Months Ended |
Oct. 31, 2020 | |
Going Concern and Financial Position [Abstract] | |
GOING CONCERN AND FINANCIAL POSITION | NOTE 2 – GOING CONCERN AND FINANCIAL POSITION The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has an accumulated deficit of $18,887,220 as of October 31, 2020 and has a working capital deficit at October 31, 2020 of $3,160,803 As of October 31, 2020, the Company only had cash and cash equivalents of $261,072 and approximately $167,000 of short-term debt in default. The short-term debt agreements provide legal remedies for satisfaction of defaults, none of the lenders to this point have pursued their legal remedies. While the Company has continued to grow its revenues, at this time, the three months ended July 31, 2020 was only the first quarter the Company was able to achieve profitability from operations prior to interest and other expenses. While the Company believes it will continue to build on the results achieved in this quarter, our current liquidity position raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plan is to raise additional funds in the form of debt or equity in order to continue to fund losses until such time as revenues can sustain the Company. However, there is no assurance that management will be successful in being able to continue to obtain additional funding. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
PROPERTY
PROPERTY | 9 Months Ended |
Oct. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY | NOTE 3 – PROPERTY The Company capitalizes all property purchases over $1,000 and depreciates the assets on a straight-line basis over their useful lives of 3 years for computers and 7 years for all other assets. Property consists of the following at October 31, 2020 and January 31, 2020: October 31, 2020 January 31, 2020 Office furniture, fixtures and equipment $ 85,413 $ 95,163 Shop equipment 43,004 43,004 Vehicles 40,433 40,433 Sub-total 168,850 178,600 Less: Accumulated depreciation (82,524 ) (64,091 ) Total Property $ 86,326 $ 114,509 Additions to fixed assets were nil for both the three months and nine months ended October 31, 2020 and $3,948 for both the three and nine months ended October 31, 2019. Office equipment having a cost of $9,750 and a net book value of $9,286 was disposed of during the nine months ended October 31, 2020. Proceeds received of $9,750 and a gain on sale of property and equipment of $464 were recorded. Vehicles having a cost of $144,662 and a net book value of $132,599 was disposed of during the nine months ended October 31, 2019. Proceeds received of $137,035 and a gain on sale of property and equipment of $4,436 was recorded. Depreciation expense was $6,299 and $7,033 for the three months ended October 31, 2020 and October 31, 2019, respectively. Depreciation expense was $18,897 and $26,021 for the nine months ended October 31, 2020 and October 31, 2019, respectively. |
LEASES
LEASES | 9 Months Ended |
Oct. 31, 2020 | |
Leases [Abstract] | |
LEASES | NOTE 4 – LEASES We lease certain warehouses and office space. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of Topic 842, we did not combine lease and non-lease components. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 17 years or more. The exercise of lease renewal options is at our sole discretion. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Below is a summary of our lease assets and liabilities at October 31, 2020 and January 31, 2020. Leases Classification October 31, 2020 January 31, 2020 Assets Operating Operating Lease Assets $ 368,605 $ 483,193 Liabilities Current Operating Current Operating Lease Liability $ 91,638 $ 101,984 Noncurrent Operating Noncurrent Operating Lease Liabilities 265,378 365,085 Total lease liabilities $ 357,016 $ 467,069 Note: As most of our leases do not provide an implicit rate, we use our incremental borrowing rate of 8% based on the information available at commencement date in determining the present value of lease payments. Effective February 29 ,2020 the Company and landlord terminated the September 2019 lease with an annual rent of $15,480, a 3 year term an 1 year renewal. There were no costs associated with the termination. The Company eliminated the operating lease asset and operating lease liability at termination which was $45,032. (see Note 11) CAM charges were not included in operating lease expense and were expensed in general and administrative expenses as incurred. Operating lease cost was $23,279 and $30,360 for the three months ended October 31, 2020 and October 31, 2019, respectively. Operating lease cost was $91,437 and $83,762 for the nine months ended October 31, 2020 and October 31, 2019, respectively. |
PPP LOAN
PPP LOAN | 9 Months Ended |
Oct. 31, 2020 | |
PPP Loan [Abstract] | |
PPP LOAN | NOTE 5 – PPP LOAN On May 2, 2020 the Company entered into a Paycheck Protection Promissory (PPP) Note Agreement whereby the lender would advance proceeds of $209,447 at a fixed rate of 1% per annum and a May 2, 2022 maturity. The loan is repayable in monthly instalments of $8,818 commencing September 2, 2022 and continuing on the second day of every month thereafter until maturity when any remaining principal and interest are due and payable. At October 31, 2020 the loan is classified as $17,293 current and $192,154 long-term. The Company used the proceeds of this loans for working capital and the Company intends to use these proceeds in a manner consistent with obtaining loan forgiveness. |
SHORT-TERM AND LONG-TERM DEBT
SHORT-TERM AND LONG-TERM DEBT | 9 Months Ended |
Oct. 31, 2020 | |
Debt Disclosure [Abstract] | |
SHORT-TERM AND LONG-TERM DEBT | NOTE 6 – SHORT-TERM AND LONG-TERM DEBT The components of the Company’s debt as of October 31, 2020 and January 31, 2020 were as follows: October 31, 2020 January 31, 2020 Working Capital Note Payable - $ 200,000 dated October 25, 2019, repayment of 10% of all eBay sales proceeds until paid in full, minimum payment of $20,417, fees of $4,173 effective interest rate of 7% (4) (4) $ — $ 6,978 Loan dated October 8, 2019, and revised February 29, 2020 and November 10, 2010 repayable June 30, 2022 with an additional interest payment of $20,000 102,168 # 63,635 Loan dated October 14, 2019, repayable in average monthly installments of $11,200, maturing April 14, 2020, interest and fees $7,200, effective interest 35.50% per annum (4)(5) — 30,000 Working Capital Note Payable - $ 200,000 dated July 19, 2019, repayment of 10% of all eBay sales proceeds until paid in full, minimum payment of $20,334, fees of $3,343 effective interest rate of 7% (4) — — Working Capital Note Payable - $200,000, dated March 5, 2020, repayment of 10% of all eBay sales proceeds until paid in full, minimum payments of $20,695 per quarter until paid, interest rate of 7% (3) — — SFS Funding Loan, original loan of $389,980 January 8, 2020, 24% interest, weekly payments of $6,006, maturing April 7, 2021 (5) 239,302 * 371,963 Forklift Note Payable, original note of $20,433 Sept 26, 2018, 6.23% interest, 60 monthly payments of $394.54 ending August 2023 (1) 13,250 # 16,106 Demand loan - $122,000 dated August 19, 2019 25% interest, 5% fee on outstanding balance (4)(6) — 122,000 Demand loan - $5,000 dated February 1, 2020, 15% interest, 5% fee on outstanding balance 5,000 * — Demand loan - $2,500, dated March 8, 2019, 25% interest, 5% fee on outstanding balance 2,500 * 2,500 Demand loan - $65,500 dated February 27, 2019, 25% interest, 5% fee on outstanding balance, Secured by the general assets of the Company 12,415 * 12,415 Promissory note -$60,000 dated September 18, 2020 maturing September 18, 2021, including $5,000 original issue discount, 15% compounded interest payable monthly 60,000 * — Promissory note -$425,000 dated August 28, 2020, including $50,000 original issue discount, 15% compounded interest payable monthly. The notes matures when the Company receives proceeds through a financing event of $825,000 plus accrued interest on the note. (7) 425,000 * — Promissory note -$1,200,000 dated August 28, 2020, maturing August 28, 2022, 12% interest payable monthly with the first six months interest deferred until the 6th month and added to principal . (8) 1,225,249 # — Promissory note -$50,000 dated August 31, 2020, maturing February 28, 2021, 10% interest payable at maturity 50,000 * — Total $ 2,134,884 $ 625,597 October 31, 2020 January 31, 2020 Short-Term Debt $ 794,217 $ 609,491 Current Portion of Long-Term Debt 433,184 4,166 Long-Term Debt 907,483 11,940 $ 2,134,884 $ 625,597 * Short-term loans # Long-term loans of $13,250 including current portion of $4,347 $102,168 including current portion of $0 $1,200,000 including current portion of $445,200 (1) Secured by equipment having a net book value of $18,243 (2) On February 29, 2020 the Company amended the agreement extending the maturity to June 1, 2022 from April 8, 2021 and changing monthly payments to $5,705 from $4,679 and interest rate from 15% to 13%.In addition prepaid rent and interest of $27,500 and $8,005 were added to the loan’s principal amount and the 1st monthly payment commence July 1, 2020. (3) The Company has pledged a security interest on all accounts receivable and banks accounts of the Company. (4) The Company has pledged a security interest on all assets of the Company. (5) The amounts due under the note are personally guaranteed by an officer or a director of the Company. (6) On February 26, 2020 the lender exchanged the $122,000 note along with $22,076 for 26 Class C preferred shares as part of a larger debt exchange transaction as described in Note 7. (7) Financing event would be a sale or issuance of assets, debt, shares or any means of raising capital. As the Company expects to enter into such a transaction within the next year this loan is treated as current. (8) Secured by all assets of the Company. Includes $25,249 accrued interest. Loan payable in 2 instalments, $428,837 payable August 28, 2021 and $826,800 payable August 28, 2022 The Company had accrued interest payable of $13,547 and $0 interest on the notes at October 31, 2020 and January 31, 2020, respectively. |
SHORT-TERM CONVERTIBLE DEBT
SHORT-TERM CONVERTIBLE DEBT | 9 Months Ended |
Oct. 31, 2020 | |
Debt Disclosure [Abstract] | |
SHORT-TERM CONVERTIBLE DEBT | NOTE 7 – SHORT-TERM CONVERTIBLE DEBT The components of the Company’s debt as of October 31, 2020 and January 31, 2020 were as follows: Interest Default Interest Conversion Outstanding Principal at Maturity Date Rate Rate Price October 31, 2020 January 31, 2020 Nov 4, 2013* 12% 12% $1,800,000 $ 100,000 $ 100,000 Jan 31, 2014* 12% 18% $2,400,000 16,000 16,000 Apr 24, 2020* (ii) Y 12% 24% (3) — 69,730 July 31, 2013* 12% 12% $1,440,000 5,000 5,000 Jan 31, 2014* 12% 12% $2,400,000 30,000 30,000 Dec 24, 2015* (v) 8% 24% (1) 5,000 5,000 Feb 3, 2017* (ii)(iv) Y 8% 24% (4) — 2,500 Mar 3, 2017* (ii)(iv) 8% 24% (5) — — Mar 3, 2017* (ii)(iv) Y 8% 24% (5) — 33,000 Mar 24, 2017* (ii)(iv) Y 8% 24% (5) — 27,500 Apr 24, 2020* (ii)(iv)(vi) Y 12% 24% (3) — 517,787 July 8, 2015* (v) 8% 24% (1) 5,500 5,500 Apr 24, 2020 (ii)(iv)(vi)X 8% 24% (3) — 4,500 Apr 24, 2020 X 8% 24% (3) — 23,297 Apr 24, 2020 X 8% 24% (3) — 7,703 Apr 24, 2020 X 8% 24% (3) — 26,500 July 19, 2016* (v) 8% 24% (1) 5,000 5,000 Mar 23, 2019* (ii)(iv)(vi)X 15% 24% (3) — 4,444 Feb 20, 2019* (ix)X 10% 10% (6) — 343,047 Jun 6, 2019* (viii)X 12% 18% (7) — 43,577 Oct 24, 2019* (ii)(iv) Y 8% 24% (5) — 45,595 Nov 14, 2019* (ii)(iv) Y 8% 24% (5) — 86,625 Dec 14, 2019* (ii)(iv) Y 8% 24% (5) — 143,000 Dec 28, 2019* (i)(iv)(vi) Y 12% 18% (6) — 133,333 Jan 9, 2020* (ii)(iv) Y 8% 24% (2) — 68,750 March 1, 2020* (x)Z 10% 15% (8) — 40,939 March 14, 2020 (iv)(vi)X 15% 24% (9) — 44,967 April 3, 2020* (iv) Y 8% 24% (2) — 172,148 April 12, 2020* (xi) Y 10% 24% (3) — 185,130 May 13, 2020 (iv)(vi)X 15% 24% (9) — 55,000 May 14, 2020* (iv)(vi) Y 8% 24% (2) — 52,500 May 24, 2020 (iv)(vi)X 15% 24% (9) — 40,000 June 11, 2020 (iv)(vi)X 15% 24% (9) — 85,000 June 26, 2020* (iv)(vi) Y 15% 24% (9) — 76,000 July 11, 2020 (iv)(vii)X 15% 24% (9) — 60,000 Aug 29, 2020 (iv)(vii)X 15% 24% (9) — 45,000 Sep 16, 2020 (iv)(vii)X 15% 24% (9) — 34,000 Sep 27, 2020 (iv)(vii)X 15% 24% (9) — 34,000 Oct 24, 2020 (iv)(vii)X 15% 24% (9) — 122,000 Nov 7, 2020 (iv)(vii)X 15% 24% (10) — 42,000 Nov 22, 2020 (ii)(iv)(vi) Y 8% 24% (2) — 55,000 Dec 10, 2020 (iv)(vii)X 15% 24% (9) — 55,000 Dec 23, 2020 (ii)(iv)(vi) Y 8% 24% (2) — 30,000 Oct. 12, 2022 12% 16% (11) 250,000 — Sub-total 416,500 2,976,072 Debt Discount (152,621 ) (689,176 ) $ 263,879 $ 2,286,896 __________ (1) 52% of the lowest trading price for the fifteen trading days prior to conversion day. (2) 50% of the lowest trading price for the fifteen trading days prior to conversion day. (3) 50% of the lowest trading price for the twenty trading days prior to conversion day. (4) 50% of the lowest trading price for the fifteen trading days prior to conversion day, but not higher than $0.001. (5) 50% of the lowest trading price for the fifteen trading days prior to conversion day, but not higher than $0.005. (6) 60% of the lowest trading price for the twenty trading days prior to conversion day. (7) 52% of the lowest trading price for the twenty trading days prior to conversion day. (8) 55% of the lowest trading price for the twenty-five trading days prior to conversion day. (9) 50% of the lowest bid price for the twenty-five trading days prior to conversion day. (10) 45% of the lowest bid price for the fifteen trading days prior to conversion day (11) closing price on the day preceding the conversion date * In default. X On February 26, 2020 the Company exchanged convertible and short term notes and accrued interest for 250 Class C shares (transaction described further below). Y On August 28, 2020 the Company exchanged convertible notes and accrued interest for a $ 1,200,000 promissory note with a 2 year maturity bearing interest at 12%, 950,000 warrants with a 3 year maturity and an exercise price of $0.40 and 150 Class C preferred shares (transaction described further below). Z On August 25,2020 the Company settled a convertible note with principal of $ 40,938 for a $14,329 cash payment. On September 14, 2020 the Company settled $20,111 in accrued interest and default interest related to this note for a cash payment of $52,446 (transaction described further below). (i) If the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the effective Conversion Price as calculated in Section 4(a) is less than $0.0001 at any time (regardless of whether or not a Conversion Notice has been submitted to the Company), the Principal Amount of the Note shall increase by ten thousand dollars ($10,000) (under Holder’s and Company’s expectation that any Principal Amount increase will tack back to the Issuance Date). In addition, the Conversion Price shall be permanently redefined to equal the lesser of (a) $0.00001 or (b) 50% of the lowest traded price during the twenty five (25) consecutive Trading Days immediately preceding the applicable Conversion Date on which the Holder elects to convert all or part of this Note, subject to adjustment as provided in this Note. If at any time while this Note is outstanding, an Event of Default (as defined herein) occurs, then an additional discount of 15% shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 65% assuming no other adjustments are triggered hereunder). These above contingencies have not occurred. (ii) In the event the Company experiences a DTC ” Chill” on its shares, the conversion price shall be decreased to 40% instead of 50% while that “Chill” is in effect. If the Company fails to maintain the share reserve at the 4x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. (iii) The share purchase agreements ancillary to the convertible note agreements do not allow the lender to engage in short sales. (iv) If the Company becomes delinquent or continues its delinquency in its periodic filings with the SEC after the 6-months anniversary of the note, then the holder is entitled to use the lowest closing bid price during the delinquency period as a base price for the conversion. (v) In the event the Company experiences a DTC ” Chill” on its