Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Feb. 29, 2020 | Apr. 14, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | Daniels Corporate Advisory Company, Inc. | |
Entity Central Index Key | 0001498291 | |
Document Type | 10-Q | |
Document Period End Date | Feb. 29, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --11-30 | |
Entity Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 27,296,452 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Feb. 29, 2020 | Nov. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 59,458 | $ 75,914 |
Accounts receivable | 602 | 30 |
Inventory | 476,892 | 504,135 |
Prepaid expenses and other current assets | 15,187 | |
Right of use assets | 42,942 | 49,212 |
Total current assets | 579,894 | 644,478 |
Property and equipment, net | 285,134 | 257,431 |
Total assets | 865,028 | 901,909 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 1,147,271 | 1,079,884 |
Notes payable, related party | 685,000 | 685,000 |
Notes payable, net of loan discounts | 769,809 | 709,313 |
Derivative liabilities | 2,585,069 | 1,650,520 |
Lease liabilities | 43,750 | 50,000 |
Related party payables | 233,445 | 242,706 |
Total current liabilities | 5,464,344 | 4,417,423 |
Total liabilities | 5,464,344 | 4,417,423 |
Commitments and contingencies | ||
Stockholders' Deficit: | ||
Preferred stock, $0.001 par value. 100,000 shares authorized; 100,000 shares issued and outstanding as of February 29, 2020 and November 30, 2019, respectively | 100 | 100 |
Common stock, $0.001 par value. 6,000,000,000 shares authorized; 27,296,452 and 25,546,452 shares issued and outstanding as of February 29, 2020 and November 30, 2019, respectively | 27,296 | 25,546 |
Additional paid-in capital | 7,193,018 | 7,171,768 |
Accumulated deficit | (11,755,381) | (10,648,579) |
Accumulated other comprehensive loss | (64,349) | (64,349) |
Total stockholders' deficit | (4,599,316) | (3,515,514) |
Total liabilities and stockholders' deficit | $ 865,028 | $ 901,909 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Feb. 29, 2020 | Nov. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares issued | 100,000 | 100,000 |
Preferred stock, shares outstanding | 100,000 | 100,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 6,000,000,000 | 6,000,000,000 |
Common stock, shares issued | 27,296,452 | 25,546,452 |
Common stock, shares outstanding | 27,296,452 | 25,546,452 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
Feb. 29, 2020 | Feb. 28, 2019 | |
Income Statement [Abstract] | ||
Sales | $ 1,293,386 | $ 506,883 |
Cost of goods sold | 1,098,340 | 503,594 |
Gross margin | 195,046 | 3,289 |
Selling, general and administrative expenses | 273,870 | 107,802 |
Income (loss) from operations | (78,824) | (104,513) |
Other income (expense) | ||
Derivative expense | (104,179) | |
Gain (loss) on change in derivative liabilities | (934,549) | 111,698 |
Interest income (expense), net | (88,993) | (177,239) |
Other income (expense), net | (4,436) | |
Total other income (expense), net | (1,027,978) | (169,720) |
Loss before income taxes | (1,106,802) | (274,233) |
Provision for income taxes (benefit) | ||
Net loss | $ (1,106,802) | $ (274,233) |
Basic and diluted loss per common share | $ (0.04) | $ 0 |
Weighted-average number of common shares outstanding: | ||
Basic and diluted | 25,972,276 | 22,193,111 |
Comprehensive loss: | ||
Net loss | $ (1,106,802) | $ (274,233) |
Comprehensive loss | $ (1,106,802) | $ (274,233) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Deficit (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income [Member] | Total |
Balance at Nov. 30, 2018 | $ 100 | $ 21,127 | $ 7,032,417 | $ (9,041,150) | $ (64,349) | $ (2,051,855) |
Balance, shares at Nov. 30, 2018 | 100,000 | 21,127,402 | ||||
Net loss | (274,233) | (274,233) | ||||
Conversion of convertible debentures and accrued interest into common stock | $ 2,109 | 10,542 | 12,651 | |||
Conversion of convertible debentures and accrued interest into common stock, shares | 2,108,500 | |||||
Recognition of beneficial conversion features related to convertible debentures | 38,500 | 38,500 | ||||
Balance at Feb. 28, 2019 | $ 100 | $ 23,236 | 7,081,459 | (9,315,383) | (64,349) | (2,274,937) |
Balance, shares at Feb. 28, 2019 | 100,000 | 23,235,902 | ||||
Balance at Nov. 30, 2019 | $ 100 | $ 25,546 | 7,171,768 | (10,648,579) | (64,349) | (3,515,514) |
Balance, shares at Nov. 30, 2019 | 100,000 | 25,546,452 | ||||
Net loss | (1,106,802) | (1,106,802) | ||||
Issuance of common stock in exchange for consulting, professional and other services | $ 1,750 | 21,250 | 23,000 | |||
Issuance of common stock in exchange for consulting, professional and other services, shares | 1,750,000 | |||||
Balance at Feb. 29, 2020 | $ 100 | $ 27,296 | $ 7,193,018 | $ (11,755,381) | $ (64,349) | $ (4,599,316) |
Balance, shares at Feb. 29, 2020 | 100,000 | 27,296,452 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Feb. 29, 2020 | Feb. 28, 2019 | |
Cash flows from operating activities of continuing operations: | ||
Net loss | $ (1,106,802) | $ (274,233) |
Adjustments to reconcile net loss to cash provided by (used in) operating activities: | ||
Depreciation and amortization | 10,902 | 6,221 |
Amortization of debt discount | 20,496 | 119,236 |
Common stock issued in exchange for fees and services | 23,000 | |
Derivative expense | 104,179 | |
Loss (gain) on change in derivative liabilities | 934,549 | (111,698) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (572) | 77,638 |
Inventory | 27,243 | (122,342) |
Prepaid expenses and other current assets | 18,190 | 199,972 |
Right of use assets and lease liabilities | 21 | |
Accounts payable and accrued liabilities | 64,382 | 254,124 |
Related party payables | (9,260) | 500 |
Net cash provided by (used in) operating activities | (17,851) | 253,597 |
Cash flows from investing activities: | ||
Purchase of fixed assets | (38,605) | (195,229) |
Net cash used in investing activities | (38,605) | (195,229) |
Cash flows from financing activities: | ||
Proceeds from issuance of notes payable | 50,000 | 50,000 |
Repayments of notes payable | (10,000) | |
Net cash provided by financing activities | 40,000 | 50,000 |
Net increase in cash and cash equivalents | (16,456) | 108,368 |
Cash and cash equivalents at beginning of period | 75,914 | 56,996 |
Cash and cash equivalents at end of period | 59,458 | 165,364 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Conversion of notes payable and accrued interest into common stock | 12,651 | |
Discount for issuance costs and/or beneficial conversion features on notes payable | $ 2,500 | $ 38,500 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Feb. 29, 2020 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION Daniels Corporate Advisory Company, Inc. (“Daniels” or the Company) was incorporated in the State of Nevada on May 2, 2002. The Company creates and implements corporate strategy alternatives for mini-cap public and private companies. The Company formed Payless Truckers, Inc. (“Payless”), a wholly-owned subsidiary which was incorporated in the State of Nevada, on April 11, 2018. Payless is a start-up trucking company whose principal business is to acquire, refurbish, add location electronics, advertise and sell or lease commercial vehicles to long haul drivers. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Feb. 29, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation We have prepared the accompanying consolidated financial statements in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). We believe these consolidated financial statements reflect all adjustments (consisting of normal, recurring adjustments) that are necessary for a fair presentation of our consolidated financial position and consolidated results of operations for the periods presented. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Risk and Uncertainties Our future results of operations and financial condition will be impacted by the following factors, among others: our lack of capital resources, dependence on third-party management to operate the companies in which we invest and dependence on the successful development and marketing of any new products in new and existing markets. Generally, we are unable to predict the future status of these areas of risk and uncertainty. However, negative trends or conditions in these areas could have an adverse effect on our business. Interim Financial Statements These unaudited consolidated financial statements have been prepared in accordance with US GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These consolidated financial statements should be read in conjunction with the financial statements for the fiscal year ended November 30, 2019 and notes thereto and other pertinent information contained in our Form 10-K the Company has filed with the Securities and Exchange Commission (the “SEC”) on March 16, 2020. The results of operations for the three months ended February 29, 2020, are not necessarily indicative of the results to be expected for the full fiscal year ending November 30, 2020. