Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
May 31, 2019 | Aug. 28, 2019 | Nov. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | Chineseinvestors.com, Inc. | ||
Entity Central Index Key | 0001459482 | ||
Document Type | 10-K | ||
Document Period End Date | May 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --05-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity File Number | 000-54207 | ||
Entity Incorporation, State or Country Code | IN | ||
Entity Interactive Data Current | Yes | ||
Entity Public Float | $ 15,136,493 | ||
Entity Common Stock, Shares Outstanding | 48,738,497 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | May 31, 2019 | May 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 1,311,984 | $ 1,390,258 |
Accounts receivable, net | 635,874 | 9,815 |
Marketable equity securities | 1,133,256 | 1,230,754 |
Inventories | 189,397 | 130,679 |
Due from related party | 606 | 87,379 |
Other current assets | 471,120 | 331,628 |
Total current assets | 3,742,237 | 3,180,513 |
Non-current assets | ||
Long-term investments | 323,603 | 250,000 |
Property and equipment, net | 98,250 | 65,250 |
Website development, net | 148,361 | 104,278 |
Other assets | 111,357 | 76,271 |
Total noncurrent assets | 681,571 | 495,799 |
Total assets | 4,423,808 | 3,676,312 |
Current liabilities | ||
Accounts payable | 487,090 | 359,597 |
Short-term notes | 5,873,709 | 1,058,084 |
Deferred revenue, current | 518,570 | 787,557 |
Other current liabilities | 638,248 | 430,538 |
Total current liabilities | 7,517,617 | 2,635,776 |
Non-current liabilities | ||
Deferred revenue, noncurrent | 122,329 | 114,875 |
Total noncurrent liabilities | 122,329 | 114,875 |
Total liabilities | 7,639,946 | 2,750,651 |
Stockholders' equity | ||
Common stock $0.001 par value 80,000,000 authorized and 45,486,497 and 29,520,560 issued and outstanding May 31, 2019 and 2018, respectively | 45,488 | 29,522 |
Additional paid-in capital | 44,118,980 | 36,651,070 |
Accumulated deficit | (47,348,927) | (35,268,062) |
Accumulated other comprehensive loss | (38,710) | (495,186) |
Total stockholders' equity | (3,216,138) | 925,661 |
Total liabilities and stockholders' equity | 4,423,808 | 3,676,312 |
Series 2012 Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock | 445 | 445 |
Series A-2014 Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock | 356 | 606 |
Series C-2016 Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock | 193 | 623 |
Series D-2017 Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock | $ 6,037 | $ 6,643 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | May 31, 2019 | May 31, 2018 |
Stockholders' equity | ||
Common stock par value | $ 0.001 | $ 0.001 |
Common stock authorized | 80,000,000 | 80,000,000 |
Common stock issued | 45,486,497 | 29,520,560 |
Common stock outstanding | 45,486,497 | 29,520,560 |
Series 2012 Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock authorized | 20,000,000 | 20,000,000 |
Preferred stock issued | 445,000 | 445,000 |
Preferred stock outstanding | 445,000 | 445,000 |
Series A-2014 Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock authorized | 20,000,000 | 20,000,000 |
Preferred stock issued | 356,000 | 606,000 |
Preferred stock outstanding | 356,000 | 606,000 |
Series C-2016 Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock authorized | 20,000,000 | 20,000,000 |
Preferred stock issued | 193,000 | 622,958 |
Preferred stock outstanding | 193,000 | 622,958 |
Series D-2017 Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock authorized | 20,000,000 | 20,000,000 |
Preferred stock issued | 6,037,050 | 6,643,050 |
Preferred stock outstanding | 6,037,050 | 6,643,050 |
Consolidated Statements Of Stoc
Consolidated Statements Of Stockholders' Equity (Deficit) - USD ($) | Common Stock | Preferred Stock,series 2012 | Preferred Stock, series A | Preferred Stock, series C | Preferred Stock, series D | Additional Paid-In Capital | Stockholders' Deficit | Accumulated Other Comprehensive Income (Loss) | Total |
Beginning balance, shares at May. 31, 2017 | 11,446,805 | 615,000 | 1,770,000 | 5,000,043 | |||||
Beginning balance, value at May. 31, 2017 | $ 11,448 | $ 615 | $ 1,770 | $ 5,000 | $ 23,928,741 | $ (22,349,379) | $ (206,892) | $ 1,391,303 | |
Stock Compensation expenses, shares | 1,520,000 | ||||||||
Stock Compensation expenses, value | $ 1,520 | 768,700 | 770,220 | ||||||
Stock issued new, shares | 6,793,050 | ||||||||
Stock issued new, value | $ 6,793 | 6,786,257 | 6,793,050 | ||||||
Deemed dividend associated with preferred stock | 5,178,065 | (5,178,065) | |||||||
Stock converted, shares issued | 16,553,755 | ||||||||
Stock converted, value issued | $ 16,554 | ||||||||
Stock converted, shares converted | (170,000) | (1,164,000) | (4,377,085) | (150,000) | |||||
Stock converted, shares converted value | $ (170) | $ (1,164) | $ (4,377) | $ (150) | (10,693) | ||||
Preferred Stock dividends | (335,014) | (335,014) | |||||||
Unrealized investment gain/loss | (279,895) | (279,895) | |||||||
Foreign currency translation | (8,399) | (8,399) | |||||||
Net loss | (7,405,604) | (7,405,604) | |||||||
Ending balance, shares at May. 31, 2018 | 29,520,560 | 445,000 | 606,000 | 622,958 | 6,643,050 | ||||
Ending balance, value at May. 31, 2018 | $ 29,522 | $ 445 | $ 606 | $ 623 | $ 6,643 | 36,651,070 | (35,268,062) | (495,186) | 925,661 |
Stock Compensation expenses, shares | 4,573,245 | ||||||||
Stock Compensation expenses, value | $ 4,573 | 2,296,867 | 2,301,440 | ||||||
Stock issued new, shares | 1,109,818 | 3,578,000 | |||||||
Stock issued new, value | $ 1,110 | $ 3,578 | 4,183,762 | 4,188,450 | |||||
Deemed dividend associated with preferred stock | $ 992,700 | (992,700) | |||||||
Stock converted, shares issued | 10,282,874 | ||||||||
Stock converted, value issued | $ 10,283 | ||||||||
Stock converted, shares converted | (250,000) | (429,958) | (4,184,000) | ||||||
Stock converted, shares converted value | $ (250) | $ (430) | $ (4,184) | (5,419) | |||||
Preferred Stock dividends | (410,216) | (410,216) | |||||||
Unrealized investment gain/loss | (486,787) | 486,787 | |||||||
Foreign currency translation | (30,311) | (30,311) | |||||||
Net loss | (10,191,162) | (10,191,162) | |||||||
Ending balance, shares at May. 31, 2019 | 45,486,497 | 445,000 | 356,000 | 193,000 | 6,037,050 | ||||
Ending balance, value at May. 31, 2019 | $ 45,488 | $ 445 | $ 356 | $ 193 | $ 6,037 | $ 44,118,980 | $ (47,348,927) | $ (38,710) | $ (3,216,138) |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Operating revenues | ||
Total revenues | $ 6,476,442 | $ 2,353,331 |
Total cost of revenues | 4,935,381 | 1,400,058 |
Gross profit | 1,541,061 | 953,273 |
Operating expenses | ||
General and administrative expenses | 11,744,041 | 6,998,171 |
Advertising expense | 1,353,760 | 1,169,968 |
Total operating expenses | 13,097,801 | 8,168,139 |
Income (loss) from operations | (11,556,740) | (7,214,866) |
Other income/(expense) | ||
Other income (expense) | 3,146 | (5,013) |
Interest expense | (309,838) | (103,809) |
Net realized (loss) gain on investment | 1,335,181 | (7,148) |
Equity in loss from equity method investments | (11,397) | (60,000) |
Unrealized (loss) gain on equity securities | 323,227 | 0 |
Unrealized (loss) gain on cryptocurrencies | 25,259 | (14,768) |
Total other income / (expense) | 1,365,578 | (190,738) |
Loss before income taxes | (10,191,162) | (7,405,604) |
Income tax expense | 0 | 0 |
Net loss | (10,191,162) | (7,405,604) |
Deemed dividend for beneficial conversion of convertible preferred stock | (992,700) | (5,178,065) |
Preferred stock dividends | (410,216) | (335,014) |
Net loss attributable to common shareholders | (11,594,078) | (12,918,683) |
Other comprehensive income (loss) | ||
Net unrealized loss for available for sale securities | 0 | (279,895) |
Foreign currency translation loss | (30,311) | (8,399) |
Comprehensive loss attributable to common shareholders | $ (11,624,389) | $ (13,206,977) |
Loss per share attributable to common shareholders: | ||
Basic and diluted loss per share | $ (0.31) | $ (0.58) |
Weighted average shares outstanding | ||
Weighted average number of shares outstanding - basic and diluted | 37,752,790 | 22,427,427 |
Investor-relation service [Member] | ||
Operating revenues | ||
Total revenues | $ 1,323,506 | $ 968,282 |
Total cost of revenues | 1,419,250 | 1,237,866 |
Subscription [Member] | ||
Operating revenues | ||
Total revenues | 865,457 | 779,964 |
Products [Member] | ||
Operating revenues | ||
Total revenues | 4,189,935 | 378,984 |
Total cost of revenues | 3,516,131 | 162,192 |
Other Revenues [Member] | ||
Operating revenues | ||
Total revenues | $ 97,544 | $ 226,101 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Cash flows from operating activities | ||
Net loss | $ (10,191,162) | $ (7,405,604) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Non-cash revenue received as available for sale securities | (936,966) | (768,282) |
Investment (gain) loss on marketable equity securities | (1,335,181) | 7,148 |
Equity in loss from equity method investments | 11,397 | 60,000 |
Unrealized (loss) gain on equity securities | (323,227) | 0 |
Unrealized loss (gain) on crypto currencies | (25,259) | 14,768 |
Stock based compensation | 2,301,440 | 770,220 |
Depreciation and amortization | 65,750 | 29,622 |
Changes in operating assets and liabilities | ||
Accounts receivable | (451,077) | (1,188) |
Inventories | (65,636) | (275,793) |
Other current assets | (74,735) | (261,025) |
Accounts payable | 130,797 | 56,134 |
Accrued interest | 41,026 | (72,062) |
Deferred revenue | (168,196) | 290,754 |
Customer deposit | 52,266 | 0 |
Other accrued liabilities | 85,895 | 206,104 |
Net cash used in operating activities | (10,882,868) | (7,349,204) |
Cash flows from investing activities | ||
Long-term equity investments | (160,000) | (30,000) |
Purchase of property and equipment | (145,229) | (64,431) |
Proceeds from investment return | 75,000 | 0 |
Proceeds from the sale of marketable equity securities | 2,378,689 | 0 |
Loan to related party | (606) | 0 |
Net cash (used in) provided by investing activities | 2,147,854 | (94,431) |
Cash flows from financing activities | ||
Cash raised by sale of common stock | 610,450 | 0 |
Proceeds of issuance of preferred stock, series D | 3,578,000 | 6,793,050 |
Payments made for preferred stock dividends | (393,880) | (306,627) |
Proceeds of issuance of debts | 5,873,709 | 995,140 |
Repayments of debts | (995,140) | (410,000) |
Net cash provided by financing activities | 8,673,139 | 7,071,563 |
Effects of exchange rates on cash and cash equivalents | (16,399) | (8,399) |
Net increase/(decrease) in cash and cash equivalents | (78,274) | (380,471) |
Cash and cash equivalents - beginning of year | 1,390,258 | 1,770,729 |
Cash and cash equivalents, end of year | 1,311,984 | 1,390,258 |
Supplemental cash flow disclosures | ||
Cash paid for interest | 59,708 | 47,217 |
Supplemental disclosure of non-cash activity: | ||
Stock received for investor relations | $ 1,211,925 | $ 909,375 |
1. Organization and Nature of O
1. Organization and Nature of Operations | 12 Months Ended |
May 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | 1. Organization and Nature of Operations Chineseinvestors.com, Inc. (the “Company”) was incorporated on January 6, 1997 in the State of Indiana under the corporate name “MAS Acquisition LII Corp.” Prior to June 12, 2000, the Company was a ‘blank check’ company seeking a business combination with an unidentified business. On June 12, 2000, the Company acquired 8,200,000 shares of common stock, representing 100% of the outstanding shares of Chineseinvestors.com, Inc., which was incorporated in the State of California on June 15, 1999. In connection with this acquisition, Aaron Tsai, the Company’s former sole officer and director, was replaced by Chineseinvestors.com, Inc.’s officers and directors. The stockholders of Chineseinvestors.com, Inc. were issued 8,200,000 shares of common stock, or approximately 96% of the Company’s total outstanding common shares. After giving effect to the acquisition, Chineseinvestors.com, Inc. became a wholly owned subsidiary and the name was changed to Chineseinvestors.com, Inc. Immediately prior to the acquisition of Chineseinvestors.com, Inc., MAS Capital Inc. returned 8,200,000 shares of common stock for cancellation without any consideration. Chineseinvestors.com, Inc. was established as an ‘in language’ (Chinese) financial information web portal, offering news and information relative to the US Equity and Financial Markets, as well as certain other specific financial markets (including China A Shares, FOREX, etc.). Over the years, various informational components have been added and the general content of the web portal has improved as the Company continues to derive a material portion of its income from the various subscription services it offers to its customers, which provide investment education, news and analysis on the US Equity and Financial Markets as well as news about particular stocks that we are following. Nevertheless, the Company does not provide subscribers with individualized investment advice and never has investment discretion over any subscribers’ or site visitors’ funds. In addition, the Company provides investor relations services for other companies, especially those requiring Mandarin language support, which now accounts for one of the Company’s most significant revenue sources. These services typically include translating client releases into English from Mandarin or vice versa, featuring client advertisements on the www.chinesefn.com website, and assisting clients to achieve goals which may be to increase stock price, to increase awareness about clients and their stock, or to helping clients to move from pink sheets to an established public securities market. Not all of those goals are shared by every client. Promotions geared to the Chinese American market are the underlying common thread, generally in the form of advertisements on the chinesefn.com website. In exchange for services provided, the Company generally receives fees consisting of cash, client securities, or a combination of cash and equity. Chineseinvestors.com, Inc. has been in continuous operation since July 1999 using the web domains (uniform resource locators) www.chineseinvestors.com and www.chinesefn.com. The Company has representative offices in leased office space in Shanghai, China, where most support services are fulfilled, San Gabriel, California, New York City, NY and Flushing, NY and Richmond, British Columbia. In March 2017, the Company established and registered XiBiDi Biotechnology Co. Ltd./CBD Biotechnology Co. Ltd. (“CBD Biotech”) in Pudong Free-Trade Area in Shanghai, PRC as a wholly owned foreign enterprise (“WOFE”). CBD Biotech’s primary focus is online and retail sales of industrial hemp-infused cosmetics and liquor in PRC. Earlier this year, in February 2019, CBD Biotech formed CBD Biotech, Inc., an exempted company with limited liability incorporated in the Cayman Islands (“CBD Biotech Cayman”) which is solely owned by Wei Wang, CEO of ChineseInvestors.com, Inc. and Alex Hamilton, Chairman and Chief Financial Officer of CBD Biotech. In April 2017, the Company established ChineseHempOil.com, Inc. dba “Chinese Wellness Center” a Delaware corporation, as a subsidiary of the Company in San Gabriel, California. CHO is responsible for the development and operation of the online and retail sales of industrial hemp products in the United States. The Company also incorporated two subsidiaries - Hemp Logic, Inc. and CIIX Online, Inc., Delaware companies in April 2017. The two wholly owned subsidiaries have not operated since the inceptions. In June 2017, the Company formed CBD Biotechnology Ltd. (“CBD Canada”), a corporation incorporated in the Province of British Columbia, which is slated to focus on the sales of industrial hemp- products, via online and other distribution channels. CBD Canada has not generated any revenue as of May 31, 2019. In or about March 2018, the Company established Bitcoin Trading Academy, LLC, a California limited liability company, formerly known as Stock Surge Momentum. LLC, a California limited liability