shares, the conversion price shall be decreased to 42% instead of 52% while that “Chill” is in effect. (vi) If the Company fails to maintain the share reserve at the 4x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. (vii) If the Company fails to maintain the share reserve at the 3x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. (viii) If at any time while this Note is outstanding, an event of default occurs, then an additional discount of 15% shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 65% assuming no other adjustments are triggered hereunder). If at any time while this Note is outstanding, the Borrower’s Common Stock are not deliverable via DWAC, an additional 10% discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding. (ix) If the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the effective Conversion Price is less than $0.01 at any time, the Principal Amount of the Note shall increase by ten thousand dollars ($10,000). In addition, the Conversion price shall be permanently redefined to equal the lesser of (a) $0.001 or (b) 50% of the lowest traded price during the twenty five (25) consecutive Trading Days immediately preceding the applicable Conversion Date on which the Holder elects to convert all or part of this Note, subject to adjustment as provided in this Note. (x) In the event that shares of the Borrower’s Common Stock are not deliverable via DWAC following the conversion of any amount hereunder, an additional ten percent (10%) discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 55% assuming no other adjustments are triggered hereunder). Additionally, if the Borrower fails to comply with the reporting requirements of the Exchange Act (including but not limited to becoming late or delinquent in its filings, even if the Borrower subsequently cures such delinquency) at any time while after the Issue Date, and/or the Borrower shall cease to be subject to the reporting requirements of the exchange Act, an additional fifteen percent (15%) discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 60% assuming no other adjustments are triggered hereunder). (xi) If the Borrower’s Common stock is chilled for deposit at DTC, becomes chilled at any point while this Note remains outstanding or deposit or other additional fees are payable due to a Yield Sign, Stop Sign or other trading restrictions, or if the closing price at any time falls below $0.01 (as appropriately and equitably adjusted for stock splits, stock dividends, stock contributions and similar events), then an additional 15% discount will be attributed to the Conversion Price for any and all Conversions submitted thereafter. The Company had accrued interest payable of $203,377 and $703,270 on the notes at October 31, 2020 and January 31, 2020, respectively. The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that some instruments should be classified as liabilities due to there being a variable number of shares to be delivered upon settlement of the above conversion options. The instruments are measured at fair value at the end of each reporting period or termination of the instrument with the change in fair value recorded to earnings. The fair value of the embedded conversion option resulted in a discount to the note on the debt modification date. For the three months ended October 31, 2020 and 2019, the Company recorded amortization of debt discount expense of $67,357 and $212,004, respectively. For the nine months ended October 31, 2020 and 2019, the Company recorded amortization of debt discount expense of $694,168 and $462,175, respectively See more information in Note 8. During the nine months ended October 31, 2020 and October 31, 2019 the Company added $3,394 and $294,978 in penalty interest to the loan, respectively. On February 26, 2020 a lender exchanged $1,070,035 in convertible notes and $175,421 in accrued interest (as denoted by X in the above schedule) as well as $122,000 in short-term debt and $22,076 in accrued interest (as described in Note 6), and the associated derivative liability of $792,218 all totaling $2,181,750 in exchange for 250 Class C shares having a fair-value of $9,105. A gain of $2,172,646 was recorded. On August 28, 2020 a lender exchanged $1,692,690 in convertible notes and $571,454 in accrued interest (as denoted by Y in the above schedule) as well as the associated derivative liability of $2,177,794 all totaling $4,441,938 in exchange for a promissory note of $1,200,000 bearing interest at 12% and maturing August 28, 2022 (see Note 6), 950,000 Warrants with a 3 year maturity and an exercise price of $0.40 having a fair value of $351,500 (see Note 9) and 150 Class C shares having a fair-value of $20,290. A gain of $2,820,147 was recorded. On August 25, 2020 a lender exchanged $40,939 in a convertible note (as denoted by Z in the above schedule), and the associated derivative liability of $31,320 all totaling $72,259 in exchange for a cash payment of $14,329. On September 14, 2020 the same lender exchanged $20,111 in accrued interest and default interest (from that note) for a cash payment of $52,446. A total gain of $25,595 on the two transactions was recorded. On October 12, 2020 the Company entered into a new convertible note for $250,000 with a one year maturity, interest rate of 12%, the Company received $210,250 in cash proceeds, recorded an original issue discount of $25,000, a derivative discount of $132,613, and transaction fees of $14,750. The first year’s interest of $28,000 is guaranteed and has been accrued. As part of the loan the Company paid a commitment fee of $ 50,000 through the issuance of 19,685 shares. During the nine months ended October 31, 2020, the Company converted a total of $9,303 of the convertible notes and $6,509 accrued interest into 578,495 common shares. As of October 31, 2020, the Company had $166,500 of aggregate debt in default. The agreements provide legal remedies for satisfaction of defaults, none of the lenders to this point have pursued their legal remedies. The Company continues to accrue interest at the listed rates, and plans to seek their conversion or payoff within the next twelve months. |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 9 Months Ended |
Oct. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITIES | NOTE 8 – DERIVATIVE LIABILITIES As of October 31, 2020 and January 31, 2020, the Company had derivative liabilities of $229,895 and $2,611,125, respectively. During the three months ended October 31, 2020 and 2019, the Company recorded a loss of $939,873 and $196,303 from the change in the fair value of derivative liabilities, respectively. During the nine months ended October 31, 2020 and 2019, the Company recorded a loss of $507,674 and $107,953 from the change in the fair value of derivative liabilities, respectively. Any liabilities resulting from the warrants outstanding are immaterial. The derivative liabilities are valued as a level 3 input for valuing financial instruments. The following table presents changes in Level 3 liabilities measured at fair value for the nine months ended October 31, 2020. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities) inputs. Level 3 Derivatives Balance, January 31, 2020 $ 2,611,125 Change due to Settlement of Debt (3,001,332 ) Changes due to Conversion of Notes Payable (20,185 ) Changes due to issuance of New Convertible Notes 132,613 Mark to Market Change in Derivatives 507,674 Balance, October 31, 2020 $ 229,895 The derivatives arise from convertible debt where the debt is convertible into common stock at variable conversion prices which are linked to the trading and/or bid prices of the Company’s common stock as traded on the OTC market. As the price of the common stock varies it triggers a gain or loss based upon the discount to market assuming the debt was converted at the balance sheet date. The fair value of the derivative liability is determined using the lattice model, is re-measured on the Company’s reporting dates, and is affected by changes in inputs to that model including our stock price, expected stock price volatility, the expected term, and the risk-free interest rate. A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liabilities and embedded conversion feature that are categorized within Level 3 of the fair value hierarchy as of October 31, 2020 is as follows: Embedded Derivative Liability As of Strike price $ 0.37 - 4.30 Contractual term (years) 0.25 - 0.95 years Volatility (annual) 352.1% - 557.3% High yield cash rate 26.55% - 37.72% Underlying fair market value $0.11 Risk-free rate 0.09% - 0.13% Dividend yield (per share) 0% |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 9 Months Ended |
Oct. 31, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' DEFICIT | NOTE 9 – STOCKHOLDERS’ DEFICIT Preferred Stock: The Series A Preferred Stock has an automatic forced conversion into common stock upon the completion of the repurchase or extinguishing of all “toxic” debt (notes having conversion features tied to the Company’s common stock), the extinguishing of all other existing dilutive debt or equity structures, and total recapitalization of the Company. As of both October 31, 2020, and January 31, 2020 the Company had 0 shares of Series A Preferred issued and outstanding and 330,000 authorized with a par value of $0.001 per share. At both October 31, 2020 and January 31, 2020, there were 20,000 and 20,000 Series B preferred shares outstanding, respectively. The Series B Preferred Stock have voting rights equal to 51% of the total voting rights at any time. There are no conversion rights granted holders of Series B Preferred shares, they are not entitled to dividends, and the Company does not have the right of redemption. Currently, there are 20,000 Series B preferred shares authorized and issued of the Series B Preferred Stock with a par-value of $0.001 per share. At both October 31, 2020 and January 31, 2020, there were 7,250 and 6,750 Series C preferred shares outstanding, respectively. The Series C Preferred Stock have the right to convert into the common stock of the Company by multiplying the number of issued and outstanding shares of common stock by 2.63 on the conversion date. The holders of Series C Preferred shares are not entitled to dividends, and the Company does not have the right of redemption. Currently, there are 7,250 Series C preferred shares authorized and issued with a par-value of $0.001 per share. On February 26, 2020 the Company issued 250 Class C preferred shares and on August 28, 2020 the Company issued another 150 Class C preferred shares in debt exchange transactions described in Note 7. On September 1, 2020 the Company issued 100 Class C preferred share at a fair value of $11,177 to repay Accrued Expenses- Related Party. At both October 31, 2020 and January 31, 2020, there were 870 Series D preferred shares authorized and outstanding, respectively which with a par value $.001. All shares of Series D Preferred Stock will rank subordinate and junior to all shares of Series A, B and C of Preferred Stock of the Corporation and pari passu with any of the Corporation’s preferred stock hereafter created as to distributions of assets upon dissolution or winding up of the Corporation, whether voluntary or involuntary. These shares are non-voting, do not receive dividends and are redeemable according to the terms set out as follows: OPTIONAL REDEMPTION. (1) At any time, either the Corporation or the holder may redeem for cash out of funds legally available therefor, any or all of the outstanding Series D Preferred Stock (“Optional Redemption”) at $1,000 per share. (2) Should the Corporation exercise the right of Optional Redemption it shall provide each holder of Preferred Stock with at least 30 days’ notice of any proposed optional redemption pursuant this Section VI (an “Optional Redemption Notice”). Any optional redemption pursuant to this Section VI shall be made rateably among holders in proportion to the Liquidation Value of Preferred Stock then outstanding and held by such holders. The Optional Redemption Notice shall state the Liquidation Value of Preferred Stock to be redeemed and the date on which the Optional Redemption is to occur (which shall not be less than thirty (30) or more than sixty (60) Business Days after the date of delivery of the Optional Redemption Notice) and shall be delivered by the Corporation to the holders at the address of such holder appearing on the register of the Corporation for the Preferred Stock. Within seven (7) business days after the date of delivery of the Optional Redemption Notice, each holder shall provide the Corporation with instructions as to the account to which payments associated with such Optional Redemption should be deposited. On the date of the Optional Redemption, provided for in the relevant Optional Redemption Notice, (A) the Corporation will deliver the redemption amount via wire transfer to the account designated by the holders, and (B) the holders will deliver the certificates relating to that number of shares of Preferred Stock being redeemed, duly executed for transfer or accompanied by executed stock powers, in either case, transferring that number of shares to be redeemed. Upon the occurrence of the wire transfer (or, in the absence of a holder designating an account to which funds should be transferred, delivery of a certified or bank cashier’s check in the amount due such holder in connection with such Optional Redemption to the address of such holder appearing on the register of the Corporation for the Preferred Stock), that number of shares of Preferred Stock redeemed pursuant to such Optional Redemption as represented by the previously issued certificates will be deemed no longer outstanding. Notwithstanding anything to the contrary in this Designation, each holder may continue to convert Preferred Stock in accordance with the terms hereof until the date such Preferred Stock is actually redeemed pursuant to an Optional Redemption. (3) Should the holder exercise the right of Optional Redemption it shall provide the Corporation with at least 30 days’ notice of any proposed optional redemption pursuant this Section VI (an “Optional Redemption Notice”). The Optional Redemption Notice shall state the value of the Preferred Stock to be redeemed and the date on which the Optional Redemption is to occur (which shall not be less than thirty (30) or more than sixty (60) Business Days after the date of delivery of the Optional Redemption Notice) and shall be delivered by the holder to the Corporation at the address of the Corporation for the Preferred Stock. Within seven (7) business days after the date of delivery of the Optional Redemption Notice, each holder shall provide the Corporation with instructions as to the account to which payments associated with such Optional Redemption should be deposited. On the date of the Optional Redemption, provided for in the relevant Optional Redemption Notice, (A) the Corporation will deliver the redemption amount via wire transfer to the account designated by the holder, and (B) the holder will deliver the certificates relating to that number of shares of Preferred Stock being redeemed, duly executed for transfer or accompanied by executed stock powers, in either case, transferring that number of shares to be redeemed. Upon the occurrence of the wire transfer (or, in the absence of a holder designating an account to which funds should be transferred, delivery of a certified or bank cashier’s check in the amount due such holder in connection with such Optional Redemption to the address of such holder appearing on the register of the Corporation for the Preferred Stock), that number of shares of Preferred Stock redeemed pursuant to such Optional Redemption as represented by the previously issued certificates will be deemed no longer outstanding. Notwithstanding anything to the contrary in this Designation, each holder may continue to convert Preferred Stock in accordance with the terms hereof until the date such Preferred Stock is actually redeemed pursuant to an Optional Redemption. The Series D Preferred Stock is not entitled to