Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Aug. 31, 2017 | Dec. 11, 2017 | Feb. 28, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | DOCASA Inc. | ||
Entity Central Index Key | 1,619,055 | ||
Document Type | 10-K | ||
Document Period End Date | Aug. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --08-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 44,160,000 | ||
Entity Common Stock, Shares Outstanding | 160,012,875 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Aug. 31, 2017 | Aug. 31, 2016 |
Current assets: | ||
Cash | $ 93,400 | $ 91,137 |
Accounts receivable, net (includes $0 and $288,389 to related parties for August 31, 2017 and 2016, respectively) | 496,822 | 368,807 |
Other receivables | 113,994 | |
Prepaid expenses | 36,270 | 190,249 |
Inventory | 47,477 | 40,323 |
Total current assets | 673,969 | 804,510 |
Fixed assets, net | 1,672,176 | 674,627 |
Intangible assets, net | 10,134 | 9,065 |
Other receivables | 38,660 | 39,540 |
Investments | 1,289 | 1,318 |
Deposits | 89,989 | 57,311 |
Total assets | 2,486,217 | 1,586,371 |
Current liabilities: | ||
Notes payable | 139,419 | 18,368 |
Accounts payable | 849,642 | 610,101 |
Accrued expenses | 59,561 | 95,226 |
Accounts payable to related parties | 95,213 | |
Taxes payable | 151,676 | 73,091 |
Leases payable, current | 116,146 | |
Deferred revenue | 32,661 | 6,557 |
Total current liabilities | 1,444,318 | 803,343 |
Non-current liabilities: | ||
Notes payable (includes $1,040 and $39,540 to related parties for August 31, 2017 and 2016, respectively) | 372,926 | 209,797 |
Other long-term liabilities | 207,003 | 23,168 |
Total long-term liabilities | 579,929 | 232,965 |
Total liabilities | 2,024,247 | 1,036,308 |
Shareholders' equity: | ||
Common stock, $0.001 par value, 250,000,000 shares authorized, 150,036,000 and 0 shares issued and outstanding, at August 31, 2017 and 2016, and 57,064,000 and 0 conditionally issuable, at August 31, 2017 and 2016, respectively | 207,100 | |
Additional paid-in capital | 758,969 | |
Preference shares (25,000,000 shares authorized, £1 par value, 1,642,826 and 870,826 shares issued and outstanding as of August 31, 2017 and 2016, respectively) | 1,154,127 | |
Share premium | 193,540 | |
Accumulated other comprehensive income | 119,464 | 153,187 |
Minority interest | 2,142,804 | |
Accumulated deficit | (2,766,367) | (1,340,521) |
Total shareholders' equity | 461,970 | 550,063 |
Total liabilities and shareholders' equity | 2,486,217 | 1,586,371 |
Common Class A [Member] | ||
Shareholders' equity: | ||
Ordinary shares | 389,730 | |
Common Class B [Member] | ||
Shareholders' equity: | ||
Ordinary shares |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) | Aug. 31, 2017USD ($)$ / sharesshares | Aug. 31, 2017£ / shares | Aug. 31, 2016USD ($)$ / sharesshares | Aug. 31, 2016£ / shares |
Current assets: | ||||
Accounts receivable, net | $ | $ 0 | $ 288,389 | ||
Non-current liabilities: | ||||
Notes payable to related parties | $ | $ 1,040 | $ 39,540 | ||
Shareholders' equity: | ||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | ||
Common stock, shares authorized | 250,000,000 | 250,000,000 | ||
Common stock, shares issued | 150,036,000 | 0 | ||
Common stock, shares outstanding | 150,036,000 | 0 | ||
Conditionally issuable | 57,064,000 | 0 | ||
Preference shares, par value | £ / shares | £ 1 | £ 1 | ||
Preference shares, shares authorized | 25,000,000 | 25,000,000 | ||
Preference shares, shares issued | 1,642,826 | 870,826 | ||
Preference shares, shares outstanding | 1,642,826 | 870,826 | ||
Common Class A [Member] | ||||
Shareholders' equity: | ||||
Ordinary shares, par value | £ / shares | 1 | 1 | ||
Ordinary shares, shares authorized | 25,000,000 | 25,000,000 | ||
Ordinary shares, shares issued | 0 | 243,800 | ||
Ordinary shares, shares outstanding | 0 | 243,800 | ||
Common Class B [Member] | ||||
Shareholders' equity: | ||||
Ordinary shares, par value | £ / shares | £ 1 | £ 1 | ||
Ordinary shares, shares authorized | 10,000,000 | 10,000,000 | ||
Ordinary shares, shares issued | 0 | 0 | ||
Ordinary shares, shares outstanding | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Consolidated Statements Of Operations | ||
Revenue, net | $ 4,180,483 | $ 3,869,517 |
Operating expenses | ||
Direct costs of revenue | 3,633,591 | 2,458,240 |
Professional fees | 171,181 | 83,401 |
Rent | 463,655 | 418,193 |
Depreciation and amortization | 191,025 | 149,588 |
Property taxes | 10,461 | 169,940 |
Other general and administrative expenses | 1,091,080 | 557,120 |
Operating income (loss) | (1,380,510) | 33,035 |
Other income (expense) | ||
Interest expense | 0 | (5,710) |
Impairment expense | (46,566) | |
Income (loss) before tax and minority interest | (1,427,076) | 27,325 |
Minority interest income (loss) | 1,230 | |
Net income (loss) | (1,425,846) | 27,325 |
Foreign currency translation gain | (33,723) | 94,785 |
Total comprehensive income (loss) | $ (1,459,569) | $ 122,110 |
Net income (loss) per share - basic and diluted | $ (0.01) | $ .00 |
Weighted average number of shares outstanding - basic and diluted | 207,025,000 | 206,800,000 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Deficit - USD ($) | Class A Ordinary Stock | Class B Ordinary Stock | Common Stock | Common Stock Issuable | Preference Shares | Share Premium | Additional Paid-In Capital | Accumulated Other Compre-hensive Income (Loss) | Minority Interest | Accumulated Deficit | Total |
Begnning Balance, Shares at Aug. 31, 2015 | 2,000 | 241,800 | |||||||||
Begnning Balance, Amount at Aug. 31, 2015 | $ 3,195 | $ 386,535 | $ 193,540 | $ 58,402 | $ (1,367,846) | $ (726,175) | |||||
Conversion of Class B to Class A, Shares | 241,800 | (241,800) | |||||||||
Conversion of Class B to Class A, Amount | $ 386,535 | $ (386,535) | |||||||||
Shares issued in exchange for debt, Shares | 870,826 | ||||||||||
Shares issued in exchange for debt, Amount | $ 1,154,127 | 1,154,127 | |||||||||
Other comprehensive income (loss) | 94,785 | 94,785 | |||||||||
Net income for the period ended | 27,325 | 27,325 | |||||||||
Ending Balance, Shares at Aug. 31, 2016 | 243,800 | 870,826 | |||||||||
Ending Balance, Amount at Aug. 31, 2016 | $ 389,730 | $ 1,154,127 | 193,540 | 153,187 | (1,340,521) | 550,063 | |||||
Other comprehensive income (loss) | (33,723) | (33,723) | |||||||||
Recapitalization - merger, Shares | (243,800) | 146,800,000 | 60,000,000 | (870,826) | |||||||
Recapitalization - merger, Amount | $ (389,730) | $ 146,800 | $ 60,000 | $ (1,154,127) | (193,540) | 376,677 | 1,154,127 | 207 | |||
Issuance of common stock, Shares | 2,936,000 | (2,936,000) | |||||||||
Issuance of common stock, Amount | $ 2,936 | $ (2,936) | |||||||||
Issuance of common stock, Shares | 300,000 | ||||||||||
Issuance of common stock, Amount | $ 300 | 299,700 | 300,000 | ||||||||
Issuance of preference shares, Shares | |||||||||||
Issuance of preference shares, Amount | 996,203 | 996,203 | |||||||||
Return of preference shares, Shares | |||||||||||
Return of preference shares, Amount | (6,296) | (6,296) | |||||||||
Contributions | 82,592 | 82,592 | |||||||||
Net income for the period ended | (1,230) | (1,425,846) | (1,427,076) | ||||||||
Ending Balance, Shares at Aug. 31, 2017 | 150,036,000 | 57,064,000 | |||||||||
Ending Balance, Amount at Aug. 31, 2017 | $ 150,036 | $ 57,064 | $ 758,969 | $ 119,464 | $ 2,142,804 | $ (2,766,367) | $ 461,970 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (1,425,846) | $ 27,325 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations: | ||
Depreciation and amortization expense | 190,645 | 149,588 |
Other comprehensive income | (33,723) | 94,785 |
Impairment expense | 46,566 | |
Bad debt expense | 423,680 | |
Minority interest gain (loss) | (1,230) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (551,695) | (146,194) |
Other receivables | 114,874 | (112,454) |
Prepaid expenses | 153,979 | (123,200) |
Inventory | (7,154) | (2,308) |
Prepaid expenses and other assets | (32,678) | |
Other non-current receivables | 6,660 | |
Deposits | 25,053 | |
Investments | 222 | |
Accounts payable | 322,133 | 131,374 |
Accrued expenses | (35,665) | (48,547) |
Taxes payable | 78,585 | (90,625) |
Deferred revenue | 26,104 | (2,580) |
Other non-current liabilities | (83,001) | |
Net cash used in operating activities | (731,424) | (173,902) |
Cash flows used in investing activities | ||
Acquisition of property and equipment | (831,296) | (186,443) |
Investments | 29 | |
Net cash used in investing activities | (831,267) | (186,443) |
Cash flows from (used in) financing activities: | ||
Proceeds from notes payable | 3,229,558 | 370,227 |
Payment on capital leases | (57,986) | |
Payments on notes payable | (2,244,654) | |
Sale of preference shares | 638,037 | |
Net cash provided by financing activities | 1,564,954 | 370,227 |
Net increase (decrease) in cash | 2,263 | 9,882 |
Cash at beginning of period | 91,137 | 81,255 |
Cash at end of period | 93,400 | 91,137 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | ||
Cash paid for taxes | 606 | |
Non-cash investing and financing activities: | ||
Fixed asset additions by capital leases | 357,967 | |
Payment of services by third party | 82,592 | |
Preference shares issued for debt | $ 605,511 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Organization DOCASA, Inc. (the Company, we, us, our, or DOCASA) was incorporated in the State of Nevada on July 22, 2014, under the name of FWF Holdings, Inc. The Company changed its name on August 4, 2016. The Company was originally engaged in the business of commercial production and distribution of hot sauce (see Note 3). On August 4, 2016, the Company changed its year end from July 31 to August 31. On July 8, 2016, the Company experienced a change in control. Atlantik LP (Atlantik), a related party, acquired a majority of the issued and outstanding common stock of the Company in accordance with a stock purchase agreement by and between Atlantik and Nami Shams (the Seller). On the closing date, July 8, 2016, pursuant to the terms of the stock purchase agreement, Atlantik purchased from the Seller 115,000,000 shares of the Companys outstanding restricted common stock for $200,000, representing 75.8% of the Companys outstanding common stock at that time. On September 1, 2016, the Company acquired 99.8% of the voting stock of the Department of Coffee and Social Affairs Limited, a United Kingdom corporation (the DEPT-UK), and the Company agreed to issue DEPT-UKs majority shareholder 170,000,000 shares of the Companys common stock110,000,000 shares initially and 60,000,000 shares at a time determined by the Companys Board of Directors but no later than August 31, 2017, which deadline was subsequently extended to August 31, 2018. Also on September 1, 2016, the Company acquired 115,000,000 shares of the Companys common stock from Atlantik in exchange for issuing Atlantik a promissory note for $320,000, which shares were then cancelled and which note has since been paid in full. As a result of the acquisition and the issuance of the initial 110,000,000 shares of common stock, and the cancellation of the 115,000,000 Atlantik shares, DEPT-UK is now the majority-owned subsidiary of the Company, and the Company experienced a change of control. DEPT-UK formed a wholly-owned subsidiary, Department of Coffee and Internal Affairs Limited (DCIA), on September 11, 2014, as filed with the Registrar of Companies for England and Wales. As of August 31, 2017, DCIA has had no operations or activity. DEPT-UK formed a wholly-owned subsidiary, The Department of Coffee and Social Affairs Limited, on November 