company, with Warren (Wei) Wang, the Company’s CEO, as its sole managing member. Mr. Wang has transferred all of his interest in Bitcoin Trading Academy, LLC to the Company for $1 consideration. Bitcoin Trading Academy LLC began offering in person and on-line courses on cryptocurrency investment and trading education in July 2018. In April 2018, the Company established NewCoins168.com Digital Media Technology Ltd. (Shanghai) as a WOFE registered in China Free Trade Zone, with registered capital of 10 million RMB. In August 2018, the Company formed CIIX Online Ltd. (“CIIX Online”), a corporation incorporated in the Province of British Columbia, which is anticipated to focus on the sales of the Company’s subscription service to consumers. On November 11, 2018, the Company established Blue Ocean Capital Holding LLC (“BO”), a Delaware limited liability company. On January 23, 2019, BO entered into an Equity Transfer Agreement (“ETA”) with The Connell Company (“CC”) whereby CC will sell its 100% ownership stake in Connell Securities LLC (“CS”) to BO. CS is a registered broker-dealer and member of FINRA. BO is a Delaware limited liability company with two members — Wei Wang, the Company’s chief executive officer, who owns 10% of the issued and outstanding member units and CIIX which owns 90% of the issued and outstanding member units. Pursuant to the ETA, the purchase price of CS is $75,000 and is subject to review and approval of FINRA before the sale can be consummated. In accordance with the ETA, BO’s $75,000 purchase price is held in escrow and will be disbursed to CC upon closing or returned to BO if no closing occurs. Donald Capital, LLC, is a Delaware limited liability company established on May 7, 2018. In exchange for capital contributions totaling $160,000 from ChineseInvestors.com, Inc., the Company received a 24.99% interest in Donald Capital LLC. The remaining 75.1% is held equally by Hamilton Strategy Group, Inc. and McDonald Global Enterprises LLC. Alex Hamilton, is the CFO of CBD Biotech Cayman and is the President of Donald Capital LLC. Mr. Hamilton is also the owner of Hamilton Global Strategy. Donald Capital LLC is a registered broker dealer approved by FINRA effective May 14, 2019. Liquidity and Capital Resources: Cash Flows Cash flows used in operations for the years ended May 31, 2019 and 2018 were $10,882,868 and $7,349,204, respectively. The increase of cash used in operations was primarily caused by the increased net loss due to the industrial hemp-related business lines and liquor sales launched during the year. Capital Resources Since inception in 1997, the Company has primarily relied upon proceeds from private placements of its equity securities and issuance of debt, sometimes pledged with the marketable securities the Company holds to fund its operations. The Company anticipates continuing to rely on these two means in order to continue to fund business operations. Issuances of additional shares will result in dilution to its existing stockholders. There is no assurance that the Company will be able to complete any additional sales of its equity securities or that it will be able arrange for other financing to fund our planned business activities. Going Concern |
2. Critical Accounting Policies
2. Critical Accounting Policies and Estimates | 12 Months Ended |
May 31, 2019 | |
Accounting Policies [Abstract] | |
Critical Accounting Policies and Estimates | 2. Critical Accounting Policies and Estimates: Principles of Consolidation These accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). The consolidated financial statements include the operations of Chineseinvestors.com Inc. and its subsidiaries. The Company’s wholly owned subsidiaries include ChineseHempOil.com Inc, CBD Biotech, Hemp Logic, CIIX Online, Newcoins1688, Bitcoin Trading Academy LLC, CIIX Online Ltd and Blue Ocean Capital Holding LLC. Intercompany accounts and transactions have been eliminated upon consolidation. Certain reclassifications have been made to the consolidated financial statements for prior years to the current year’s presentation. Such reclassifications have no effect on net income as previously reported. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates and assumptions. On an ongoing basis, management evaluates its estimates based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Recently Adopted Accounting Pronouncements: Revenue from Contracts with Customers On June 1, 2018, the Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2014-09, with regard to FASB ASC 606 Revenue from Contracts with Customers The Company’s revenue was mainly derived from four sources: 1. Investor-relations service income Investor-relations service income is earned by the Company in return for delivering current, publicly available information related to our clients. a. Identify contracts with clients. The Company enters into service agreements with clients. The Company always discloses the nature of the contract including the contact price. b. Identify performance obligations in the contract. Many of our investor-relations service contracts contain multiple performance obligations, including presentation of clients’ information on Chinesefn.com, translation of client all materials to be released, and monthly presentation in the newsletter the Company sends to its registered members. We account for individual performance obligations separately if they are distinct. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. c. Determine the transaction price. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. Judgment is required to determine the standalone selling price for each distinct performance obligation. We typically have more than one standalone selling price for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we determine the standalone selling price based on our overall pricing objectives, taking into consideration contract term, industry relevance and other factors. Fees are fixed based on rates specified in the service provided agreements, which do not provide for any refunds or adjustments. In determining the transaction price, the effects of the time value of money is not accounted as the normal term of our service provider agreements are one year or less. d. The service contract amount is valued based upon the fair market value of the clients’ stock closing price at the contract date multiplied by the numbers of shares earned when the service is paid by clients’ common stocks other than cash. For the performance obligations, such as the availability of our clients’ information in our website, the revenue is recognized over the term of the services period while the services are being provided, e. For the performance obligations will be surrendered at a point of time, the revenue is recognized after the service is provided. In addition, the Company is applying the definition of readily determinable fair value presented at Accounting Standards Codification 820-10-15-5 in assessing the amount to recognize in each accounting period. There is no significant adjustment from the implementation of ASU 2014-09. 2. Subscription income is recognized over the term of the subscription membership. Subscription fees for our registered members are charged on a per-month basis. Our customers do not have rights to the underlying software code of our solutions, and accordingly, we recognize subscription revenue over time on a straight-line basis over the contract term beginning on the date that our service is made available to the customer. Subscription terms are generally between one to three years but can occasionally be as short as one month or as long as 60 months. Long term deferred revenues are recognized from subscriptions over twelve months. 3. The Company recognizes revenue of product sales of hemp-related products and liquor distribution upon transfer of title to the customer. Customer purchase orders and/or contracts are generally used to determine the existence of contract. Shipping documents and terms and the completion of any customer acceptance requirements, when applicable, are used to verify product delivery, or to satisfy the performance obligation. The Company determines and allocates the transaction price based upon the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. The Company has no product returns or sales discounts and allowances because goods delivered and accepted by customers are normally not returnable. 4. Other revenues include various fee-based income earned through banner advertisements, webpage hosting and maintenance, on-line promotion and translation services, advertising and promotion fees on the Company’s website, sponsorship fees from investment seminars, road shows, forums on the Company’s website, and referral fees from cryptocurrency referrals. The sales prices of these services are fixed and determinable at the time the contracts are signed and there are no provisions for refunds contained in these contracts. These revenues are recognized when all significant performance obligations have been satisfied and collection of the resulting receivable is reasonably assured. The Company recognized revenue pursuant to revenue recognition principles presented in SAB Topic 13 prior to May 31, 2018. First, persuasive evidence of an arrangement. Second, delivery has occurred, or services have been rendered. Third the seller’s price to the buyer is fixed or determinable. And last collectability is reasonably assured. We adopted ASU 2014-09, or ASC 606, on June 1, 2018 and it did not have a material impact on our financial position or results of operations. The guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Financial Instruments – Recognition and Measurement Recognition and measurement of financial assets and financial liabilities- In January 2016, the FASB issued ASU 2016-01 amending various aspects of the recognition, measurement, presentation, and disclosure requirements for financial instruments. The changes mainly relate to the requirement to measure equity investments in unconsolidated subsidiaries, other than those accounted for under the equity method of accounting, at fair value with changes in fair value recognized in earnings. However, this ASU permits entities to elect to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. This ASU is effective for the Company as of June 1, 2018. As a result of the adoption of this ASU, the Company reclassified $486,789 in the net unrealized losses, net of tax, on equity securities previously classified as available-for-sale, from accumulated other comprehensive loss to accumulated deficit. In addition, changes in value due to the revaluation of equity securities are recorded in unrealized gain on equity securities, net in the consolidated statement of comprehensive (loss) and income. Foreign Currency The Company’s financial statements are presented in U.S. dollars ($), which is the reporting and functional currency for the Company. The functional currency of the two subsidiaries operated in PRC, CBD Biotech and Newcoins168, is the Chinese Renminbi (“RMB”). The functional currency of the subsidiary operated in Canada, CIIX Online Ltd. is the Canadian Dollar (“CAD”). Assets and liabilities are translated at the exchange rates as of the balance sheet date. Shareholders’ contribution is translated at historical rate. Income and expenditures are translated at the average exchange rate of the period. The RMB is not freely convertible into foreign currency and all foreign currency exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US dollar at the rates used in translation. The exchange rates used were as follows: May 31, 2019 Spot rate RMB 6.90 to US $1.00 Spot rate CAD 1.35 to US $1.00 Average rate for the year end May 31, 2019 RMB 6.79 to US $1.00 Average rate for the year end May 31, 2019 CAD 1.32 to US $1.00 May 31, 2018 Balance sheet RMB 6.40 to US $1.00 Average rate for the year end May 31, 2018 RMB 6.36 to US $1.00 Cash and cash equivalents The Company considers all cash on hands and the highly liquid instruments with an original maturity of three months or less to be cash equivalents. There is no cash equivalents as of May 31, 2019 and 2018. Accounts Receivable, net The Company extends unsecured credit to its customers in the ordinary course of business. Accounts receivable are reported at their outstanding unpaid principal balances net of allowances for uncollectible accounts. The Company provides for allowances for uncollectible receivables based on management’s estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. The Company writes off accounts receivable against the allowance for doubtful accounts when a balance is determined to be uncollectible. As of May 31, 2019 and 2018, the Company determined that an allowance was not needed. Concentration of Credit Risk The Company maintains cash at banks in the United States and PRC. Should any bank holding cash become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose the cash with that bank; however, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. In the PRC, a depositor has up to RMB 500,000 insured by the People’s Bank of China Financial Stability Bureau (“FSD”), whereas the standard insurance amount is $250,000 per depositor in a bank insured by the Federal Deposit Insurance Corporation (“FDIC”) in the United States. As of May 31, 2019 and 2018 the Company has $608,908 and $780,726 cash balances uninsured, respectively. Major customers and vendors Two customers accounted for 46% of the total sales of the Company for year ended May 31, 2019 with $380,322 accounts receivable outstanding as of May 31, 2019. One customer accounted for 22% of the total sales of the Company for the year ended May 31, 2018 without accounts receivable outstanding as of May 31, 2018. Two vendors accounted for 71% of the total purchase of the Company for the year ended May 31, 2019 with $76,002 accounts payable outstanding. There was no vendor concentration for the Company for the year ended May 31, 2018. The Company has operations in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by the political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. Marketable equity securities Marketable equity securities is comprised of publicly traded stocks received in return for providing investor relations services to the Company’s customers. The service terms range from one month to a year. The Company considers the securities to be liquid and convertible to cash within a year. The Company has the ability and intent to liquidate any security that the Company holds to fund operations over the next twelve months, if necessary, and as such has classified all of its marketable securities as short-term. In accordance with the provisions of topic 820-10-15-5, which states that an equity security has a readily determinable fair value if it meets the condition of having a “sales prices or bid-and-asked quotations which are currently available on a securities exchange registered with the U.S. Securities and Exchange Commission (SEC) or in the over-the-counter market, provided that those prices or quotations for the over-the-counter market are publicly reported by the National Association of Securities Dealers Automated Quotation systems or by the OTC Markets Group Ins. Restricted stock meets that definition if the restriction terminates within one year.” These shares were classified as marketable securities in accordance with ASC 320-10-25-1 as the Companies intention is to sell them in the near-term (less than one year). In compliance with ASC 320-10-35-1, equity securities that have readily determinable fair values that are classified as marketable securities shall be measured subsequently at fair value in the statement of financial position. The Company has adopted ASU 2016-01 from June 1, 2018, and as a result, unrealized holding gains and losses for marketable equity securities (including those classified as current assets) shall be reported as unrealized gain (loss) in the consolidated statement of operation and comprehensive income (loss) under loss before income taxes. As these shares will be earned over the term of the contracts, the Company will defer the recognition of the earnings