any pre-emptive or subscription rights in respect of any securities of the Corporation. Neither the Company nor any Series D preferred stockholders has given notice to exercise the redemption as of October 31, 2020 on the date of the financial statements. Because the holders of the Series D preferred stock have the right to demand cash redemption, the cumulative amount of the redemption feature is included in Temporary Equity as of October 31, 2020 and January 31, 2020. Common Stock The Company is authorized to issue 15,000,000 common shares at a par value of $0.000001 per share (see Note 12). These shares have full voting rights. On June 4, 2020 the Company amended its articles decreasing authorized common shares from 20,000,000,000 to 1,000,000,000 and again on September 8, 2020 the Company further decreased authorized common shares to 15,000,000. On March 29, 2019 the Company undertook a 6000:1 reverse stock. On February 25, 2020, the Company undertook a 4000:1 reverse stock split. The share capital has been retrospectively adjusted accordingly to reflect these reverse stock splits. At October 31, 2020 and January 31, 2020 there were 1,181,644 and 538,464 shares outstanding and issuable , respectively. No dividends were paid in the nine months ended October 31, 2020 or 2019. The Company’s articles of incorporation include a provision that the Company is not allowed to issue fractional shares. As a result, as part of the reverse split described above, the Company issued an additional 1,699 shares in March 2020 and these shares were included in the shares outstanding as of January 31, 2020 as issuable. The Company issued the following shares of common stock in the nine months ended October 31, 2020: Conversion of $9,303 Notes Payable and $6,509 Interest to 578,495 shares of Common Stock. Issuance of 19,685 shares with a fair value of $50,000 as commitment fee for convertible note in Note 7. Issuance of $45,000 shares with a value of $18,900 to the CEO as repayment of Accrued Expenses-Related Party. Options and Warrants: The Company recorded option and warrant expense of $0 and $0 for the three months ended October 31, 2020 and 2019, respectively. For the three months ended October 31, 2020, the Company issued a warrant to acquire 950,000 shares of stock as part of a debt settlement transaction describe in Note 7. The Warrant gives the holder the right to cash settle the warrants if a fundamental transaction as defined in the warrants occurs. However, a member of management and shareholder of the Company who controls approximately 60% of all voting shares would decide if a fundamental transaction would occur. The Company currently is not considering any fundamental transactions. Based on the above the Company used a Black Scholes model to record the value of the warrant. The warrants having a fair value of $351,500 with a corresponding increase in additional paid-in capital valued using the Black-Scholes option pricing model according to the following assumptions: Expected volatility 506.8% Exercise price $0.40 Stock price $0.37 Expected life 3 years Risk-free interest rate 0.19% Dividend yield 0% The Company had the following options and warrants outstanding at October 31, 2020: Issued To # Warrants Dated Expire Strike Price Expired Exercised Lender 1.4 01/08/2018 01/08/2021 $1,800 per share N N Lender 950,000 08/28/2020 08/28/2023 $0.40 per share N N Options Weighted Average Warrants Weighted Average Outstanding at January 31, 2020 — $ — 1.4 $ 1,800 Granted — — 950,000 0.40 Exercised — — — — Forfeited and canceled — — — — Outstanding at October 31, 2020 — $ — 950,001 $ 0.40 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Oct. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 10 – RELATED PARTY TRANSACTIONS As of October 31, 2020 and January 31, 2020, the Company had $125,673 and $155,750, respectively of related party accrued expenses related to accrued compensation for employees and consultants. During the quarter ended October 31, 2020 the Company issued 45,000 shares of common stock for a fair value of $18,900 as payment towards these accrued expenses. On September 1, 2020 the Company issued 100 Class C preferred share at a fair value of $11,177 to repay Accrued Expenses- Related Party. In February 2020, a shareholder and landlord of 4Less, agreed to renegotiate a loan (as described in Note 5) by providing $25,700 in rent concessions over a 4 month period which increased the loan and prepaid rent by that amount. As of both October 31, 2020, and January 31, 2020 the balance of prepaid rent totaled $0. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Oct. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11 – COMMITMENTS AND CONTINGENCIES On June 1, 2015, the Company entered into a 36-month lease agreement for its 2,590 sf office facility with a minimum base rent of $2,720 per month. The Company paid base rent and their share of maintenance expense of $43,200 and $43,200 related to this lease for the periods ended January 31, 2019 and 2018, respectively. The lease is currently on a month to month basis since the lease has not been renewed and the Company records the payments as rent expense. This lease was with a shareholder – See Note 8 – Related Party Transactions. On August 30, 2016, the Company entered into a 60-month lease agreement for its 3,554 sf warehouse facility starting in December 2016 with a minimum base rent of $2,132 and estimated monthly CAM charges of $1,017 per month. This lease is with a shareholder – See Note 9 – Related Party Transactions. On July 1, 2018, the Company entered into a 60-month lease agreement with its minority shareholder for its 8,800 sf warehouse facility with a minimum base rent of $6,400 per month. In September 2019 the Company entered into an operating lease for premises with an annual rent of $15,480, a three year term commencing September 1, 2019 to August 31, 2022 and a one year renewal option. On October 23, 2020 the Company and landlord terminated this lease effective February 29, 2020. There were no costs associated with the termination. The Company eliminated the operating lease asset and operating lease liability at termination which was $45,032. In October 2019 the Company entered into an operating lease for a vehicle with an annual cost of $9,067 and a three year term. The company paid initial fees of $17,744 and will pay fees on lease termination of $395. On a straight-line basis these costs amount to $1,259 per month. Maturity of Lease Liabilities Operating October 31 2021 $ 121,917 October 31, 2022 120,657 October 31, 2023 81,203 October 31, 2024 31,203 October 31, 2025 30,003 After October 31, 2025 40,005 Total lease payments 424,988 Less: Interest (67,972 ) Present value of lease liabilities $ 357,016 The Company had total operating lease and rent expense of $23,279 and $30,360 for the three months ended October 31, 2020 and 2019 respectively. The Company had total operating lease and rent expense of $91,437 and $83,762 for the nine months ended October 31, 2020 and 2019 respectively. There is pending litigation initiated by the Company around the validity of a $100,000 note which the Company signed based upon representations of funding from the maker which were never received. The Company initiated litigation to dispute the note and the 1,692 shares that have been issued. There was no consideration for the issuance of the shares and the shares have been accounted for as if they were returned and cancelled although they have not been returned. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 9 Months Ended |
Oct. 31, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | NOTE 12 – EARNINGS (LOSS) PER SHARE The net income (loss) per common share amounts were determined as follows: For the Three Months Ended October 31, 2020 2019 Numerator: Net income (loss) available to common shareholders $ 1,100,073 $ (994,960 ) Denominator: Weighted average shares – basic 1,067,074 20,683 Net income (loss) per share – basic $ 1.03 $ (48.11 ) Effect of common stock equivalents Add: interest expense on convertible debt 44,110 88,911 Add: amortization of debt discount 67,357 212,004 Less: gain on settlement of debt on convertible notes (2,845,742 ) — Add (Less): loss (gain) on change of derivative liabilities 939,873 196,303 Net income (loss) adjusted for common stock equivalents (694,329 ) (497,742 ) Dilutive effect of common stock equivalents: Convertible notes and accrued interest 144,158 — Convertible Class C Preferred shares 3,107,724 — Warrants (1) 950,001 — Denominator: Weighted average shares – diluted 5,268,957 20,683 Net income (loss) per share – diluted $ (0.13 ) $ (48.11 ) For the Nine Months Ended October 31, 2020 2019 Numerator: Net income (loss) available to common shareholders $ 2,681,933 $ (2,554,510 ) Denominator: Weighted average shares – basic 797,126 7,613 Net income (loss) per share – basic $ 3.36 $ (335.55 ) Effect of common stock equivalents Add: interest expense on convertible debt 253,691 340,367 Add: amortization of debt discount 694,168 462,175 Less: gain on settlement of debt on convertible notes (4,793,113 ) (67,622 ) Add (Less): loss (gain) on change of derivative liabilities 507,674 107,953 Net income (loss) adjusted for common stock equivalents (655,647) (1,711,368 ) Dilutive effect of common stock equivalents: Convertible notes and accrued interest 144,158 — Convertible Class C Preferred shares 3,107,724 — Warrants (1) 950,001 — Denominator: Weighted average shares – diluted 4,999,009 7,613 Net income (loss) per share – diluted $ (0.13) $ (335.55 ) The anti-dilutive shares of common stock equivalents for the nine months ended October 31, 2020 and October 31, 2019 were as follows: October 31, 2020 2019 Convertible notes and accrued interest — 756,759 Convertible Class C Preferred shares — 174,490 Warrants — 1 Total — 931,250 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Oct. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 – SUBSEQUENT EVENTS On November 16, 2020 the Company entered into a convertible promissory note with a lender for $100,000 with cash proceeds of $80,000 and original issue discount of $12,000, interest payable at 12% per annum with the first twelve months interest of $12,000 guaranteed, with a one year maturity. The note, accrued interest, and any default penalty are convertible into common stock of the Company at a conversion price equal to the closing bid price on the trading day immediately preceding the conversion date. On November 17, 2020 the Company issued 6,667 shares of common stock at a fair value of $20,668 as a commitment fee for this loan. On November 23, 2020 the Company entered into a convertible promissory note with a lender for $165,000 with cash proceeds of $150,000 and original issue discount of $15,000, interest payable at 12% per annum with the first twelve months interest of $19,800 guaranteed, with a one year maturity. The note, accrued interest, and any default penalty are convertible into common stock of the Company at a conversion price equal to the closing bid price on the trading day immediately preceding the conversion date. On November 24, 2020 the Company issued 17,500 shares of common stock at a fair value of $36,750 as a commitment fee for this loan. On December 11, 2020 the Company filed a Form 1-A statement indicating its intention to issue a public offering of shares of voting Common Stock pursuant to Regulation A, par value $0.00001 at an offering price range of $2.00 up to a maximum offering amount of $15,000,000 or 7,500,000 shares. There is a minimum investment of $500. During the Offering, the Company may, in its sole discretion, increase the per share price, subject to filing an offering circular supplement or post qualification amendment. |
NATURE OF BUSINESS AND SIGNIF_2
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Oct. 31, 2020 | |
Accounting Policies [Abstract] | |
Business | Business: Nature of Business – On November 29, 2018, the Company entered into a transaction (the “Share Exchange”), pursuant to which the Company acquired 100% of the issued and outstanding equity securities of The 4LESS Corp. (“4LESS”), in exchange for the issuance of (i) nineteen thousand (19,000) shares of Series B Preferred Stock, (ii) six thousand seven hundred fifty (6,750) shares of Series C Preferred Stock, and (iii) 870 shares of Series D Preferred Stock. The Series C Preferred Shares have a right to convert into common stock of the Company by multiplying the number of issued and outstanding shares of common stock by 2.63 on the conversion date. The Share Exchange closed on November 29, 2018. As a result of the Share Exchange, the former shareholders of 4LESS became the controlling shareholders of the Company. The Share Exchange was accounted for as a reverse takeover/recapitalization effected by a share exchange, wherein 4LESS is considered the acquirer for accounting and financial reporting purposes. The capital, share price, and earnings per share amount in these consolidated financial statements for the period prior to the reverse merger were restated to reflect the recapitalization in accordance with the shares issued as a result of the reverse merger except otherwise noted. 4LESS was formed as Vegas Suspension & Offroad, LLC on October 24, 2013 as a Nevada limited liability company and converted to a Nevada corporation with the same name on May 8, 2017. On April 2, 2018, the Company changed its name to The 4LESS Corp. The Corporation had S Corporation status. The Corporation operates as an e-commerce auto and truck parts sales company. As a result of the share exchange, the 4LESS Group, Inc. is now a holding company operating through 4LESS and offers products including exhaust systems, suspension systems, wheels, tires, stereo systems, truck bed covers, and shocks. On December 30, 2019 4LESS changed its name to Auto Parts 4Less, Inc. |
Significant Accounting Policies | Significant Accounting Policies: The Company’s management selects accounting principles generally accepted in the United States of America and adopts methods for their application. The application of accounting principles requires the estimating, matching and timing of revenue and expense. The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these condensed financial statements. |
Basis of Presentation | Basis of Presentation: The Company prepares its financial statements on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States. The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim unaudited consolidated financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete consolidated financial statements. Certain information and footnote disclosure normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the SEC. The unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended January 31, 2020 and notes thereto contained in the Company’s Annual Report on Form 10-K filed on May 6, 2020. |
Principles of Consolidation | Principles of Consolidation: The condensed financial statements include the accounts of The 4LESS Group, Inc. as well as The Auto Parts 4Less, Inc., and JBJ Wholesale LLC. All significant inter-company transactions have been eliminated. All amounts are presented in U.S. Dollars unless otherwise stated. |
Use of Estimates | Use of Estimates: In order to prepare financial statements in conformity with accounting principles generally accepted in the United States, management must make estimates, judgments and assumptions that affect the amounts reported in the financial statements and determine whether contingent assets and liabilities, if any, are disclosed in the financial statements. The ultimate resolution of issues requiring these estimates and assumptions could differ significantly from resolution currently anticipated by management and on which the financial statements are based. The most significant estimates included in these consolidated financial statements are those associated with the assumptions used to value derivative liabilities. |
Reclassifications | Reclassifications Certain amounts in the Company’s condensed consolidated financial statements for prior periods have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. |