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. The Company maintains its cash balances with a high-credit-quality financial institution. At times, such cash may be in excess of the Federal Deposit Insurance Corporation-insured limit of $250,000. The Company has not experienced any losses in such accounts, and management believes the Company is not exposed to any significant credit risk on its cash and cash equivalents. Accounts receivable Accounts receivable are customer obligations due under normal trade terms which are recorded at net realizable value. The Company establishes an allowance for doubtful accounts based on management’s assessment of the collectability of trade receivables. A considerable amount of judgment is required in assessing the amount of the allowance. The Company makes judgments about the creditworthiness of each customer based on ongoing credit evaluations and monitors current economic trends that might impact the level of credit losses in the future. If the financial condition of the customers were to deteriorate, resulting in their inability to make payments, a specific allowance will be required. Recovery of bad debt amounts previously written off is recorded as a reduction of bad debt expense in the period the payment is collected. If the Company’s actual collection experience changes, revisions to its allowance may be required. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Inventory Inventory consists of well-maintained, class 8 heavy duty trucks primarily acquired at auction. Inventory is valued at the lower of cost (first in, first out) or net realizable value. An allowance for potential non-saleable inventory due to movement, current conditions or obsolescence is based upon a review of inventory quantities, past history and expected future usage. The Company believes that no write-down for slow moving or obsolete inventory is necessary as of February 29, 2020. Convertible Instruments The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 “ Derivatives and Hedging Activities Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) by recording, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. Fair Value of Financial Instruments In September 2006, the Financial Accounting Standards Board (FASB) introduced a framework for measuring fair value and expanded required disclosure about fair value measurements of assets and liabilities. The Company adopted the standard for those financial assets and liabilities as of the beginning of the 2008 fiscal year and the impact of adoption was not significant. FASB Accounting Standards Codification (ASC) 820 “ Fair Value Measurements and Disclosures ● Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. ● Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability; either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3—Inputs that are both significant to the fair value measurement and unobservable. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, accounts payable and accrued expenses, notes payable, notes payable to related parties, related parties payable and derivative liabilities. The Company has also applied ASC 820 for all non-financial assets and liabilities measured at fair value on a non-recurring basis. The adoption of ASC 820 for non-financial assets and liabilities did not have a significant impact on the Company’s financial statements. Comprehensive Income (Loss) ASC Topic 220 (SFAS No. 130) establishes standards for reporting comprehensive income (loss) and its components. Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events from non-owner sources. Other-Than-Temporary Impairment All of our non-marketable and other investments are subject to a periodic impairment review. Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. When events or changes in circumstances indicate that long-lived assets other than goodwill may be impaired, an evaluation is performed to determine if a write-down to fair value is required. When an asset is classified as held for sale, the asset’s book value is evaluated and adjusted to the lower of its carrying amount or fair value less cost to sell. In addition, depreciation and amortization ceases while it is classified as held for sale. The indicators that we use to identify those events and circumstances include: ● the investee’s revenue and earnings trends relative to predefined milestones and overall business prospects; ● the general market conditions in the investee’s industry or geographic area, including regulatory or economic changes; ● factors related to the investee’s ability to remain in business, such as the investee’s liquidity, debt ratios, and the rate at which the investee is using its cash; and ● the investee’s receipt of additional funding at a lower valuation. If an investee obtains additional funding at a valuation lower than our carrying amount or a new round of equity funding is required for the investee to remain in business, and the new round of equity does not appear imminent, it is presumed that the investment is other than temporarily impaired, unless specific facts and circumstances indicate otherwise. Revenue and Cost Recognition We recognize revenue when we satisfy performance obligations by the transfer of control of products or services to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products or services. We recognize revenue from class 8 heavy duty truck sales to customers when we satisfy our performance obligation, at a point in time, when title to the truck is transferred to the customer and collection of cash is certain. Delivery or shipping charges billed to customers, if applicable, are included in product sales and the related shipping costs are included in cost of goods sold. We also recognize revenue from the rental of class 8 heavy-duty trucks to customers. Revenue from these truck rental agreements is recognized based upon the passage of time over the term of the arrangement once control of the underlying asset has been transferred to the customer. The arrangements require weekly payments, and the customer may cancel the agreement at any time by notifying the Company in writing at least 30 days before such termination. Accounts receivable is recognized when we have transferred a good or service to a customer and our right to receive consideration is unconditional through the completion of our performance obligation. We had accounts receivable totaling $602 and $30 as of February 29, 2020 and November 30, 2019, respectively. Right of Use Assets and Lease Liabilities In February 2016, the FASB issued ASU No. 2016-02, “Leases” (ASC 842). The standard requires lessees to recognize almost all leases on the balance sheet as a Right-of-Use (“ROU”) asset and a lease liability and requires leases to be classified as either an operating or a finance type lease. The standard excludes leases of intangible assets or inventory. The standard became effective for the Company beginning December 1, 2018. The Company adopted ASC 842 using the modified retrospective approach, by applying the new standard to all leases existing at the date of initial application. Results and disclosure requirements for reporting periods beginning after January 1, 2019 are presented under ASC 842, while prior period amounts have not been adjusted and continue to be reported in accordance with our historical accounting under ASC 840. The Company elected the package of practical expedients permitted under the standard, which also allowed the Company to carry forward historical lease classifications. The Company also elected the practical expedient related to treating lease and non-lease components as a single lease component for all equipment leases as well as electing a policy exclusion permitting leases with an original lease term of less than one year to be excluded from the ROU assets and lease liabilities. Under ASC 842, the Company determines if an arrangement is a lease at inception. Right-of-Use assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company’s leases do not provide an implicit rate, the Company estimated the incremental borrowing rate in determining the present value of lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The Company lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. Operating leases are included in operating lease right-of-use assets and operating lease liabilities on the Company’s condensed consolidated balance sheets. The adoption did not impact the Company’s beginning retained earnings, or prior year consolidated statements of income and statements of cash flows. Property and Equipment, Net Property and equipment, net is reported at cost less accumulated depreciation, which is generally provided on the straight-line method over the estimated useful lives of the assets. Upon sale or retirement of an asset, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is recognized. Income Taxes The Company, a C-corporation, accounts for income taxes under ASC Topic 740 (SFAS No. 109). Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company adopted the provisions of FASB ASC 740-10 “ Uncertainty in Income Taxes” Net Loss Per Share The Company reports basic and diluted earnings per share (EPS) according to the provisions of ASC Topic 260, which requires the presentation of basic EPS and, for companies with complex capital structures, diluted EPS. Basic EPS excludes dilution and is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) available to common stockholders, adjusted by other changes in income or loss that would result from the assumed conversion of those potential common shares, by the weighted number of common shares and common share equivalents (unless their effect is antidilutive) outstanding. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive. Thus, these equivalents are not included in the calculation of diluted loss per share, resulting in basic and diluted loss per share being equal. Reverse Stock Split All common share amounts (except par value and par value per share amounts) referred to in these financial statements have been retroactively adjusted to reflect the Company’s one-for-200 reverse capital stock split effective September 27, 2019. Recently Issued Accounting Pronouncements In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with partial early adoption permitted for eliminated disclosures. The method of adoption varies by the disclosure. The Company is currently evaluating the impact that adopting this guidance will have on the unaudited condensed consolidated financial statements. The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its unaudited condensed consolidated financial statements. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Feb. 29, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 3 - RELATED PARTY TRANSACTIONS The Company currently rents space from our president, Mr. Arthur Viola. This is a month to month rental and there is no commitment beyond each month. The monthly rent expense is $2,100. Effective December 15, 2016, Mr. Viola entered into a $685,000 convertible promissory note agreement with the Company and forgave all remaining amounts outstanding at that time. The note matured on December 15, 2018 and bears interest at a rate of 10% per annum. Mr. Viola has the option to convert any portion of the unpaid principal balance into the Company’s common stock at a discount to market of 50% at any time. No repayment or conversion of the note occurred as of February 29, 2020, and no notice of default has been issued. See Note 8. During 2016, Mr. Viola personally funded $10,200 in expenses on behalf of the Company. These advances were made interest free with no maturity date. No repayments have been made against these advances as of February 29, 2020. Mr. Viola is entitled to receive a salary of $175,000 annually. Mr. Viola has deferred all cash payments of his base salary in an effort to help the Company fund its operations. At February 29, 2020 and November 30, 2019, the total amount of accrued compensation owed to Mr. Viola was $410,303 and $369,303, respectively. These amounts are included in accounts payable. Since its formation in 2018, the Company’s wholly-owned subsidiary Payless Truckers, Inc. has received net loan proceeds aggregating $223,245 from a related party to help fund the subsidiary’s operations. The loan currently bears no interest and is payable on demand. The Company has imputed interest on this obligation at a rate of 10% per annum, which the Company believes is appropriate and represents a market lending rate based upon other debt financings. |
Going Concern
Going Concern | 3 Months Ended |
Feb. 29, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 4 - GOING CONCERN The accompanying financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business as they become due. For the three months ended February 29, 2020, the Company incurred net losses of $1,106,802 and had negative cash flows from operating activities of $17,851. The Company has relied, in large part, upon debt financing to fund its operations. As of February 29, 2020, the Company had outstanding indebtedness, net of discounts, of $1,454,809 and had $59,458 in cash. As such, there is substantial doubt as to the Company’s ability to continue as a going concern. The Company’s ability to continue as such is dependent upon management’s ability to successfully execute its business plan, including increasing revenues through the sale of existing and future product offerings and reducing expenses in order to meet the Company’s current and future obligations. In addition, the Company’s ability to continue as a going concern is dependent upon management’s ability to successfully satisfy, refinance or replace its current indebtedness. Failure to satisfy existing or obtain new financing may have a material adverse impact on the Company’s operations and liquidity. The Company is expanding its operations through its leasing program. Its believes that it is well positioned to generate significant recurring revenue and cash flows required to sustain its operations. However, even if the Company is successful in executing its plan, the Company may not generate enough revenue to satisfy all of its current obligations as they become due in addition to its outstanding indebtedness. Until the Company consistently generates positive cash flow from its operations, or successfully satisfies, refinances or replaces its current indebtedness, there is substantial doubt as to the Company’s ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result if the Company is unable to operate as a going concern. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Feb. 29, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 5 - COMMITMENTS AND CONTINGENCIES Commitments The Company currently has no long-term commitments. Contingencies None. |
Leases
Leases | 3 Months Ended |
Feb. 29, 2020 | |
Leases [Abstract] | |
Leases | NOTE 6 - LEASES The Company has entered into operating leases primarily for real estate. These leases have terms which range from one year to two years, and often include one or more options to renew. The Company recognizes on the balance sheet at the time of lease commencement or modification a right of use (“ROU”) operating lease asset and a lease liability, initially measured at the present value of the lease payments. Lease costs are recognized in the income statement over the lease term on a straight-line basis. RoU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities commencing after January 1, 2019 are recognized at commencement date based on the present value of lease payments over the lease term. Based on the present value of the lease payments for the remaining lease term of the Company’s existing leases, the Company recorded ROU assets of $42,942 in assets and lease liabilities of $43,750 for operating leases as of February 29, 2020. For the three months ended February 29, 2020, the Company recognized approximately $7,521 in total lease costs. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. Information related to the Company’s operating right-of-use assets and related lease liabilities were as follows: Cash paid for operating lease liabilities $ 7,500 Weighted-average remaining lease term (in years) 1.6 Weighted-average discount rate 10.0 % Minimum future lease payments 50,000 The following table presents the Company’s future minimum lease obligation under ASC 840 as of November 30, 2019: 2020 fiscal year $ 22,500 2021 fiscal year $ 27,500 |
Legal Proceedings
Legal Proceedings | 3 Months Ended |