9, 2014, as filed with the Registrar of Companies for England and Wales. On February 28, 2014, the name was changed to DOCASA Limited. On May 1, 2015, the name was changed to Eat Sleep Juice Repeat Limited. As of January 18, 2017, this subsidiary, with no operations or activity, was sold for £1. On April 5, 2017, the Company formed Department of Coffee and Social Affairs IL, Inc. (DEPT-IL), an Illinois corporation. On May 18, 2017, the Company formed Department of Coffee and Social Affairs White Space Limited (DEPT-UKWS), as filed with the Registrar of Companies for England and Wales. DEPT-UKWS is a subsidiary of DEPT-UK. For financial reporting purposes, the acquisition of DEPT-UK and the change of control in connection with acquisition represented a "reverse merger" rather than a business combination, and DEPT-UK is deemed to be the accounting acquirer in the transaction. For the periods subsequent to August 31, 2016, the acquisition is being accounted for as a reverse-merger and recapitalization. DEPT-UK is the acquirer for financial reporting purposes, and the Company (DOCASA, Inc., f/k/a FWF Holdings, Inc.) is the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the acquisition are those of DEPT-UK and have been recorded at the historical cost basis of DEPT-UK, and the financial statements after completion of the acquisition include the assets and liabilities of both the Company and DEPT-UK, and the historical operations of DEPT-UK prior to closing and operations of both companies from the closing of the acquisition. Nature of Operations We are currently devoting our efforts to the specialty coffee industry, specifically with company-operated stores. The Company will generate revenue through sales at fifteen existing company-operated coffee shop locations in the UK, with seven more locations under construction. The Company is expanding its operations to the United States and is opening its first coffee shop in Chicago, Illinois in October 2017. Our objective is to continue to be recognized as one of the upper tier specialty coffee retail operations. Similar to other leading operators, we sell our proprietary coffee and related products, and complementary food and snacks. The Company, as of August 31, 2017, has discontinued its hot sauce products which had no activity in the year ended August 31, 2017 (see Note 3). Accounting for discontinued operations not required due to immateriality. Principles of Consolidation The consolidated financial statements include the accounts of DOCASA and its subsidiaries, DEPT-UK, DCIA, DEPT-IL and DEPT-UKs subsidiary, DEPT-UKWS. All significant inter-company balances and transactions have been eliminated in consolidation. Basis of Presentation The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. Significant estimates in the accompanying financial statements include the amortization period for intangible assets, valuation and impairment valuation of intangible assets, allowance for accounts receivable, depreciable lives of the web site, valuation of warrants and beneficial conversion feature debt discounts, valuation of derivatives, and valuation of share-based payments. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Accounts Receivable Accounts receivable consisted of amounts due from customers primarily for management fees. The Company considered accounts more than 30 days old to be past due. The Company used the allowance method for recognizing bad debts. When an account was deemed uncollectible, it was written off against the allowance. The Company generally does not require collateral for its accounts receivable. Management has not recorded an allowance for doubtful accounts as of August 31, 2017. Inventory Inventory is recorded at the lower of cost or market and the cost of sales are recorded utilizing the first in first out (FIFO) method. Property, Equipment and Depreciation Property and equipment is recorded at cost. Depreciation is computed using the straight-line method based on the estimated useful lives of the related assets of three years for computer equipment, five years for office furniture and fixtures, and the lesser of the lease term or the useful life of the leased equipment. Leasehold improvements, if any, would be amortized over the lesser of the lease term or the useful life of the improvements. Expenditures for maintenance and repairs along with fixed assets below our capitalization threshold are expensed as incurred. Impairment of Long-Lived Assets The Company accounts for long-lived assets in accordance with the provisions of Statement of Financial Accounting Standards ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Fair Value of Financial Instruments The Company measures its financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash, accounts payable, accrued expenses, and short-term loans the carrying amounts approximate fair value due to their short maturities. We follow accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. Revenue Recognition The Company recognizes revenue for our services in accordance with ASC 605-10, Revenue Recognition in Financial Statements. Under these guidelines, revenue is recognized on transactions when all of the following exist: persuasive evidence of an arrangement did exist, delivery of service has occurred, the sales price to the buyer is fixed or determinable and collectability is reasonably assured. The Company has three primary revenue streams as follows: · Sales of specialty coffee and complementary food products. · Coffee school. · Coffee services. Stock-Based Compensation The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition provisions ASC Topic 505-50. The Company estimates the fair value of stock options at the grant date by using the Black-Scholes option-pricing model. Advertising Advertising is expensed as incurred and is included in loss from operations on the accompanying statement of operations. For the years ended August 31, 2017 and 2016 advertising expense was $39,628 and $27,395, respectively. Income Taxes The Company adopted the provisions of ASC 740-10, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of August 31, 2017, tax years 2014 2017 remain open for IRS audit and tax years 20152017 remain open for HM Revenue & Customs (HMRC) audit. The Company has received no notice of audit from the IRS or HMRC for any of the open tax years. The Company adopted ASC 740-10, Net Earnings (Loss) Per Share In accordance with ASC 260-10, Earnings Per Share, basic net earnings (loss) per common share is computed by dividing the net earnings (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted average number of common and dilutive common stock equivalent shares outstanding during the period. Foreign Currency Translation and Transactions The British Pound (£) is the functional currency of DEPT-UK whereas the financial statements are reported in United States Dollar (USD, $). Assets and liabilities are translated based on the exchange rates at the balance sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the period. Equity accounts are translated at historical exchange rates. The resulting translation gain and loss adjustments are accumulated as a component of stockholders equity and other comprehensive income. Comprehensive Income (Loss) The Company reports comprehensive income (loss) and its components in its consolidated financial statements. Comprehensive income (loss) consists of net loss and foreign currency translation adjustments affecting stockholders equity that, under U.S. GAAP, are excluded from net loss. As of August 31, 2017, the exchange rate between U.S. Dollars and British Pounds was US$1.2886604425 = £1.00, and the weighted average exchange rate for the year ended August 31, 2017 was US$1.3079355980 = £1.00. As of August 31, 2016, the exchange rate between U.S. Dollars and British Pounds was US$1.318 = £1.00. Going Concern The Company has a net loss for the year ended August 31, 2017 of $1,425,846 and a working capital deficit as of August 31, 2017 of $770,349, and has used cash in operations of $731,424 for the year ended August 31, 2017. In addition, as of August 31, 2017, the Company had a stockholders equity and accumulated deficit of $461,970 and $2,766,367, respectively. Without further funding, these conditions raise substantial doubt about the Companys ability to continue as a going concern. The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The ability of the Company to continue its operations is dependent on the execution of managements plans, which include the raising of capital through the debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements. If the Company were not to continue as a going concern, it would likely not be able to realize its assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the consolidated financial statements. There can be no assurances that the Company will be successful in generating additional cash from the equity/debt markets or other sources to be used for operations. The consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary. Based on the Companys current resources, the Company will not be able to continue to operate without additional immediate funding. Should the Company not be successful in obtaining the necessary financing to fund its operations, the Company would need to curtail certain or all operational activities and/or contemplate the sale of its assets, if necessary. Segment Information In accordance with the provisions of ASC 280-10, Disclosures about Segments of an Enterprise and Related Information, the Company is required to report financial and descriptive information about its reportable operating segments. The Company does not have any operating segments as of August 31, 2017 and 2016. Effect of Recent Accounting Pronouncements The Company reviews new accounting standards and updates as issued. No new standards or updates had any material effect on these financial statements. The accounting pronouncements and updates issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these financial statements as presented and does not anticipate the need for any future restatement of these financial statements because of the retro-active application of any accounting pronouncements issued subsequent to August 31, 2017 through the date these financial statements were issued. In February 2016, the Financial Accounting Standards Board (FASB) issued an ASU on lease accounting. The ASU requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized as assets and liabilities on the balance sheet. The ASU is effective for reporting periods beginning after December 15, 2018 with early adoption permitted. While the Company is still evaluating the ASU, the Company expects the adoption of the ASU to have a material effect on the Companys financial condition due to the recognition of the lease rights and obligations as assets and liabilities. The Company expects the ASU to have a material effect on the Companys results of operations, and the ASU will have no effect on cash flows. ASU 2014-09, Revenue Revenue from Contracts with Customers. In May 2014, the FASB issued a new accounting standard that requires recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. The FASB has also issued several updates to ASU 2014-09. The new standard supersedes U.S. GAAP guidance on revenue recognition and requires the use of more estimates and judgments than the present standards. It also requires additional disclosures. We will adopt the new revenue guidance effective January 1, 2017, by recognizing the cumulative effect