Cash and Cash Equivalents | Cash and Cash Equivalents: The Company considers all highly liquid instruments with a maturity of three months or less to be cash equivalents. At times, cash balances may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The carrying amount of cash and cash equivalents approximates fair market value. |
Inventory Valuation | Inventory Valuation Inventories are stated at the lower of cost or net realizable value. Inventories are valued on a first-in, first-out (FIFO) basis. Inventory is comprised of finished goods. |
Concentrations | Concentrations Cost of Goods Sold For the nine months ended October 31, 2020 the Company purchased approximately 55% of its inventory and items available for sale from third parties from three vendors. As of October 31, 2020, the net amount due to those vendors included in accounts payable was $393,729. For the nine months ended October 31, 2019, the Company purchased from three vendors approximately 53% of its inventory and items available for sale from third parties. As of October 31, 2019, the net amount due to those vendors included in accounts payable was $128,461. The Company believes there are numerous other suppliers that could be substituted should a supplier become unavailable or non-competitive. |
Leases | Leases We adopted ASU No. 2016-02— Leases (Topic 842) In addition, we elected the hindsight practical expedient to determine the lease term for existing leases. Our election of the hindsight practical expedient resulted in the shortening of lease terms for certain existing leases and the useful lives of corresponding leasehold improvements. In our application of hindsight, we evaluated the performance of the leased stores and the associated markets in relation to our overall real estate strategies, which resulted in the determination that most renewal options would not be reasonably certain in determining the expected lease term. Adoption of the new standard resulted in the recording of additional net lease assets and lease liabilities of $454,087 and $454,087 respectively, as of February 1, 2019. The standard did not materially impact our consolidated net earnings, retained earnings and had no impact on cash flows. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized when items of income and expense are recognized in the financial statements in different periods than when recognized in the tax return. Deferred tax assets arise when expenses are recognized in the financial statements before the tax returns or when income items are recognized in the tax return prior to the financial statements. Deferred tax assets also arise when operating losses or tax credits are available to offset tax payments due in future years. Deferred tax liabilities arise when income items are recognized in the financial statements before the tax returns or when expenses are recognized in the tax return prior to the financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was signed into law. ASC 740, Accounting for Income Taxes requires companies to recognize the effects of changes in tax laws and rates on deferred tax assets and liabilities and the retroactive effects of changes in tax laws in the period in which the new legislation is enacted. The Company’s gross deferred tax assets were revalued based on the reduction in the federal statutory tax rate from 35% to 21%. A corresponding offset has been made to the valuation allowance, and any potential other taxes arising due to the Tax Act will result in reductions to the Company’s net operating loss carryforward and valuation allowance. The Company will continue to analyze the Tax Act to assess its full effects on the Company’s financial results, including disclosures, for the Company’s fiscal year ending January 31, 2020, but the Company does not expect the Tax Act to have a material impact on the Company’s consolidated financial statements. On November 29, 2018, the Company completed a reverse merger with The 4 Less Corp. At such time that there was a change in control, all net operating losses for tax purposes of the parent were no longer available for carry-forward and the parent started to accumulate profits or losses from that point forward. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments: The Company’s financial instruments consist of cash, accounts payable, advances and notes payable. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of these financial instruments. Derivatives are recorded at fair value at each period end. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The ASC guidance for fair value measurements and disclosure establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 Inputs Level 2 Inputs Level 3 Inputs The following table sets forth, by level within the fair value hierarchy, the Company’s financial liabilities that were accounted for at fair value on a recurring basis as of October 31, 2020: October 31, 2020 Quoted Prices in Significant Significant Liabilities: Derivative Liabilities – embedded redemption feature $ 229,895 $ — $ — $ 229,895 Totals $ 229,895 $ — $ — $ 229,895 |
Related Party Transactions | Related Party Transactions: The Company has a verbal policy that includes procedures intended to ensure compliance with the related party provisions in common practice for public companies. For purposes of the policy, a “related party transaction” is a transaction in which the Company or any one of its subsidiaries participates and in which a related party has a direct or indirect material interest, other than ordinary course, arms-length transactions of less than 1% of the revenue of the counterparty. Any transaction exceeding the 1% threshold, and any transaction involving consulting, financial advisory, legal or accounting services that could impair a director’s independence, must be approved by the CEO. Any related party transaction in which an executive officer or a Director has a personal interest, or which could present a possible conflict under the Guide to Ethical Conduct, must be approved by Board of Directors, following appropriate disclosure of all material aspects of the transaction. |
Derivative Liability | Derivative Liability The derivative liabilities are valued as a level 3 input under the fair value hierarchy for valuing financial instruments. The derivatives arise from convertible debt where the debt and accrued interest is convertible into common stock at variable conversion prices and reclassification of equity instrument to liability due to insufficient shares for issuance. As the price of the common stock varies, it triggers a gain or loss based upon the discount to market assuming the debt was converted at the balance sheet date. When evaluating the effect of the issuance of new equity-linked or equity-settled instruments on previously issued instruments, the Company uses first-in, first-out method (“FIFO”) where authorized and unused shares would first be used to satisfy the earliest issued equity-linked instruments. As of October 31, 2020, warrants to purchase 0 common shares (583 shares before the reverse split of 2/25/2020 referred to in Note 6) issued in July 2014 were not classified as derivative liability while the remaining warrants outstanding were classified as derivative liability based on the FIFO method. The fair value of the derivative liability is determined using a lattice model, is re-measured on the Company’s reporting dates, and is affected by changes in inputs to that model including our stock price, historical stock price volatility, the expected term, and both high risk and the risk-free interest rate. The most sensitive inputs to the model are for expected time for the holder to convert or be repaid and the estimated historical volatility of the Company’s common stock. However, because the historical volatility of the Company’s common stock is so high (see Note 7), the sensitivity required to change the liability by 1% as of October 31, 2020 is greater than 25% change in historical volatility as of that date. The other inputs, such as risk free rate, high yield cash rate and stock price all have a sensitivity for a 1% change in the input variable results in a significantly less than 1% change in the calculated derivative liability. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when the company satisfies a performance obligation Because the Company’s sales agreements generally have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations. Disaggregation of Revenue: Channel Revenue The following table shows revenue split between proprietary and third party website revenue for the nine months ended October 31, 2020 and 2019: Change 2020 2019 $ % Proprietary website revenue $ 3,704,215 $ 2,572,137 $ 1,132,078 44% Third party website revenue 3,557,891 3,646,249 (88,358 ) (2% ) Total revenue $ 7,262,106 $ 6,218,386 $ 1,043,720 17% The Company’s performance obligations are satisfied at the point in time when products are received by the customer, which is when the customer has title and obtained the significant risks and rewards of ownership. Therefore, the Company’s contracts have a single performance obligation (shipment of product). The Company primarily receives fixed consideration for sales of product. Shipping and handling amounts paid by customers are primarily for online orders, and are included in revenue. Sales tax and other similar taxes are excluded from revenue. |
Stock-Based Compensation | Stock-Based Compensation: The Company accounts for stock options at fair value. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model and provides for expense recognition over the service period, if any, of the stock option. |
Earnings (Loss) Per Common Share | Earnings (Loss) Per Common Share: Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS give effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used to determine the number of shares assumed to be purchased from the exercise of stock options and/or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive. Basic loss per common share is computed based on the weighted average number of shares outstanding during the period. Diluted loss per share is computed in a manner similar to the basic loss per share, except the weighted-average number of shares outstanding is increased to include all common shares, including those with the potential to be issued by virtue of convertible debt and other such convertible instruments. Diluted loss per share contemplates a complete conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards: In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) which simplifies goodwill impairment testing by requiring that such periodic testing be performed by comparing the fair value of a reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The policy is effective for fiscal years, including interim periods, beginning after December 15, 2019. We adopted on February 1, 2020 and the adoption had no impact. Fair Value Measurement In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvement to Nonemployee Share-Based Payment Accounting, which is part of the FASB’s simplification initiative to maintain or improve the usefulness of the information provided to the users of financial statements while reducing cost and complexity in financial reporting. This update provides consistency in the accounting for share-based payments to nonemployees with that of employees. The updated guidance had no impact on the Company’s consolidated financial position, results of operations or cash flows. In addition to the above, the Company has reviewed all other recently issued, but not yet effective, accounting pronouncements, and does not believe the future adoption of any such pronouncements will have a material impact on its financial condition or the results of its operations. There were various other accounting standards and interpretations issued recently, none of which are expected to a have a material impact on our financial position, operations or cash flows. |
NATURE OF BUSINESS AND SIGNIF_3
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of fair value of assets acquired and liabilities | The following table sets forth, by level within the fair value hierarchy, the Company’s financial liabilities that were accounted for at fair value on a recurring basis as of October 31, 2020: October 31, 2020 Quoted Prices in Significant Significant Liabilities: Derivative Liabilities – embedded redemption feature $ 229,895 $ — $ — $ 229,895 Totals $ 229,895 $ — $ — $ 229,895 |
Schedule of disaggregation of Revenue | The following table shows revenue split between proprietary and third party website revenue for the nine months ended October 31, 2020 and 2019: Change 2020 2019 $ % Proprietary website revenue $ 3,704,215 $ 2,572,137 $ 1,132,078 44% Third party website revenue 3,557,891 3,646,249 (88,358 ) (2% ) Total revenue $ 7,262,106 $ 6,218,386 $ 1,043,720 17% |
PROPERTY (Tables)
PROPERTY (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property | Property consists of the following at October 31, 2020 and January 31, 2020: October 31, 2020 January 31, 2020 Office furniture, fixtures and equipment $ 85,413 $ 95,163 Shop equipment 43,004 43,004 Vehicles 40,433 40,433 Sub-total 168,850 178,600 Less: Accumulated depreciation (82,524 ) (64,091 ) Total Property $ 86,326 $ 114,509 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
Leases [Abstract] | |
Schedule of operating lease assets and liabilities | Below is a summary of our lease assets and liabilities at October 31, 2020 and January 31, 2020. Leases Classification October 31, 2020 January 31, 2020 Assets Operating Operating Lease Assets $ 368,605 $ 483,193 Liabilities Current Operating Current Operating Lease Liability $ 91,638 $ 101,984 Noncurrent Operating Noncurrent Operating Lease Liabilities 265,378 365,085 Total lease liabilities $ 357,016 $ 467,069 |
SHORT-TERM AND LONG-TERM DEBT (