Feb. 29, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | NOTE 7 - LEGAL PROCEEDINGS The Company is not currently a party to any material legal proceedings. The Company’s counsel has no formal knowledge in the form of filings of any pending or contemplated litigation, claims or assessments. With regard to matters recognized to involve an unasserted possible claim or assessment that may call for financial statement disclosure and to which counsel has formed a professional conclusion that the Company should disclosure or consider disclosure concerning such possible claims or assessment, as a matter of professional responsibility to the Company, counsel will so advise and will consult with the company concerning the question of such disclosure and the applicable requirements of FASB ASC 450, “Contingencies”. To date, counsel has no formal knowledge of any unasserted possible claims. |
Income Taxes
Income Taxes | 3 Months Ended |
Feb. 29, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 8 - INCOME TAXES The following table sets forth a reconciliation of income tax expense (benefit) at the federal statutory rate to recorded income tax expense (benefit) for the three months ended February 29, 2020 and February 28, 2019: February 29, 2020 February 28, 2019 Tax provision (recovery) at effective tax rate (21%) $ (232,428 ) $ (57,589 ) Change in valuation reserve 232,428 57,589 Tax provision (recovery), net $ – $ – As of February 29, 2020, the Company had approximately $11.8 million in net operating loss carry forwards for federal income tax purposes which expire at various dates through 2037. Generally, these can be carried forward and applied against future taxable income at the tax rate applicable at that time. We are currently using a 21% effective tax rate for our projected available net operating loss carry-forward. However, as a result of potential stock offerings and stock issuance in connection with potential acquisitions, as well as the possibility of the Company not realizing its business plan objectives and having future taxable income to offset, the Company’s use of these NOLs may be limited under the provisions of Section 382 of the Internal Revenue Code of 1986, as amended. The Company is in the process of evaluating the implications of Section 382 on its ability to utilize some or all of its NOLs. Components of deferred tax assets and (liabilities) are as follows: February 29, 2020 November 30, 2019 Net operating loss carry forwards available at effective tax rate (21%) $ 2,469,000 $ 2,236,000 Valuation Allowances (2,469,000 ) (2,236,000 ) Deferred Tax Asset $ – $ – In accordance with FASB ASC 740 “Income Taxes”, valuation allowances are provided against deferred tax assets, if based on the weight of available evidence, some or all of the deferred tax assets may or will not be realized. The Company has evaluated its ability to realize some or all of the deferred tax assets on its balance sheet and has established a valuation allowance of approximately $2,469,000 at February 29, 2020. The Company did not utilize any NOL deductions for the three months ended February 29, 2020. |
Notes Payable
Notes Payable | 3 Months Ended |
Feb. 29, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 9 - NOTES PAYABLE On August 31, 2015, the Company entered in convertible note agreement with a private and accredited investor, LG Capital, in the amount of $75,000, unsecured, with principal and interest (stated at 8%) amounts due and payable upon maturity on February 28, 2016. After six months, the note holder has the option to convert any portion of the unpaid principal balance into the Company’s common shares at any time. The Company has determined that the conversion feature in this note is not indexed to the Company’s stock and is considered to be a derivative that requires bifurcation. The Company calculated the fair value of this conversion feature using the Black-Scholes model and the following assumptions: Risk-free interest rates ranging from .03% to .08%; Dividend rate of 0%; and, historical volatility rates ranging from 195% to 236%. As of February 29, 2020, the note balance was $55,224 and all associated loan discounts were fully amortized. On December 30, 2015, the Company entered in convertible note agreement with a private and accredited investor, Auctus Private Equity Fund LLC, in the amount of $130,000, unsecured, with principal and interest (stated at 10%) amounts due and payable upon maturity on September 30, 2016. After six months, the note holder has the option to convert any portion of the unpaid principal balance into the Company’s common shares at any time. The Company has determined that the conversion feature in this note is not indexed to the Company’s stock and is considered to be a derivative that requires bifurcation. The Company calculated the fair value of this conversion feature using the Black-Scholes model and the following assumptions: Risk-free interest rates ranging from .03% to .16%; Dividend rate of 0%; and, historical volatility rates ranging from 208% to 269%. On January 9, 2019, $6,325 of principal was converted into 210,850,000 shares of the Company’s common stock. On January 15, 2019, $6,325 of principal was converted into 210,850,000 shares of the Company’s common stock. See Note 11. As of February 29, 2020, the note balance was $100,297 and all associated loan discounts were fully amortized. On January 21, 2016, the Company entered in convertible note agreement with a private and accredited investor, John De La Cross Capital Partners Inc., in the amount of $8,000, unsecured, with principal and interest (stated at 5%) amounts due and payable upon demand. The note holder has the option to convert any portion of the unpaid principal balance into the Company’s common shares at any time. The Company has determined that the conversion feature in this note is not indexed to the Company’s stock and is considered to be a derivative that requires bifurcation. The Company calculated the fair value of this conversion feature using the Black-Scholes model and the following assumptions: Risk-free interest rates ranging from .03% to .16%; Dividend rate of 0%; and, historical volatility rates ranging from 208% to 269%. As of February 29, 2020, the note balance was $4,000 and all associated loan discounts were fully amortized. On November 23, 2016, the Company entered in convertible note agreement with a private and accredited investor, Auctus Private Equity Fund LLC, in the amount of $61,000, unsecured, with principal and interest (stated at 12%) amounts due and payable upon maturity on August 23, 2017. After six months, the note holder has the option to convert any portion of the unpaid principal balance into the Company’s common shares at any time. The Company has determined that the conversion feature in this note is not indexed to the Company’s stock and is considered to be a derivative that requires bifurcation. The Company calculated the fair value of this conversion feature using the Black-Scholes model and the following assumptions: Risk-free interest rates ranging from .03% to .16%; Dividend rate of 0%; and, historical volatility rates ranging from 208% to 269%. The Company amended its convertible note agreement to allow for additional principal borrowings. As of February 29, 2020, the note balance was $97,000 and all associated loan discounts were fully amortized. On October 15, 2018, the Company entered in convertible note agreement with a private and accredited investor, Auctus Fund LLC, in the amount of $350,000, unsecured, with principal and interest (stated at 12%) amounts due and payable upon maturity on July 15, 2019. At any time following issuance, the note holder has the option to convert any portion of the unpaid principal balance into the Company’s common shares at any time. The Company has determined that the conversion feature in this note is not indexed to the Company’s stock and is considered to be a derivative that requires bifurcation. The Company calculated the fair value of this conversion feature using the Black-Scholes model and the following assumptions: Risk-free interest rates ranging from 2.67% to 2.70%; Dividend rate of 0%; and, historical volatility rates ranging from 390% to 423%. As of February 29, 2020, the note balance was $350,000 and all associated loan discounts were fully amortized. On February 14, 2019, the Company entered in convertible note agreement with a private and accredited investor, Auctus Fund LLC, in the amount of $57,750, unsecured, with principal and interest (stated at 12%) amounts due and payable upon maturity on