of initially applying the new standard as an increase to the opening balance of retained earnings. We expect this adjustment to be less than $100 million, with an immaterial impact to our net income on an ongoing basis. Adoption of the new standard will also result in changes in classification between Revenues, Cost of sales, Non-Financial Services interest income and other income/(loss), net, and Financial Services other income/(loss), net. In July 2017, the FASB issued ASU 2017-11 Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic 480) Derivatives and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entitys own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, DebtDebt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. Under current GAAP, an equity-linked financial instrument with a down round feature that otherwise is not required to be classified as a liability under the guidance in Topic 480 is evaluated under the guidance in Topic 815, Derivatives and Hedging, to determine whether it meets the definition of a derivative. If it meets that definition, the instrument (or embedded feature) is evaluated to determine whether it is indexed to an entitys own stock as part of the analysis of whether it qualifies for a scope exception from derivative accounting. Generally, for warrants and conversion options embedded in financial instruments that are deemed to have a debt host (assuming the underlying shares are readily convertible to cash or the contract provides for net settlement such that the embedded conversion option meets the definition of a derivative), the existence of a down round feature results in an instrument not being considered indexed to an entitys own stock. This results in a reporting entity being required to classify the freestanding financial instrument or the bifurcated conversion option as a liability, which the entity must measure at fair value initially and at each subsequent reporting date. The amendments in this Update revise the guidance for instruments with down round features in Subtopic 815-40, Derivatives and HedgingContracts in Entitys Own Equity, which is considered in determining whether an equity-linked financial instrument qualifies for a scope exception from derivative accounting. An entity still is required to determine whether instruments would be classified in equity under the guidance in Subtopic 815-40 in determining whether they qualify for that scope exception. If they do qualify, freestanding instruments with down round features are no longer classified as liabilities and embedded conversion options with down round features are no longer bifurcated. For entities that present EPS in accordance with Topic 260, and when the down round feature is included in an equity-classified freestanding financial instrument, the value of the effect of the down round feature is treated as a dividend when it is triggered and as a numerator adjustment in the basic EPS calculation. This reflects the occurrence of an economic transfer of value to the holder of the instrument, while alleviating the complexity and income statement volatility associated with fair value measurement on an ongoing basis. Convertible instruments are unaffected by the Topic 260 amendments in this Update. Those amendments in Part 1 of this Update are a cost savings relative to current GAAP. This is because, assuming the required criteria for equity classification in Subtopic 815-40 are met, an entity that issued such an instrument no longer measures the instrument at fair value at each reporting period (in the case of warrants) or separately accounts for a bifurcated derivative (in the case of convertible instruments) on the basis of the existence of a down round feature. For convertible instruments with embedded conversion options that have down round features, applying specialized guidance such as the model for contingent beneficial conversion features rather than bifurcating an embedded derivative also reduces cost and complexity. Under that specialized guidance, the issuer recognizes the intrinsic value of the feature only when the feature becomes beneficial instead of bifurcating the conversion option and measuring it at fair value each reporting period. The amendments in Part II of this Update replace the indefinite deferral of certain guidance in Topic 480 with a scope exception. This has the benefit of improving the readability of the Codification and reducing the complexity associated with navigating the guidance in Topic 480. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part 1 of this Update should be applied in either of the following ways: 1. Retrospectively to outstanding financial instruments with a down round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective; or 2. Retrospectively to outstanding financial instruments with a down round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. |
ENTRY INTO A DEFINITIVE AGREEME
ENTRY INTO A DEFINITIVE AGREEMENT | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 2 - ENTRY INTO A DEFINITIVE AGREEMENT | Acquisition of Department of Coffee and Social Affairs Limited DOCASA, Inc. (f/k/a FWF Holdings, Inc., the “Public Company,” “we,” “us,” “our”) entered into an acquisition agreement (the “Acquisition Agreement”) with Department of Coffee and Social Affairs Limited (the “Private Company”), a United Kingdom corporation. Prior to the acquisition, Pankaj Rajani, an officer and director of the Public Company, through Atlantik, acquired 115,000,000, or 75.8% of the outstanding shares of DOCASA, Inc. (f/k/a FWF Holdings, Inc.), the public company. Stefan Allesch-Taylor, an individual, and the Private Company’s chairman (“Allesch-Taylor,” or “Shareholder”), was the owner of record of 99.8% of the voting shares of the Private Company (the “Private Company Stock”). Pursuant to the Acquisition Agreement, the Private Company Stock was transferred to the Public Company in consideration of the Public Company issuing Shareholder 170,000,000 shares (the “New Shares”) of the Public Company’s common stock to the Shareholder (or his designees) in an initial tranche of 110,000,000 shares and a subsequent tranche of 60,000,000 shares. The Public Company issued Shareholder 110,000,000 fully paid and nonassessable shares of the Public Company’s restricted common stock at the time of the execution of the Agreement. The Public Company was required to issue a second tranche of 60,000,000 fully paid and nonassessable shares of the Company’s restricted common stock (the “Deferred Shares”) at a time to be determined by the Public Company’s Board of Directors, but no later than August 31, 2017. On April 6, 2017, 2,936,000 shares were issued to Mr. Allesch-Taylor leaving 57,064,000 shares as issuable. On June 26, 2017, Mr. Allesch-Taylor requested that the issuance deadline of August 31, 2017, be extended to August 31, 2018, which was agreed to by the Company. The issuance of the Deferred Shares is not conditional or contingent on any event or action by any party to the Agreement. As a result of the Acquisition Agreement, the Private Company became a subsidiary of the Public Company. See Notes 1, 8, 9 and 10. Also in connection with the Acquisition Agreement, (i) Allesch-Taylor and Gill were appointed to serve on the Public Company’s Board of Directors, serving as Chairman and Vice-Chairman, respectively; and (ii) Ashley Lopez (“Lopez”) was appointed Chief Executive Officer and President and Kazi Shahid (“Shahid”) was appointed Chief Financial Officer. Allesch-Taylor, Gill, Lopez and Shahid maintained the same positions with DEPT-UK. Subsequently, Shahid resigned in March 2017 as Chief Financial Officer of the Public Company and DEPT-UK. The transaction was accounted for as a reverse acquisition. As such, the future period equity amounts will be retro-actively restated to reflect the equity instruments of the accounting acquirer. The following table summarizes the consideration given for DEPT-UK and the fair values of the assets and liabilities assumed at the acquisition date. Consideration given: Common stock given $ 207 Total consideration given $ 207 Fair value of identifiable assets acquired and liabilities assumed: Inventory $ 731 Notes payable (32,547 ) Accounts payable (6,043 ) Accrued expenses (8,500 ) Total identifiable net liabilities (46,359 ) Goodwill 46,566 Total consideration $ 207 The Company has determined that the goodwill of $46,566 was impaired and expensed it accordingly in the period ended November 30, 2016. Accounting Treatment of the Merger For financial reporting purposes, the Share Exchange represented a “reverse merger” rather than a business combination and Private Company was deemed to be the accounting acquirer in the transaction. The Share Exchange has been accounted for as a reverse-merger and recapitalization. Private Company is deemed to be the acquirer for financial reporting purposes, and the Public Company (DOCASA, Inc., f/k/a FWF Holdings, Inc.) is treated as the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the Share Exchange are those of the Private Company and are recorded at the historical cost basis of the Private Company, and the financial statements after completion of the Share Exchange will include the assets and liabilities of the Public Company and the Private Company, and the historical operations of Private Company and operations of both companies from the closing date of the Share Exchange. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 3 - DISCONTINUED OPERATIONS | On August 31, 2017, the Company determined that the short- and long-term potential for the hot sauce products were not sufficient to warrant continuing this product line thereby discontinuing all operations in regards to the hot sauce products. The only balance sheet item related to the hot sauce products was inventory of $731, which was written off accordingly. Due to immateriality and no operations in the year ended August 31, 2017, there is no accounting for discontinued operations required. |
RECEIVABLES
RECEIVABLES | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 4 – RECEIVABLES | As of August 31, 2017, and 2016, the Company has net receivables of $496,822 and $368,807, respectively. The receivables are as follows: August 31, August 31, 2017 2016 Trade receivables $ 168,121 $ 270,641 Loan receivable 328,701 109,755 Allowance for doubtful accounts - (11,589 ) Receivables, net $ 496,822 $ 368,807 The loan receivable does not have terms, therefore there is no applicable interest, it is unsecured, and no due date. |
INVENTORY
INVENTORY | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 5 - INVENTORY | The Company has inventory of various items used for the sale of coffee and complementary products. As of August 31, 2017, and 2016, the Company had inventory for the coffee related products of $47,477 and $40,323, respectively. The Company accounts for its inventory using the lower of cost or market and the cost of sales are recorded utilizing the first in first out (“FIFO”) method. As of August 31, 2017, the Company had 49 cases containing 12 bottles per case (588 bottles) of hot sauce products. Due to the shelf life and the lack of sales, the Company wrote off the inventory of hot sauce products and discontinued this product line (see Note 3). The inventory is as follows: August 31, August 31, 2017 2016 Consumable products $ 17,894 $ 8,500 Food and drinks 24,117 22,858 Retail products 5,466 8,965 Total inventory $ 47,477 $ 40,323 Note: The hot sauce products were recorded on the books of DOCASA for the year ended August 31, 2016, and due to the reverse merger with DEPT-UK were not reflected as of August 31, 2016 (since the reverse merge did not occur until September 1, 2016). |