SHORT-TERM AND LONG-TERM DEBT (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of debt | The components of the Company’s debt as of October 31, 2020 and January 31, 2020 were as follows: October 31, 2020 January 31, 2020 Working Capital Note Payable - $ 200,000 dated October 25, 2019, repayment of 10% of all eBay sales proceeds until paid in full, minimum payment of $20,417, fees of $4,173 effective interest rate of 7% (4) (4) $ — $ 6,978 Loan dated October 8, 2019, and revised February 29, 2020 and November 10, 2010 repayable June 30, 2022 with an additional interest payment of $20,000 102,168 # 63,635 Loan dated October 14, 2019, repayable in average monthly installments of $11,200, maturing April 14, 2020, interest and fees $7,200, effective interest 35.50% per annum (4)(5) — 30,000 Working Capital Note Payable - $ 200,000 dated July 19, 2019, repayment of 10% of all eBay sales proceeds until paid in full, minimum payment of $20,334, fees of $3,343 effective interest rate of 7% (4) — — Working Capital Note Payable - $200,000, dated March 5, 2020, repayment of 10% of all eBay sales proceeds until paid in full, minimum payments of $20,695 per quarter until paid, interest rate of 7% (3) — — SFS Funding Loan, original loan of $389,980 January 8, 2020, 24% interest, weekly payments of $6,006, maturing April 7, 2021 (5) 239,302 * 371,963 Forklift Note Payable, original note of $20,433 Sept 26, 2018, 6.23% interest, 60 monthly payments of $394.54 ending August 2023 (1) 13,250 # 16,106 Demand loan - $122,000 dated August 19, 2019 25% interest, 5% fee on outstanding balance (4)(6) — 122,000 Demand loan - $5,000 dated February 1, 2020, 15% interest, 5% fee on outstanding balance 5,000 * — Demand loan - $2,500, dated March 8, 2019, 25% interest, 5% fee on outstanding balance 2,500 * 2,500 Demand loan - $65,500 dated February 27, 2019, 25% interest, 5% fee on outstanding balance, Secured by the general assets of the Company 12,415 * 12,415 Promissory note -$60,000 dated September 18, 2020 maturing September 18, 2021, including $5,000 original issue discount, 15% compounded interest payable monthly 60,000 * — Promissory note -$425,000 dated August 28, 2020, including $50,000 original issue discount, 15% compounded interest payable monthly. The notes matures when the Company receives proceeds through a financing event of $825,000 plus accrued interest on the note. (7) 425,000 * — Promissory note -$1,200,000 dated August 28, 2020, maturing August 28, 2022, 12% interest payable monthly with the first six months interest deferred until the 6th month and added to principal . (8) 1,225,249 # — Promissory note -$50,000 dated August 31, 2020, maturing February 28, 2021, 10% interest payable at maturity 50,000 * — Total $ 2,134,884 $ 625,597 October 31, 2020 January 31, 2020 Short-Term Debt $ 794,217 $ 609,491 Current Portion of Long-Term Debt 433,184 4,166 Long-Term Debt 907,483 11,940 $ 2,134,884 $ 625,597 * Short-term loans # Long-term loans of $13,250 including current portion of $4,347 $102,168 including current portion of $0 $1,200,000 including current portion of $445,200 (1) Secured by equipment having a net book value of $18,243 (2) On February 29, 2020 the Company amended the agreement extending the maturity to June 1, 2022 from April 8, 2021 and changing monthly payments to $5,705 from $4,679 and interest rate from 15% to 13%.In addition prepaid rent and interest of $27,500 and $8,005 were added to the loan’s principal amount and the 1st monthly payment commence July 1, 2020. (3) The Company has pledged a security interest on all accounts receivable and banks accounts of the Company. (4) The Company has pledged a security interest on all assets of the Company. (5) The amounts due under the note are personally guaranteed by an officer or a director of the Company. (6) On February 26, 2020 the lender exchanged the $122,000 note along with $22,076 for 26 Class C preferred shares as part of a larger debt exchange transaction as described in Note 7. (7) Financing event would be a sale or issuance of assets, debt, shares or any means of raising capital. As the Company expects to enter into such a transaction within the next year this loan is treated as current. (8) Secured by all assets of the Company. Includes $25,249 accrued interest. Loan payable in 2 instalments, $428,837 payable August 28, 2021 and $826,800 payable August 28, 2022 |
SHORT-TERM CONVERTIBLE DEBT (Ta
SHORT-TERM CONVERTIBLE DEBT (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of short term convertible debt | The components of the Company’s debt as of October 31, 2020 and January 31, 2020 were as follows: Interest Default Interest Conversion Outstanding Principal at Maturity Date Rate Rate Price October 31, 2020 January 31, 2020 Nov 4, 2013* 12% 12% $1,800,000 $ 100,000 $ 100,000 Jan 31, 2014* 12% 18% $2,400,000 16,000 16,000 Apr 24, 2020* (ii) Y 12% 24% (3) — 69,730 July 31, 2013* 12% 12% $1,440,000 5,000 5,000 Jan 31, 2014* 12% 12% $2,400,000 30,000 30,000 Dec 24, 2015* (v) 8% 24% (1) 5,000 5,000 Feb 3, 2017* (ii)(iv) Y 8% 24% (4) — 2,500 Mar 3, 2017* (ii)(iv) 8% 24% (5) — — Mar 3, 2017* (ii)(iv) Y 8% 24% (5) — 33,000 Mar 24, 2017* (ii)(iv) Y 8% 24% (5) — 27,500 Apr 24, 2020* (ii)(iv)(vi) Y 12% 24% (3) — 517,787 July 8, 2015* (v) 8% 24% (1) 5,500 5,500 Apr 24, 2020 (ii)(iv)(vi)X 8% 24% (3) — 4,500 Apr 24, 2020 X 8% 24% (3) — 23,297 Apr 24, 2020 X 8% 24% (3) — 7,703 Apr 24, 2020 X 8% 24% (3) — 26,500 July 19, 2016* (v) 8% 24% (1) 5,000 5,000 Mar 23, 2019* (ii)(iv)(vi)X 15% 24% (3) — 4,444 Feb 20, 2019* (ix)X 10% 10% (6) — 343,047 Jun 6, 2019* (viii)X 12% 18% (7) — 43,577 Oct 24, 2019* (ii)(iv) Y 8% 24% (5) — 45,595 Nov 14, 2019* (ii)(iv) Y 8% 24% (5) — 86,625 Dec 14, 2019* (ii)(iv) Y 8% 24% (5) — 143,000 Dec 28, 2019* (i)(iv)(vi) Y 12% 18% (6) — 133,333 Jan 9, 2020* (ii)(iv) Y 8% 24% (2) — 68,750 March 1, 2020* (x)Z 10% 15% (8) — 40,939 March 14, 2020 (iv)(vi)X 15% 24% (9) — 44,967 April 3, 2020* (iv) Y 8% 24% (2) — 172,148 April 12, 2020* (xi) Y 10% 24% (3) — 185,130 May 13, 2020 (iv)(vi)X 15% 24% (9) — 55,000 May 14, 2020* (iv)(vi) Y 8% 24% (2) — 52,500 May 24, 2020 (iv)(vi)X 15% 24% (9) — 40,000 June 11, 2020 (iv)(vi)X 15% 24% (9) — 85,000 June 26, 2020* (iv)(vi) Y 15% 24% (9) — 76,000 July 11, 2020 (iv)(vii)X 15% 24% (9) — 60,000 Aug 29, 2020 (iv)(vii)X 15% 24% (9) — 45,000 Sep 16, 2020 (iv)(vii)X 15% 24% (9) — 34,000 Sep 27, 2020 (iv)(vii)X 15% 24% (9) — 34,000 Oct 24, 2020 (iv)(vii)X 15% 24% (9) — 122,000 Nov 7, 2020 (iv)(vii)X 15% 24% (10) — 42,000 Nov 22, 2020 (ii)(iv)(vi) Y 8% 24% (2) — 55,000 Dec 10, 2020 (iv)(vii)X 15% 24% (9) — 55,000 Dec 23, 2020 (ii)(iv)(vi) Y 8% 24% (2) — 30,000 Oct. 12, 2022 12% 16% (11) 250,000 — Sub-total 416,500 2,976,072 Debt Discount (152,621 ) (689,176 ) $ 263,879 $ 2,286,896 __________ (1) 52% of the lowest trading price for the fifteen trading days prior to conversion day. (2) 50% of the lowest trading price for the fifteen trading days prior to conversion day. (3) 50% of the lowest trading price for the twenty trading days prior to conversion day. (4) 50% of the lowest trading price for the fifteen trading days prior to conversion day, but not higher than $0.001. (5) 50% of the lowest trading price for the fifteen trading days prior to conversion day, but not higher than $0.005. (6) 60% of the lowest trading price for the twenty trading days prior to conversion day. (7) 52% of the lowest trading price for the twenty trading days prior to conversion day. (8) 55% of the lowest trading price for the twenty-five trading days prior to conversion day. (9) 50% of the lowest bid price for the twenty-five trading days prior to conversion day. (10) 45% of the lowest bid price for the fifteen trading days prior to conversion day (11) closing price on the day preceding the conversion date * In default. X On February 26, 2020 the Company exchanged convertible and short term notes and accrued interest for 250 Class C shares (transaction described further below). Y On August 28, 2020 the Company exchanged convertible notes and accrued interest for a $ 1,200,000 promissory note with a 2 year maturity bearing interest at 12%, 950,000 warrants with a 3 year maturity and an exercise price of $0.40 and 150 Class C preferred shares (transaction described further below). Z On August 25,2020 the Company settled a convertible note with principal of $ 40,938 for a $14,329 cash payment. On September 14, 2020 the Company settled $20,111 in accrued interest and default interest related to this note for a cash payment of $52,446 (transaction described further below). (i) If the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the effective Conversion Price as calculated in Section 4(a) is less than $0.0001 at any time (regardless of whether or not a Conversion Notice has been submitted to the Company), the Principal Amount of the Note shall increase by ten thousand dollars ($10,000) (under Holder’s and Company’s expectation that any Principal Amount increase will tack back to the Issuance Date). In addition, the Conversion Price shall be permanently redefined to equal the lesser of (a) $0.00001 or (b) 50% of the lowest traded price during the twenty five (25) consecutive Trading Days immediately preceding the applicable Conversion Date on which the Holder elects to convert all or part of this Note, subject to adjustment as provided in this Note. If at any time while this Note is outstanding, an Event of Default (as defined herein) occurs, then an additional discount of 15% shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 65% assuming no other adjustments are triggered hereunder). These above contingencies have not occurred. (ii) In the event the Company experiences a DTC ” Chill” on its shares, the conversion price shall be decreased to 40% instead of 50% while that “Chill” is in effect. If the Company fails to maintain the share reserve at the 4x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. (iii) The share purchase agreements ancillary to the convertible note agreements do not allow the lender to engage in short sales. (iv) If the Company becomes delinquent or continues its delinquency in its periodic filings with the SEC after the 6-months anniversary of the note, then the holder is entitled to use the lowest closing bid price during the delinquency period as a base price for the conversion. (v) In the event the Company experiences a DTC ” Chill” on its shares, the conversion price shall be decreased to 42% instead of 52% while that “Chill” is in effect. (vi) If the Company fails to maintain the share reserve at the 4x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. (vii) If the Company fails to maintain the share reserve at the 3x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. (viii) If at any time while this Note is outstanding, an event of default occurs, then an additional discount of 15% shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 65% assuming no other adjustments are triggered hereunder). If at any time while this Note is outstanding, the Borrower’s Common Stock are not deliverable via DWAC, an additional 10% discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding. (ix) If the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the effective Conversion Price is less than $0.01 at any time, the Principal Amount of the Note shall increase by ten thousand dollars ($10,000). In addition, the Conversion price shall be permanently redefined to equal the lesser of (a) $0.001 or (b) 50% of the lowest traded price during the twenty five (25) consecutive Trading Days immediately preceding the applicable Conversion Date on which the Holder elects to convert all or part of this Note, subject to adjustment as provided in this Note. (x) In the event that shares of the Borrower’s Common Stock are not deliverable via DWAC following the conversion of any amount hereunder, an additional ten percent (10%) discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 55% assuming no other adjustments are triggered hereunder). Additionally, if the Borrower fails to comply with the reporting requirements of the Exchange Act (including but not limited to becoming late or delinquent in its filings, even if the Borrower subsequently cures such delinquency) at any time while after the Issue Date, and/or the Borrower shall cease to be subject to the reporting requirements of the exchange Act, an additional fifteen percent (15%) discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 60% assuming no other adjustments are triggered hereunder). (xi) If the Borrower’s Common stock is chilled for deposit at DTC, becomes chilled at any point while this Note remains outstanding or deposit or other additional fees are payable due to a Yield Sign, Stop Sign or other trading restrictions, or if the closing price at any time falls below $0.01 (as appropriately and equitably adjusted for stock splits, stock dividends, stock contributions and similar events), then an additional 15% discount will be attributed to the Conversion Price for any and all Conversions submitted thereafter. |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of changes in fair value of the derivative liability | The following table presents changes in Level 3 liabilities measured at fair value for the nine months ended October 31, 2020. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities) inputs. Level 3 Derivatives Balance, January 31, 2020 $ 2,611,125 Change due to Settlement of Debt (3,001,332 ) Changes due to Conversion of Notes Payable (20,185 ) Changes due to issuance of New Convertible Notes 132,613 Mark to Market Change in Derivatives 507,674 Balance, October 31, 2020 $ 229,895 |
Schedule of derivative liability | A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liabilities and embedded conversion feature that are categorized within Level 3 of the fair value hierarchy as of October 31, 2020 is as follows: Embedded Derivative Liability As of Strike price $ 0.37 - 4.30 Contractual term (years) 0.25 - 0.95 years Volatility (annual) 352.1% - 557.3% High yield cash rate 26.55% - 37.72% Underlying fair market value $0.11 Risk-free rate 0.09% - 0.13% Dividend yield (per share) 0% |
STOCKHOLDERS' DEFICIT (Tables)
STOCKHOLDERS' DEFICIT (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
Equity [Abstract] | |
Schedule of warrants fair value | The warrants having a fair value of $351,000 with a corresponding increase in additional paid-in capital valued using the Black-Scholes option pricing model according to the following assumptions: Expected volatility 506.8% Exercise price $0.40 Stock price $0.37 Expected life 3 years Risk-free interest rate 0.19% Dividend yield 0% |
Schedule of issued options and warrants outstanding | The Company had the following options and warrants outstanding at October 31, 2020: Issued To # Warrants Dated Expire Strike Price Expired Exercised Lender 1.4 01/08/2018 01/08/2021 $1,800 per share N N Lender 950,000 08/28/2020 08/28/2023 $0.40 per share N N |
Schedule of options and warrants outstanding | Options Weighted Average Warrants Weighted Average Outstanding at January 31, 2020 — $ — 1.4 $ 1,800 Granted — — 950,000 0.40 Exercised — — — — Forfeited and canceled — — — — Outstanding at October 31, 2020 — $ — 950,001 $ 0.40 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of minimum lease obligations | Maturity of Lease Liabilities Operating October 31 2021 $ 121,917 October 31, 2022 120,657 October 31, 2023 81,203 October 31, 2024 31,203 October 31, 2025 30,003 After October 31, 2025 40,005 Total lease payments 424,988 Less: Interest (67,972 ) Present value of lease liabilities $ 357,016 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of net income (loss) | The net income (loss) per common share amounts were determined as follows: For the Three Months Ended October 31, 2020 2019 Numerator: Net income (loss) available to common shareholders $ 1,100,073 $ (994,960 ) Denominator: Weighted average shares – basic 1,067,074 20,683 Net income (loss) per share – basic $ 1.03 $ (48.11 ) Effect of common stock equivalents Add: interest expense on convertible debt 44,110 88,911 Add: amortization of debt discount 67,357 212,004 Less: gain on settlement of debt on convertible notes (2,845,742 ) — Add (Less): loss (gain) on change of derivative liabilities 939,873 196,303 Net income (loss) adjusted for common stock equivalents (694,329 ) (497,742 ) Dilutive effect of common stock equivalents: Convertible notes and accrued interest 144,158 — Convertible Class C Preferred shares 3,107,724 — Warrants (1) 950,001 — Denominator: Weighted average shares – diluted 5,268,957 20,683 Net income (loss) per share – diluted $ (0.13 ) $ (48.11 ) For the Nine Months Ended October 31, 2020 2019 Numerator: Net income (loss) available to common shareholders $ 2,681,933 $ (2,554,510 ) Denominator: Weighted average shares – basic 797,126 7,613 Net income (loss) per share – basic $ 3.36 $ (335.55 ) Effect of common stock equivalents Add: interest expense on convertible debt 253,691 340,367 Add: amortization of debt discount 694,168 462,175 Less: gain on settlement of debt on convertible notes (4,793,113 ) (67,622 ) Add (Less): loss (gain) on change of derivative liabilities 507,674 107,953 Net income (loss) adjusted for common stock equivalents (655,647) (1,711,368 ) Dilutive effect of common stock equivalents: Convertible notes and accrued interest 144,158 — Convertible Class C Preferred shares 3,107,724 — Warrants (1) 950,001 — Denominator: Weighted average shares – diluted 4,999,009 7,613 Net income (loss) per share – diluted $ (0.13) $ (335.55 ) |
Schedule of diluted loss per share | The anti-dilutive shares of common stock equivalents for the nine months ended October 31, 2020 and October 31, 2019 were as follows: October 31, 2020 2019 Convertible notes and accrued interest — 756,759 Convertible Class C Preferred shares — 174,490 Warrants — 1 Total — 931,250 |
NATURE OF BUSINESS AND SIGNIF_4
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Oct. 31, 2020 | Jan. 31, 2020 | |
Liabilities: | |||
Derivative Liabilities - embedded redemption feature | $ 229,895 | ||
Totals | 229,895 | $ 2,611,125 | [1] |
Quoted Prices in Active Markets For Identical Assets (Level 1) [Member] | |||
Liabilities: | |||
Derivative Liabilities - embedded redemption feature | |||
Totals | |||