of the revenue over the period the services are performed. The value recorded will be determined by multiplying the average of the closing price on the last day of the month for the period being reported based on closing market price per share. Inventories Inventories include industrial hemp-related finished products and liquor, stated at the lower of cost or net realizable value using the weighted average cost method. Management reviews inventories for obsolescence and cost in excess of net realizable value at least annually and records a reserve against the inventory and additional cost of goods sold when the carrying value exceeds net realizable value. There was no reserve needed for inventory obsolescence and slow-moving as of May 31, 2019 and 2018. Equity Method investments Under equity method, the Company records its proportionate share of the investee’s profit or loss based on the specified profit and loss percentage. Distributions received from equity method investees are accounted for as returns on investment and classified as cash inflows from operating activities, unless the Company’s cumulative distributions received less distributions received in prior periods that were determined to be returns of investment exceed cumulative equity in earnings recognized by the Company. When such an excess occurs, the current year distribution up to this excess would be considered a return of investment and classified as cash inflows from investing activities. In September 2017, the Company entered a letter of intent to invest $60,000 (44.45% of ownership) to jointly operate Beijing New Sino-North America Financial Information Co., Ltd and its subsidiaries (“Sino-U.S. Finance”) with three Chinese individuals to operate a mobile application under the name of “Sino-U.S. Finance” slated to provide a platform of information and analysis for Chinese-speaking investors in the PRC and US. The Company started to account the investment under equity method in the year ended May 31, 2018 and the proportional operation losses picked up for the year ended of May 31, 2018 was $93,562, higher than the $60,000 investment amount. According to ASC 323-10-35-19, if the carrying amount of the investment is reduced to zero, and there are no other investments in the investee, the equity method normally is discounted, and investee losses are no longer reported on the income statement. Thus, the Company recorded $60,000 investment loss for Sino-U.S. Finance for the year ended May 31, 2018 and with $0 balance under long-term investment as of May 31, 2019 and 2018. Property and Equipment, net Property and equipment are stated at cost minus accumulated depreciation and any accumulated impairment. Depreciation and amortization of property and equipment is calculated using the straight-line method over estimated useful lives ranging from three to five years. Leasehold improvements are amortized over the term of the lease. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Gains and losses from retirement or replacement are included in statement of operations. Depreciation on equipment is provided on a straight-line basis over their expected useful lives at the following annual rates. Computer equipment 3 years Furniture & fixtures 3 years Leasehold improvements Term of the lease Website Development, Net The Company accounts for its development costs in accordance with ASC 350-50, “Accounting for Website Development Costs.” The Company’s website comprises multiple features and offerings that are currently developed with ongoing refinements. In connection with the development of its products, the Company has incurred external costs for hardware, software, and consulting services, and internal costs for payroll and related expenses of its technology employees directly involved in the development. All hardware costs are capitalized as fixed assets. Purchased software costs are capitalized in accordance with ASC 350-50-25 related to accounting for the costs of computer software developed or obtained for internal use. All other costs are reviewed to determine whether they should be capitalized or expensed. Impairment of Long-life Assets In accordance with ASC 360, the Company reviews its long-lived assets, including property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. There was no impairment for the years ended May 31, 2019 and 2018 . Deferred revenue The Company receives payment for subscription revenues in advance before the subscription service is granted. The company recognizes the revenue as being earned as the services are provided. The amount paid for which services have not yet been provided related to subscription revenues is recorded as a liability in the current or long-term portion of the liabilities section of the balance sheet. The Company also receives shares of stocks and warrants as means of payments for the investor relationship (“IR”) service provided. The fair market value of the stocks and warrants on the contract date are amortized and recognized as IR revenue over the contract terms. As of May 31, 2019 and 2018, the deferred revenue compromised as following: May 31, 2019 May 31, 2018 Deferred subscription $ 503,644 $ 587,194 Unearned IR revenue 137,255 315,238 Total 640,899 902,432 Current (518,570 ) (787,557 ) Noncurrent $ 122,329 $ 114,875 Fair Value of Financial Instruments The Company has adopted the provisions of ASC Topic 820, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. ASC 820 does not require any new fair value measurements but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels: · Level one – Quoted market prices in active markets for identical assets or liabilities; · Level two – Inputs other than level one inputs that are either directly or indirectly observable; and · Level three – Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. The carrying amount of cash and cash equivalents, investments available for sale, accounts receivable, due from related party, inventories, other current assets, accounts payable, deferred revenue (current and noncurrent), short-term notes and other current liabilities approximates fair value because of the short term nature of these instruments and the fair values close to its carrying value for the non-current deferred revenue. The following table summarizes the fair value and carrying value of the Company’s assets and liabilities as of May 31, 2019: Fair Value Carrying Level 1 Level 2 Level 3 Value Assets - Cash $ 1,311,984 $ – $ – $ 1,311,984 Short-term investments, available for sale $ 1,133,256 $ – $ – $ 1,133,256 Cryptocurrency $ 67,420 $ – $ – $ 67,420 Liability - Short-term notes $ – $ 5,387,609 $ – $ 5,873,709 The following table summarizes the fair value and carrying value of the Company’s assets and liabilities as of May 31, 2018: Fair Value Carrying Level 1 Level 2 Level 3 Value Assets - Cash $ 1,390,258 $ – $ – $ 1,390,258 Short-term investments, available for sale $ 1,230,754 $ – $ – $ 1,230,754 Cryptocurrency $ 31,479 $ – $ – $ 31,479 Liability - Short-term notes $ – $ 998,192 $ – $ 1,058,084 Short-term notes – The fair value of such notes payable had been determined based on 10% and 6% annual interest rates and the proximity to the issuance date as of May 31, 2019 and 2018, respectively. The Company uses Level 1 of the fair value hierarchy to measure the fair value of digital currencies and revalues its digital currencies at every reporting period and recognizes gains or losses in the consolidated statements of operations that are attributable to the change in the fair value of the cryptocurrencies. Other Revenue Other revenue is comprised of revenue related to Forex service fees, referral fees and other miscellaneous service revenues generated which are recognized over the term the services are to be provided. For the year ended May 31, 2019 and 2018 details as below: May 31, May 31, Misc. service revenues $ 64,646 $ 23,383 Bitcoin trading class revenues 32,898 – Referral fees – 202,718 Total $ 97,544 $ 226,101 Costs of revenues Income Taxes Deferred tax assets are reduced by a full valuation allowance since it is more likely than not that the amount will not be realized. Deferred tax assets and liabilities are classified as current or noncurrent based on the classification of the underlying asset or liability giving rise to the temporary difference or the expected date of utilization of the carry forwards. On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) passed that significantly reforms the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The TCJA, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, effective as of January 1, 2018; limitation of the tax deduction for interest expense; limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, in each case, for losses arising in taxable years beginning after December 31, 2017 (though any such tax losses may be carried forward indefinitely); and repeal of the federal corporate Alternative Minimum Tax (“AMT”). In connection with the analysis of the impact of the TCJA, the Company determined that it does not have any impact on the financial statements. The Company considers the earnings of the non-U.S. subsidiaries to be indefinitely invested outside the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs. Advertising Costs Advertising costs are expensed when incurred. Earnings (Loss) Per Share Earnings (loss) per share is computed using the weighted average number of common shares outstanding during the period. Fully diluted loss per share are not calculated and presented on the financial statements as the calculation would be antidilutive for the years ended May 31, 2019 and 2018. Stock Based Compensation The Company accounts for share-based payments pursuant to ASC 718, “Stock Compensation” and, accordingly, the Company records compensation expense for share-based awards based upon an assessment of the grant date fair value for stock options and restricted stock awards using the Black-Scholes option pricing model. Stock compensation expense for stock options is recognized over the vesting period of the award or expensed immediately under ASC 718 when stock or options are awarded for previous or current service without further recourse. We periodically issue shares of our common stock to non-employees in non-capital raising transactions for fees and services. We account for stock issued to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees Preferred Stock Beneficial Convertible Feature Upon issuance of preferred stock convertible in shares of common stock at a price lower than the fair market value of common stock on the date of issuance, in accordance with the guidance provided in ASC 505-10-50, we have recorded the intrinsic value of this beneficial conversion feature (“BCF”). In accordance with ASC 470-20-30-6 Intrinsic value shall be calculated at the commitment date as the differences between the conversion price and the fair value of the common stock or other securities into which the security is convertible, multiplied by the number of shares into which the security is convertible. In according to ASC 470-20-30-8, if the intrinsic value of the beneficial conversion feature is greater than the proceeds allocated to the convertible instrument, the amount of the discount assigned to the beneficial conversion feature shall be limited to the amount of the proceeds allocated to the convertible instrument. Since all the preferred stocks are issued on different date, we calculate the intrinsic value for each individual preferred stock issuance based on stock issuance date. If the intrinsic value exceeds actual proceeds we received, actual proceeds will be BCF, otherwise, the intrinsic value is the BCF. Recent Accounting Pronouncements Upon issuance of final pronouncements, we review the new accounting literature to determine its relevance, if any, to our business. The Company is in the progress of evaluating the following accounting updates: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, for public business entities that are U.S. Securities and Exchange Commission (SEC) filers, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Subsequently, the FASB announced certain codification improvements including ASU 2018-19, ASU-2019-04 and ASU 2019-05. The Company is currently evaluating the impact will have on its consolidated financial statements and associated disclosures. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, Effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company is currently evaluating the impact will have on its consolidated financial statements and associated disclosures. Except for the above-mentioned pronouncements, there are no new recent issued accounting standards that will have material impact on the unaudited condensed consolidated financial position, statements of operations and cash flows. |
3. Other Current Assets
3. Other Current Assets | 12 Months Ended |
May 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | 3. Other Current Assets Other current assets consist of deposits on building space under an operating lease. Security deposits of office rent in United States, purchase deposits to vendors for the hemp and liquor product, prepaid expenses in both United States and Shanghai, set forth as below: May 31, 2019 May 31, 2018 Prepaid expenses $ 314,707 $ 79,822 Purchase deposit 49,773 145,376 Cryptocurrency on hands 67,420 31,479 Other receivables and others 39,220 74,951 Total $ 471,120 $ 331,628 The Company holds various types of cryptocurrency during the years ended of May 31, 2019 and 2018, including Ethereum, Bitcoin, Litecoin, and etc., and reported them under other current assets as of May 31, 2019 and 2018. The cryptocurrencies were recorded at fair market value and recognizes the change of the fair market value as unrealized gain or loss in the statement of operations. The cryptocurrencies are able to convert to cash like marketable securities. During the year ended May 31, 2019 and 2018 the Company recorded $25,259 and ($14,768) as unrealized gain (loss) on cryptocurrency, respectively. |
4. Long-term investments
4. Long-term investments | 12 Months Ended |