FIXED ASSETS
FIXED ASSETS | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 6 - FIXED ASSETS | The Company has fixed assets including computer equipment, office equipment, site equipment and machinery, site fit out costs, site furniture, fixtures and fittings. As of August 31, 2017, and 2016, the Company had total fixed assets of $2,294,264 and $1,126,093, respectively, with accumulated depreciation of $622,088 and $451,466, respectively, for net fixed assets of $1,672,176 and $674,627, respectively. Variances between the two reporting periods are primarily due to the currency translation calculation. The fixed assets are as follows: DEPT-UK DEPT-IL Consolidated August 31, August 31, August 31, 2017 2016 2017 2016 2017 2016 Computer equipment $ 62,038 $ 36,839 $ - $ - $ 62,038 $ 36,839 Office equipment 22,526 22,972 - - 22,526 22,972 Site equipment and machinery 366,661 198,532 - - 366,661 198,532 Site fit out costs 1,588,480 707,678 17,587 - 1,606,067 707,678 Site furniture, fixtures and fittings 236,384 160,072 588 - 236,972 160,072 Total fixed assets 2,276,089 1,126,093 18,175 - 2,294,264 1,126,093 Less: Accumulated depreciation 622,088 451,466 - - 622,088 451,466 Fixed assets, net $ 1,654,001 $ 674,627 $ 18,175 $ - $ 1,672,176 $ 674,627 The depreciation expense for the years ended August 31, 2017 and 2016, was $183,374 and $139,837, respectively. The variance between the expense and the increase in accumulated depreciation is due to timing of the currency translation calculation. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 7 - INTANGIBLE ASSETS | The Company has intangible assets related to website development. The amortization of the intangible assets is over a three-year period. As of August 31, 2017, and 2016, the Company had intangible assets, net of accumulated amortization, of $10,134 and $9,065, respectively. Variances between the two reporting periods are primarily due to the currency translation calculation. The intangible assets are as follows: August 31, August 31, 2017 2016 Website development $ 29,428 $ 21,088 Total intangible assets 29,428 21,088 Less: Accumulated amortization 19,294 12,023 Intangible assets, net $ 10,134 $ 9,065 The amortization expense for the years ended August 31, 2017 and 2016, was $7,271 and $9,751, respectively. The variance between the expense and the increase in accumulated amortization is due to timing of the currency translation calculation. Amortization, based on the currency translation calculation as of the date of this report, for the next five years, is as follows: 2018 $ 9,835 2019 299 2020 - 2021 - 2022 - Total $ 10,134 |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 8 - INVESTMENTS | On January 12, 2017, Allesch-Taylor purchased the Company’s original investment of £5,000 for a 5% ownership of Radio Station (f/k/a Soho Radio Ltd.) for £5,000 of his issued preference shares in DEPT-UK. The relationship with Radio Station will continue to provide the Company with intangible benefits. As the Company had previously impaired £4,000 of the investment as of August 31, 2015, the exchange resulted in a gain on the transaction and will be recorded accordingly. The Company had previously impaired the investment as the investment would only provide intangible benefits, which, after this transaction, are still anticipated to be to the benefit of the Company. See Notes 10 and 11. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 9 - NOTES PAYABLE | The Company has notes payable as of August 31, 2017 and 2016 are as follows: Notes payable - current August 31, 2017 August 31, 2016 Accrued Accrued Principal Interest Total Principal Interest Total Arch Investments (1) $ 2,194 $ - $ 2,194 $ - $ - $ - Arch Investments (1) 5,067 - 5,067 - - - Arch Investments (1) 5,065 - 5,065 - - - Arch Investments (1) 15,873 - 15,873 - - - Arch Investments (1) 4,349 - 4,349 - - - HSBC 106,871 - 106,871 18,368 - 18,368 Total $ 139,419 $ - $ 139,419 $ 18,368 $ - $ 18,368 ________________ (1) The balance for August 31, 2016 of $32,548 is not reflected on the balance sheet due to the reverse merger. The Company assumed this liability as a condition of the reverse merger. Notes payable - non-current August 31, 2017 August 31, 2016 Accrued Accrued Principal Interest Total Principal Interest Total Deij Capital Limited $ 70,079 $ - $ 70,079 $ 39,540 $ - $ 39,540 HSBC 302,847 - 302,847 170,257 - 170,257 Total $ 372,926 $ - $ 372,926 $ 209,797 $ - $ 209,797 On February 1, 2010, DEPT-UK entered into a business loan with International Capital Corporation (ICC). The loan is for 7 years, with no interest. The imputed interest is deemed immaterial as of August 31, 2017. The loan was for $1,353,645 (£850,000) to be drawn down as and when required. On June 30, 2016, ICC converted the balance due of $719,143 (£542,617) into 542,617 shares of Preference Shares (see Note 11). The outstanding principal as of August 31, 2017 and 2016 was $0 (£0) and $0 (£0), respectively. See Note 10. On July 1, 2014, DEPT-UK entered into a business loan with Deij Capital Limited (Deij Capital), a company in which Gill is the director and owner. The loan is for 3 years, with an interest rate of 0%. The note was extended to July 1, 2018. The imputed interest is deemed immaterial as of August 31, 2017. The facility loan was for $171,437 (£100,000) to be drawn down as and when required. On June 30, 2016, Deij Capital converted the balance due of $179,534 (£135,464) into 135,464 shares of Preference Shares (see Note 11). On May 31, 2017, Deij Capital converted of the balance due $63,990 (£51,500) into 51,500 shares of Preference Shares (see Note 11). The outstanding principal as of August 31, 2017 and 2016, was $70,079 (£56,454) and $39,540 (£30,000), respectively. The accrued interest as of August 31, 2017 and 2016, was $0 (£0) and $0 (£0), respectively. See Note 10. On July 31, 2014, DOCASA executed a promissory note for $2,194 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. The imputed interest is deemed immaterial as of August 31, 2017. As of August 31, 2017, and 2016, the principal was $2,194. The balance for August 31, 2016, is not reflected on the balance sheet due to the reverse merger. The Company retained this liability as a condition of the reverse merger. This note was acquired by Arch Investments, LLC. See Notes 2 and 10. On April 30, 2015, DOCASA executed a promissory note for $5,067 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. On July 20, 2016, Arch Investments, LLC acquired this promissory note due to Nami Shams. The imputed interest is deemed immaterial as of August 31, 2017. As of August 31, 2017, and 2016, the principal was $5,067. The balance for August 31, 2016, is not reflected on the balance sheet due to the reverse merger. The Company retained this liability as a condition of the reverse merger. See Notes 2 and 10. On July 31, 2015, DOCASA executed a promissory note for $5,065 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. The imputed interest is deemed immaterial as of August 31, 2017. As of August 31, 2017, and 2016, the principal was $5,065. The balance for August 31, 2016, is not reflected on the balance sheet due to the reverse merger. The Company retained this liability as a condition of the reverse merger. This note was acquired by Arch Investments, LLC. See Notes 2 and 10. On October 31, 2015, DOCASA executed a promissory note for $15,873 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. The imputed interest is deemed immaterial as of August 31, 2017. As of August 31, 2017, and 2016, the principal was $15,873. The balance for August 31, 2016, is not reflected on the balance sheet due to the reverse merger. The Company retained this liability as a condition of the reverse merger. This note was acquired by Arch Investments, LLC. See Notes 2 and 10. On January 31, 2016, DOCASA executed a promissory note for $4,349 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. The imputed interest is deemed immaterial as of May 31, 2017. As of August 31, 2017, and 2016, the principal was $4,349. The balance for August 31, 2016, is not reflected on the balance sheet due to the reverse merger. The Company retained this liability as a condition of the reverse merger. This note was acquired by Arch Investments, LLC. See Notes 2 and 10. On July 28, 2016, DEPT-UK entered into a business loan with HSBC. The loan is a development loan drawn down against development invoices. The loan is for 4 years, with an interest rate of 4.5% over the Bank of England base rate. The loan repayment is monthly, interest-only payments for the first six months followed by monthly repayments of principal and interest over the remaining forty-two months. The loan was for $437,992 (£352,500) with an initial $115,767 (£93,178) drawn. The outstanding principal and accrued interest as of August 31, 2017 and 2016, was $409,718 (£317,941) and $170,257 (£129,178), respectively. As of August 31, 2017, the current portion was $106,871 (£82,932) and the non-current portion was $302,847 (£235,009). As of August 31, 2016, the Company had a temporary loan from HSBC in the amount of $18,368. As of August 31, 2017, the liability had been paid in full. On September 1, 2016, DOCASA acquired the 115,000,000 shares of common stock from Atlantik in exchange for a promissory note for $320,000, which is non-interest bearing and terminates in one year. The imputed interest is deemed immaterial as of August 31, 2017. The principal is payable in two tranches; $20,000 due September 30, 2016, and the remaining $300,000 due August 31, 2017. The $20,000 payment was made by a third party and recorded as contributed capital in September 2016. The remaining $300,000 balance was paid on November 30, 2016, to Atlantik by Allesch-Taylor. See Notes 1, 2, 5, 6 and 10. |
RELATED PARTIES TRANSACTIONS