Significant Other Observable Inputs (Level 2) [Member] | |||
Liabilities: | |||
Derivative Liabilities - embedded redemption feature | |||
Totals | |||
Significant Unobservable Inputs (Level 3) [Member] | |||
Liabilities: | |||
Derivative Liabilities - embedded redemption feature | 229,895 | $ 2,611,125 | |
Totals | $ 229,895 | ||
[1] | Derived from audited information |
NATURE OF BUSINESS AND SIGNIF_5
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | 9 Months Ended | |
Oct. 31, 2020 | Oct. 31, 2019 | |
Total revenue | $ 7,262,106 | $ 6,218,386 |
Change in revenue | $ 1,043,720 | |
Percentage change in revenue | 17.00% | |
Proprietary Website Revenue [Member] | ||
Total revenue | $ 3,704,215 | 2,572,137 |
Change in revenue | $ 1,132,078 | |
Percentage change in revenue | 44.00% | |
Third Party Website Revenue [Member] | ||
Total revenue | $ 3,557,891 | $ 3,646,249 |
Change in revenue | $ (88,358) | |
Percentage change in revenue | (2.00%) |
NATURE OF BUSINESS AND SIGNIF_6
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||||
Nov. 29, 2018 | Dec. 22, 2017 | Oct. 31, 2020 | Feb. 25, 2020 | Oct. 31, 2019 | Feb. 02, 2019 | |
Date of incorporation | Dec. 5, 2007 | |||||
Business acquisition transaction of equity securities, description | The Company entered into a transaction (the “Share Exchange”), pursuant to which the Company acquired 100% of the issued and outstanding equity securities of The 4LESS Corp. (“4LESS”), in exchange for the issuance of (i) nineteen thousand (19,000) shares of Series B Preferred Stock, (ii) six thousand seven hundred fifty (6,750) shares of Series C Preferred Stock, and (iii) 870 shares of Series D Preferred Stock. The Series C Preferred Shares have a right to convert into common stock of the Company by multiplying the number of issued and outstanding shares of common stock by 2.63 on the conversion date. | |||||
Warrants to purchase common shares | 950,000 | |||||
Additional net lease asset | $ 454,087 | |||||
Additional lease liabilities | $ 454,087 | |||||
Percentage of inventory | 55.00% | 53.00% | ||||
Accounts payable | $ 393,729 | $ 128,461 | ||||
Warrant [Member] | ||||||
Warrants to purchase common shares | 0 | 583 | ||||
Minimum [Member] | ||||||
Federal statutory tax rate | 21.00% | |||||
Maximum [Member] | ||||||
Federal statutory tax rate | 35.00% |
GOING CONCERN AND FINANCIAL P_2
GOING CONCERN AND FINANCIAL POSITION (Details Narrative) - USD ($) | Oct. 31, 2020 | Jan. 31, 2020 | Oct. 31, 2019 | Jan. 31, 2019 | |
Going Concern and Financial Position [Abstract] | |||||
Accumulated deficit | $ (18,887,220) | $ (21,569,153) | |||
Working capital deficit | 3,160,803 | ||||
Cash and cash equivalents | 261,072 | $ 162,124 | [1] | $ 128,028 | $ 59,401 |
Short-term debt in default | $ 166,500 | ||||
[1] | Derived from audited information |
PROPERTY (Details)
PROPERTY (Details) - USD ($) | Oct. 31, 2020 | Jan. 31, 2020 | |
Sub-total | $ 168,850 | $ 178,600 | |
Less: Accumulated depreciation | (82,524) | (64,091) | |
Total Property | 86,326 | 114,509 | [1] |
Office Furniture, Fixtures and Equipment [Member] | |||
Sub-total | 85,413 | 95,163 | |
Shop Equipment [Member] | |||
Sub-total | 43,004 | 43,004 | |
Vehicles [Member] | |||
Sub-total | $ 40,433 | $ 40,433 | |
[1] | Derived from audited information |
PROPERTY (Details Narrative)
PROPERTY (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
Purchase property | $ 1,000 | |||
Purchase of Property and Equipment | $ 0 | $ 3,948 | $ 3,948 | |
Depreciation expense | 6,299 | 7,033 | 18,897 | 26,021 |
Gain on sale of property and equipment | $ 4,436 | 464 | 4,436 | |
Office equipment [Member] | ||||
Cost | 9,750 | |||
Net book value | 9,286 | |||
Proceeds received | 9,750 | |||
Gain on sale of property and equipment | $ 464 | |||
Vehicles [Member] | ||||
Cost | 144,662 | |||
Net book value | 132,599 | |||
Proceeds received | 137,035 | |||
Gain on sale of property and equipment | $ 4,436 | |||
Computer [Member] | ||||
Property for their estimated useful lives | 3 years | |||
Other Assets [Member] | ||||
Property for their estimated useful lives | 7 years |
LEASES (Details)
LEASES (Details) - USD ($) | Oct. 31, 2020 | Jan. 31, 2020 | |
Assets | |||
Operating Lease Assets | $ 368,605 | $ 483,193 | |
Current | |||
Current Operating Lease Liability | 91,638 | 101,984 | [1] |
Noncurrent | |||
Noncurrent Operating Lease Liabilities | 265,378 | 365,085 | [1] |
Total lease liabilities | $ 357,016 | $ 467,069 | |
[1] | Derived from audited information |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | Oct. 23, 2020 | Feb. 29, 2020 | Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 |
Operating lease cost | $ 23,279 | $ 30,360 | $ 91,437 | $ 83,762 | ||
Leases, description | The Company and landlord terminated this lease effective February 29, 2020. | Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. | ||||
Incremental borrowing rate | 8.00% | |||||
Description of renewal lease term | One to 17 years or more, | |||||
September 2019 Lease [Member] | ||||||
Annual rent | $ 15,480 | |||||
Lease term | 3 years | |||||
Renewal lease term | 1 year | |||||
Termination of operating lease asset and operating lease liability | $ 45,032 |
PPP LOAN (Details Narrative)
PPP LOAN (Details Narrative) - USD ($) | May 02, 2020 | Oct. 31, 2020 | Jan. 31, 2020 | [1] |
PPP Loan-current portion | $ 17,293 | |||
Paycheck Protection Promissory (PPP) [Member] | ||||
Proceeds from PPP Loan | $ 209,447 | |||
Maturity of loan | May 2, 2022 | |||
Monthly instalments | $ 8,818 | |||
PPP Loan-current portion | 17,293 | |||
PPP Loan-Long term | $ 192,154 | |||
Fixed rate per annum | 1.00% | |||
[1] | Derived from audited information |
SHORT-TERM AND LONG-TERM DEBT_2
SHORT-TERM AND LONG-TERM DEBT (Details) - USD ($) | Oct. 31, 2020 | Jan. 31, 2020 | |
Total | $ 2,134,884 | $ 625,597 | |
Working Capital Note Payable Two [Member] | |||
Debt | |||
Loan One [Member] | |||
Debt | 102,168 | [1] | 63,635 |
Loan Two [Member] | |||
Debt | 30,000 | ||
SFS Funding Loan [Member] | |||
Debt | 239,302 | [2] | 371,963 |
Forklift Note Payable [Member] | |||
Debt | 13,250 | [1] | 16,106 |
Demand Loan [Member] | |||
Debt | 122,000 | ||
Demand Loan One [Member] | |||
Debt | 5,000 | [2] | |
Demand Loan Two [Member] | |||
Debt | 2,500 | [2] | 2,500 |
Demand Loan Three [Member] | |||
Debt | 12,415 | [2] | 12,415 |
Working Capital Note Payable Three [Member] | |||
Debt | |||
Total | |||
Working Capital Note Payable One [Member] | |||
Debt | 6,978 | ||
Amazon Working Capital Note [Member] | |||
Debt | |||
Promissory Note [Member] | |||
Debt | 60,000 | [2] | |
Promissory Note One [Member] | |||
Debt | 425,000 | [2] | |
Promissory Note Two [Member] | |||
Debt | 1,225,249 | [1] | |
Promissory Note Three [Member] | |||
Debt | $ 50,000 | [2] | |
[1] | Long-term loans of $13,250 including current portion of $4,347 $102,168 including current portion of $0 $1,200,000 including current portion of $445,200. | ||
[2] | Short-term loans |
SHORT-TERM AND LONG-TERM DEBT_3
SHORT-TERM AND LONG-TERM DEBT (Details 1) - USD ($) | Oct. 31, 2020 | Jan. 31, 2020 | |
Debt Disclosure [Abstract] | |||
Short-Term Debt | $ 794,217 | $ 609,491 | [1] |
Current Portion of Long-Term Debt | 433,184 | 4,166 | |
Long-Term Debt | 907,483 | 11,940 | |
Total | $ 2,134,884 | $ 625,597 | |
[1] | Derived from audited information |
SHORT-TERM AND LONG-TERM DEBT_4
SHORT-TERM AND LONG-TERM DEBT (Details Narrative) - USD ($) | Feb. 29, 2020 | Feb. 26, 2020 | Oct. 31, 2020 | Feb. 28, 2020 | Jan. 31, 2020 | ||
Maturity date, description | Maturity to June 1, 2022 from April 8, 2021 | ||||||
Description of payment terms | monthly | ||||||
Accrued interest payable | $ 13,547 | $ 0 | |||||
Short-term notes | 794,217 | 609,491 | [1] | ||||
Long-term loan, current | 433,184 | 4,166 | [1] | ||||
Long-term loan | 907,483 | 11,940 | |||||
Prepaid rent | $ 0 | $ 25,700 | $ 0 | ||||
Loan Payable [Member] | |||||||
Description of payment terms | Loan payable in 2 instalments, $428,837 payable August 28, 2021 and $826,800 payable August 28, 2022. | ||||||
Accrued interest payable | $ 25,249 | ||||||
Promissory Note Three [Member] | |||||||
Notes payable principal amount | $ 50,000 | ||||||
Debt issuance date | Aug. 31, 2020 | ||||||
Maturity date | Feb. 28, 2021 | ||||||
Percentage of debt instrument interest rate | 10.00% | ||||||
Promissory Note Two [Member] | |||||||
Notes payable principal amount | [2] | $ 1,200,000 | |||||
Debt issuance date | [2] | Aug. 28, 2020 | |||||
Maturity date | [2] | Aug. 28, 2022 | |||||
Percentage of debt instrument interest rate | [2] | 12.00% | |||||
Description of payment terms | [2] | Interest payable monthly with the first six months interest deferred until the 6th month and added to principal. | |||||
Promissory Note One [Member] | |||||||
Notes payable principal amount | [3] | $ 425,000 | |||||
Debt issuance date | [3] | Aug. 28, 2020 | |||||
Percentage of debt instrument interest rate | [3] | 15.00% | |||||
Original issue discount | [3] | $ 50,000 | |||||
Accrued interest payable | [3] | 825,000 | |||||
Promissory Note [Member] | |||||||
Notes payable principal amount | $ 60,000 | ||||||
Debt issuance date | Sep. 18, 2020 | ||||||
Maturity date | Sep. 18, 2021 | ||||||
Percentage of debt instrument interest rate | 15.00% | ||||||
Original issue discount | $ 5,000 | ||||||
Working Capital Note Payable One [Member] | |||||||
Notes payable principal amount | $ 200,000 | ||||||
Debt issuance date | Oct. 25, 2019 | ||||||
Maturity date | [4] | Jan. 25, 2020 | |||||
Note payable percentage | 10.00% | ||||||
Percentage of debt instrument interest rate | [4] | 7.00% | |||||
Debt fees | $ 4,173 | ||||||
Debt instrument periodic payment | $ 20,417 | ||||||
Debt repayment date | Feb. 5, 2020 | ||||||
Loan One [Member] | |||||||
Debt issuance date | Oct. 8, 2019 | ||||||
Maturity date | Jun. 30, 2022 | ||||||
Debt instrument periodic payment | $ 20,000 | ||||||
Debt repayment date | Feb. 29, 2020 | ||||||
Debt revised date | Nov. 10, 2010 | ||||||
Loan One [Member] | Minimum [Member] | |||||||
Percentage of debt instrument interest rate | 13.00% | ||||||
Debt instrument periodic payment | $ 4,679 | ||||||
Prepaid rent | $ 8,005 | ||||||
Loan One [Member] | Maximum [Member] | |||||||
Percentage of debt instrument interest rate | 15.00% | ||||||
Debt instrument periodic payment | $ 5,705 | ||||||
Prepaid rent | $ 27,500 | ||||||
Loan Two [Member] | |||||||
Debt issuance date | Oct. 14, 2019 | ||||||
Maturity date | Apr. 14, 2020 | ||||||
Percentage of debt instrument interest rate | [4],[5] | 35.50% | |||||
Debt fees | $ 7,200 | ||||||
Debt instrument periodic payment | 11,200 | ||||||
Working Capital Note Payable Two [Member] | |||||||
Notes payable principal amount | $ 200,000 | ||||||
Debt issuance date | Jul. 19, 2019 | ||||||
Maturity date | Oct. 22, 2019 | ||||||
Note payable percentage | 10.00% | ||||||
Percentage of debt instrument interest rate | [4] | 7.00% | |||||
Debt fees | $ 3,343 | ||||||
Debt instrument periodic payment | 20,334 | ||||||
Working Capital Note Payable Three [Member] | |||||||
Notes payable principal amount | $ 200,000 | ||||||
Debt start date | Mar. 5, 2020 | ||||||
Note payable percentage | 10.00% | ||||||
Percentage of debt instrument interest rate | [6] | 7.00% | |||||
Debt instrument periodic payment | $ 20,695 | ||||||
SFS Funding Loan [Member] | |||||||
Notes payable principal amount | $ 389,980 | ||||||
Debt issuance date | Jan. 8, 2020 | ||||||
Maturity date | [5] | Apr. 7, 2021 | |||||
Note payable percentage | 24.00% | ||||||
Description of payment terms | Weekly | ||||||
Debt instrument periodic payment | $ 6,006 | ||||||
Forklift Note Payable [Member] | |||||||
Notes payable principal amount | $ 20,433 | ||||||
Debt issuance date | Sep. 26, 2018 | ||||||
Maturity date | [7] | Aug. 31, 2023 | |||||
Note payable percentage | 6.23% | ||||||
Description of payment terms | 60 monthly payments | ||||||
Debt instrument periodic payment | $ 395 | ||||||
Secured equipment net book value | 18,243 | ||||||
Demand Loan [Member] | |||||||
Notes payable principal amount | $ 122,000 | ||||||
Debt issuance date | Aug. 19, 2019 | ||||||
Note payable percentage | 25.00% | ||||||
Maturity date, description | [4],[8] | 5% fee on outstanding balance | |||||
Demand Loan [Member] | Preferred Series C [Member] | |||||||
Notes payable principal amount | $ 122,000 | ||||||
Exchange amount | $ 22,076 | ||||||
Demand Loan One [Member] | |||||||
Notes payable principal amount | $ 5,000 | ||||||
Debt issuance date | Feb. 1, 2020 | ||||||
Note payable percentage | 15.00% | ||||||
Maturity date, description | 5% fee on outstanding balance | ||||||
Demand Loan Two [Member] | |||||||
Notes payable principal amount | $ 2,500 | ||||||
Debt issuance date | Mar. 8, 2019 | ||||||
Note payable percentage | 25.00% | ||||||
Maturity date, description | 5% fee on outstanding balance | ||||||
Demand Loan Three [Member] | |||||||
Notes payable principal amount | $ 65,500 | ||||||
Debt issuance date | Feb. 27, 2019 | ||||||
Note payable percentage | 25.00% | ||||||
Maturity date, description | 5% fee on outstanding balance, Secured by the general assets of the Company | ||||||
Long-Term Loans [Member] | |||||||
Long-term loan, current | $ 4,347 | ||||||
Long-term loan | 13,250 | ||||||
Long-Term Loans [Member] | |||||||
Long-term loan, current | 0 | ||||||
Long-term loan | 102,168 | ||||||
Long-Term Loans [Member] | |||||||
Long-term loan, current | 1,200,000 | ||||||
Long-term loan | $ 445,200 | ||||||
[1] | Derived from audited information | ||||||
[2] | Secured by all assets of the Company. Includes $25,249 accrued interest. Loan payable in 2 instalments, $428,837 payable August 28, 2021 and $826,800 payable August 28, 2022 | ||||||
[3] | Financing event would be a sale or issuance of assets, debt, shares or any means of raising capital. As the Company expects to enter into such a transaction within the next year this loan is treated as current. | ||||||
[4] | The Company has pledged a security interest on all assets of the Company. | ||||||
[5] | The amounts due under the note are personally guaranteed by an officer or a director of the Company. | ||||||
[6] | The Company has pledged a security interest on all accounts receivable and banks accounts of the Company. | ||||||
[7] | Secured by equipment having a net book value of $18,243 | ||||||
[8] | On February 26, 2020 the lender exchanged the $122,000 note along with $22,076 for 26 Class C preferred shares as part of a larger debt exchange transaction as described in Note 7. |
SHORT-TERM CONVERTIBLE DEBT (De
SHORT-TERM CONVERTIBLE DEBT (Details) - USD ($) | 9 Months Ended | |||
Oct. 31, 2020 | Jan. 31, 2020 | |||
Sub-total | $ 416,500 | $ 2,976,072 | ||
Debt Discount | (152,621) | (689,176) | ||
Total | $ 263,879 | 2,286,896 | ||
Debt Due On Oct. 12, 2022 [Member] | ||||
Interest rate | [1] | 12.00% | ||
Default interest rate | [1] | 16.00% | ||
Sub-total | [1] | $ 250,000 | ||
Debt Due on Nov 4, 2013 [Member] | ||||
Maturity date | [2] | Nov. 4, 2013 | ||
Interest rate | 12.00% | |||
Default interest rate | [2] | 12.00% | ||
Conversion price | $ 1,800,000 | |||
Sub-total | $ 100,000 | 100,000 | ||
Debt Due On Jan 31, 2014 [Member] | ||||
Maturity date | [2] | Jan. 31, 2014 | ||
Interest rate | 12.00% | |||
Default interest rate | [2] | 18.00% | ||
Conversion price | $ 2,400,000 | |||
Sub-total | $ 16,000 | 16,000 | ||
Debt Due on Apr 24, 2020 [Member] | ||||
Maturity date | [2],[3],[4] | Apr. 24, 2020 | ||
Interest rate | [3] | 12.00% | ||
Default interest rate | [2],[3],[4] | 24.00% | ||
Sub-total | [3] | 69,730 | ||
Debt Due On July 31, 2013 [Member] | ||||
Maturity date | [2] | Jul. 31, 2013 | ||
Interest rate | 12.00% | |||
Default interest rate | [2] | 12.00% | ||
Conversion price | $ 1,440,000 | |||
Sub-total | $ 5,000 | 5,000 | ||
Debt Due on Jan 31, 2014 [Member] | ||||
Maturity date | [2] | Jan. 31, 2014 | ||
Interest rate | 12.00% | |||
Default interest rate | [2] | 12.00% | ||
Conversion price | $ 2,400,000 | |||
Sub-total | $ 30,000 | 30,000 | ||
Debt Due On Dec 24, 2015 [Member] | ||||
Maturity date | [2],[5] | Dec. 24, 2015 | ||
Interest rate | [5] | 8.00% | ||
Default interest rate | [2],[5] | 24.00% | ||