November 14, 2019. At any time following issuance, the note holder has the option to convert any portion of the unpaid principal balance into the Company’s common shares at any time. The Company has determined that the conversion feature in this note is not indexed to the Company’s stock and is considered to be a derivative that requires bifurcation. The Company calculated the fair value of this conversion feature using the Black-Scholes model and the following assumptions: Risk-free interest rates ranging from 2.53% to 2.540%; Dividend rate of 0%; and, historical volatility rates ranging from 309% to 339%. As of February 29, 2020, the note balance was $57,750 and all associated loan discounts were fully amortized. On July 22, 2019, the Company entered in convertible note agreement with a private and accredited investor, Auctus Fund LLC, in the amount of $75,250, secured by all of the assets of the Company and its subsidiaries, with principal and interest (stated at 12%) amounts due and payable upon maturity on April 22, 2020. At any time following issuance, the note holder has the option to convert any portion of the unpaid principal balance into the Company’s common shares at any time. The Company has determined that the conversion feature in this note is not indexed to the Company’s stock and is considered to be a derivative that requires bifurcation. The Company calculated the fair value of this conversion feature using the Black-Scholes model and the following assumptions: Risk-free interest rates ranging from 1.76% to 1.95%; Dividend rate of 0%; and, historical volatility rates ranging from 1,313% to 1,467%. As of February 29, 2020, the note balance was $75,250 and the remaining balance on the associated loan discounts were $10,069. On January 31, 2020, the Company issued a promissory note to GC Capital Partners, LLC in the amount of $52,500, unsecured, with principal amounts payable in monthly installments of $10,000 until maturity on August 26, 2020. The note had an original issuance discount of $2,500, which will be amortized on a straight-line basis over the life of the note. As of February 29, 2020, the note balance was $42,500 and the remaining balance on the associated loan discounts were $2,143. |
Derivative Liabilities
Derivative Liabilities | 3 Months Ended |
Feb. 29, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | NOTE 10 - DERIVATIVE LIABILITIES The Company accounts for derivative financial instruments in accordance with ASC 815, which requires that all derivative financial instruments be recorded in the balance sheets either as assets or liabilities at fair value. The Company’s derivative liability is an embedded derivative associated with one of the Company’s convertible promissory notes. The convertible promissory notes were issued at various times but with similar terms and are therefore being termed as one instrument for this footnote, (the “Note”), is a hybrid instruments which contain an embedded derivative feature which would individually warrant separate accounting as a derivative instrument under Paragraph 815-10-05-4. The embedded derivative feature includes the conversion feature to the Note. Pursuant to Paragraph 815-10-05-4, the value of the embedded derivative liability has been bifurcated from the debt host contract and recorded as a derivative liability resulting in a reduction of the initial carrying amount (as unamortized discount) of the notes, which are amortized as debt discount to be presented in other (income) expenses in the statements of operations using the effective interest method over the life of the notes. The embedded derivative within the note have been valued using the Black Scholes approach, recorded at fair value at the date of issuance; and marked-to-market at each reporting period end date with changes in fair value recorded in the Company’s statements of operations as “change in the fair value of derivative instrument”. As of February 29, 2020 and November 30, 2019, the estimated fair value of derivative liability was determined to be $2,585,069 and $1,650,520, respectively. The change in the fair value of derivative liabilities for the three months ended February 29, 2020 was $934,549 resulting in an aggregate loss on derivative liabilities. Summary of Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed at November 30, 2019: Fair Value Measurement Using Carrying Value Level 1 Level 2 Level 3 Total Derivative liabilities on conversion feature $ 1,650,520 $ – $ – $ 1,650,520 $ 1,650,520 Total derivative liabilities $ 1,650,520 $ – $ – $ 1,650,520 $ 1,650,520 Summary of Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed at February 29, 2020: Fair Value Measurement Using Carrying Value Level 1 Level 2 Level 3 Total Derivative liabilities on conversion feature $ 2,585,069 $ – $ – $ 2,585,069 $ 2,585,069 Total derivative liabilities $ 2,585,069 $ – $ – $ 2,585,069 $ 2,585,069 Summary of the Changes in Fair Value of Level 3 Financial Liabilities The table below provides a summary of the changes in fair value of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended February 29, 2020: Derivative Liabilities Fair value, November 30, 2019 1,650,520 Change in fair value 934,549 Fair value, February 29, 2020 $ 2,585,069 |
Equity
Equity | 3 Months Ended |
Feb. 29, 2020 | |
Equity [Abstract] | |
Equity | NOTE 11 – EQUITY The Company is authorized to issue two classes of shares being designated preferred stock and common stock. Common Stock The number of shares of common stock authorized is 6,000,000,000, par value $0.001 per share. At February 29, 2020 and November 30, 2019, the Company had 27,296,452 and 25,546,452 shares of common stock, respectively, issued and outstanding. During the three months ended February 29, 2020, the Company issued 1,750,000 shares of common stock valued at $23,000 in exchange for consulting, professional and other services. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Feb. 29, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 12 - SUBSEQUENT EVENTS In accordance with FASB ASC 855-10 Subsequent Events, the Company has analyzed its operations subsequent to February 29, 2020 to the date these consolidated financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Feb. 29, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation We have prepared the accompanying consolidated financial statements in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). We believe these consolidated financial statements reflect all adjustments (consisting of normal, recurring adjustments) that are necessary for a fair presentation of our consolidated financial position and consolidated results of operations for the periods presented. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Risk and Uncertainties | Risk and Uncertainties Our future results of operations and financial condition will be impacted by the following factors, among others: our lack of capital resources, dependence on third-party management to operate the companies in which we invest and dependence on the successful development and marketing of any new products in new and existing markets. Generally, we are unable to predict the future status of these areas of risk and uncertainty. However, negative trends or conditions in these areas could have an adverse effect on our business. |
Interim Financial Statements | Interim Financial Statements These unaudited consolidated financial statements have been prepared in accordance with US GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These consolidated financial statements should be read in conjunction with the financial statements for the fiscal year ended November 30, 2019 and notes thereto and other pertinent information contained in our Form 10-K the Company has filed with the Securities and Exchange Commission (the “SEC”) on March 16, 2020. The results of operations for the three months ended February 29, 2020, are not necessarily indicative of the results to be expected for the full fiscal year ending November 30, 2020. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. The Company maintains its cash balances with a high-credit-quality financial institution. At times, such cash may be in excess of the Federal Deposit Insurance Corporation-insured limit of $250,000. The Company has not experienced any losses in such accounts, and management believes the Company is not exposed to any significant credit risk on its cash and cash equivalents. |