RELATED PARTIES TRANSACTIONS | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 10 - RELATED PARTIES TRANSACTIONS | On February 1, 2010, DEPT-UK entered into a business loan with ICC. The loan is for 7 years, with no interest. The imputed interest is deemed immaterial as of August 31, 2017. The loan was for $1,353,645 (£850,000) to be drawn down as and when required. On June 30, 2016, ICC converted the balance due of $719,143 (£542,617) into 542,617 shares of Preference Shares (see Note 11). The outstanding principal as of August 31, 2017 and 2016 was $0 (£0) and $0 (£0), respectively. See Note 9. On July 1, 2014, DEPT-UK entered into a business loan with Deij Capital Limited (Deij Capital), a company in which Gill is the director and owner. The loan is for 3 years, with an interest rate of 0%. The imputed interest is deemed immaterial as of May 31, 2017. The facility loan was for $171,437 (£100,000) to be drawn down as and when required. On June 30, 2016, Deij Capital converted the balance due of $179,534 (£135,464) into 135,464 shares of Preference Shares (see Note 11). On May 31, 2017, Deij Capital converted of the balance due $63,990 (£51,500) into 51,500 shares of Preference Shares (see Note 11). The outstanding principal as of August 31, 2017 and 2016, was $70,079 (£56,454) and $39,540 (£30,000), respectively. The accrued interest as of August 31, 2017 and 2016, was $0 (£0) and $0 (£0), respectively. See Note 9. On July 31, 2014, DOCASA executed a promissory note for $2,194 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. The imputed interest is deemed immaterial as of August 31, 2017. See Notes 2 and 9. On April 30, 2015, DOCASA executed a promissory note for $5,067 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. The imputed interest is deemed immaterial as of August 31, 2017. On July 20, 2016, Arch Investments, LLC acquired this promissory note due to Nami Shams. See Notes 2 and 9. On July 31, 2015, DOCASA executed a promissory note for $5,065 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. The imputed interest is deemed immaterial as of August 31, 2017. See Notes 2 and 9. On October 31, 2015, DOCASA executed a promissory note for $15,873 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. The imputed interest is deemed immaterial as of August 31, 2017. See Notes 2 and 9. On January 31, 2016, DOCASA executed a promissory note for $4,349 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. The imputed interest is deemed immaterial as of August 31, 2017. See Notes 2 and 9. On June 30, 2016, Nami Shams, a former officer and director of DOCASA, provided DOCASA with a Forgiveness of Debt for $6,302 for advances made by Nami Shams to the Company. On June 30, 2016, 192,745 Preference Shares were issued to Allesch-Taylor in exchange for a payable of $255,450 (£192,745). See Note 11. On July 8, 2016, the majority shareholder of DOCASA, Nami Shams, sold 115,000,000 shares of common stock representing 75.8% of the outstanding shares of the Company at such time to Atlantik for a total purchase price of $200,000. See Notes 2 and 11. On September 1, 2016, the Company acquired the 115,000,000 shares of common stock from Atlantik in exchange for a promissory note for $320,000. The principal is payable in two tranches; $20,000, which was paid on September 30, 2016, and the remaining $300,000 due August 29, 2017. See Notes 1, 2, 4, 6 and 10. On September 1, 2016, the Company acquired DEPT-UK (see Notes 2, 6 and 9) and initially issued 110,000,000 shares of common stock as part of the acquisition to Stefan Allesch-Taylor, the Chairman of the Company. On April 6, 2017, the Board of Directors approved the issuance of 2,936,000 shares of common stock to Allesch-Taylor, which are part of the 60,000,000 shares to be issued to Allesch-Taylor by August 31, 2017. On June 26, 2017, Mr. Allesch-Taylor requested that the issuance deadline of August 31, 2017, be extended to August 31, 2018, which was agreed to by the Company. In October 2017, the Company issued an additional 8,976,875 shares of common stock to Allesch-Taylor (see Note 17). On November 30, 2016, 10,750 Preference Shares were issued to Deij Capital in exchange for a debt of $13,422 (£10,750). See Note 11. On January 12, 2017, Allesch-Taylor purchased the Companys original investment of £5,000 for Radio Station for £5,000 of his issued preference shares in DEPT-UK. As the Company had impaired £4,000 of the investment as of August 31, 2015, the exchange will result in a gain on the transaction and will be recorded accordingly. The Company had previously impaired the investment as the investment would only provide intangible benefits, which, after this transaction, will still be applicable. See Notes 8 and 11. On February 28, 2017, 51,500 Preference Shares were issued to Deij Capital in exchange for a debt of $63,990 (£51,500). See Note 11. For the years ended August 31, 2017 and August 31, 2016, the Company purchased $194,352 (£150,817) and $132,508 (£92,320), respectively, of cakes from Dee Light, a company which Gill, the vice chairman of the Company, was a 50% shareholder (until November 2016). As of August 31, 2017, and 2016, the Company owed Dee Light $70,165 (£54,448) and $56,102 (£42,566), respectively. For the years ended August 31, 2017 and 2016, the Company made sales or advances of $530,780 (£405,815) and $328,924 (£229,166), respectively, to The Roastery Department Ltd. (The Roastery Department), and made purchases from it of £217,418 and £123,705 for the years ended August 31, 2017, and 2016, respectively. As of August 31, 2017, and 2016, the Company both has receivables and payables from The Roastery Department, which netted as receivables of $1,198,811 (£930,277) and payables of $452,674 (£351,275), respectively. Gill, the Companys vice chairman, and Ashley Lopez (Lopez), the Companys chief executive officer, were both unpaid directors of The Roastery Department until they resigned on December 1, 2016. The Company, when purchasing products from The Roastery Department, was provided a discount due to the strategic relationship between the two parties which provided the Company its purchases at cost. The relationship between The Roastery Department and the Company, as stated, is classified as a barter transaction. Therefore, the Company expensed the net of the receivable and the payable, $417,436 (£323,930), resulted in an expense of $423,680, with the variance due to the currency translation. The Company maintains a receivable for cash advance of $328,703 (£255,072). As of August 31, 2017, and 2016, the Company owed Allesch-Taylor, the Companys chairman, payables of $41,174 (£31,951) and $0 (£0), respectively. As of August 31, 2017, and 2016, the Company owed Lopez, the Companys chief executive officer, payables of $893 (£693) and $2,985 (£2,265), respectively. As of August 31, 2017, and 2016, the Company owed Deij Capital, a company in which Gill, the deputy chairman of the Company, is the director and owner, notes payable of $70,079 (£56,454) and $39,540 (£30,000), respectively. As of August 31, 2017, and 2016, the Company owed Deij Capital, accounts payable of $12,045 (£9,347) and $5,390 (£3,500), respectively. On November 30, 2016, Allesch-Taylor individually paid the Companys remaining balance of $300,000 in regards to the promissory note to Atlantik (see Notes 9 and 11). In exchange for the payment on behalf of the Company, the Company agreed to issue Allesch-Taylor 300,000 shares of common stock at a value of $1.00 per share. As of that date, the last stock transaction with stock was September 1, 2016, which valued the common stock at $0.0027 per share, and the Company therefore believes that the agreed valuation of $1.00 per share was fair and beneficial to the Company. Nevertheless, this transaction was not necessarily an arms length transaction. As of August 31, 2017, the stock has not been issued and is recorded as issuable. The Company has an employment agreement with Lopez, our CEO, and did have a consulting agreement with Clearbrook Capital Partners LLP (Clearbrook), an entity where Kazi Shahid, our former CFO, was a partner and also served as CFO. Allesch-Taylor is a director of Clearbrook. The agreement with Clearbrook was terminated on March 15, 2017. The above related party transactions are not necessarily considered as arms length transactions for all circumstances. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 11 - STOCKHOLDERS’ EQUITY | Common Stock The Company was authorized to issue up to 75,000,000 shares of common stock, par value $0.001 per share. On March 26, 2015, the Company increased its authorized common stock to 250,000,000 shares of common stock. Each outstanding share of common stock entitles the holder to one vote per share on all matters submitted to a stockholder vote. All shares of common stock are non-assessable and non-cumulative, with no pre-emptive rights. On July 8, 2016, the majority shareholder of the Company, Nami Shams, sold 115,000,000 shares of common stock representing 75.8% of the outstanding shares of the Company for a total purchase price of $200,000. See Notes 2 and 10. On September 1, 2016, the Company acquired DEPT-UK (see Notes 2, 5 and 10). As a condition of the acquisition, 110,000,000 shares of common stock were issued on September 1, 2016. Additionally, 60,000,000 shares of common stock were issuable at the discretion of the board of directors but no later than August 31, 2017. On April 6, 2017, 2,936,000 shares were issued to Mr. Allesch-Taylor leaving 57,064,000 as issuable. On June 26, 2017, Mr. Allesch-Taylor requested that the deadline to issue the shares of August 31, 2017, be extended to August 31, 2018, which was agreed to by the Company. On September 1, 2016, the Company acquired the 115,000,000 shares of common stock from Atlantik in exchange for a promissory note for $320,000. The acquired shares were cancelled on September 1, 2016. See Notes 1, 2, 5 and 10. On November 30, 2016, Allesch-Taylor individually paid the Company’s remaining balance of $300,000 in regards to the promissory note to Atlantik (see Notes 9 and 10). In exchange for the payment on behalf of the Company, the Company issued Allesch-Taylor 300,000 shares of common stock at a value of $1.00 per share. The last transaction with stock was September 1, 2016, which valued the common stock at $0.0027 per share. The Company’s common stock did not trade during this period therefore the value for the November 30, 2016 transaction was determined to be multiples higher than the last recorded transaction. The Company believes that the value is not beneficial to Allesch-Taylor but does not state that this was an arm’s length transaction. On April 6, 2017, the Board of Directors approved the issuance of 2,936,000 shares of common stock to Allesch-Taylor, which are part of the 60,000,000 shares to be issued to Allesch-Taylor by August 31, 2018 (see Notes 1, 5, 6, 9 and 10). As of May 31, 2017, the Company has not granted any stock options and has not recorded any stock-based compensation. All references in these financial statements to number of common shares, price per share and weighted average number of shares outstanding prior to the 115:1 forward split have been adjusted to reflect the stock split on a retroactive basis unless otherwise noted. Preference Shares – DEPT-UK The Articles of Association of DEPT-UK, pursuant to the Companies Act 2006, authorized DEPT-UK to issue up to 25,000,000 preference shares, par value £1.00 per share (such subsidiary preference shares referred to herein as “Preference Shares”). Such Preference Shares have no votes and limited distribution rights. Subject to the provisions of the Companies Act 2006, DEPT-UK shall have the right pursuant to Section 687-688 of the Companies Act 2006 to redeem at par the whole or any part of the Preference Shares at any time or times after the date of issue of the said Preference Shares upon giving to DEPT-UK not less than three months’ previous notice in writing. The Preference Shares, at the discretion of the Board of Director of DEPT-UK, can be purchased at the value they were issued or can be converted into contributed capital. The Preference Shares are accounted for as minority interest. On June 30, 2016, 192,745 Preference Shares were issued to Allesch-Taylor in exchange for payables of $255,450 (£192,745). See Note 10. On June 30, 2016, 542,617 Preference Shares were issued to ICC in exchange for a debt of $719,143 (£542,617). See Note 9. On June 30, 2016, 135,464 Preference Shares were issued to Deij Capital, a company which is owned and controlled by Gill, a director of the Company, in exchange for a debt of $179,534 (£135,464). On November 30, 2016, 10,750 Preference Shares were issued to Deij Capital in exchange for a debt of $13,422 (£10,750). See Note 10. On January 12, 2017, Allesch-Taylor purchased the Company’s original investment of £5,000 for Radio Station for £5,000 of his issued preference shares in DEPT-UK. As the Company had impaired £4,000 of the investment as of August 31, 2015, the exchange will result in a gain on the transaction and was recorded. The Company had previously impaired the investment as the investment would only provide intangible benefits, which, after this transaction, will still be applicable. See Notes 8 and 10. On January 23, 2017, Borough Capital subscribed to 300,000 Preference Shares for $374,479 (£305,032). On January 25, 2017, Borough Capital subscribed to 5,000 Preference Shares for $6,310 (£5,000). On February 28, 2017, 29,250 Preference Shares were issued to Deij Capital in exchange for a debt of $36,300 (£29,250). See Note 10. On May 31, 2017, Borough Capital subscribed to 200,000 Preference Shares for $257,997 (£200,000). On August 31, 2017, Borough Capital subscribed to 232,000 Preference Shares for $298,969 (£232,000). The dollar amount of Preference Shares, as recorded, were reclassified to additional paid-in capital as part of consolidation. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 12 - COMMITMENTS AND CONTINGENCIES | Legal Matters From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of October 25, 2017, there were no pending or threatened lawsuits. Lease Commitment We lease office space in Schaumburg, Illinois, pursuant to a lease that is monthly. This facility serves as our corporate office. Future minimum lease payments under leases due to the acquisition of DEPT-UK (see Note 2) and the expansion in the US, are as follows: 2018 $ 775,726 2019 775,490 2020 778,760 2021 746,502 2022 532,555 Future 1,241,852 Total $ 4,850,885 Note: The above table will change in each future filing due to currency translation as applicable. As a result of the acquisition on September 1, 2016 (see Note 10), for DEPT-UK, 16 leases, of which one is for the UK administrative office, and 15 operational leases. The Company has one lease in the United States for DEPT-IL. The Company also has one coffee shop under construction in the US, which is under lease, and opened in October 2017. Various leases have break out dates prior to expiration. See Notes 2 and 10. The Company entered into six leases during the year ended August 31, 2017. The Company is a primary leaseholder on one lease which it has subleased to the Roastery and is responsible for the payments. The Company is responsible for annual payments of approximately £19,500 for an undefined period of time. Rent expense for the years ended August 31, 2017 and 2016, was $463,655 and $418,193, respectively. |
INCOME TAX
INCOME TAX | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 13 - INCOME TAX | For the fiscal year 2017 and 2016, there was no provision for income taxes and deferred tax assets have been entirely offset by valuation allowances. As of August 31, 2017, and 2016, the Company has United States net operating loss carry forwards of $88,646 and $0, respectively. The carry forwards expire through the year 2036. The Companys net operating loss carry forwards may be subject to annual limitations, which could reduce or defer the utilization of the losses as a result of an ownership change as defined in Section 382 of the Internal Revenue Code. The United Kingdom does not recognize net operating loss carry forwards. The Company’s tax expense differs from the “expected” tax expense for Federal income tax purposes (computed by applying the United States Federal tax rate of 34% to loss before taxes), as follows: For the Years Ended August 31, 2017 2016 Tax expense (benefit) at the statutory rate Federal $ (45,553 ) $ - Non-U.S. (367,468 ) 9,291 State income taxes, net of federal income tax benefit (3,606 ) - Non-deductible items - Federal 15,832 - Non-U.S. 367,468 (9,291 ) Change in valuation allowance 33,327 - Total $ - $ - The tax effects of the temporary differences between reportable financial statement income and taxable income are recognized as deferred tax assets and liabilities. The tax effect of significant components of the Company’s deferred tax assets and liabilities at August 31, 2017 and 2016, respectively, are as follows: August 31, 2017 2016 Deferred tax assets: Net operating loss carryforward $ 30,140 $ - Less: Deferred tax asset valuation allowance (30,140 ) - Total net deferred taxes $ - $ - In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Because of the historical earnings history of the Company, the net deferred tax assets for 2017 were fully offset by a 100% valuation allowance. The valuation allowance for the remaining net deferred tax assets was $30,140 and $0 as of August 31, 2017 and 2016, respectively. |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 14 - CONCENTRATIONS | Concentration of Credit Risk Financial instruments, which potentially subject the Company to a concentration of credit risk, consist principally of temporary cash investments. The Company places its temporary cash investments with financial institutions insured by the Federal Deposit Insurance Corporation (“FDIC”) for the United States and the Financial Services Compensation Scheme (“FSCS”) for the United Kingdom. No amounts exceeded federally insured limits as of August 31, 2017. There have been no losses in these accounts through August 31, 2017. Concentration of Customer The Company has one customer, which, for the years ended August 31, 2017 and 2016, had sales of $557,416 (£426,180, 13.3% of total revenue) and $451,261 (£372,678, 16.7% of total revenue), respectively. The Company has a contract with the customer that expires in February 2020. Concentration of Supplier The Company relies on several suppliers for coffee, none of which are irreplaceable. The Company relies on one company to provide roasting services, which could be replaced without any negative long-term effects on the Company. Concentration of Lender The Company has two lenders, one a third-party and the other a related party, for its notes payable. Concentration of Intellectual Property The Company, after the acquisition of DEPT-UK, owns or has filed for the trademarks “Department of Coffee and Social Affairs,” “Coffeesmiths,” and “Elixir Espresso,” as filed with in Great Britain and Northern Ireland with the Trade Marks Registry, the European Union with the Intellectual Property Office, and the United States with the Patent and Trademark Office. |
REVENUE CLASSES
REVENUE CLASSES | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 15 – REVENUE CLASSES | Selected financial information for the Company’s operating revenue classes for the years ended August 31, 2017 and 2016, are as follows: Revenues: For the year ended For the year ended August 31, 2017 August 31, 2016 Coffee and complementary food products $ 3,669,307 £ 2,805,418 $ 3,409,213 £ 2,375,245 Coffee school $ 12,425 £ 9,500 $ 20,357 £ 14,183 Management fees $ 498,751 £ 381,327 $ 439,947 £ 306,517 Hot sauce (a) $ - £ 0 $ - £ 0 Total $ 4,180,483 £ 3,196,245 $ 3,869,517 £ 2,695,945 (a) For the year ended August 31, 2016, due to the reverse merger on September 1, 2016, are not reflective on this table. Direct costs of revenue: For the year ended For the year ended August 31, 2017 August 31, 2016 Coffee and complementary food products $ 3,479,372 £ 2,660,202 $ 2,316,912 £ 1,619,427 Coffee school $ 1,319 £ 1,008 $ 2,061 £ 1,388 Management fees $ 152,900 £ 116,902 $ 139,268 £ 93,781 Hot sauce (a) $ - £ 0 $ - £ 0 Total $ 3,633,591 £ 2,778,112 $ 2,458,240 £ 1,714,595 (a) For the year ended August 31, 2016, due to the reverse merger on September 1, 2016, are not reflective on this table. |
MINORITY INTEREST
MINORITY INTEREST | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 16 - MINORITY INTEREST | DEPT-UK has a minority interest of 0.2%. For the year ended August 31, 2017, the Company had a minority interest of $1,230. For the year ended August 31, 2016, the Company had a minority interest of $55, which was not material therefore not recorded. |
CAPITAL LEASE OBLIGATIONS
CAPITAL LEASE OBLIGATIONS | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 17 - CAPITAL LEASE OBLIGATIONS | The Company leases various assets under capital lease. As of August 31, 2017, and 2016, capital lease obligations consisted of the following: DEPT-UK August 31, 2017 2016 Computer equipment $ 57,128 $ 36,839 Office equipment 20,420 22,972 Site equipment and machinery 355,914 198,532 Site furniture, fixtures and fittings 233,669 160,072 Total fixed assets 667,131 418,415 Less: Accumulated depreciation 240,246 180,874 Fixed assets, net $ 426,885 $ 237,541 Aggregate future minimum rentals under capital leases are as follows: Year ended August 31, 2018 $ 116,146 2019 88,906 2020 65,083 2021 50,564 2022 13,543 Total 334,242 Less: Interest 15,157 Present value of minimum lease payments 319,085 Less: Current portion of capital lease obligations 116,146 Capital lease obligations, net of current portion $ 202,939 Note: The above schedule reflects only items that have payments associated with them. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 18 - SUBSEQUENT EVENTS | The Company has evaluated subsequent events through the date the financial statements were issued and filed with the Securities and Exchange Commission. The Company has determined that there are no other such events that warrant disclosure or recognition in the financial statements, except as stated herein. On October 4, 2017, the Company opened its first coffee shop location in the United States, in Chicago, Illinois. On October 6, 2017, the Company issued 8,976,875 shares of common stock to Allesch-Taylor as part of the common stock owed to Allesch-Taylor in regards to the acquisition (see Notes 2, 5, 10 and 11). After this issuance, of the original 60,000,000 shares issuable, 48,087,125 remain issuable by no later than August 31, 2018. On October 30, 2017, the Company issued 1,000,000 shares of common stock to Allesch-Taylor as part of the common stock owed to Allesch-Taylor in regards to the acquisition (see Notes 2, 5, 10 and 11). After this issuance, of the second tranche of 60,000,000 shares issuable to Allesch-Taylor pursuant to the acquisition terms, 47,087,125 remain issuable to him by no later than August 31, 2018. |
NATURE OF OPERATIONS AND SUMM25
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Aug. 31, 2017 | |
Nature Of Operations And Summary Of Significant Accounting Policies Policies | |