Sub-total | [5] | $ 5,000 | 5,000 | |
Debt Due On Feb 3, 2017 [Member] | ||||
Maturity date | [2],[3],[4],[6] | Feb. 3, 2017 | ||
Interest rate | [3],[6] | 8.00% | ||
Default interest rate | [2],[3],[4],[6] | 24.00% | ||
Sub-total | [3],[6] | 2,500 | ||
Debt Due On Mar 3, 2017 [Member] | ||||
Maturity date | [2],[3],[6] | Mar. 3, 2017 | ||
Interest rate | [3],[6] | 8.00% | ||
Default interest rate | [2],[3],[6] | 24.00% | ||
Sub-total | [3],[6] | |||
Debt Due On Mar 3, 2017 [Member] | ||||
Maturity date | [2],[3],[4],[6] | Mar. 3, 2017 | ||
Interest rate | [3],[6] | 8.00% | ||
Default interest rate | [2],[3],[4],[6] | 24.00% | ||
Sub-total | [3],[6] | 33,000 | ||
Debt Due On Mar 24, 2017 [Member] | ||||
Maturity date | [2],[3],[4],[6] | Mar. 24, 2017 | ||
Interest rate | [3],[6] | 8.00% | ||
Default interest rate | [2],[3],[4],[6] | 24.00% | ||
Sub-total | [3],[6] | 27,500 | ||
Debt Due On Apr 24, 2020 [Member] | ||||
Maturity date | [2],[3],[4],[6],[7] | Apr. 24, 2020 | ||
Interest rate | [3],[6],[7] | 12.00% | ||
Default interest rate | [2],[3],[4],[6],[7] | 24.00% | ||
Sub-total | [3],[6],[7] | 517,787 | ||
Debt Due On July 8, 2015 [Member] | ||||
Maturity date | [2],[5] | Jul. 8, 2015 | ||
Interest rate | [5] | 8.00% | ||
Default interest rate | [2],[5] | 24.00% | ||
Sub-total | [5] | $ 5,500 | 5,500 | |
Debt Due On Apr 24, 2020 [Member] | ||||
Maturity date | [3],[6],[7],[8] | Apr. 24, 2020 | ||
Interest rate | [3],[6],[7] | 8.00% | ||
Default interest rate | [3],[6],[7],[8] | 24.00% | ||
Sub-total | [3],[6],[7] | 4,500 | ||
Debt Due On Apr 24, 2020 [Member] | ||||
Maturity date | [8] | Apr. 24, 2020 | ||
Interest rate | 8.00% | |||
Default interest rate | [8] | 24.00% | ||
Sub-total | 23,297 | |||
Debt Due On Apr 24, 2020 [Member] | ||||
Maturity date | [8] | Apr. 24, 2020 | ||
Interest rate | 8.00% | |||
Default interest rate | [8] | 24.00% | ||
Sub-total | 7,703 | |||
Debt Due On Apr 24, 2020 [Member] | ||||
Maturity date | [8] | Apr. 24, 2020 | ||
Interest rate | 8.00% | |||
Default interest rate | [8] | 24.00% | ||
Sub-total | 26,500 | |||
Debt Due On July 19, 2016 [Member] | ||||
Maturity date | [2],[5] | Jul. 19, 2016 | ||
Interest rate | 8.00% | |||
Default interest rate | [2],[5] | 24.00% | ||
Sub-total | $ 5,000 | 5,000 | ||
Debt Due On Mar 23, 2019 [Member] | ||||
Maturity date | [2],[3],[6],[7],[8] | Mar. 23, 2019 | ||
Interest rate | [3],[6],[7] | 15.00% | ||
Default interest rate | [2],[3],[6],[7],[8] | 24.00% | ||
Sub-total | [3],[6],[7] | 4,444 | ||
Debt Due On Feb 20, 2019 [Member] | ||||
Maturity date | [2],[8],[9] | Feb. 20, 2019 | ||
Interest rate | [9] | 10.00% | ||
Default interest rate | [2],[8],[9] | 10.00% | ||
Sub-total | [9] | 343,047 | ||
Debt Due On Jun 6, 2019 [Member] | ||||
Maturity date | [2],[8],[10] | Jun. 6, 2019 | ||
Interest rate | [10] | 12.00% | ||
Default interest rate | [2],[8],[10] | 18.00% | ||
Sub-total | [10] | 43,577 | ||
Debt Due On Oct 24, 2019 [Member] | ||||
Maturity date | [2],[3],[4] | Oct. 24, 2019 | ||
Interest rate | [3],[6] | 8.00% | ||
Default interest rate | [2],[3],[4] | 24.00% | ||
Sub-total | [3],[6] | 45,595 | ||
Debt Due On Nov 14, 2019 [Member] | ||||
Maturity date | [2],[3],[4] | Nov. 14, 2019 | ||
Interest rate | [3],[6] | 8.00% | ||
Default interest rate | [2],[3],[4] | 24.00% | ||
Sub-total | [3],[6] | 86,625 | ||
Debt Due On Dec 14, 2019 [Member] | ||||
Maturity date | [2],[3],[4],[6] | Dec. 14, 2019 | ||
Interest rate | [3],[6] | 8.00% | ||
Default interest rate | [2],[3],[4],[6] | 24.00% | ||
Sub-total | [3],[6] | 143,000 | ||
Debt Due On Dec 28, 2019 [Member] | ||||
Maturity date | [2],[4],[6],[7],[11] | Dec. 28, 2019 | ||
Interest rate | [6],[7],[11] | 12.00% | ||
Default interest rate | [2],[4],[6],[7],[11] | 18.00% | ||
Sub-total | [6],[7],[11] | 133,333 | ||
Debt Due On Jan 9, 2020 [Member] | ||||
Maturity date | [2],[3],[4] | Jan. 9, 2020 | ||
Interest rate | [3],[6] | 8.00% | ||
Default interest rate | [2],[3],[4] | 24.00% | ||
Sub-total | [3],[6] | 68,750 | ||
Debt Due On March 1, 2020 [Member] | ||||
Maturity date | [2],[12],[13] | Mar. 1, 2020 | ||
Interest rate | [12] | 10.00% | ||
Default interest rate | [2],[12],[13] | 15.00% | ||
Sub-total | [12] | 40,939 | ||
Debt Due On March 14, 2020 [Member] | ||||
Maturity date | [6],[7],[8] | Mar. 14, 2020 | ||
Interest rate | [6] | 15.00% | ||
Default interest rate | [6],[7],[8] | 24.00% | ||
Sub-total | [6] | 44,967 | [7] | |
Debt Due On April 3, 2020 [Member] | ||||
Maturity date | [2],[4] | Apr. 3, 2020 | ||
Interest rate | [6] | 8.00% | ||
Default interest rate | [2],[4] | 24.00% | ||
Sub-total | [6] | 172,148 | ||
Debt Due On April 12, 2020 [Member] | ||||
Maturity date | [2],[4],[14] | Apr. 12, 2020 | ||
Interest rate | 10.00% | |||
Default interest rate | [2],[4],[14] | 24.00% | ||
Sub-total | 185,130 | |||
Debt Due On May 13, 2020 [Member] | ||||
Maturity date | [6],[7],[8] | May 13, 2020 | ||
Interest rate | [6],[7] | 15.00% | ||
Default interest rate | [6],[7],[8] | 24.00% | ||
Sub-total | [6],[7] | 55,000 | ||
Debt Due On May 14, 2020 [Member] | ||||
Maturity date | [2],[4],[6],[7] | May 14, 2020 | ||
Interest rate | [6],[7] | 8.00% | ||
Default interest rate | [2],[4],[6],[7] | 24.00% | ||
Sub-total | [6],[7] | 52,500 | ||
Debt Due On May 24, 2020 [Member] | ||||
Maturity date | [6],[7],[8] | May 24, 2020 | ||
Interest rate | [6],[7] | 15.00% | ||
Default interest rate | [6],[7],[8] | 24.00% | ||
Sub-total | [6],[7] | 40,000 | ||
Debt Due On June 11, 2020 [Member] | ||||
Maturity date | [6],[7],[8] | Jun. 11, 2020 | ||
Interest rate | [6],[7] | 15.00% | ||
Default interest rate | [6],[7],[8] | 24.00% | ||
Sub-total | [6],[7] | 85,000 | ||
Debt Due On June 26, 2020 [Member] | ||||
Maturity date | [2],[4],[6],[7] | Jun. 26, 2020 | ||
Interest rate | [6],[7] | 15.00% | ||
Default interest rate | [2],[4],[6],[7] | 24.00% | ||
Sub-total | [6],[7] | 76,000 | ||
Debt Due On July 11, 2020 [Member] | ||||
Maturity date | [6],[8],[15] | Jul. 11, 2020 | ||
Interest rate | [6],[15] | 15.00% | ||
Default interest rate | [6],[8],[15] | 24.00% | ||
Sub-total | [6],[15] | 60,000 | ||
Debt Due On Aug 29, 2020 [Member] | ||||
Maturity date | [6],[8],[15] | Aug. 29, 2020 | ||
Interest rate | [6],[15] | 15.00% | ||
Default interest rate | [6],[8],[15] | 24.00% | ||
Sub-total | [6],[15] | 45,000 | ||
Debt Due On Sep 16, 2020 [Member] | ||||
Maturity date | [6],[8],[15] | Sep. 16, 2020 | ||
Interest rate | [6],[15] | 15.00% | ||
Default interest rate | [6],[8],[15] | 24.00% | ||
Sub-total | [6],[15] | 34,000 | ||
Debt Due On Sep 27, 2020 [Member] | ||||
Maturity date | [6],[8],[15] | Sep. 27, 2020 | ||
Interest rate | [6],[15] | 15.00% | ||
Default interest rate | [6],[8],[15] | 24.00% | ||
Sub-total | [6],[15] | 34,000 | ||
Debt Due On Oct 24, 2020 [Member] | ||||
Maturity date | [6],[8],[15] | Oct. 24, 2020 | ||
Interest rate | [6],[15] | 15.00% | ||
Default interest rate | [6],[8],[15] | 24.00% | ||
Sub-total | [6],[15] | 122,000 | ||
Debt Due On Nov 7, 2020 [Member] | ||||
Maturity date | [6],[8],[15] | Nov. 7, 2020 | ||
Interest rate | [6],[15] | 15.00% | ||
Default interest rate | [6],[8],[15] | 24.00% | ||
Sub-total | [6],[15] | 42,000 | ||
Debt Due On Nov 22, 2020 [Member] | ||||
Maturity date | [4],[6],[7] | Nov. 22, 2020 | ||
Interest rate | [6],[15] | 8.00% | ||
Default interest rate | [4],[6],[7] | 24.00% | ||
Sub-total | [6],[15] | 55,000 | [7] | |
Debt Due On Dec 10, 2020 [Member] | ||||
Maturity date | [6],[8],[15] | Dec. 10, 2020 | ||
Interest rate | [6] | 15.00% | ||
Default interest rate | [6],[8],[15] | 24.00% | ||
Sub-total | [6] | 55,000 | ||
Debt Due On Dec 23, 2020 [Member] | ||||
Maturity date | [3],[4],[6],[7] | Dec. 23, 2020 | ||
Interest rate | [6],[7] | 8.00% | ||
Default interest rate | [3],[4],[6],[7] | 24.00% | ||
Sub-total | [3],[6],[7] | $ 30,000 | [15] | |
[1] | closing price on the day preceding the conversion date. | |||
[2] | In default | |||
[3] | In the event the Company experiences a DTC "Chill" on its shares, the conversion price shall be decreased to 40% instead of 50% while that "Chill" is in effect. If the Company fails to maintain the share reserve at the 4x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. | |||
[4] | On August 28, 2020 the Company exchanged convertible notes and accrued interest for a $ 1,200,000 promissory note with a 2 year maturity bearing interest at 12%, 950,000 warrants with a 3 year maturity and an exercise price of $0.40 and 150 Class C preferred shares (transaction described further below). | |||
[5] | In the event the Company experiences a DTC "Chill" on its shares, the conversion price shall be decreased to 42% instead of 52% while that "Chill" is in effect. | |||
[6] | If the Company becomes delinquent or continues its delinquency in its periodic filings with the SEC after the 6-months anniversary of the note, then the holder is entitled to use the lowest closing bid price during the delinquency period as a base price for the conversion. | |||
[7] | If the Company fails to maintain the share reserve at the 4x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10% | |||
[8] | On February 26, 2020 the company exchanged convertible and short term notes and accrued interest for 250 Class C shares (transaction described further below). | |||
[9] | If the Company fails to maintain its status as "DTC Eligible'' for any reason, or, if the effective Conversion Price is less than $0.01 at any time, the Principal Amount of the Note shall increase by ten thousand dollars ($10,000). In addition, the Conversion price shall be permanently redefined to equal the lesser of (a) $0.001 or (b) 50% of the lowest traded price during the twenty five (25) consecutive Trading Days immediately preceding the applicable Conversion Date on which the Holder elects to convert all or part of this Note, subject to adjustment as provided in this Note. | |||
[10] | If at any time while this Note is outstanding, an event of default occurs, then an additional discount of 15% shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 65% assuming no other adjustments are triggered hereunder). If at any time while this Note is outstanding, the Borrower's Common Stock are not deliverable via DWAC, an additional 10% discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding. | |||
[11] | If the Company fails to maintain its status as "DTC Eligible" for any reason, or, if the effective Conversion Price as calculated in Section 4(a) is less than $0.0001 at any time (regardless of whether or not a Conversion Notice has been submitted to the Company), the Principal Amount of the Note shall increase by ten thousand dollars ($10,000) (under Holder's and Company's expectation that any Principal Amount increase will tack back to the Issuance Date). In addition, the Conversion Price shall be permanently redefined to equal the lesser of (a) $0.00001 or (b) 50% of the lowest traded price during the twenty five (25) consecutive Trading Days immediately preceding the applicable Conversion Date on which the Holder elects to convert all or part of this Note, subject to adjustment as provided in this Note. If at any time while this Note is outstanding, an Event of Default (as defined herein) occurs, then an additional discount of 15% shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 65% assuming no other adjustments are triggered hereunder). These above contingencies have not occurred | |||
[12] | In the event that shares of the Borrower's Common Stock are not deliverable via DWAC following the conversion of any amount hereunder, an additional ten percent (10%) discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 55% assuming no other adjustments are triggered hereunder). Additionally, if the Borrower fails to comply with the reporting requirements of the Exchange Act (including but not limited to becoming late or delinquent in its filings, even if the Borrower subsequently cures such delinquency) at any time while after the Issue Date, and/or the Borrower shall cease to be subject to the reporting requirements of the exchange Act, an additional fifteen percent (15%) discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 60% assuming no other adjustments are triggered hereunder). | |||
[13] | On August 25,2020 the Company settled a convertible note with principal of $ 40,938 for a $14,329 cash payment. On September 14, 2020 the Company settled $20,111 in accrued interest and default interest related to this note for a cash payment of $52,446 (transaction described further below). | |||
[14] | If the Borrower's Common stock is chilled for deposit at DTC, becomes chilled at any point while this Note remains outstanding or deposit or other additional fees are payable due to a Yield Sign, Stop Sign or other trading restrictions, or if the closing price at any time falls below $0.01 (as appropriately and equitably adjusted for stock splits, stock dividends, stock contributions and similar events), then an additional 15% discount will be attributed to the Conversion Price for any and all Conversions submitted thereafter. | |||
[15] | If the Company fails to maintain the share reserve at the 3x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. |
SHORT-TERM CONVERTIBLE DEBT (_2
SHORT-TERM CONVERTIBLE DEBT (Details Narrative) - USD ($) | Oct. 12, 2020 | Aug. 28, 2020 | Aug. 28, 2020 | Aug. 25, 2020 | Aug. 25, 2020 | Sep. 14, 2020 | Feb. 26, 2020 | Oct. 31, 2020 | Sep. 01, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | Jan. 31, 2020 |
Accrued interest payable | $ 20,111 | $ 203,377 | $ 203,377 | $ 703,270 | |||||||||
Debt cash payment | $ 52,446 | ||||||||||||
Converted Debt | 263,879 | 263,879 | $ 2,286,896 | ||||||||||
Amortization expense | 67,357 | $ 212,004 | $ 694,168 | $ 462,175 | |||||||||
Short term debt, description | If the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the effective Conversion Price as calculated in Section 4(a) is less than $0.0001 at any time (regardless of whether or not a Conversion Notice has been submitted to the Company), the Principal Amount of the Note shall increase by ten thousand dollars ($10,000) (under Holder’s and Company’s expectation that any Principal Amount increase will tack back to the Issuance Date). In addition, the Conversion Price shall be permanently redefined to equal the lesser of (a) $0.00001 or (b) 50% of the lowest traded price during the twenty five (25) consecutive Trading Days immediately preceding the applicable Conversion Date on which the Holder elects to convert all or part of this Note, subject to adjustment as provided in this Note. | ||||||||||||
Description of short term debt default | Event of Default (as defined herein) occurs, then an additional discount of 15% shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 65% assuming no other adjustments are triggered hereunder). | ||||||||||||
Convertible notes payable | 9,303 | $ 9,303 | |||||||||||
Number of shares issued (in shares) | 45,000 | ||||||||||||
Aggregate debt in default | 166,500 | $ 166,500 | |||||||||||
Penalty interest to the loan | $ 3,394 | $ 294,978 | |||||||||||
Number of warrant issued | 950,000 | 950,000 | |||||||||||
Warrant [Member] | |||||||||||||
Number of shares converted (in shares) | 950,000 | ||||||||||||
Warrant maturity date | 3 years | 3 years | |||||||||||
Excercised price of warrant | $ 0.40 | $ 0.40 | |||||||||||
Common Stock [Member] | |||||||||||||
Accrued interest payable | $ 6,509 | $ 6,509 | |||||||||||
Number of shares converted (in shares) | 578,495 | ||||||||||||
Preferred Series C [Member] | |||||||||||||
Convertible debt, description | On February 26, 2020 a lender exchanged $1,070,035 in convertible notes and $175,421 in accrued interest (as denoted by X in the above schedule) as well as $122,000 in short-term debt and $22,076 in accrued interest (as described in Note 5), and the associated derivative liability of $792,218 all totaling $2,181,750 in exchange for 250 Class C shares having a fair-value of $9,105. A gain of $2,172,646 was recorded. | ||||||||||||
Number of shares converted (in shares) | 250 | ||||||||||||
Number of shares issued (in shares) | 100 | ||||||||||||