Accounts Receivable | Accounts receivable Accounts receivable are customer obligations due under normal trade terms which are recorded at net realizable value. The Company establishes an allowance for doubtful accounts based on management’s assessment of the collectability of trade receivables. A considerable amount of judgment is required in assessing the amount of the allowance. The Company makes judgments about the creditworthiness of each customer based on ongoing credit evaluations and monitors current economic trends that might impact the level of credit losses in the future. If the financial condition of the customers were to deteriorate, resulting in their inability to make payments, a specific allowance will be required. Recovery of bad debt amounts previously written off is recorded as a reduction of bad debt expense in the period the payment is collected. If the Company’s actual collection experience changes, revisions to its allowance may be required. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. |
Inventory | Inventory Inventory consists of well-maintained, class 8 heavy duty trucks primarily acquired at auction. Inventory is valued at the lower of cost (first in, first out) or net realizable value. An allowance for potential non-saleable inventory due to movement, current conditions or obsolescence is based upon a review of inventory quantities, past history and expected future usage. The Company believes that no write-down for slow moving or obsolete inventory is necessary as of February 29, 2020. |
Convertible Instruments | Convertible Instruments The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 “ Derivatives and Hedging Activities Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) by recording, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments In September 2006, the Financial Accounting Standards Board (FASB) introduced a framework for measuring fair value and expanded required disclosure about fair value measurements of assets and liabilities. The Company adopted the standard for those financial assets and liabilities as of the beginning of the 2008 fiscal year and the impact of adoption was not significant. FASB Accounting Standards Codification (ASC) 820 “ Fair Value Measurements and Disclosures ● Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. ● Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability; either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3—Inputs that are both significant to the fair value measurement and unobservable. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, accounts payable and accrued expenses, notes payable, notes payable to related parties, related parties payable and derivative liabilities. The Company has also applied ASC 820 for all non-financial assets and liabilities measured at fair value on a non-recurring basis. The adoption of ASC 820 for non-financial assets and liabilities did not have a significant impact on the Company’s financial statements. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) ASC Topic 220 (SFAS No. 130) establishes standards for reporting comprehensive income (loss) and its components. Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events from non-owner sources. |
Other-Than-Temporary Impairment | Other-Than-Temporary Impairment All of our non-marketable and other investments are subject to a periodic impairment review. Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. When events or changes in circumstances indicate that long-lived assets other than goodwill may be impaired, an evaluation is performed to determine if a write-down to fair value is required. When an asset is classified as held for sale, the asset’s book value is evaluated and adjusted to the lower of its carrying amount or fair value less cost to sell. In addition, depreciation and amortization ceases while it is classified as held for sale. The indicators that we use to identify those events and circumstances include: ● the investee’s revenue and earnings trends relative to predefined milestones and overall business prospects; ● the general market conditions in the investee’s industry or geographic area, including regulatory or economic changes; ● factors related to the investee’s ability to remain in business, such as the investee’s liquidity, debt ratios, and the rate at which the investee is using its cash; and ● the investee’s receipt of additional funding at a lower valuation. If an investee obtains additional funding at a valuation lower than our carrying amount or a new round of equity funding is required for the investee to remain in business, and the new round of equity does not appear imminent, it is presumed that the investment is other than temporarily impaired, unless specific facts and circumstances indicate otherwise. |
Revenue and Cost Recognition | Revenue and Cost Recognition We recognize revenue when we satisfy performance obligations by the transfer of control of products or services to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products or services. We recognize revenue from class 8 heavy duty truck sales to customers when we satisfy our performance obligation, at a point in time, when title to the truck is transferred to the customer and collection of cash is certain. Delivery or shipping charges billed to customers, if applicable, are included in product sales and the related shipping costs are included in cost of goods sold. We also recognize revenue from the rental of class 8 heavy-duty trucks to customers. Revenue from these truck rental agreements is recognized based upon the passage of time over the term of the arrangement once control of the underlying asset has been transferred to the customer. The arrangements require weekly payments, and the customer may cancel the agreement at any time by notifying the Company in writing at least 30 days before such termination. Accounts receivable is recognized when we have transferred a good or service to a customer and our right to receive consideration is unconditional through the completion of our performance obligation. We had accounts receivable totaling $602 and $30 as of February 29, 2020 and November 30, 2019, respectively. |
Right of Use Assets and Lease Liabilities | Right of use assets and lease liabilities In February 2016, the FASB issued ASU No. 2016-02, “Leases” (ASC 842). The standard requires lessees to recognize almost all leases on the balance sheet as a Right-of-Use (“ROU”) asset and a lease liability and requires leases to be classified as either an operating or a finance type lease. The standard excludes leases of intangible assets or inventory. The standard became effective for the Company beginning December 1, 2018. The Company adopted ASC 842 using the modified retrospective approach, by applying the new standard to all leases existing at the date of initial application. Results and disclosure requirements for reporting periods beginning after January 1, 2019 are presented under ASC 842, while prior period amounts have not been adjusted and continue to be reported in accordance with our historical accounting under ASC 840. The Company elected the package of practical expedients permitted under the standard, which also allowed the Company to carry forward historical lease classifications. The Company also elected the practical expedient related to treating lease and non-lease components as a single lease component for all equipment leases as well as electing a policy exclusion permitting leases with an original lease term of less than one year to be excluded from the ROU assets and lease liabilities. Under ASC 842, the Company determines if an arrangement is a lease at inception. Right-of-Use assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company’s leases do not provide an implicit rate, the Company estimated the incremental borrowing rate in determining the present value of lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The Company lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. Operating leases are included in operating lease right-of-use assets and operating lease liabilities on the Company’s condensed consolidated balance sheets. The adoption did not impact the Company’s beginning retained earnings, or prior year consolidated statements of income and statements of cash flows. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net is reported at cost less accumulated depreciation, which is generally provided on the straight-line method over the estimated useful lives of the assets. Upon sale or retirement of an asset, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is recognized. |