May 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Long-term investments | 4. Long-term investments Long-term investments include: 1) investment at Breakwater MB, LLC accounted as equity investment without readily available fair value since the Company does not have the significant influence, and 2) investment at Sino-U.S. Finance and Donald Capital LLC are accounted for equity method since the Company has the ability to exercise significant influence over the investee, under which the Company records its proportionate share of the investee’s profit or loss based on the specified profit and loss percentage. Distributions received from equity method investees are accounted for as returns on investment and classified as cash inflows from operating activities, unless the Company’s cumulative distributions received less distributions received in prior periods that were determined to be returns of investment exceed cumulative equity in earnings recognized by the Company. When such an excess occurs, the current year distribution up to this excess would be considered a return of investment and classified as cash inflows from investing activities. Since the Company’s investments include privately held companies where quoted market prices are not available and as a result, the cost method, combined with other intrinsic information, is used to assess the fair value of the investment. If the carrying value is above the fair value of an investment at the end of any reporting period, the investment is reviewed to determine if the impairment is other than temporary. Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis in the investment is established. In March 2017, the Company made a $250,000 investment in Breakwater MB, LLC, a cannabis-focused investment and consulting company, formed by Paul Dickman, the Company’s former CFO and a former board member of ChineseInvestors.com, Inc., as a means to invest capital in and provide consulting services to private, cannabis-focused companies as they transition into the public market. The invested capital was to be primarily be used to cover the costs of becoming a publicly traded company, a strategy the Company expects will provide significant investment appreciation and opportunity for liquidity. All opportunities will be evaluated by the investment committee comprised of ChineseInvestors.com, Inc.’s CEO Warren Wang, Medicine Man Technologies CEO Andy Williams, and Paul Dickman. Mr. Dickman is the managing member of Breakwater MB, LLC and Warren Wang serves as an advisor receiving no compensation for his services. Breakwater MB, LLC completed its planned raise of $1,000,000 for 50% of Breakwater MB, LLC’s equity by December 2017. The Company’s equity position in Breakwater MB, LLC stands at 8.75% with carrying value $140,000 and 12.5% with carrying value of $250,000 as of May 31, 2019 and May 31, 2018, respectively. ChineseInvestors.com, Inc.’s board reviewed and approved the investment with Mr. Dickman abstaining from voting. Mr. Dickman held 30% of the equity of Breakwater MB LLC as of May 31, 2018 after a $5,000 cash investment in equity in addition to the services that Mr. Dickman renders to Breakwater MB, LLC. On August 23, 2018, the Company entered into a Redemption Agreement and Mutual Release with Mr. Dickman to liquidate 40% of the Company’s investment in Breakwater MB, LLC. Mr. Dickman agreed to pay an aggregate purchase price of $100,000 ($75,000 at the closing and $25,000 no later than September 15, 2018) to redeem the portion of equity (the “Redemption Agreement”). The Redemption Agreement provided for a mutual release and waiver with regard to any claims the parties to the Redemption Agreement ever had, owned or held, or now have, own or hold, as against one another resulting from, arising out of or in any manner relating to or based on the Company’s investment in Breakwater MB LLC, the redemption, or otherwise relating to CIIX’s relationship with Breakwater MB LLC. As of May 31, 2019, the Company had received the $75,000 payment but not the $25,000 payment due September 15, 2018. The redemption agreement will be amended to reflect the payment by Breakwater MB, LLC in the amount of $75,000 only. The Company’s equity position in Breakwater MB, LLC currently stands at 8.75% as of May 31, 2019. For the year ended May 31, 2019, Breakwater transferred 400,000 shares of its stock holding in Grow Flow Inc to the Company as dividend distribution. Those shares were valued at $35,000 based on 20% of the equity holding $175,000 in Breakwater MB, LLC. In September 2017, the Company entered a letter of intent for investment cooperation to invest $60,000 (44.45% of ownership) to jointly operate Sino-U.S. Finance. The investee will operate a mobile application under the name of “Sino-U.S. Finance” which will provide the platform of information and analysis for Chinese investors in the PRC and US. The Company started to account the investment under equity method for the quarter May 31, 2018 and the proportional operation losses picked up for the year ended of May 31, 2018 was $93,562, higher than the $60,000 investment amount. According to ASC 323-10-35-19, if the carrying amount of the investment is reduced to zero, and there are no other investments in the investee, the equity method normally is discounted, and investee losses are no longer reported on the income statement. Thus, the Company recorded $60,000 investment loss for Sino-U.S. Finance for the year ended May 31, 2018 and with $0 balance under long-term investment as of May 31, 2019. In April 2019, the Company made a $160,000 investment to Donald Capital LLC a Delaware Corporation. The remaining 75.1% is held equally by Hamilton Strategy Group, Inc. and McDonald Global Enterprises LLC. Alex Hamilton is the CFO of CBD Biotech Cayman and is the President of Donald Capital LLC. Mr. Hamilton is also the owner of Hamilton Global Strategy. Donald Capital is a boutique investment bank, approved by FINRA and the SEC on May 14, 2019. As of May 31, 2019, the Company’s equity position in Donald Capital LLC currently stands at 24.9%. The Company recorded $11,397 investment loss for Donald Capital LLC for the year ended May 31, 2019 and with $148,603 balance under long-term investment as of May 31, 2019. |
5. Property and Equipment, net
5. Property and Equipment, net | 12 Months Ended |
May 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | 5. Property and Equipment, net Property and equipment are recorded at cost, net of accumulated depreciation is comprised of the following: May 31, 2019 May 31, 2018 Furniture & Fixtures $ 179,337 $ 154,748 Leasehold Improvements 96,718 35,176 276,055 189,924 Less: Accumulated Depreciation (177,805 ) (124,674 ) $ 98,250 $ 65,250 Depreciation expense for the years ending May 31, 2019 and 2018 was $54,454 and $19,159, respectively. |
6. Website development, net
6. Website development, net | 12 Months Ended |
May 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Website development, net | 6. Website development, net Website development is comprised of the following: May 31, 2019 May 31, 2018 Website development $ 276,861 $ 220,598 Less: Accumulated Amortization (128,500 ) (116,320 ) $ 148,361 $ 104,278 Amortization expense for the years ended May 31, 2019 and 2018 was $11,296 and $10,463, respectively. |
7. Short-term notes
7. Short-term notes | 12 Months Ended |
May 31, 2019 | |
Debt Disclosure [Abstract] | |
Short-term notes | 7. Short-term notes In September 2016, the Company issued one-year promissory notes in the total amount of $410,000 with 6% annum interest rate from various individuals (the “2016 Notes”). Based on the original lending agreements (the “2016 Note Agreements”), the Notes were to be secured by the stocks of the following companies held by the Company. Company Name Shares Secured Sino-Global Shipping America LTD (SINO) 80,000 Recon Technology LTD (RCON) 60,000 Nengfa Weiye Energy (NFEC) 185,000 SGOCO Group LTD (SGOC) 28,333 When entering the 2016 Note Agreements, the Company believed that the SINO contract would be executed, and SINO shares would be delivered upon signing the IR service contract. However, such it was not executed due to a disagreement among SINO’s management, as a result, the Company had not obtained the SINO shares as of May 31, 2018. On January 9, 2018, the Company filed a lawsuit on the Los Angeles County Superior Court, Case No. EC067692 for breach of contract and common counts against SINO-GLOBAL SHIPPING AMERICA LTD which has been settled. The parties recently executed the Settlement Agreement and the Company is awaiting receipt of the settlement shares. The Company obtained 100,000 NFEC shares when entering the 2016 Note Agreements and the remaining 85,000 shares were received by the end of year 2016. The Company obtained 50,000 RCON shares upon entering the IR service contract, which was 10,000 shares short of the pledged collateral for the 2016 Notes. Later, it was determined that the 2016 Notes were not properly collateralized as the ownership of the collateral had not been transferred from the Company to the collateral agent. For the year ended May 31, 2018, the Company paid off $306,627 principal of the 2016 Notes and $36,424 interest back to creditors; The remaining $116,669 principal of the 2016 Notes and interest payable were rolled over upon the lenders’ requests into new notes in 2017. On October 2017, the Company issued additional one-year promissory notes (the “2017 Notes”) totaling of $995,140 to various individuals. The interest rate for the 2017 Notes was 6% annum. Of the $995,140, as noted above, $116,669 was rolled over from the 2016 Notes with renegotiated terms. The 2017 Notes were to be secured by the stocks of the following companies held by the Company: Company name Shares Secured for 2017 Notes Nemaura Medical, Inc (NMRD) 100,000 Recon Technology LTD (RCON) 49,999 Solbright Group Inc. (SBRT) 195,122 Nengfa Weiye Energy (NFEC) 218,779 SGOCO Group LTD (SGOC) 29,412 The Company transferred NMRD shares held to the Collateral Agent in quarter ended May 31, 2018. It was determined that with the exception of 2017 Notes secured by NMRD shares, the remaining 2017 Notes were not properly secured as the shares could not be transferred to the Collateral Agent. In April 2018, the Company offered the lenders of the unsecured 2017 Notes the option to either rescind the 2017 Notes or allow them to remain in place as unsecured notes. Pursuant to the 2017 Notes, the Company/Borrower, at its sole discretion, could at any time during the term of the 2017 Notes, sell the above referenced stocks, or in the case of the 2017 Notes properly secured by shares in NMRD, instruct the Collateral Agent to sell, at which time the principal and accrued interest under the 2017 Notes would be accelerated and would become due and owing, and in addition, an incentive would be due and owing to the lenders collectively (in their proportionate share) in the total amount equal to 20% of the appreciation, if any, of the pledged collateral/stocks sold. None of the respective Fstocks/pledged collateral was sold during the term of the 2017 Notes The 2017 Notes were paid full according to their terms and were effectively cancelled. The Company paid $995,140 of the total $995,140 short term 2017 Notes in December 2018. On August 2018, the board of directors of the Company approved the Company to offer unsecured one-year term notes (the “2018 Notes-10%”) to individual lenders for a maximum $3,000,000 with 10% annual interest rate. As of May 31, 2019, the Company has issued 2018 Notes-10% in the total amount of $3,030,000 from various individual lenders. As of May 31, 2019, the Company accrued interest payable at $234,162 for the 2018 Notes-10%. On October 2018, the board of directors of the Company approved the Company to offer unsecured one-year term notes (the “2018 Notes-8%”) to individual lenders for a maximum $3,000,000 with 8% annual interest rate. At the time the Notes were executed, the Company held 220,000 shares of NF Energy Savings Corporation (“NFEC”) (the “Securities”). As of May 31, 2019, the Company had issued 2018 Notes-8% in the total amount of $1,154,800 to various individual lenders. As of May 31, 2019, the Company accrued interest payable at $43,916 for the 2018 Notes-8%. The 2018 Notes – 8% included an incentive based on the NFEC share value of $10.38 per share (the “Base Value”). As provided for in the 2018 Notes – 8%, the Company/Borrower agreed that if Borrower, at its sole discretion, sold any of the Securities, all of the Lenders in the Class would be entitled to receive in the aggregate, twenty percent (20%) of the excess of the sales proceeds of such Securities over the Base Value (the “Incentive Payment”). The Lender’s share of the Incentive Payment would be determined by the fraction of the total loan to all loans in the class, not exceed $3,000,000. As of May 31, 2019, the Company sold all holdings in NEFC and accrued incentives totaling $51,314 incentive payable to the lenders. On February 2019, the board of directors of the Company approved the Company offering unsecured one-year term notes (the “2019 Notes-10%”) to individual lenders for a maximum $5,000,000 with 10% annual interest rate. As of May 31, 2019, the Company has issued 2019 Notes-10% in the total amount of $1,688,908 from various individual lenders. As of May 31, 2019, the Company accrued interest payable at $15,205 for the 2019 Notes-10%. As of May 31, 2019 and May 31, 2018, the short-term notes are compromised as follows: May 31, May 31, Short-term 2017 notes Secured short term notes, due on October 2018, 6% annual interest rate $ – $ 635,140 Debt incentive to the secured short-term notes above – 41,539 Short term notes, due on April and May 2018, 6% annual interest rate – 360,000 Debt incentive related to the short-term notes above – 21,405 Total short-term 2017 notes $ – $ 1,058,084 Short-term 2018 notes-annual interest rate 10% due August to October 2019 $ 3,030,000 $ – Short-term 2018 notes-annual interest rate 8% due December 2019 $ 1,154,800 $ – Debt incentive related to the short-term notes above – – Total short-term 2018 notes-annual interest rate 8% $ 1,154,800 $ – Short-term 2019 notes-annual interest rate 10% due February 2020 $ 1,688,908 $ – Total Short-term notes $ 5,873,709 $ 1,058,084 |
8. Other Current Liabilities
8. Other Current Liabilities | 12 Months Ended |
May 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | 8. Other Current Liabilities Other current liabilities compromise as following: May 31, 2019 May 31, 2018 Accrued dividends $ 195,554 $ 179,218 Accrued interests and others 143,377 32,721 Accrued payroll and taxes 299,317 218,599 Total $ 638,248 $ 430,538 Accrued dividends as of May 31, 2019 are comprised of dividends payable to the preferred stockholders, Series D-2017 in the amount of $195,554. Accrued dividends as of May 31, 2018 are comprised of dividends payable to the preferred stockholders, Series C-2016 and Series D-2017, in the amount of $14,981 and $164,237, respectively. Accrued interest as of May 31, 2019 represents interest payable for the 2018-10% Notes, 2018-8% Notes and 2019-10% Notes. Accrued interest as of May 31, 2018 represents interest payable for 2017 Notes. |
9. Stockholders' Equity
9. Stockholders' Equity | 12 Months Ended |
May 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 9. Stockholders’ Equity As of May 31, 2019, the Company was authorized to issue 80,000,000 shares of common stock, $0.001 par value per share. In addition, 20,000,000 shares of $0.001 par value preferred stock were authorized. All common stock shares have full dividend rights. However, it is not anticipated that the Company will be declaring distributions in the foreseeable future. Series 2012 Convertible Preferred Stock During the third quarter of fiscal year 2013, effective February 29, 2012, the Company issued 2,003,776 shares of preferred stock as Series 2012 Convertible Preferred Stock for total proceeds of $2,003,776. The terms of the preferred stock allow the holder to convert each share of preferred stock into 1.25 shares of common stock at any time after nine months from the date of issuance. The holders of shares of preferred stock were entitled to receive a dividend of $0.06 per share per annum for the first two years from the issuance of the instruments. The Company maintained the right to suspend the dividend at its discretion if it is deemed necessary. The Company has paid off all the dividends for the Series 2012 Convertible Preferred Stock and the holders of this preferred stock no longer entitle to dividends. During the year ended May 31, 2019 and 2018, the shareholders of preferred stock series 2012 did not convert into common stocks. Series A-2014 Convertible Preferred Stock In the years ended May 31, 2016 and 2015 the Company issued 720,000 and 1,885,000 shares of preferred stock as Series A-2014 Convertible Preferred Stock for total proceeds of $2,605,000. The terms of the preferred stock allow the holder to convert each share of preferred stock into 2.5 shares of common stock at any time after nine months from the date of issuance. The holders of shares of preferred stock shall have the right to one vote for each share of common stock into which such preferred stock could convert. The holders of shares of preferred stock are entitled to receive a dividend of $0.06 per share per annum for the first two years from the issuance of the instruments, which has been recorded as an accrued dividend on the liabilities section of the balance sheet. The Company maintained the right to suspend the dividend at its discretion if it is deemed necessary. The Company has paid off all the dividends for the Series A- 2014 Convertible Preferred Stock and the holders of this preferred stock no longer entitle to dividends. During the year ended May 31, 2019 the shareholders of preferred stock series A-2014 converted 250,000 shares of preferred stock for 625,000 of common stock shares at a conversion rate of 1 share of preferred stock series A-2014 for 2.50 shares of common stock. Series C-2016 Convertible Preferred Stock In December 2016, the Company issued 5,000,043 shares of its Series C-2016 Convertible Preferred Stock at a price of $1.00 per share for total proceeds