Organization | DOCASA, Inc. (the “Company,” “we,” “us,” “our,” or “DOCASA”) was incorporated in the State of Nevada on July 22, 2014, under the name of FWF Holdings, Inc. The Company changed its name on August 4, 2016. The Company was originally engaged in the business of commercial production and distribution of hot sauce (see Note 3). On August 4, 2016, the Company changed its year end from July 31 to August 31. On July 8, 2016, the Company experienced a change in control. Atlantik LP (“Atlantik”), a related party, acquired a majority of the issued and outstanding common stock of the Company in accordance with a stock purchase agreement by and between Atlantik and Nami Shams (the “Seller”). On the closing date, July 8, 2016, pursuant to the terms of the stock purchase agreement, Atlantik purchased from the Seller 115,000,000 shares of the Company’s outstanding restricted common stock for $200,000, representing 75.8% of the Company’s outstanding common stock at that time. On September 1, 2016, the Company acquired 99.8% of the voting stock of the Department of Coffee and Social Affairs Limited, a United Kingdom corporation (the “DEPT-UK”), and the Company agreed to issue DEPT-UK’s majority shareholder 170,000,000 shares of the Company’s common stock—110,000,000 shares initially and 60,000,000 shares at a time determined by the Company’s Board of Directors but no later than August 31, 2017, which deadline was subsequently extended to August 31, 2018. Also on September 1, 2016, the Company acquired 115,000,000 shares of the Company’s common stock from Atlantik in exchange for issuing Atlantik a promissory note for $320,000, which shares were then cancelled and which note has since been paid in full. As a result of the acquisition and the issuance of the initial 110,000,000 shares of common stock, and the cancellation of the 115,000,000 Atlantik shares, DEPT-UK is now the majority-owned subsidiary of the Company, and the Company experienced a change of control. DEPT-UK formed a wholly-owned subsidiary, Department of Coffee and Internal Affairs Limited (“DCIA”), on September 11, 2014, as filed with the Registrar of Companies for England and Wales. As of August 31, 2017, DCIA has had no operations or activity. DEPT-UK formed a wholly-owned subsidiary, The Department of Coffee and Social Affairs Limited, on November 9, 2014, as filed with the Registrar of Companies for England and Wales. On February 28, 2014, the name was changed to DOCASA Limited. On May 1, 2015, the name was changed to Eat Sleep Juice Repeat Limited. As of January 18, 2017, this subsidiary, with no operations or activity, was sold for £1. On April 5, 2017, the Company formed Department of Coffee and Social Affairs IL, Inc. (“DEPT-IL”), an Illinois corporation. On May 18, 2017, the Company formed Department of Coffee and Social Affairs White Space Limited (“DEPT-UKWS”), as filed with the Registrar of Companies for England and Wales. DEPT-UKWS is a subsidiary of DEPT-UK. For financial reporting purposes, the acquisition of DEPT-UK and the change of control in connection with acquisition represented a "reverse merger" rather than a business combination, and DEPT-UK is deemed to be the accounting acquirer in the transaction. For the periods subsequent to August 31, 2016, the acquisition is being accounted for as a reverse-merger and recapitalization. DEPT-UK is the acquirer for financial reporting purposes, and the Company (DOCASA, Inc., f/k/a FWF Holdings, Inc.) is the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the acquisition are those of DEPT-UK and have been recorded at the historical cost basis of DEPT-UK, and the financial statements after completion of the acquisition include the assets and liabilities of both the Company and DEPT-UK, and the historical operations of DEPT-UK prior to closing and operations of both companies from the closing of the acquisition. |
Nature of Operations | We are currently devoting our efforts to the specialty coffee industry, specifically with company-operated stores. The Company will generate revenue through sales at fifteen existing company-operated coffee shop locations in the UK, with seven more locations under construction. The Company is expanding its operations to the United States and is opening its first coffee shop in Chicago, Illinois in October 2017. Our objective is to continue to be recognized as one of the upper tier specialty coffee retail operations. Similar to other leading operators, we sell our proprietary coffee and related products, and complementary food and snacks. The Company, as of August 31, 2017, has discontinued its hot sauce products which had no activity in the year ended August 31, 2017 (see Note 3). Accounting for discontinued operations not required due to immateriality. |
Principles of Consolidation | The consolidated financial statements include the accounts of DOCASA and its subsidiaries, DEPT-UK, DCIA, DEPT-IL and DEPT-UK’s subsidiary, DEPT-UKWS. All significant inter-company balances and transactions have been eliminated in consolidation. |
Basis of Presentation | The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America. |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. Significant estimates in the accompanying financial statements include the amortization period for intangible assets, valuation and impairment valuation of intangible assets, allowance for accounts receivable, depreciable lives of the web site, valuation of warrants and beneficial conversion feature debt discounts, valuation of derivatives, and valuation of share-based payments. |
Cash and Cash Equivalents | The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. |
Accounts Receivable | Accounts receivable consisted of amounts due from customers primarily for management fees. The Company considered accounts more than 30 days old to be past due. The Company used the allowance method for recognizing bad debts. When an account was deemed uncollectible, it was written off against the allowance. The Company generally does not require collateral for its accounts receivable. Management has not recorded an allowance for doubtful accounts as of August 31, 2017. |
Inventory | Inventory is recorded at the lower of cost or market and the cost of sales are recorded utilizing the first in first out (“FIFO”) method. |
Property, Equipment and Depreciation | Property and equipment is recorded at cost. Depreciation is computed using the straight-line method based on the estimated useful lives of the related assets of three years for computer equipment, five years for office furniture and fixtures, and the lesser of the lease term or the useful life of the leased equipment. Leasehold improvements, if any, would be amortized over the lesser of the lease term or the useful life of the improvements. Expenditures for maintenance and repairs along with fixed assets below our capitalization threshold are expensed as incurred. |
Impairment of Long-Lived Assets | The Company accounts for long-lived assets in accordance with the provisions of Statement of Financial Accounting Standards ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets”. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. |
Fair Value of Financial Instruments | The Company measures its financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash, accounts payable, accrued expenses, and short-term loans the carrying amounts approximate fair value due to their short maturities. We follow accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. |
Revenue Recognition | The Company recognizes revenue for our services in accordance with ASC 605-10, “Revenue Recognition in Financial Statements.” Under these guidelines, revenue is recognized on transactions when all of the following exist: persuasive evidence of an arrangement did exist, delivery of service has occurred, the sales price to the buyer is fixed or determinable and collectability is reasonably assured. The Company has three primary revenue streams as follows: · Sales of specialty coffee and complementary food products. · Coffee school. · Coffee services. |
Stock-Based Compensation | The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition provisions ASC Topic 505-50. The Company estimates the fair value of stock options at the grant date by using the Black-Scholes option-pricing model. |
Advertising | Advertising is expensed as incurred and is included in loss from operations on the accompanying statement of operations. For the years ended August 31, 2017 and 2016 advertising expense was $39,628 and $27,395, respectively. |
Income Taxes | The Company adopted the provisions of ASC 740-10, “Accounting for Uncertain Income Tax Positions.” When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of August 31, 2017, tax years 2014 – 2017 remain open for IRS audit and tax years 2015–2017 remain open for HM Revenue & Customs (“HMRC”) audit. The Company has received no notice of audit from the IRS or HMRC for any of the open tax years. The Company adopted ASC 740-10, “ |
Net Earnings (Loss) Per Share | In accordance with ASC 260-10, “Earnings Per Share,” basic net earnings (loss) per common share is computed by dividing the net earnings (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted average number of common and dilutive common stock equivalent shares outstanding during the period. |
Foreign Currency Translation and Transactions | The British Pound (“£”) is the functional currency of DEPT-UK whereas the financial statements are reported in United States Dollar (“USD,” “$”). Assets and liabilities are translated based on the exchange rates at the balance sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the period. Equity accounts are translated at historical exchange rates. The resulting translation gain and loss adjustments are accumulated as a component of stockholders’ equity and other comprehensive income. |
Comprehensive Income (Loss) | The Company reports comprehensive income (loss) and its components in its consolidated financial statements. Comprehensive income (loss) consists of net loss and foreign currency translation adjustments affecting stockholders equity that, under U.S. GAAP, are excluded from net loss. As of August 31, 2017, the exchange rate between U.S. Dollars and British Pounds was US$1.2886604425 = £1.00, and the weighted average exchange rate for the year ended August 31, 2017 was US$1.3079355980 = £1.00. As of August 31, 2016, the exchange rate between U.S. Dollars and British Pounds was US$1.318 = £1.00. |
Going Concern | The Company has a net loss for the year ended August 31, 2017 of $1,425,846 and a working capital deficit as of August 31, 2017 of $770,349, and has used cash in operations of $731,424 for the year ended August 31, 2017. In addition, as of August 31, 2017, the Company had a stockholders equity and accumulated deficit of $461,970 and $2,766,367, respectively. Without further funding, these conditions raise substantial doubt about the Companys ability to continue as a going concern. The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The ability of the Company to continue its operations is dependent on the execution of management’s plans, which include the raising of capital through the debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements. If the Company were not to continue as a going concern, it would likely not be able to realize its assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the consolidated financial statements. There can be no assurances that the Company will be successful in generating additional cash from the equity/debt markets or other sources to be used for operations. The consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary. Based on the Company’s current resources, the Company will not be able to continue to operate without additional immediate funding. Should the Company not be successful in obtaining the necessary financing to fund its operations, the Company would need to curtail certain or all operational activities and/or contemplate the sale of its assets, if necessary. |
Segment Information | In accordance with the provisions of ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information”, the Company is required to report financial and descriptive information about its reportable operating segments. The Company does not have any operating segments as of August 31, 2017 and 2016. |