Income Taxes | Income Taxes The Company, a C-corporation, accounts for income taxes under ASC Topic 740 (SFAS No. 109). Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company adopted the provisions of FASB ASC 740-10 “ Uncertainty in Income Taxes” |
Net Loss Per Share | Net Loss Per Share The Company reports basic and diluted earnings per share (EPS) according to the provisions of ASC Topic 260, which requires the presentation of basic EPS and, for companies with complex capital structures, diluted EPS. Basic EPS excludes dilution and is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) available to common stockholders, adjusted by other changes in income or loss that would result from the assumed conversion of those potential common shares, by the weighted number of common shares and common share equivalents (unless their effect is antidilutive) outstanding. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive. Thus, these equivalents are not included in the calculation of diluted loss per share, resulting in basic and diluted loss per share being equal. |
Reverse Stock Split | Reverse Stock Split All common share amounts (except par value and par value per share amounts) referred to in these financial statements have been retroactively adjusted to reflect the Company’s one-for-200 reverse capital stock split effective September 27, 2019. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with partial early adoption permitted for eliminated disclosures. The method of adoption varies by the disclosure. The Company is currently evaluating the impact that adopting this guidance will have on the unaudited condensed consolidated financial statements. The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its unaudited condensed consolidated financial statements. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Feb. 29, 2020 | |
Leases [Abstract] | |
Schedule of Operating Right-of-Use Assets | Information related to the Company’s operating right-of-use assets and related lease liabilities were as follows: Cash paid for operating lease liabilities $ 7,500 Weighted-average remaining lease term (in years) 1.6 Weighted-average discount rate 10.0 % Minimum future lease payments 50,000 |
Schedule of Future Minimum Lease Obligation | The following table presents the Company’s future minimum lease obligation under ASC 840 as of November 30, 2019: 2020 fiscal year $ 22,500 2021 fiscal year $ 27,500 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Feb. 29, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense (Benefit) | The following table sets forth a reconciliation of income tax expense (benefit) at the federal statutory rate to recorded income tax expense (benefit) for the three months ended February 29, 2020 and February 28, 2019: February 29, 2020 February 28, 2019 Tax provision (recovery) at effective tax rate (21%) $ (232,428 ) $ (57,589 ) Change in valuation reserve 232,428 57,589 Tax provision (recovery), net $ – $ – |
Schedule of Deferred Tax Assets and Liabilities | Components of deferred tax assets and (liabilities) are as follows: February 29, 2020 November 30, 2019 Net operating loss carry forwards available at effective tax rate (21%) $ 2,469,000 $ 2,236,000 Valuation Allowances (2,469,000 ) (2,236,000 ) Deferred Tax Asset $ – $ – |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 3 Months Ended |
Feb. 29, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis | Summary of Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed at November 30, 2019: Fair Value Measurement Using Carrying Value Level 1 Level 2 Level 3 Total Derivative liabilities on conversion feature $ 1,650,520 $ – $ – $ 1,650,520 $ 1,650,520 Total derivative liabilities $ 1,650,520 $ – $ – $ 1,650,520 $ 1,650,520 Summary of Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed at February 29, 2020: Fair Value Measurement Using Carrying Value Level 1 Level 2 Level 3 Total Derivative liabilities on conversion feature $ 2,585,069 $ – $ – $ 2,585,069 $ 2,585,069 Total derivative liabilities $ 2,585,069 $ – $ – $ 2,585,069 $ 2,585,069 |
Summary of Changes in Fair Value of Level 3 Financial Liabilities | The table below provides a summary of the changes in fair value of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended February 29, 2020: Derivative Liabilities Fair value, November 30, 2019 1,650,520 Change in fair value 934,549 Fair value, February 29, 2020 $ 2,585,069 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Sep. 27, 2019 | Feb. 29, 2020 | Nov. 30, 2019 |
Accounting Policies [Abstract] | |||
Federal deposit insurance corporation - insured, amount | $ 250,000 | ||
Accounts receivable | $ 602 | $ 30 | |
Reverse stock split, description | one-for-200 reverse capital stock |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Dec. 15, 2016 | Feb. 29, 2020 | Nov. 30, 2019 | Nov. 30, 2018 | Nov. 30, 2016 |
Payless Truckers, Inc [Member] | |||||
Related Party Transaction [Line Items] | |||||
Interest rate | 10.00% | ||||
Proceeds from related party | $ 223,245 | ||||
Arthur Viola [Member] | |||||
Related Party Transaction [Line Items] | |||||
Monthly rent expense | $ 2,100 | ||||
Proceeds from related party | $ 10,200 | ||||
Salary received during period | 175,000 | ||||
Unpaid accrued compensation | $ 410,303 | $ 369,303 | |||
Arthur Viola [Member] | Convertible Promissory Note Agreement [Member] | |||||
Related Party Transaction [Line Items] | |||||
Debt face amount | $ 685,000 | ||||
Debt instrument, maturity date | Dec. 15, 2018 | ||||
Interest rate | 10.00% | ||||
Debt instrument, description | Mr. Viola has the option to convert any portion of the unpaid principal balance into the Company's common stock at a discount to market of 50% at any time. No repayment or conversion of the note occurred as of February 29, 2020, and no notice of default has been issued. |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Nov. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Net loss | $ (1,106,802) | $ (274,233) | |
Cash flows from operating activities | (17,851) | $ 253,597 | |
Outstanding indebtedness, net of discounts | 1,454,809 | ||
Cash | $ 59,458 | $ 75,914 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 3 Months Ended | |
Feb. 29, 2020 | Nov. 30, 2019 | |
Leases [Abstract] | ||
Right-of-use assets | $ 42,942 | $ 49,212 |
Lease liabilities | 43,750 | $ 50,000 |
Total lease costs | $ 7,521 |
Leases - Schedule of Operating
Leases - Schedule of Operating Right-of-Use Assets (Details) | 3 Months Ended |
Feb. 29, 2020USD ($) | |
Leases [Abstract] | |
Cash paid for operating lease liabilities | $ 7,500 |
Weighted-average remaining lease term (in years) | 1 year 7 months 6 days |
Weighted-average discount rate | 10.00% |
Minimum future lease payments | $ 50,000 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Obligation (Details) | Nov. 30, 2019USD ($) |
Leases [Abstract] | |
2020 fiscal year | $ 22,500 |
2021 fiscal year | $ 27,500 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Feb. 29, 2020 | Feb. 28, 2019 | Nov. 30, 2019 | |
Income Tax Disclosure [Abstract] | |||
Net operating loss carry forward | $ 11,800,000 | ||
Federal income tax expiration, description | Expire at various dates through 2037. | ||
Effective income tax rate, percentage | 21.00% | 21.00% | 21.00% |
Valuation allowances of deferred tax assets | $ 2,469,000 | $ 2,236,000 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Expense (Benefit) (Details) - USD ($) | 3 Months Ended | |
Feb. 29, 2020 | Feb. 28, 2019 | |
Income Tax Disclosure [Abstract] | ||
Tax provision (recovery) at effective tax rate (21%) | $ (232,428) | $ (57,589) |
Change in valuation reserve | 232,428 | 57,589 |
Tax provision (recovery), net |
Income Taxes - Schedule of In_2
Income Taxes - Schedule of Income Tax Expense (Benefit) (Details) (Parenthetical) | 3 Months Ended | 12 Months Ended | |
Feb. 29, 2020 | Feb. 28, 2019 | Nov. 30, 2019 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | 21.00% | 21.00% | 21.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Feb. 29, 2020 | Nov. 30, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forwards available at effective tax rate (21%) | $ 2,469,000 | $ 2,236,000 |
Valuation Allowances | (2,469,000) | (2,236,000) |
Deferred Tax Asset |
Income Taxes - Schedule of De_2
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) (Parenthetical) | 3 Months Ended | 12 Months Ended | |
Feb. 29, 2020 | Feb. 28, 2019 | Nov. 30, 2019 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | 21.00% | 21.00% | 21.00% |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Jan. 31, 2020 | Jul. 22, 2019 | Feb. 14, 2019 | Jan. 15, 2019 | Jan. 09, 2019 | Oct. 15, 2018 | Nov. 23, 2016 | Dec. 30, 2015 | Aug. 31, 2015 | Feb. 29, 2020 | Feb. 28, 2019 | Jan. 21, 2016 |