of $5,000,043. The terms of the preferred stock allow the holder to convert each share of preferred stock into 3 shares of common stock at any time after nine months from the date of issuance. The holders of shares of preferred stock are entitled to receive a dividend of $0.06 per share per annum for the first year from the issuance of the instruments, the Company maintained the right to suspend the dividend at its discretion if it is deemed necessary. The Company paid total $232,449 dividends to Series C-2016 Convertible Preferred Stock holders and the holders of this preferred stock no longer entitle to dividends. We calculated the BCF (defined below, the beneficial conversion feature) of the Series C-2016 Convertible Preferred Stock as $4,930,143. The BCF would be recorded as paid-in capital with an offsetting debit to convertible preferred stock. The discount attributable to the BCF, however, is amortized as a deemed dividend over the period from issuance to the date the convertible preferred stock becomes convertible. In our case, preferred stock-series C-2016 is convertible after six months from the date of issuance. We then amortize the BCF over six months period, we recorded $3,685,520 as deemed dividend as of May 31, 2018, and we recorded the remaining $1,244,622 as deemed dividend that increases accumulated deficit for the period ended August 31, 2017. During the year ended May 31, 2019, the shareholders of preferred stock series C-2016 converted 429,958 shares of preferred stock for 1,289,874 of common stock shares at a conversion rate of 1 share of preferred stock series C-2016 for 3.00 shares of common stock. Series D-2017 Convertible Preferred Stock For the year ended May 31, 2018, the Company issued 6,793,050 shares of its Series D-2017 Convertible Preferred Stock at a price of $1.00 per share for total proceeds of $6,793,050. For the year ended May 31, 2019, the Company issued 3,578,000 shares of its Series D-2017 Convertible Preferred Stock at a price of $1.00 per share for total proceeds of $3,578,000. The terms of the preferred stock allow the holder to convert each share of preferred stock into 2 shares of common stock at any time from the date of issuance. The holders of shares of preferred stock are entitled to receive a dividend of $0.06 per share per annum for the first two years from the issuance, which has been recorded as an accrued dividend on the liabilities section of the balance sheet. The Company maintained the right to suspend the dividend at its discretion if it is deemed necessary. We calculated the BCF of the preferred shares as $992,700 and $3,933,443 for the year ended May 31, 2019 and 2018, respectively. The BCF would be recorded as paid-in capital with an offsetting debit to convertible preferred stock. The discount attributable to the BCF, however, is amortized as a deemed dividend over the period from issuance to the date the convertible preferred stock becomes convertible. In our case, preferred stock-series D-2017 is convertible at any time from the date of issuance. We recorded $992,700 and $3,933,443 as deemed dividend as of May 31, 2019 and 2018, respectively. During the year ended May 31, 2019, the shareholders of preferred stock series D-2017 converted 4,184,000 shares of preferred stock for 8,368,000 of common stock shares at a conversion rate of 1 share of preferred stock series D -2017 for 2.00 shares of common stock. Restricted Common Stock During the year ended May 31, 2018, the Company granted 1,520,000 shares of restricted common stock for compensation. The stock was valued from $0.49 to $0.87 per share based on the market price at the grant date and fully vested immediately since the service had been provided. The compensation and consulting expense was recorded as general and administrative expenses totaling $770,220 for the year ended May 31, 2018. On July 26, 2018, the Company entered into a Consulting Agreement with Regal Consulting, LLC (“Regal”). The agreement had a five-month term ending January 21, 2019, pursuant to which Regal received 20,000 shares of the Company’s common stock per month for the term of the Agreement for a total of 100,000 shares, in addition to other compensation. $67,000 in share-based compensation expense has been recorded associated with the award for the year ended May 31, 2019. On June 20, 2019, the Company entered into a Consulting Agreement with Regal Consulting, LLC (“Regal”). The agreement had a six-month term ending December 20, 2019, pursuant to which Regal received 30,000 shares of the Company’s common stock per month for the term of the Agreement for a total of 180,000 shares, in addition to other compensation. The Company provided notice of termination on August 16, 2019. On August 9, 2018, the Company entered into a Services Agreement with IRTH Communications LLC (“IRTH”) for a one-year term, pursuant to which ITRH was to receive $100,000 worth of shares of the Company’s common stock in addition to other compensation. On August 22, 2018, the Company adopted a resolution authorizing the issuance of 226,245 shares of the Company’s common stock to IRTH for its professional services to be provided during the term of the agreement. $83,333 in share-based compensation expense has been recorded associated with the award for the year ended May 31, 2019. The Company did not renew this agreement with IRTH at the end of the term. On August 9, 2018, the Company entered into a Consulting Agreement with Axis Partners, Inc. (“Axis”). The agreement is for a six-month term, pursuant to which Axis is to receive 150,000 shares of the Company’s common stock for the term of the agreement. On August 22, 2018, the Company adopted a resolution authorizing the issuance of 150,000 shares of the Company’s common stock to Axis for its professional service to be provided during the term of the agreement. $100,500 share-based compensation expense has been recorded associated with the award for the year ended May 31, 2019. On August 24, 2018, the Board adopted a resolution ratifying the award to Melissa Armstrong of an additional 50,000 shares of common stock, for a total award of 100,000 shares, effective October 26, 2016. All services to be performed in conjunction with this award have been fully performed and the shares were fully vested as of the effective date of the award. $33,500 share-based compensation expense was recorded associated with the award for the year ended May 31, 2019. During the year ended May 31, 2019, the Company granted 4,047,000 shares of restricted common stock compensation to employees and contractors. The stock was valued from $0.44 to $0.47 per share and fully vested on the grant date as the service had been provided. The compensation and consulting expense were recorded as general and administrative expenses totaling $1,996,940 for the year ended May 31, 2019. |
10. Related Party Transactions
10. Related Party Transactions | 12 Months Ended |
May 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 10. Related Party Transactions Mrs. Lan Jiang is the spouse of the Company’s CEO, Mr. Warren Wang. During the years ended May 31, 2019 and 2018, she received 800,000 and 380,000 restricted shares of the Company’s stock compensation with the fair market value $380,000 and $186,200 as of grant date. As of May 31, 2019, the Company owes $87,379 to the CEO, Mr. Warren Wang for daily operations. The Company made a long-term investment of $250,000 to Breakwater MB LLC in March 2017 formed by the Company’s former board member and former CFO, Paul Dickman. Breakwater MB LLC returned $75,000 and issued $35,000 dividend to the Company in year ended May 31, 2019. The Company’s equity position in Breakwater MB, LLC will be approximately 8.75% and 12.5% as of May 31, 2019 and 2018, respectively. Refer to Note 4 for investment details. The Company paid $62,500 and $72,500 to Breakwater Corporate Finance in years ended May 31, 2019 and 2018, a consulting firm owned by the Company’s former board member and former CFO, Paul Dickman. Mr. Dickman resigned from his position as the Company’s Chief Financial Officer effective January 31, 2019. He resigned from the Board of Directors effective April 3, 2019. The Company purchased the shares of Medicine Man Technologies, Inc. (“MDCL”) in April 2014 using equity method of accounting initially and started to account the ownership as investment available for sale as of May 31, 2015 as the Company no longer had “significant influence” over MDCL as a result of shares issuance. The Company liquidated 1,306,378 shares of MDCL for $1,996,939 cash during the year ended May 31, 2018. The Company earned additional 31,250 shares for investor relation service provided for the year ended May 31, 2019. The Company still held 72,488 and 41,238 shares of MDCL stock representing $260,232 and $74,696, respectively of value based upon the closing market price of $3.59 and $1.86 on May 31, 2019 and 2018, respectively. In April 2019, the Company made a $160,000 investment to Donald Capital LLC a Delaware Corporation. The Company received 24.9% interest in Donald Capital LLC. The remaining 75.1% is held equally by Hamilton Strategy Group, Inc. and McDonald Global Enterprises LLC. Alex Hamilton is the CFO of CBD Biotech Cayman and is the President of Donald Capital LLC. Mr. Hamilton is also the owner of Hamilton Global Strategy. Donald Capital is a boutique investment bank, approved by FINRA and the SEC on May 14, 2019. As of May 31, 2019, the Company’s equity position in Donald Capital LLC currently stands at 24.9%. Refer to Note 4 for investment details. |
11. Commitments and Concentrati
11. Commitments and Concentrations | 12 Months Ended |
May 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Concentrations | 11. Commitments and Contingencies Operating Leases The Company entered into lease agreements for its operations in San Gabriel (California), New York City (New York), Flushing (New York), Richmond (British Columbia) and Shanghai (China) since 2013 with lease terms ranging from two to four years. Future minimum lease commitments for office facilities as of May 31, 2019 are as follows: For the years ended May 31, 2020 $ 305,731 2021 241,972 2022 92,744 2023 95,526 $ 735,973 For the years ended May 31, 2019 and 2018, the total rent expense for office facilities was $403,434 and $227,422, respectively. Litigation As stated above, when entering the 2016 Note Agreements, the Company believed that the SINO IR Service Agreement would be executed, and SINO shares would be delivered upon signing the agreement. However, the agreement was not executed due to a disagreement among SINO’s management, and as a result, the Company did not receive the SINO shares despite commencing performance under the Agreement. On January 9, 2018, the Company filed a lawsuit on the Los Angeles County Superior Court, Case No. EC067692 for breach of contract and common counts against SINO-GLOBAL SHIPPING AMERICA LTD. The dispute was ultimately arbitrated by the American Arbitration Association in May 2019 and the parties reached a settlement whereby SINO will issue 40,000 shares of its Rule 144 Common Stock to the Company in full settlement of the claim. The Settlement Agreement has been executed by the parties, and the Company is awaiting receipt of the settlement shares. In or about October 9, 2018, a former employee filed an administrative claim with the U.S. Equal Employment Commission. In or about June 2019, the former employee and the Company entered into a “no fault” Confidential Settlement Agreement pursuant to which all claims and controversies were fully and finally settled. |
12. Income Taxes
12. Income Taxes | 12 Months Ended |
May 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes The Company recorded no income tax provision or benefit for the years ended May 31, 2019 and 2018, because the Company believes it is more likely than not that these will not be utilized in the near future due to net losses. The Company generated no taxable income. The income tax provision (benefit) differs from the amount computed by applying the U.S. Federal income tax rate of 21% plus applicable state rates to the loss before income taxes due to the unrecognized benefit resulting from the Company’s valuation allowance, as well as due to nondeductible expenses. For income tax reporting purposes, the Company has approximately $25 million and $16 million of net operating loss (the “NOL”) carry forwards as of May 31, 2019 and 2018. Tax Reform Act of 1986 contains provisions that may limit the net operating loss carry forwards and tax credits available to be used in any given year if certain events occur, including significant changes in ownership interests. Realization of net operating loss and tax credit carry forwards is dependent on generating sufficient taxable income prior to their expiration dates. The comprehensive tax legislation (the “Tax Act”) issued on December 22, 2017 disallows the carryback of NOLs but allow for the indefinite carryforward of those NOLs and a new limitation on NOL utilization is added for the NOL incurred in years ending after December 31, 2017. The NOL deduction is limited for 80% of the income for NOL generated after December 31, 2017. As of May 31, 2019 and 2018, the Company had approximately $5.25 million and $5.6 million, respectively, of net deferred tax assets, comprised primarily of the potential future tax benefits from net operating loss carry forwards. Based upon the level of historical taxable income and projections for future taxable income over the period in which the deferred tax assets are deductible, management could not conclude that realization of the deferred tax assets as of May 31, 2019 and 2018, was more likely than not, and therefore, the Company has recorded a valuation allowance to reduce the net deferred tax assets to zero. The amount of deferred tax assets considered realizable could be adjusted in the near term if future taxable income is generated. The Company’s effective tax rate differs from the statutory rate due to the following (expressed as a percentage of pre-tax income): May 31, 2019 May 31, 2018 Federal Statutory Rate 21% 21% State Statutory Rate 6% 6% Change in Rate / Other 3% 3% Permanent Tax Differences (3% ) (3% ) Calculated Rate 27% 27% Actual Calculated Rate (27% ) (27% ) Difference 0% 0% On December 22, 2017, the U.S. government enacted comprehensive tax legislation (the “Tax Act”), which lowers the U.S. federal corporate income tax rate from 35% to 21%, implementing a territorial tax system, imposing one-time tax on foreign unremitted earnings and setting limitations on deductibility of certain costs (e.g., interest expense), among other things. Due to the complexities involved in accounting for the recently enacted Tax Act, the U.S. Securities and Exchange Commission’s Staff Accounting Bulletin 118 (“SAB 118”) requires that the company include in its financial statements the reasonable estimate of the impact of the Tax Act on earnings to the extent such reasonable estimate has been determined. For the year ended May 31, 2019, the Company accrued a $0 tax expense for the Tax Act’s one-time transition tax on the foreign subsidiaries due to the accumulated deficit. No net operating losses is carried forward Realization of net operating loss and tax credit carry forwards are most likely than not for the foreign subsidiaries. For the year ended May 31, 2019, the Company did not accrue in its provisional tax benefit any amount related to the net change in deferred tax liabilities stemming from the Tax Act’s reduction of the U.S. federal tax rate from 35% to 21% as the Company provides full allowances for its net deferred tax assets as of May 31, 2019. |
13. Earnings (loss) per share
13. Earnings (loss) per share | 12 Months Ended |
May 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings (loss) per share | 13. Earnings (loss) per share The following table presents the calculation of the Company’s basic and diluted loss per share for the years ended: May 31, 2019 May 31, 2018 Net loss attributable to common shareholders of the Company $ (11,594,078 ) $ (12,918,683 ) Weighted average shares used to compute net loss per share available to common shareholders, basic and diluted 37,752,790 22,427,427 Basic and diluted net loss per share $ (0.31 ) $ (0.58 ) For the years ended May 31, 2019 and 2018, outstanding preferred stocks of 7,031,050 shares and 8,317,008 shares, respectively, were excluded from the computation of diluted net loss per share as the impact of including those option shares would be anti-dilutive. |