Class C Preferred Shares [Member] | |||||||||||||
Number of shares converted (in shares) | 150 | ||||||||||||
Promissory Convertible Notes [Member] | |||||||||||||
Principal amount | $ 40,938 | $ 40,938 | |||||||||||
Maturity term | 2 years | ||||||||||||
Debt cash payment | $ 14,329 | ||||||||||||
Default interest rate | 12.00% | ||||||||||||
Convertible debt, description | On October 12, 2020 the Company entered into a new convertible note for $250,000 with a one year maturity, interest rate of 12%, the Company received $210,250 in cash proceeds, recorded an original issue discount of $25,000, a derivative discount of $132,613, and transaction fees of $14,750. The first year’s interest of $28,000 is guaranteed and has been accrued. As part of the loan the Company paid a commitment fee of $ 50,000 through the issuance of 19,685 shares. | ||||||||||||
Number of shares converted (in shares) | 1,200,000 | ||||||||||||
Promissory Convertible Notes [Member] | Lender [Member] | |||||||||||||
Convertible debt, description | On August 28, 2020 a lender exchanged $1,692,690 in convertible notes and $571,454 in accrued interest (as denoted by Y in the above schedule) as well as the associated derivative liability of $2,177,794 all totaling $4,441,938 in exchange for a promissory note of $1,200,000 bearing interest at 12% and maturing August 28, 2022 (see Note 6), 950,000 Warrants with a 3 year maturity and an exercise price of $0.40 having a fair value of $351,500 (see Note 9) and 150 Class C shares having a fair-value of $20,290. A gain of $2,820,147 was recorded. | On August 25, 2020 a lender exchanged $40,939 in a convertible note (as denoted by Z in the above schedule), and the associated derivative liability of $31,320 all totaling $72,259 in exchange for a cash payment of $14,329. On September 14, 2020 the same lender exchanged $20,111 in accrued interest and default interest (from that note) for a cash payment of $52,446. A total gain of $25,595 on the two transactions was recorded. |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details) - Fair Value, Inputs, Level 3 [Member] | 9 Months Ended |
Oct. 31, 2020USD ($) | |
Balance, January 31, 2020 | $ 2,611,125 |
Change due to Settlement of Debt | (3,001,332) |
Changes due to Conversion of Notes Payable | (20,185) |
Changes due to issuance of New Convertible Notes | 132,613 |
Mark to Market Change in Derivatives | 507,674 |
Balance, October 31, 2020 | $ 229,895 |
DERIVATIVE LIABILITIES (Detai_2
DERIVATIVE LIABILITIES (Details 1) - Significant Unobservable Inputs (Level 3) [Member] | Oct. 31, 2020Number |
Strike Price [Member] | Maximum [Member] | |
Derivative liability, measurement input | 4.30 |
Strike Price [Member] | Minimum [Member] | |
Derivative liability, measurement input | 0.37 |
Contractual Term (Years) [Member] | Maximum [Member] | |
Contractual term | 11 months 12 days |
Contractual Term (Years) [Member] | Minimum [Member] | |
Contractual term | 3 months |
Volatility [Member] | Maximum [Member] | |
Derivative liability, measurement input | 557.3 |
Volatility [Member] | Minimum [Member] | |
Derivative liability, measurement input | 352.1 |
High Yield Cash Rate [Member] | Maximum [Member] | |
Derivative liability, measurement input | 37.72 |
High Yield Cash Rate [Member] | Minimum [Member] | |
Derivative liability, measurement input | 26.55 |
Underlying Fair Market Value [Member] | |
Derivative liability, measurement input | 0.11 |
Risk-Free Rate [Member] | Maximum [Member] | |
Derivative liability, measurement input | 0.13 |
Risk-Free Rate [Member] | Minimum [Member] | |
Derivative liability, measurement input | 0.09 |
Dividend Yield [Member] | |
Derivative liability, measurement input | 0 |
DERIVATIVE LIABILITIES (Detai_3
DERIVATIVE LIABILITIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | Jan. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||
Derivative liabilities | $ 229,895 | $ 229,895 | $ 2,611,125 | ||
Gain loss fair value of derivative liabilities | $ 939,873 | $ 196,303 | $ 507,674 | $ 107,953 |
STOCKHOLDERS' DEFICIT (Details)
STOCKHOLDERS' DEFICIT (Details) | 9 Months Ended |
Oct. 31, 2020$ / shares | |
Equity [Abstract] | |
Expected volatility | 506.80% |
Exercise price | $ 0.40 |
Stock price | $ 0.37 |
Expected life | 3 years |
Risk-free interest rate | 0.19% |
Dividend yield | 0.00% |
STOCKHOLDERS' DEFICIT (Details
STOCKHOLDERS' DEFICIT (Details 1) | 9 Months Ended |
Oct. 31, 2020$ / sharesshares | |
# Warrants | 950,000 |
Lender One [Member] | |
Issued To | Lender |
# Warrants | 1.4 |
Dated | Jan. 8, 2018 |
Expire | Jan. 8, 2021 |
Strike Price | $ / shares | $ 1,800 |
Expired | N |
Exercised | N |
Lender Two [Member] | |
Issued To | Lender |
# Warrants | 950,000 |
Dated | Aug. 28, 2020 |
Expire | Aug. 28, 2023 |
Strike Price | $ / shares | $ 0.40 |
Expired | N |
Exercised | N |
STOCKHOLDERS' DEFICIT (Detail_2
STOCKHOLDERS' DEFICIT (Details 2) | 9 Months Ended |
Oct. 31, 2020$ / sharesshares | |
Warrant [Member] | |
Number of outstanding | |
Beginning balance | shares | 1.4 |
Granted | shares | 950,000 |
Exercised | shares | |
Forfeited and canceled | shares | |
Ending balance | shares | 950,001 |
Weighted Average Exercise Price | |
Beginning balance | $ / shares | $ 1,800 |
Granted | $ / shares | 0.40 |
Exercised | $ / shares | |
Forfeited and canceled | $ / shares | |
Ending balance | $ / shares | $ 0.40 |
Employee Stock Option [Member] | |
Number of outstanding | |
Beginning balance | shares | |
Granted | shares | |
Exercised | shares | |
Forfeited and canceled | shares | |
Ending balance | shares | |
Weighted Average Exercise Price | |
Beginning balance | $ / shares | |
Granted | $ / shares | |
Exercised | $ / shares | |
Forfeited and canceled | $ / shares | |
Ending balance | $ / shares |
STOCKHOLDERS' DEFICIT (Detail_3
STOCKHOLDERS' DEFICIT (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
Mar. 31, 2020 | Feb. 25, 2020 | Mar. 29, 2019 | Oct. 31, 2020 | Sep. 01, 2020 | Oct. 31, 2020 | Oct. 31, 2019 | Sep. 08, 2020 | Aug. 28, 2020 | Jun. 04, 2020 | Feb. 26, 2020 | Jan. 31, 2020 | |
Description of voting rights | Company who controls approximately 60% of all voting shares. | |||||||||||
Common stock, par value | $ 0.000001 | $ 0.000001 | $ 0.000001 | |||||||||
Common stock, shares issued | 1,181,644 | 1,181,644 | 538,464 | |||||||||
Common stock, shares outstanding | 1,181,644 | 1,181,644 | 538,464 | |||||||||
Common stock, shares authorized | 15,000,000 | 15,000,000 | 15,000,000 | 20,000,000,000 | 15,000,000 | |||||||
Number of warrant issued | 950,000 | 950,000 | ||||||||||
Option and warrant expense | $ 351,500 | $ 0 | $ 0 | |||||||||
Conversion of notes payable | $ 9,303 | 9,303 | ||||||||||
Accrued Interest to common tock | $ 6,509 | |||||||||||
Conversion of common stock | 578,495 | |||||||||||
Description of reverse stock split | 4000:1 reverse stock split | 6000:1 reverse stock | ||||||||||
Additional number of common stock issued | 1,699 | |||||||||||
Number of shares issued | 45,000 | |||||||||||
Value of shares issued | $ 18,900 | |||||||||||
Preferred Series C [Member] | ||||||||||||
Preferred stock, shares authorized | 7,250 | 7,250 | 7,250 | |||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Preferred stock, shares issued | 7,250 | 100 | 7,250 | 150 | 6,750 | |||||||
Preferred stock, shares outstanding | 7,250 | 7,250 | 6,750 | |||||||||
Conversion price | $ 2.63 | $ 2.63 | $ 2.63 | |||||||||
Accrued expenses - related party | $ 11,177 | |||||||||||
Number of shares issued | 100 | |||||||||||
Value of shares issued | $ 11,177 | |||||||||||
Preferred Series B [Member] | ||||||||||||
Preferred stock, shares authorized | 20,000 | 20,000 | 20,000 | |||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Preferred stock, shares issued | 20,000 | 20,000 | 20,000 | |||||||||
Preferred stock, shares outstanding | 20,000 | 20,000 | 20,000 | |||||||||
Preferred stock voting rights, description | The Series B Preferred Stock have voting rights equal to 51% of the total voting rights at any time. | |||||||||||
Preferred Series A [Member] | ||||||||||||
Preferred stock, shares authorized | 330,000 | 330,000 | 330,000 | |||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Preferred stock, shares issued | 0 | 0 | 0 | |||||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | |||||||||
Series D Preferred Stock [Member] | ||||||||||||
Preferred stock, shares authorized | 870 | 870 | 870 | |||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Preferred stock, shares issued | 870 | 870 | 870 | |||||||||
Preferred stock, shares outstanding | 870 | 870 | 870 | |||||||||
Optional redemption per share | $ 1,000 | $ 1,000 | ||||||||||
Convertible Notes [Member] | ||||||||||||
Number of shares issued | 19,685 | |||||||||||
Value of shares issued | $ 50,000 | |||||||||||
Demand Loan [Member] | Preferred Series C [Member] | ||||||||||||
Preferred stock, shares issued | 250 | |||||||||||
Chief Executive Officer [Member] | ||||||||||||
Number of shares issued | 45,000 | |||||||||||
Value of shares issued | $ 18,900 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 01, 2020 | Oct. 31, 2020 | Feb. 28, 2020 | Jan. 31, 2020 | |
Accrued expenses related party | $ 125,673 | $ 155,750 | ||
Prepaid rent | $ 0 | $ 25,700 | $ 0 | |
Number of shares issued | 45,000 | |||
Value of shares issued | $ 18,900 | |||
Preferred Series C [Member] | ||||
Number of shares issued | 100 | |||
Value of shares issued | $ 11,177 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Oct. 31, 2020 | Jan. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
October 31 2021 | $ 121,917 | |
October 31, 2022 | 120,657 | |
October 31, 2023 | 81,203 | |
October 31, 2024 | 31,203 | |
October 31, 2025 | 30,003 | |
After October 31, 2025 | 40,005 | |
Total lease payments | 424,988 | |
Less: Interest | (67,972) | |
Present value of lease liabilities | $ 357,016 | $ 467,069 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details Narrtive) - USD ($) | Oct. 23, 2020 | Jul. 01, 2018 | Jun. 01, 2015 | Oct. 30, 2019 | Sep. 30, 2019 | Aug. 30, 2016 | Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | Jan. 31, 2019 | Jan. 31, 2018 |
Rent expense | $ 23,279 | $ 30,360 | $ 91,437 | $ 83,762 | ||||||||
Operating lease description | The Company eliminated the operating lease asset and operating lease liability at termination which was $45,032 | |||||||||||
Litigation description | There is pending litigation initiated by the Company around the validity of a $100,000 note which the Company signed based upon representations of funding from the maker which were never received. The Company initiated litigation to dispute the note and the 1,692 shares that have been issued. There was no consideration for the issuance of the shares and the shares have been accounted for as if they were returned and cancelled although they have not been returned. | |||||||||||
Leases, description | The Company and landlord terminated this lease effective February 29, 2020. | Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. | ||||||||||
Warehouse Facility Three [Member] | ||||||||||||
Operating leases, rent expense | $ 6,400 | |||||||||||
Operating lease description | The Company entered into a 60-month lease agreement with its minority shareholder for its 8,800 sf warehouse facility with a minimum base rent of $6,400 per month. | |||||||||||
Warehouse Facility One [Member] | ||||||||||||
Operating leases, rent expense | $ 2,720 | |||||||||||
Lease maintenance expense | $ 43,200 | $ 43,200 | ||||||||||
Operating lease description | The Company entered into a 36-month lease agreement for its 2,590 sf office facility with a minimum base rent of $2,720 per month. | |||||||||||
Vehicles [Member] | ||||||||||||
Operating leases, rent expense | $ 9,067 | |||||||||||
Operating lease description | The Company entered into an operating lease for a vehicle with an annual cost of $9,067 and a three year term. The company paid initial fees of $17,744 and will pay fees on lease termination of $395. On a straight-line basis these costs amount to $1,259 per month. | |||||||||||
Premises [Member] | ||||||||||||
Operating leases, rent expense | $ 15,480 | |||||||||||
Operating lease description | The Company entered into an operating lease for premises with an annual rent of $15,480, a three year term commencing September 1, 2019 to August 31, 2022 and a one year renewal option. | |||||||||||
Warehouse Facility Two [Member] | ||||||||||||
Operating leases, rent expense | $ 2,132 | |||||||||||
Operating lease description | The Company entered into a 60-month lease agreement for its 3,554 sf warehouse facility starting in December 2016 with a minimum base rent of $2,132 and estimated monthly CAM charges of $1,017 per month. |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
Numerator: | ||||
Net income (loss) available to common shareholders | $ 1,100,073 | $ (994,960) | $ 2,681,933 | $ (2,554,510) |
Denominator: | ||||
Weighted average shares - basic | 1,067,074 | 20,683 | 797,126 | 7,613 |
Net income (loss) per share - basic | $ 1.03 | $ (48.11) | $ 3.36 | $ (335.54) |
Effect of common stock equivalents | ||||
Add: interest expense on convertible debt | $ 44,110 | $ 88,911 | $ 253,691 | $ 340,367 |
Add: amortization of debt discount | 67,357 | 212,004 | 694,168 | 462,175 |
Less: gain on settlement of debt on convertible notes | (2,845,742) | (4,793,113) | (67,622) | |
Add (Less): loss (gain) on change of derivative liabilities | 939,873 | 196,303 | 507,674 | 107,953 |
Net income (loss) adjusted for common stock equivalents | (694,329) | (497,742) | (655,647) | (1,711,368) |
Dilutive effect of common stock equivalents: | ||||
Convertible notes and accrued interest | $ 144,158 | $ 144,158 | ||
Denominator: | ||||
Weighted average shares - diluted | 5,268,957 | 20,683 | 4,999,009 | 7,613 |
Net income (loss) per share - diluted | $ (0.13) | $ (48.11) | $ (0.13) | $ (335.54) |
Warrant [Member] | ||||
Dilutive effect of common stock equivalents: | ||||
Convertible notes and accrued interest | $ 950,001 | $ 950,001 | ||
Convertible Class C Preferred Shares [Member] | ||||
Dilutive effect of common stock equivalents: | ||||
Convertible notes and accrued interest | $ 3,107,724 | $ 3,107,724 |
EARNINGS (LOSS) PER SHARE (De_2
EARNINGS (LOSS) PER SHARE (Details 1) - shares | 9 Months Ended | |
Oct. 31, 2020 | Oct. 31, 2019 | |
Anti-dilutive shares | 931,250 | |
Warrant [Member] | ||
Anti-dilutive shares | 1 | |
Convertible Class C Preferred Shares [Member] | ||
Anti-dilutive shares | 174,490 | |
Convertible Notes And Accrued Interest [Member] | ||
Anti-dilutive shares | 756,759 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Dec. 11, 2020 | Nov. 24, 2020 | Nov. 23, 2020 | Nov. 17, 2020 | Nov. 16, 2020 | Feb. 29, 2020 | Oct. 31, 2020 | Jan. 31, 2020 |
Payment term | monthly | |||||||
Interest payable | $ 13,547 | $ 0 | ||||||
Number of shares issued | 45,000 | |||||||
Value of shares issued | $ 18,900 | |||||||
Common stock, par value | $ 0.000001 | $ 0.000001 | ||||||
Subsequent Event [Member] | Common Stock [Member] | IPO [Member] | ||||||||
Common stock, par value | $ 0.00001 | |||||||
Maximum offering price range (in dollars per share) | $ 2 | |||||||
Subsequent Event [Member] | Common Stock [Member] | IPO [Member] | Minimum [Member] | ||||||||
Maximum offering amount | $ 7,500,000 | |||||||
Investment amount | 500 | |||||||
Subsequent Event [Member] | Common Stock [Member] | IPO [Member] | Maximum [Member] | ||||||||
Maximum offering amount | $ 15,000,000 | |||||||
Subsequent Event [Member] | Promissory Convertible Notes [Member] | Lender [Member] | ||||||||
Debt principal amount | $ 165,000 | $ 100,000 | ||||||
Cash proceeds | 150,000 | 80,000 | ||||||
Original issue discount | $ 15,000 | $ 12,000 | ||||||
Debt interest payable | 12.00% | 12.00% | ||||||
Payment term | twelve months | twelve months | ||||||
Interest payable | $ 19,800 | $ 12,000 | ||||||
Maturity term | 1 year | 1 year | ||||||
Subsequent Event [Member] | Promissory Convertible Notes [Member] | Lender [Member] | Common Stock [Member] | ||||||||
Number of shares issued | 17,500 | 6,667 | ||||||
Value of shares issued | $ 36,750 | $ 20,668 |