Debt Instrument [Line Items] | ||||||||||||
Debt conversion converted into stock, value | $ 12,651 | |||||||||||
Monthly payments of note payable | $ 10,000 | |||||||||||
Convertible Note Agreement [Member] | LG Capital [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument principal value | $ 75,000 | |||||||||||
Debt interest rate | 8.00% | |||||||||||
Debt instrument maturity date | Feb. 28, 2016 | |||||||||||
Notes payable | 55,224 | |||||||||||
Convertible Note Agreement [Member] | LG Capital [Member] | Risk-free Interest [Member] | Minimum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 0.03 | |||||||||||
Convertible Note Agreement [Member] | LG Capital [Member] | Risk-free Interest [Member] | Maximum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 0.08 | |||||||||||
Convertible Note Agreement [Member] | LG Capital [Member] | Dividend Rate [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 0 | |||||||||||
Convertible Note Agreement [Member] | LG Capital [Member] | Volatility [Member] | Minimum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 195 | |||||||||||
Convertible Note Agreement [Member] | LG Capital [Member] | Volatility [Member] | Maximum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 236 | |||||||||||
Convertible Note Agreement [Member] | Auctus Private Equity Fund LLC [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument principal value | $ 61,000 | $ 130,000 | ||||||||||
Debt interest rate | 12.00% | 10.00% | ||||||||||
Debt instrument maturity date | Aug. 23, 2017 | Sep. 30, 2016 | ||||||||||
Notes payable | 100,297 | |||||||||||
Debt conversion converted into stock, value | $ 6,325 | $ 6,325 | ||||||||||
Debt conversion converted into stock | 210,850,000 | 210,850,000 | ||||||||||
Convertible Note Agreement [Member] | Auctus Private Equity Fund LLC [Member] | Risk-free Interest [Member] | Minimum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 0.03 | 0.03 | ||||||||||
Convertible Note Agreement [Member] | Auctus Private Equity Fund LLC [Member] | Risk-free Interest [Member] | Maximum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 0.16 | 0.16 | ||||||||||
Convertible Note Agreement [Member] | Auctus Private Equity Fund LLC [Member] | Dividend Rate [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 0 | 0 | ||||||||||
Convertible Note Agreement [Member] | Auctus Private Equity Fund LLC [Member] | Volatility [Member] | Minimum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 208 | 208 | ||||||||||
Convertible Note Agreement [Member] | Auctus Private Equity Fund LLC [Member] | Volatility [Member] | Maximum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 269 | 269 | ||||||||||
Convertible Note Agreement [Member] | John De La Cross Capital Partners Inc., [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument principal value | $ 8,000 | |||||||||||
Debt interest rate | 5.00% | |||||||||||
Notes payable | 4,000 | |||||||||||
Convertible Note Agreement [Member] | John De La Cross Capital Partners Inc., [Member] | Risk-free Interest [Member] | Minimum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 0.03 | |||||||||||
Convertible Note Agreement [Member] | John De La Cross Capital Partners Inc., [Member] | Risk-free Interest [Member] | Maximum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 0.16 | |||||||||||
Convertible Note Agreement [Member] | John De La Cross Capital Partners Inc., [Member] | Dividend Rate [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 0 | |||||||||||
Convertible Note Agreement [Member] | John De La Cross Capital Partners Inc., [Member] | Volatility [Member] | Minimum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 208 | |||||||||||
Convertible Note Agreement [Member] | John De La Cross Capital Partners Inc., [Member] | Volatility [Member] | Maximum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 269 | |||||||||||
Convertible Note Agreement [Member] | Auctus Fund LLC [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument principal value | $ 75,250 | $ 57,750 | $ 350,000 | |||||||||
Debt interest rate | 12.00% | 12.00% | 12.00% | |||||||||
Debt instrument maturity date | Apr. 22, 2020 | Nov. 14, 2019 | Jul. 15, 2019 | |||||||||
Notes payable | 350,000 | |||||||||||
Convertible Note Agreement [Member] | Auctus Fund LLC [Member] | Risk-free Interest [Member] | Minimum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 1.76 | 2.53 | 2.67 | |||||||||
Convertible Note Agreement [Member] | Auctus Fund LLC [Member] | Risk-free Interest [Member] | Maximum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 1.95 | 2.540 | 2.70 | |||||||||
Convertible Note Agreement [Member] | Auctus Fund LLC [Member] | Dividend Rate [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 0 | 0 | 0 | |||||||||
Convertible Note Agreement [Member] | Auctus Fund LLC [Member] | Volatility [Member] | Minimum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 1,313 | 309 | 390 | |||||||||
Convertible Note Agreement [Member] | Auctus Fund LLC [Member] | Volatility [Member] | Maximum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument measurement input, percentage | 1,467 | 339 | 423 | |||||||||
Convertible Note Agreement [Member] | GC Capital Partners, LLC [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument principal value | $ 52,500 | |||||||||||
Debt instrument maturity date | Aug. 26, 2020 | |||||||||||
Notes payable | 42,500 | |||||||||||
Loan discounts | $ 2,500 | 2,143 | ||||||||||
Monthly payments of note payable | $ 10,000 | |||||||||||
Convertible Note Agreement [Member] | Auctus Private Equity Fund LLC [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Notes payable | 97,000 | |||||||||||
Convertible Note Agreement [Member] | Auctus Fund LLC [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Notes payable | 57,750 | |||||||||||
Convertible Note Agreement [Member] | Auctus Fund LLC [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Notes payable | 75,250 | |||||||||||
Loan discounts | $ 10,069 |
Derivative Liabilities (Details
Derivative Liabilities (Details Narrative) - USD ($) | 3 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Nov. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Fair value of derivative liability | $ 2,585,069 | $ 1,650,520 | |
Loss on change in derivative liabilities | $ (934,549) | $ 111,698 |
Derivative Liabilities - Summar
Derivative Liabilities - Summary of Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) | Feb. 29, 2020 | Nov. 30, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative liabilities | $ 2,585,069 | $ 1,650,520 |
Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative liabilities | 2,585,069 | 1,650,520 |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative liabilities | ||
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative liabilities | ||
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative liabilities | 2,585,069 | 1,650,520 |
Derivative Liabilities on Conversion Feature [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative liabilities | 2,585,069 | 1,650,520 |
Derivative Liabilities on Conversion Feature [Member] | Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative liabilities | 2,585,069 | 1,650,520 |
Derivative Liabilities on Conversion Feature [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative liabilities | ||
Derivative Liabilities on Conversion Feature [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative liabilities | ||
Derivative Liabilities on Conversion Feature [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative liabilities | $ 2,585,069 | $ 1,650,520 |
Derivative Liabilities - Summ_2
Derivative Liabilities - Summary of Changes in Fair Value of Level 3 Financial Liabilities (Details) | 3 Months Ended |
Feb. 29, 2020USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair value, beginning balance | $ 1,650,520 |
Change in fair value | 934,549 |
Fair value, ending balance | $ 2,585,069 |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | 3 Months Ended | |
Feb. 29, 2020 | Nov. 30, 2019 | |
Equity [Abstract] | ||
Common stock, shares authorized | 6,000,000,000 | 6,000,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares issued | 27,296,452 | 25,546,452 |
Common stock, shares outstanding | 27,296,452 | 25,546,452 |
Shares issued during period for services, shares | 1,750,000 | |
Shares issued during period for services | $ 23,000 |