14. Subsequent Events
14. Subsequent Events | 12 Months Ended |
May 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent events On August 5, 2019, the Company announces the appointment of Shelby Chan as an independent director to serve until the next annual meeting of the shareholders. Ms. Chan is a licensed certified public accountant in Hong Kong. Ms. Chan has experience in working with the financial reporting of publicly traded companies. During the period from June 1, 2019 until August 28, 2019, the shareholders of preferred stock series D-2017 converted 505,000 shares of preferred stock for 1,010,000 of common stock shares at a conversion rate of 1 share of preferred stock series D-2017 for 2 shares of common stock. |
2. Critical Accounting Polici_2
2. Critical Accounting Policies and Estimates (Policies) | 12 Months Ended |
May 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation These accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). The consolidated financial statements include the operations of Chineseinvestors.com Inc. and its subsidiaries. The Company’s wholly owned subsidiaries include ChineseHempOil.com Inc, CBD Biotech, Hemp Logic, CIIX Online, Newcoins1688, Bitcoin Trading Academy LLC, CIIX Online Ltd and Blue Ocean Capital Holding LLC. Intercompany accounts and transactions have been eliminated upon consolidation. Certain reclassifications have been made to the consolidated financial statements for prior years to the current year’s presentation. Such reclassifications have no effect on net income as previously reported. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates and assumptions. On an ongoing basis, management evaluates its estimates based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements: Revenue from Contracts with Customers On June 1, 2018, the Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2014-09, with regard to FASB ASC 606 Revenue from Contracts with Customers The Company’s revenue was mainly derived from four sources: 1. Investor-relations service income Investor-relations service income is earned by the Company in return for delivering current, publicly available information related to our clients. a. Identify contracts with clients. The Company enters into service agreements with clients. The Company always discloses the nature of the contract including the contact price. b. Identify performance obligations in the contract. Many of our investor-relations service contracts contain multiple performance obligations, including presentation of clients’ information on Chinesefn.com, translation of client all materials to be released, and monthly presentation in the newsletter the Company sends to its registered members. We account for individual performance obligations separately if they are distinct. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. c. Determine the transaction price. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. Judgment is required to determine the standalone selling price for each distinct performance obligation. We typically have more than one standalone selling price for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we determine the standalone selling price based on our overall pricing objectives, taking into consideration contract term, industry relevance and other factors. Fees are fixed based on rates specified in the service provided agreements, which do not provide for any refunds or adjustments. In determining the transaction price, the effects of the time value of money is not accounted as the normal term of our service provider agreements are one year or less. d. The service contract amount is valued based upon the fair market value of the clients’ stock closing price at the contract date multiplied by the numbers of shares earned when the service is paid by clients’ common stocks other than cash. For the performance obligations, such as the availability of our clients’ information in our website, the revenue is recognized over the term of the services period while the services are being provided, e. For the performance obligations will be surrendered at a point of time, the revenue is recognized after the service is provided. In addition, the Company is applying the definition of readily determinable fair value presented at Accounting Standards Codification 820-10-15-5 in assessing the amount to recognize in each accounting period. There is no significant adjustment from the implementation of ASU 2014-09. 2. Subscription income is recognized over the term of the subscription membership. Subscription fees for our registered members are charged on a per-month basis. Our customers do not have rights to the underlying software code of our solutions, and accordingly, we recognize subscription revenue over time on a straight-line basis over the contract term beginning on the date that our service is made available to the customer. Subscription terms are generally between one to three years but can occasionally be as short as one month or as long as 60 months. Long term deferred revenues are recognized from subscriptions over twelve months. 3. The Company recognizes revenue of product sales of hemp-related products and liquor distribution upon transfer of title to the customer. Customer purchase orders and/or contracts are generally used to determine the existence of contract. Shipping documents and terms and the completion of any customer acceptance requirements, when applicable, are used to verify product delivery, or to satisfy the performance obligation. The Company determines and allocates the transaction price based upon the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. The Company has no product returns or sales discounts and allowances because goods delivered and accepted by customers are normally not returnable. 4. Other revenues include various fee-based income earned through banner advertisements, webpage hosting and maintenance, on-line promotion and translation services, advertising and promotion fees on the Company’s website, sponsorship fees from investment seminars, road shows, forums on the Company’s website, and referral fees from cryptocurrency referrals. The sales prices of these services are fixed and determinable at the time the contracts are signed and there are no provisions for refunds contained in these contracts. These revenues are recognized when all significant performance obligations have been satisfied and collection of the resulting receivable is reasonably assured. The Company recognized revenue pursuant to revenue recognition principles presented in SAB Topic 13 prior to May 31, 2018. First, persuasive evidence of an arrangement. Second, delivery has occurred, or services have been rendered. Third the seller’s price to the buyer is fixed or determinable. And last collectability is reasonably assured. We adopted ASU 2014-09, or ASC 606, on June 1, 2018 and it did not have a material impact on our financial position or results of operations. The guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Financial Instruments – Recognition and Measurement Recognition and measurement of financial assets and financial liabilities- In January 2016, the FASB issued ASU 2016-01 amending various aspects of the recognition, measurement, presentation, and disclosure requirements for financial instruments. The changes mainly relate to the requirement to measure equity investments in unconsolidated subsidiaries, other than those accounted for under the equity method of accounting, at fair value with changes in fair value recognized in earnings. However, this ASU permits entities to elect to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. This ASU is effective for the Company as of June 1, 2018. As a result of the adoption of this ASU, the Company reclassified $486,789 in the net unrealized losses, net of tax, on equity securities previously classified as available-for-sale, from accumulated other comprehensive loss to accumulated deficit. In addition, changes in value due to the revaluation of equity securities are recorded in unrealized gain on equity securities, net in the consolidated statement of comprehensive (loss) and income. |
Foreign Currency | Foreign Currency The Company’s financial statements are presented in U.S. dollars ($), which is the reporting and functional currency for the Company. The functional currency of the two subsidiaries operated in PRC, CBD Biotech and Newcoins168, is the Chinese Renminbi (“RMB”). The functional currency of the subsidiary operated in Canada, CIIX Online Ltd. is the Canadian Dollar (“CAD”). Assets and liabilities are translated at the exchange rates as of the balance sheet date. Shareholders’ contribution is translated at historical rate. Income and expenditures are translated at the average exchange rate of the period. The RMB is not freely convertible into foreign currency and all foreign currency exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US dollar at the rates used in translation. The exchange rates used were as follows: May 31, 2019 Spot rate RMB 6.90 to US $1.00 Spot rate CAD 1.35 to US $1.00 Average rate for the year end May 31, 2019 RMB 6.79 to US $1.00 Average rate for the year end May 31, 2019 CAD 1.32 to US $1.00 May 31, 2018 Balance sheet RMB 6.40 to US $1.00 Average rate for the year end May 31, 2018 RMB 6.36 to US $1.00 |
Cash and Cash Equivalents | Cash and cash equivalents The Company considers all cash on hands and the highly liquid instruments with an original maturity of three months or less to be cash equivalents. There is no cash equivalents as of May 31, 2019 and 2018. |
Accounts Receivable, net | Accounts Receivable, net The Company extends unsecured credit to its customers in the ordinary course of business. Accounts receivable are reported at their outstanding unpaid principal balances net of allowances for uncollectible accounts. The Company provides for allowances for uncollectible receivables based on management’s estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. The Company writes off accounts receivable against the allowance for doubtful accounts when a balance is determined to be uncollectible. As of May 31, 2019 and 2018, the Company determined that an allowance was not needed. |
Concentration of Credit Risk | Concentration of Credit Risk The Company maintains cash at banks in the United States and PRC. Should any bank holding cash become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose the cash with that bank; however, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. In the PRC, a depositor has up to RMB 500,000 insured by the People’s Bank of China Financial Stability Bureau (“FSD”), whereas the standard insurance amount is $250,000 per depositor in a bank insured by the Federal Deposit Insurance Corporation (“FDIC”) in the United States. As of May 31, 2019 and 2018 the Company has $608,908 and $780,726 cash balances uninsured, respectively. Major customers and vendors Two customers accounted for 46% of the total sales of the Company for year ended May 31, 2019 with $380,322 accounts receivable outstanding as of May 31, 2019. One customer accounted for 22% of the total sales of the Company for the year ended May 31, 2018 without accounts receivable outstanding as of May 31, 2018. Two vendors accounted for 71% of the total purchase of the Company for the year ended May 31, 2019 with $76,002 accounts payable outstanding. There was no vendor concentration for the Company for the year ended May 31, 2018. The Company has operations in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by the political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. |
Marketable equity Securities | Marketable equity securities Marketable equity securities is comprised of publicly traded stocks received in return for providing investor relations services to the Company’s customers. The service terms range from one month to a year. The Company considers the securities to be liquid and convertible to cash within a year. The Company has the ability and intent to liquidate any security that the Company holds to fund operations over the next twelve months, if necessary, and as such has classified all of its marketable securities as short-term. In accordance with the provisions of topic 820-10-15-5, which states that an equity security has a readily determinable fair value if it meets the condition of having a “sales prices or bid-and-asked quotations which are currently available on a securities exchange registered with the U.S. Securities and Exchange Commission (SEC) or in the over-the-counter market, provided that those prices or quotations for the over-the-counter market are publicly reported by the National Association of Securities Dealers Automated Quotation systems or by the OTC Markets Group Ins. Restricted stock meets that definition if the restriction terminates within one year.” These shares were classified as marketable securities in accordance with ASC 320-10-25-1 as the Companies intention is to sell them in the near-term (less than one year). In compliance with ASC 320-10-35-1, equity securities that have readily determinable fair values that are classified as marketable securities shall be measured subsequently at fair value in the statement of financial position. The Company has adopted ASU 2016-01 from June 1, 2018, and as a result, unrealized holding gains and losses for marketable equity securities (including those classified as current assets) shall be reported as unrealized gain (loss) in the consolidated statement of operation and comprehensive income (loss) under loss before income taxes. As these shares will be earned over the term of the contracts, the Company will defer the recognition of the earnings of the revenue over the period the services are performed. The value recorded will be determined by multiplying the average of the closing price on the last day of the month for the period being reported based on closing market price per share. |
Inventories | Inventories Inventories include industrial hemp-related finished products and liquor, stated at the lower of cost or net realizable value using the weighted average cost method. Management reviews inventories for obsolescence and cost in excess of net realizable value at least annually and records a reserve against the inventory and additional cost of goods sold when the carrying value exceeds net realizable value. There was no reserve needed for inventory obsolescence and slow-moving as of May 31, 2019 and 2018. |
Equity Method Investment | Equity Method investments Under equity method, the Company records its proportionate share of the investee’s profit or loss based on the specified profit and loss percentage. Distributions received from equity method investees are accounted for as returns on investment and classified as cash inflows from operating activities, unless the Company’s cumulative distributions received less distributions received in prior periods that were determined to be returns of investment exceed cumulative equity in earnings recognized by the Company. When such an excess occurs, the current year distribution up to this excess would be considered a return of investment and classified as cash inflows from investing activities. In September 2017, the Company entered a letter of intent to invest $60,000 (44.45% of ownership) to jointly operate Beijing New Sino-North America Financial Information Co., Ltd and its subsidiaries (“Sino-U.S. Finance”) with three Chinese individuals to operate a mobile application under the name of “Sino-U.S. Finance” slated to provide a platform of information and analysis for Chinese-speaking investors in the PRC and US. The Company started to account the investment under equity method in the year ended May 31, 2018 and the proportional operation losses picked up for the year ended of May 31, 2018 was $93,562, higher than the $60,000 investment amount. According to ASC 323-10-35-19, if the carrying amount of the investment is reduced to zero, and there are no other investments in the investee, the equity method normally is discounted, and investee losses are no longer reported on the income statement. Thus, the Company recorded $60,000 investment loss for Sino-U.S. Finance for the year ended May 31, 2018 and with $0 balance under long-term investment as of May 31, 2019 and 2018. |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost minus accumulated depreciation and any accumulated impairment. Depreciation and amortization of property and equipment is calculated using the straight-line method over estimated useful lives ranging from three to five years. Leasehold improvements are amortized over the term of the lease. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Gains and losses from retirement or replacement are included in statement of operations. Depreciation on equipment is provided on a straight-line basis over their expected useful lives at the following annual rates. Computer equipment 3 years Furniture & fixtures 3 years Leasehold improvements Term of the lease |
Website Development, Net | Website Development, Net The Company accounts for its development costs in accordance with ASC 350-50, “Accounting for Website Development Costs.” The Company’s website comprises multiple features and offerings that are currently developed with ongoing refinements. In connection with the development of its products, the Company has incurred external costs for hardware, software, and consulting services, and internal costs for payroll and related expenses of its technology employees directly involved in the development. All hardware costs are capitalized as fixed assets. Purchased software costs are capitalized in accordance with ASC 350-50-25 related to accounting for the costs of computer software developed or obtained for internal use. All other costs are reviewed to determine whether they should be capitalized or expensed. |
Impairment of Long-life Assets | Impairment of Long-life Assets In accordance with ASC 360, the Company reviews its long-lived assets, including property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. There was no impairment for the years ended May 31, 2019 and 2018 . |
Deferred revenue | Deferred revenue The Company receives payment for subscription revenues in advance before the subscription service is granted. The company recognizes the revenue as being earned as the services are provided. The amount paid for which services have not yet been provided related to subscription revenues is recorded as a liability in the current or long-term portion of the liabilities section of the balance sheet. The Company also receives shares of stocks and warrants as means of payments for the investor relationship (“IR”) service provided. The fair market value of the stocks and warrants on the contract date are amortized and recognized as IR revenue over the contract terms. As of May 31, 2019 and 2018, the deferred revenue compromised as following: May 31, 2019 May 31, 2018 Deferred subscription $ 503,644 $ 587,194 Unearned IR revenue 137,255 315,238 Total 640,899 902,432 Current (518,570 ) (787,557 ) Noncurrent $ 122,329 $ 114,875 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company has adopted the provisions of ASC Topic 820, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. ASC 820 does not require any new fair value measurements but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels: · Level one – Quoted market prices in active markets for identical assets or liabilities; · Level two – Inputs other than level one inputs that are either directly or indirectly observable; and · Level three – Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. The carrying amount of cash and cash equivalents, investments available for sale, accounts receivable, due from related party, inventories, other current assets, accounts payable, deferred revenue (current and noncurrent), short-term notes and other current liabilities approximates fair value because of the short term nature of these instruments and the fair values close to its carrying value for the non-current deferred revenue. The following table summarizes the fair value and carrying value of the Company’s assets and liabilities as of May 31, 2019: Fair Value Carrying Level 1 Level 2 Level 3 Value Assets - Cash $ 1,311,984 $ – $ – $ 1,311,984 Short-term investments, available for sale $ 1,133,256 $ – $ – $ 1,133,256 Cryptocurrency $ 67,420 $ – $ – $ 67,420 Liability - Short-term notes $ – $ 5,387,609 $ – $ 5,873,709 The following table summarizes the fair value and carrying value of the Company’s assets and liabilities as of May 31, 2018: Fair Value Carrying Level 1 Level 2 Level 3 Value Assets - Cash $ 1,390,258 $ – $ – $ 1,390,258 Short-term investments, available for sale $ 1,230,754 $ – $ – $ 1,230,754 Cryptocurrency $ 31,479 $ – $ – $ 31,479 Liability - Short-term notes $ – $ 998,192 $ – $ 1,058,084 Short-term notes – The fair value of such notes payable had been determined based on 10% and 6% annual interest rates and the proximity to the issuance date as of May 31, 2019 and 2018, respectively. The Company uses Level 1 of the fair value hierarchy to measure the fair value of digital currencies and revalues its digital currencies at every reporting period and recognizes gains or losses in the consolidated statements of operations that are attributable to the change in the fair value of the cryptocurrencies. |
Other revenue | Other Revenue Other revenue is comprised of revenue related to Forex service fees, referral fees and other miscellaneous service revenues generated which are recognized over the term the services are to be provided. For the year ended May 31, 2019 and 2018 details as below: May 31, May 31, Misc. service revenues $ 64,646 $ 23,383 Bitcoin trading class revenues 32,898 – Referral fees – 202,718 Total $ 97,544 $ 226,101 |
Costs of revenues | Costs of revenues |
Income Taxes | Income Taxes Deferred tax assets are reduced by a full valuation allowance since it is more likely than not that the amount will not be realized. Deferred tax assets and liabilities are classified as current or noncurrent based on the classification of the underlying asset or liability giving rise to the temporary difference or the expected date of utilization of the carry forwards. On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) passed that significantly reforms the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The TCJA, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, effective as of January 1, 2018; limitation of the tax deduction for interest expense; limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, in each case, for losses arising in taxable years beginning after December 31, 2017 (though any such tax losses may be carried forward indefinitely); and repeal of the federal corporate Alternative Minimum Tax (“AMT”). In connection with the analysis of the impact of the TCJA, the Company determined that it does not have any impact on the financial statements. The Company considers the earnings of the non-U.S. subsidiaries to be indefinitely invested outside the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs. |
Advertising Costs | Advertising Costs Advertising costs are expensed when incurred. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Earnings (loss) per share is computed using the weighted average number of common shares outstanding during the period. Fully diluted loss per share are not calculated and presented on the financial statements as the calculation would be antidilutive for the years ended May 31, 2019 and 2018. |
Stock Based Compensation | Stock Based Compensation The Company accounts for share-based payments pursuant to ASC 718, “Stock Compensation” and, accordingly, the Company records compensation expense for share-based awards based upon an assessment of the grant date fair value for stock options and restricted stock awards using the Black-Scholes option pricing model. Stock compensation expense for stock options is recognized over the vesting period of the award or expensed immediately under ASC 718 when stock or options are awarded for previous or current service without further recourse. We periodically issue shares of our common stock to non-employees in non-capital raising transactions for fees and services. We account for stock issued to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees |
Preferred Stock Beneficial Convertible Feature | Preferred Stock Beneficial Convertible Feature Upon issuance of preferred stock convertible in shares of common stock at a price lower than the fair market value of common stock on the date of issuance, in accordance with the guidance provided in ASC 505-10-50, we have recorded the intrinsic value of this beneficial conversion feature (“BCF”). In accordance with ASC 470-20-30-6 Intrinsic value shall be calculated at the commitment date as the differences between the conversion price and the fair value of the common stock or other securities into which the security is convertible, multiplied by the number of shares into which the security is convertible. In according to ASC 470-20-30-8, if the intrinsic value of the beneficial conversion feature is greater than the proceeds allocated to the convertible instrument, the amount of the discount assigned to the beneficial conversion feature shall be limited to the amount of the proceeds allocated to the convertible instrument. Since all the preferred stocks are issued on different date, we calculate the intrinsic value for each individual preferred stock issuance based on stock issuance date. If the intrinsic value exceeds actual proceeds we received, actual proceeds will be BCF, otherwise, the intrinsic value is the BCF. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Upon issuance of final pronouncements, we review the new accounting literature to determine its relevance, if any, to our business. The Company is in the progress of evaluating the following accounting updates: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, for public business entities that are U.S. Securities and Exchange Commission (SEC) filers, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Subsequently, the FASB announced certain codification improvements including ASU 2018-19, ASU-2019-04 and ASU 2019-05. The Company is currently evaluating the impact will have on its consolidated financial statements and associated disclosures. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, Effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company is currently evaluating the impact will have on its consolidated financial statements and associated disclosures. Except for the above-mentioned pronouncements, there are no new recent issued accounting standards that will have material impact on the unaudited condensed consolidated financial position, statements of operations and cash flows. |
2. Critical Accounting Polici_3
2. Critical Accounting Policies and Estimates (Tables) | 12 Months Ended |
May 31, 2019 | |
Accounting Policies [Abstract] | |
Exchange rate translation | May 31, 2019 Spot rate RMB 6.90 to US $1.00 Spot rate CAD 1.35 to US $1.00 Average rate for the year end May 31, 2019 RMB 6.79 to US $1.00 Average rate for the year end May 31, 2019 CAD 1.32 to US $1.00 May 31, 2018 Balance sheet RMB 6.40 to US $1.00 Average rate for the year end May 31, 2018 RMB 6.36 to US $1.00 |
Schedule of property useful lives | Depreciation on equipment is provided on a straight-line basis over their expected useful lives at the following annual rates. Computer equipment 3 years Furniture & fixtures 3 years Leasehold improvements Term of the lease |
Deferred revenue | May 31, 2019 May 31, 2018 Deferred subscription $ 503,644 $ 587,194 Unearned IR revenue 137,255 315,238 Total 640,899 902,432 Current (518,570 ) (787,557 ) Noncurrent $ 122,329 $ 114,875 |
Fair value of financial instruments | The following table summarizes the fair value and carrying value of the Company’s assets and liabilities as of May 31, 2019: Fair Value Carrying Level 1 Level 2 Level 3 Value Assets - Cash $ 1,311,984 $ – $ – $ 1,311,984 Short-term investments, available for sale $ 1,133,256 $ – $ – $ 1,133,256 Cryptocurrency $ 67,420 $ – $ – $ 67,420 Liability - Short-term notes $ – $ 5,387,609 $ – $ 5,873,709 The following table summarizes the fair value and carrying value of the Company’s assets and liabilities as of May 31, 2018: Fair Value Carrying Level 1 Level 2 Level 3 Value Assets - Cash $ 1,390,258 $ – $ – $ 1,390,258 Short-term investments, available for sale $ 1,230,754 $ – $ – $ 1,230,754 Cryptocurrency $ 31,479 $ – $ – $ 31,479 Liability - Short-term notes $ – $ 998,192 $ – $ 1,058,084 |
Other Revenue | For the year ended May 31, 2019 and 2018 details as below: May 31, May 31, Misc. service revenues $ 64,646 $ 23,383 Bitcoin trading class revenues 32,898 – Referral fees – 202,718 Total $ 97,544 $ 226,101 |
3. Other Current Assets (Tables
3. Other Current Assets (Tables) | 12 Months Ended |
May 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | May 31, 2019 May 31, 2018 Prepaid expenses $ 314,707 $ 79,822 Purchase deposit 49,773 145,376 Cryptocurrency on hands 67,420 31,479 Other receivables and others 39,220 74,951 Total $ 471,120 $ 331,628 |
5. Property and Equipment, net
5. Property and Equipment, net (Tables) | 12 Months Ended |
May 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment are recorded at cost, net of accumulated depreciation is comprised of the following: May 31, 2019 May 31, 2018 Furniture & Fixtures $ 179,337 $ 154,748 Leasehold Improvements 96,718 35,176 276,055 189,924 Less: Accumulated Depreciation (177,805 ) (124,674 ) $ 98,250 $ 65,250 |
6. Website development, net (Ta
6. Website development, net (Tables) | 12 Months Ended |
May 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Website development, net | Website development is comprised of the following: May 31, 2019 May 31, 2018 Website development $ 276,861 $ 220,598 Less: Accumulated Amortization (128,500 ) (116,320 ) $ 148,361 $ 104,278 |
7. Short-term notes (Tables)
7. Short-term notes (Tables) | 12 Months Ended |
May 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of notes secured by stock | In September 2016, the Company issued one-year promissory notes in the total amount of $410,000 with 6% annum interest rate from various individuals (the “2016 Notes”). Based on the original lending agreements (the “2016 Note Agreements”), the Notes were to be secured by the stocks of the following companies held by the Company. Company Name Shares Secured Sino-Global Shipping America LTD (SINO) 80,000 Recon Technology LTD (RCON) 60,000 Nengfa Weiye Energy (NFEC) 185,000 SGOCO Group LTD (SGOC) 28,333 On October 2017, the Company issued additional one-year promissory notes (the “2017 Notes”) totaling of $995,140 to various individuals. The interest rate for the 2017 Notes was 6% annum. Of the $995,140, as noted above, $116,669 was rolled over from the 2016 Notes with renegotiated terms. The 2017 Notes were to be secured by the stocks of the following companies held by the Company: Company name Shares Secured for 2017 Notes Nemaura Medical, Inc (NMRD) 100,000 Recon Technology LTD (RCON) 49,999 Solbright Group Inc. (SBRT) 195,122 Nengfa Weiye Energy (NFEC) 218,779 SGOCO Group LTD (SGOC) 29,412 |
Schedule of short-term debt | As of May 31, 2019 and May 31, 2018, the short-term notes are compromised as follows: May 31, May 31, Short-term 2017 notes Secured short term notes, due on October 2018, 6% annual interest rate $ – $ 635,140 Debt incentive to the secured short-term notes above – 41,539 Short term notes, due on April and May 2018, 6% annual interest rate – 360,000 Debt incentive related to the short-term notes above – 21,405 Total short-term 2017 notes $ – $ 1,058,084 Short-term 2018 notes-annual interest rate 10% due August to October 2019 $ 3,030,000 $ – Short-term 2018 notes-annual interest rate 8% due December 2019 $ 1,154,800 $ – Debt incentive related to the short-term notes above – – Total short-term 2018 notes-annual interest rate 8% $ 1,154,800 $ – Short-term 2019 notes-annual interest rate 10% due February 2020 $ 1,688,908 $ – Total Short-term notes $ 5,873,709 $ 1,058,084 |
8. Other Current Liabilities (T
8. Other Current Liabilities (Tables) | 12 Months Ended |
May 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | Other current liabilities compromise as following: May 31, 2019 May 31, 2018 Accrued dividends $ 195,554 $ 179,218 Accrued interests and others 143,377 32,721 Accrued payroll and taxes 299,317 218,599 Total $ 638,248 $ 430,538 |
11. Commitments and Concentra_2
11. Commitments and Concentrations (Tables) | 12 Months Ended |
May 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating Leases | For the years ended May 31, 2020 $ 305,731 2021 241,972 2022 92,744 2023 95,526 $ 735,973 |
12. Income Taxes (Tables)
12. Income Taxes (Tables) | 12 Months Ended |
May 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Effective tax rate schedule | May 31, 2019 May 31, 2018 Federal Statutory Rate 21% 21% State Statutory Rate 6% 6% Change in Rate / Other 3% 3% Permanent Tax Differences (3% ) (3% ) Calculated Rate 27% 27% Actual Calculated Rate (27% ) (27% ) Difference 0% 0% |
13. Earnings (loss) per share (
13. Earnings (loss) per share (Tables) | 12 Months Ended |
May 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share, Basic and Diluted | May 31, 2019 May 31, 2018 Net loss attributable to common shareholders of the Company $ (11,594,078 ) $ (12,918,683 ) Weighted average shares used to compute net loss per share available to common shareholders, basic and diluted 37,752,790 22,427,427 Basic and diluted net loss per share $ (0.31 ) $ (0.58 ) |
1. Organization and Nature of_2
1. Organization and Nature of Operations (Details Narrative) - USD ($) | 12 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2017 | |
Cash raised through sale of preferred stock | $ 3,578,000 | $ 6,793,050 | |
Net cash used in operating activities | (10,882,868) | (7,349,204) | |
Cash and cash equivalents | 1,311,984 | 1,390,258 | $ 1,770,729 |
Proceeds from issuance of debt | 5,873,709 | 995,140 | |
Series D-2017 Preferred Stock [Member] | |||
Cash raised through sale of preferred stock | $ 3,578,000 | $ 6,793,050 |
2. Critical Accounting Polici_4
2. Critical Accounting Policies and Estimates (Details - Exchange rates) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
China, Yuan Renminbi | ||
Translation rate at period end | 6.90 | 6.40 |
Translation rate for duration period | 6.79 | 6.36 |
C A D | ||
Translation rate at period end | 1.35 | |
Translation rate for duration period | 1.32 |
2. Critical Accounting Polici_5
2. Critical Accounting Policies and Estimates (Details - useful lives of Property and Equipment) | 12 Months Ended |
May 31, 2019 | |
Computer Equipment | |
Expected Useful Lives | 3 years |
Furniture and Fixtures | |
Expected Useful Lives | 3 years |
Leasehold Improvements | |
Expected Useful Lives | Term of the lease |
2. Critical Accounting Polici_6
2. Critical Accounting Policies and Estimates (Details - Deferred revenue) - USD ($) | May 31, 2019 | May 31, 2018 |
Total deferred revenue | $ 640,899 | $ 902,432 |
Current | (518,570) | (787,557) |
Noncurrent | 122,329 | 114,875 |
Deferred Subscription [Member] | ||
Total deferred revenue | 503,644 | 587,194 |
Unearned IR Revenue [Member] | ||
Total deferred revenue | $ 137,255 | $ 315,238 |
2. Critical Accounting Polici_7
2. Critical Accounting Policies and Estimates (Details - Fair Value) - USD ($) | May 31, 2019 | May 31, 2018 |
Assets | ||
Cash | $ 1,311,984 | $ 1,390,258 |
Short-term investments, available for sale | 1,133,256 | 1,230,754 |
Cryptocurrency | 67,420 | 31,479 |
Liability - | ||
Short-term notes | 5,873,709 | 1,058,084 |
Level 1 | ||
Assets | ||
Cash | 1,311,984 | 1,390,258 |
Short-term investments, available for sale | 1,133,256 | 1,230,754 |
Cryptocurrency | 67,420 | 31,479 |
Liability - | ||
Short-term notes | 0 | 0 |
Level 2 | ||
Assets | ||
Cash | 0 | 0 |
Short-term investments, available for sale | 0 | 0 |
Cryptocurrency | 0 | 0 |
Liability - | ||
Short-term notes | 5,387,609 | 998,192 |
Level 3 | ||
Assets | ||
Cash | 0 | 0 |
Short-term investments, available for sale | 0 | 0 |
Cryptocurrency | 0 | 0 |
Liability - | ||
Short-term notes | $ 0 | $ 0 |
2. Critical Accounting Polici_8
2. Critical Accounting Policies and Estimates (Details - Other revenue) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Revenues | $ 6,476,442 | $ 2,353,331 |
Other Revenues [Member] | ||
Revenues | 97,544 | 226,101 |
Other Revenues [Member] | Misc Service Revenues [Member] | ||
Revenues | 64,646 | 23,383 |
Other Revenues [Member] | Bitcoin Trading Class Revenues [Member] | ||
Revenues | 32,898 | 0 |
Other Revenues [Member] | Referral Fees [Member] | ||
Revenues | $ 0 | $ 202,718 |
2. Critical Accounting Polici_9
2. Critical Accounting Policies and Estimates (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Reclassification of securities from AOCI to Retained Earnings | $ 486,789 | |
Cash equivalents | 0 | $ 0 |
Allowance for doubtful accounts | 0 | 0 |
Cash balances uninsured | 608,908 | 780,726 |
Inventory reserve | 0 | 0 |
Depreciation expense | 54,454 | 19,159 |
Amortization expense | 11,296 | 10,463 |
Impairment of Long-life assets | 0 | 0 |
Lease assets | 668,000 | |
Lease liabilities | 668,000 | |
Sino-U.S. Finance [Member] | ||
Loss on investment | (60,000) | |
Long term investment | $ 0 | $ 0 |
Sales Revenue, Net [Member] | Two Vendors [Member] | ||
Concentration percentage | 71.00% | |
Accounts receivable | $ 76,002 | |
Sales Revenue, Net [Member] | Two Customers [Member] | ||
Concentration percentage | 46.00% | |
Accounts receivable | $ 380,322 | |
Sales Revenue, Net [Member] | One customer [Member] | ||
Concentration percentage | 22.00% | |
Accounts receivable | $ 0 | |
China | ||
Cash, FDIC Insured Amount | 500,000 | |
United States | ||
Cash, FDIC Insured Amount | $ 250,000 |
3. Other Current Assets (Detail
3. Other Current Assets (Details - Other Current Assets) - USD ($) | May 31, 2019 | May 31, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 314,707 | $ 79,822 |
Purchase deposits | 49,773 | 145,376 |
Cryptocurrency on hand | 67,420 | 31,479 |
Other current assets | 39,220 | 74,951 |
Total other current assets | $ 471,120 | $ 331,628 |
3. Other Current Assets (Deta_2
3. Other Current Assets (Details) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Unrealized (loss) gain on cryptocurrency | $ 25,259 | $ (14,768) |
4. Long-term investments (Detai
4. Long-term investments (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Long-term investments | $ 323,603 | $ 250,000 |
Equity in loss from equity method investments | (11,397) | (60,000) |
Breakwater MB, LLC [Member] | ||
Long-term investments | $ 250,000 | 148,603 |
Payment for investment | $ 250,000 | |
Investment ownership | 8.75% | 12.50% |
Stock transfered for dividend distribution, Shares | 400,000 | |
Stock transfered for dividend distribution, Value | $ 35,000 | |
Donald Capital [Member] | ||
Equity in loss from equity method investments | $ (11,397) | |
Investment ownership | 24.90% | |
Sino-U.S. Finance [Member] | ||
Long-term investments | $ 0 | |
Equity in loss from equity method investments | $ 60,000 |
5. Property and Equipment (Deta
5. Property and Equipment (Details - property and equipment) - USD ($) | May 31, 2019 | May 31, 2018 |
Property Plant and Equipment, Gross | $ 276,055 | $ 189,924 |
Less: accumulated depreciation | (177,805) | (124,674) |
Property Plant and Equipment. Net | 98,250 | 65,250 |
Furniture and Fixtures | ||
Property Plant and Equipment, Gross | 179,337 | 154,748 |
Leasehold Improvements | ||
Property Plant and Equipment, Gross | $ 96,718 | $ 35,176 |
5. Property and Equipment (De_2
5. Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 54,454 | $ 19,159 |
6. Website development (Details
6. Website development (Details) - USD ($) | May 31, 2019 | May 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Website development costs | $ 276,861 | $ 220,598 |
Less: accumulated amortization | (128,500) | (116,320) |
Total Intangible Assets | $ 148,361 | $ 104,278 |
6. Website development (Detai_2
6. Website development (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 11,296 | $ 10,463 |
7. Short-term notes (Details -
7. Short-term notes (Details - Short term notes) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Short term debt | $ 5,873,709 | $ 1,058,084 |
Secured Short Term Notes [Member] | ||
Short term debt | 0 | $ 1,058,084 |
2017 Notes [Member] | ||
Debt stated interest rate | 6.00% | |
2017 Notes [Member] | Secured Short Term Notes [Member] | ||
Short term debt | 0 | $ 635,140 |
Debt incentive | $ 0 | $ 41,539 |
Debt maturity date | Oct. 31, 2018 | |
Debt stated interest rate | 6.00% | 6.00% |
2017 Notes [Member] | Secured Short Term Notes [Member] | ||
Short term debt | $ 0 | $ 360,000 |
Debt incentive | $ 0 | $ 21,405 |
Debt maturity date | May 31, 2018 | |
Debt stated interest rate | 6.00% | 6.00% |
2018 Notes 10% [Member] | ||
Short term debt | $ 3,030,000 | $ 0 |
Debt stated interest rate | 10.00% | |
Secured Short Term Notes [Member] | ||
Short term debt | $ 1,154,800 | |
Secured Short Term Notes [Member] | 2018 Notes 8% [Member] | ||
Short term debt | 1,154,800 | 0 |
Debt incentive | $ 0 | 0 |
Debt maturity date | Dec. 31, 2019 | |
Debt stated interest rate | 8.00% | |
2019 Notes 10% [Member] | ||
Short term debt | $ 1,688,908 | $ 0 |
Debt maturity date | Feb. 28, 2020 |
7. Short-term notes (Details Na
7. Short-term notes (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Proceeds from issuance of short term debt | $ 5,873,709 | $ 995,140 |
Repayment of notes | 995,140 | $ 410,000 |
2017 Notes [Member] | ||
Debt issuance date | Oct. 15, 2017 | |
Debt face amount | $ 995,140 | |
Debt stated interest rate | 6.00% | |
Repayment of notes | $ 995,140 | |
2018 Notes 10% [Member] | ||
Debt stated interest rate | 10.00% | |
Proceeds from issuance of short term debt | $ 3,030,000 | |
Accrued interest payable | $ 234,162 | |
2018 Notes 8% [Member] | ||
Debt stated interest rate | 8.00% | |
Proceeds from issuance of short term debt | $ 1,154,800 | |
Accrued incentives | 51,314 | |
Accrued interest payable | $ 43,916 | |
2019 Notes 10% [Member] | ||
Debt stated interest rate | 10.00% | |
Proceeds from issuance of short term debt | $ 1,688,908 | |
Accrued interest payable | $ 15,205 | |
2016 Notes [Member] | ||
Repayment of notes | $ 306,627 | |
Interest paid debt | $ 36,424 |
8. Other Current Liabilities (D
8. Other Current Liabilities (Details) - USD ($) | May 31, 2019 | May 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Accrued dividends | $ 195,554 | $ 179,218 |
Accrued interests and others | 143,377 | 32,721 |
Accrued payroll and taxes | 299,317 | 218,599 |
Total other current liabilities | $ 638,248 | $ 430,538 |
8. Other Current Liabilities _2
8. Other Current Liabilities (Details Narrative) - USD ($) | May 31, 2019 | May 31, 2018 |
Accrued dividends | $ 195,554 | $ 179,218 |
Series D-2017 Preferred Stock [Member] | ||
Accrued dividends | $ 195,554 | 164,237 |
Series C-2016 Preferred Stock [Member] | ||
Accrued dividends | $ 14,981 |
9. Stockholders Equity (Details
9. Stockholders Equity (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Proceeds from issuance of preferred stock | $ 3,578,000 | $ 6,793,050 |
Compensation and consulting expense | 2,301,440 | 770,220 |
Series C-2016 Preferred Stock [Member] | ||
Proceeds from issuance of preferred stock | $ 5,000,043 | |
Stock issued new, shares | 5,000,043 | |
Dividend paid | $ 232,449 | |
Beneficial conversion feature | 4,930,143 | |
Beneficial conversion feature- adjustment to additional paid-in capital | 3,685,520 | |
Deemed dividend | 1,244,622 | |
Series D-2017 Preferred Stock [Member] | ||
Proceeds from issuance of preferred stock | $ 3,578,000 | $ 6,793,050 |
Stock issued new, shares | 3,578,000 | 6,793,050 |
Beneficial conversion feature | $ 992,700 | $ 3,933,443 |
Deemed dividend | $ 992,700 | $ 3,933,443 |
Restricted Stock [Member] | ||
Stock granted for compensation, shares | 4,047,000 | 1,520,000 |
Compensation and consulting expense | $ 1,996,940 | $ 770,220 |
Restricted Stock [Member] | Consulting Agreement [Member] | Regal [Member] | ||
Stock issued for services, shares | 100,000 | |
Stock issued for services, value | $ 67,000 | |
Restricted Stock [Member] | Consulting Agreement [Member] | Regal [Member] | ||
Stock issued for services, shares | 180,000 | |
Restricted Stock [Member] | Services Agreement [Member] | IRTH [Member] | ||
Stock issued for services, shares | 226,245 | |
Stock issued for services, value | $ 284,333 | |
Series A-2014 Preferred Stock [Member] | Common Stock | ||
Preferred stock converted into common stock, preferred shares converted | 250,000 | |
Preferred stock converted into common stock, common stock issued | 625,000 | |
Series C-2016 Preferred Stock [Member] | Common Stock | ||
Preferred stock converted into common stock, preferred shares converted | 429,958 | |
Preferred stock converted into common stock, common stock issued | 1,289,874 | |
Series D-2017 Preferred Stock [Member] | Common Stock | ||
Preferred stock converted into common stock, preferred shares converted | 4,184,000 | |
Preferred stock converted into common stock, common stock issued | 8,368,000 |
10. Related Party (Details Narr
10. Related Party (Details Narrative) - USD ($) | 12 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2017 | |
Stock issued for compensation, value | $ 2,301,440 | $ 770,220 | |
Donald Capital [Member] | |||
Investment ownership | 24.90% | ||
Medicine Man Technologies, Inc. [Member] | |||
Number shares liquidated | 1,306,378 | ||
Proceeds from sale of stock in affiliate | $ 1,996,939 | ||
Stock issued for investor relation service | 31,250 | ||
Stock held in affiliate | 72,488 | 41,238 | |
Stock held in affiliate, value | $ 260,232 | $ 74,696 | |
Stock price | $ 3.59 | $ 1.86 | |
Lan Jiang [Member] | |||
Stock issued for compensation, shares | 800,000 | 380,000 | |
Stock issued for compensation, value | $ 380,000 | $ 186,200 | |
Warren Wang [Member] | |||
Advance to related party | 87,379 | ||
Breakwater MB, LLC [Member] | |||
Payments to Acquire Investments | $ 250,000 | ||
Return of proceeds from company | $ 75,000 | ||
Investment ownership | 8.75% | 12.50% | |
Breakwater Corporate Finance [Member] | |||
Payment to related party | $ 62,500 | $ 72,500 |
11. Commitments and Concentra_3
11. Commitments and Concentrations (Details) | May 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 305,731 |
2021 | 241,972 |
2022 | 92,744 |
2023 | 95,526 |
Total | $ 735,973 |
11. Commitments and Concentra_4
11. Commitments and Concentrations (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rent expense | $ 403,434 | $ 227,422 |
Lease assets | 668,000 | |
Lease liabilities | $ 668,000 |
12. Income Taxes (Details)
12. Income Taxes (Details) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Federal Statutory Rate | 21.00% | 21.00% |
State Statutory Rate | 6.00% | 6.00% |
Change in Rate / Other | 3.00% | 3.00% |
Permanent Tax Differences | (3.00%) | (3.00%) |
Calculated Rate | 27.00% | 27.00% |
Actual Calculated Rate | (27.00%) | (27.00%) |
Difference | 0.00% | 0.00% |
12. Income Taxes (Details Narra
12. Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 25,000,000 | $ 16,000,000 |
Net deferred tax assets | 5,250,000 | $ 5,600,000 |
Accrued tax expense | $ 0 | |
U.S. federal tax rate | 21.00% | 21.00% |
13. Earnings (loss) per share_2
13. Earnings (loss) per share (Details) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Earnings Per Share [Abstract] | ||
Net loss attributable to common shareholders of the Company | $ (11,594,078) | $ (12,918,683) |
Weighted average shares used to compute net loss per share available to common shareholders, basic and diluted | 37,752,790 | 22,427,427 |
Basic and diluted net loss per share | $ (0.31) | $ (0.58) |
13. Earnings (loss) per share_3
13. Earnings (loss) per share (Details Narrative) - shares | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Earnings Per Share [Abstract] | ||
Preferred stock excluded from Computation of Earnings Per Share | 7,031,050 | 8,317,008 |