Effect of Recent Accounting Pronouncements | The Company reviews new accounting standards and updates as issued. No new standards or updates had any material effect on these financial statements. The accounting pronouncements and updates issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these financial statements as presented and does not anticipate the need for any future restatement of these financial statements because of the retro-active application of any accounting pronouncements issued subsequent to August 31, 2017 through the date these financial statements were issued. In February 2016, the Financial Accounting Standards Board (“FASB”) issued an ASU on lease accounting. The ASU requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized as assets and liabilities on the balance sheet. The ASU is effective for reporting periods beginning after December 15, 2018 with early adoption permitted. While the Company is still evaluating the ASU, the Company expects the adoption of the ASU to have a material effect on the Company’s financial condition due to the recognition of the lease rights and obligations as assets and liabilities. The Company expects the ASU to have a material effect on the Company’s results of operations, and the ASU will have no effect on cash flows. ASU 2014-09, Revenue – Revenue from Contracts with Customers. In May 2014, the FASB issued a new accounting standard that requires recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. The FASB has also issued several updates to ASU 2014-09. The new standard supersedes U.S. GAAP guidance on revenue recognition and requires the use of more estimates and judgments than the present standards. It also requires additional disclosures. We will adopt the new revenue guidance effective January 1, 2017, by recognizing the cumulative effect of initially applying the new standard as an increase to the opening balance of retained earnings. We expect this adjustment to be less than $100 million, with an immaterial impact to our net income on an ongoing basis. Adoption of the new standard will also result in changes in classification between Revenues, Cost of sales, Non-Financial Services interest income and other income/(loss), net, and Financial Services other income/(loss), net. In July 2017, the FASB issued ASU 2017-11 “Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic 480) Derivatives and Hedging (Topic 815).” The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. Under current GAAP, an equity-linked financial instrument with a down round feature that otherwise is not required to be classified as a liability under the guidance in Topic 480 is evaluated under the guidance in Topic 815, Derivatives and Hedging, to determine whether it meets the definition of a derivative. If it meets that definition, the instrument (or embedded feature) is evaluated to determine whether it is indexed to an entity’s own stock as part of the analysis of whether it qualifies for a scope exception from derivative accounting. Generally, for warrants and conversion options embedded in financial instruments that are deemed to have a debt host (assuming the underlying shares are readily convertible to cash or the contract provides for net settlement such that the embedded conversion option meets the definition of a derivative), the existence of a down round feature results in an instrument not being considered indexed to an entity’s own stock. This results in a reporting entity being required to classify the freestanding financial instrument or the bifurcated conversion option as a liability, which the entity must measure at fair value initially and at each subsequent reporting date. The amendments in this Update revise the guidance for instruments with down round features in Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, which is considered in determining whether an equity-linked financial instrument qualifies for a scope exception from derivative accounting. An entity still is required to determine whether instruments would be classified in equity under the guidance in Subtopic 815-40 in determining whether they qualify for that scope exception. If they do qualify, freestanding instruments with down round features are no longer classified as liabilities and embedded conversion options with down round features are no longer bifurcated. For entities that present EPS in accordance with Topic 260, and when the down round feature is included in an equity-classified freestanding financial instrument, the value of the effect of the down round feature is treated as a dividend when it is triggered and as a numerator adjustment in the basic EPS calculation. This reflects the occurrence of an economic transfer of value to the holder of the instrument, while alleviating the complexity and income statement volatility associated with fair value measurement on an ongoing basis. Convertible instruments are unaffected by the Topic 260 amendments in this Update. Those amendments in Part 1 of this Update are a cost savings relative to current GAAP. This is because, assuming the required criteria for equity classification in Subtopic 815-40 are met, an entity that issued such an instrument no longer measures the instrument at fair value at each reporting period (in the case of warrants) or separately accounts for a bifurcated derivative (in the case of convertible instruments) on the basis of the existence of a down round feature. For convertible instruments with embedded conversion options that have down round features, applying specialized guidance such as the model for contingent beneficial conversion features rather than bifurcating an embedded derivative also reduces cost and complexity. Under that specialized guidance, the issuer recognizes the intrinsic value of the feature only when the feature becomes beneficial instead of bifurcating the conversion option and measuring it at fair value each reporting period. The amendments in Part II of this Update replace the indefinite deferral of certain guidance in Topic 480 with a scope exception. This has the benefit of improving the readability of the Codification and reducing the complexity associated with navigating the guidance in Topic 480. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part 1 of this Update should be applied in either of the following ways: 1. Retrospectively to outstanding financial instruments with a down round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective; or 2. Retrospectively to outstanding financial instruments with a down round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. |
ENTRY INTO A DEFINITIVE AGREE26
ENTRY INTO A DEFINITIVE AGREEMENT (Tables) | 12 Months Ended |
Aug. 31, 2017 | |
Entry Into Definitive Agreement Tables | |
Fair values of the assets and liabilities assumed at the acquisition date. | The following table summarizes the consideration given for DEPT-UK and the fair values of the assets and liabilities assumed at the acquisition date. Consideration given: Common stock given $ 207 Total consideration given $ 207 Fair value of identifiable assets acquired and liabilities assumed: Inventory $ 731 Notes payable (32,547 ) Accounts payable (6,043 ) Accrued expenses (8,500 ) Total identifiable net liabilities (46,359 ) Goodwill 46,566 Total consideration $ 207 |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 12 Months Ended |
Aug. 31, 2017 | |
Receivables Tables | |
Receivables | The receivables are as follows: August 31, August 31, 2017 2016 Trade receivables $ 168,121 $ 270,641 Loan receivable 328,701 109,755 Allowance for doubtful accounts - (11,589 ) Receivables, net $ 496,822 $ 368,807 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Aug. 31, 2017 | |
Inventory Tables | |
Inventory | The inventory is as follows: August 31, August 31, 2017 2016 Consumable products $ 17,894 $ 8,500 Food and drinks 24,117 22,858 Retail products 5,466 8,965 Total inventory $ 47,477 $ 40,323 |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 12 Months Ended |
Aug. 31, 2017 | |
Fixed Assets Tables | |
Fixed assets | The fixed assets are as follows: DEPT-UK DEPT-IL Consolidated August 31, August 31, August 31, 2017 2016 2017 2016 2017 2016 Computer equipment $ 62,038 $ 36,839 $ - $ - $ 62,038 $ 36,839 Office equipment 22,526 22,972 - - 22,526 22,972 Site equipment and machinery 366,661 198,532 - - 366,661 198,532 Site fit out costs 1,588,480 707,678 17,587 - 1,606,067 707,678 Site furniture, fixtures and fittings 236,384 160,072 588 - 236,972 160,072 Total fixed assets 2,276,089 1,126,093 18,175 - 2,294,264 1,126,093 Less: Accumulated depreciation 622,088 451,466 - - 622,088 451,466 Fixed assets, net $ 1,654,001 $ 674,627 $ 18,175 $ - $ 1,672,176 $ 674,627 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Aug. 31, 2017 | |
Intangible Assets Tables | |
Intangible assets | The intangible assets are as follows: August 31, August 31, 2017 2016 Website development $ 29,428 $ 21,088 Total intangible assets 29,428 21,088 Less: Accumulated amortization 19,294 12,023 Intangible assets, net $ 10,134 $ 9,065 |
Schedule of Finite Lived Intangible Assets Future Amortization Expense | Amortization, based on the currency translation calculation as of the date of this report, for the next five years, is as follows: 2018 $ 9,835 2019 299 2020 - 2021 - 2022 - Total $ 10,134 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Aug. 31, 2017 | |
Notes Payable Tables | |
Notes payable | The Company has notes payable as of August 31, 2017 and 2016 are as follows: Notes payable - current August 31, 2017 August 31, 2016 Accrued Accrued Principal Interest Total Principal Interest Total Arch Investments (1) $ 2,194 $ - $ 2,194 $ - $ - $ - Arch Investments (1) 5,067 - 5,067 - - - Arch Investments (1) 5,065 - 5,065 - - - Arch Investments (1) 15,873 - 15,873 - - - Arch Investments (1) 4,349 - 4,349 - - - HSBC 106,871 - 106,871 18,368 - 18,368 Total $ 139,419 $ - $ 139,419 $ 18,368 $ - $ 18,368 ________________ (1) The balance for August 31, 2016 of $32,548 is not reflected on the balance sheet due to the reverse merger. The Company assumed this liability as a condition of the reverse merger. Notes payable - non-current August 31, 2017 August 31, 2016 Accrued Accrued Principal Interest Total Principal Interest Total Deij Capital Limited $ 70,079 $ - $ 70,079 $ 39,540 $ - $ 39,540 HSBC 302,847 - 302,847 170,257 - 170,257 Total $ 372,926 $ - $ 372,926 $ 209,797 $ - $ 209,797 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Aug. 31, 2017 | |
Commitments And Contingencies Tables | |
Future minimum lease payments | Future minimum lease payments under leases due to the acquisition of DEPT-UK (see Note 2) and the expansion in the US, are as follows: 2018 $ 775,726 2019 775,490 2020 778,760 2021 746,502 2022 532,555 Future 1,241,852 Total $ 4,850,885 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Aug. 31, 2017 | |
Income Tax Tables | |
Federal income tax | The Company’s tax expense differs from the “expected” tax expense for Federal income tax purposes (computed by applying the United States Federal tax rate of 34% to loss before taxes), as follows: For the Years Ended August 31, 2017 2016 Tax expense (benefit) at the statutory rate Federal $ (45,553 ) $ - Non-U.S. (367,468 ) 9,291 State income taxes, net of federal income tax benefit (3,606 ) - Non-deductible items - Federal 15,832 - Non-U.S. 367,468 (9,291 ) Change in valuation allowance 33,327 - Total $ - $ - |
Schedule of Deferred Tax Assets And Liabilities | The tax effect of significant components of the Company’s deferred tax assets and liabilities at August 31, 2017 and 2016, respectively, are as follows: August 31, 2017 2016 Deferred tax assets: Net operating loss carryforward $ 30,140 $ - Less: Deferred tax asset valuation allowance (30,140 ) - Total net deferred taxes $ - $ - |
REVENUE CLASSES (Tables)
REVENUE CLASSES (Tables) | 12 Months Ended |
Aug. 31, 2017 | |
Revenue Classes Tables | |
Operating revenue classes | Selected financial information for the Company’s operating revenue classes for the years ended August 31, 2017 and 2016, are as follows: Revenues: For the year ended For the year ended August 31, 2017 August 31, 2016 Coffee and complementary food products $ 3,669,307 £ 2,805,418 $ 3,409,213 £ 2,375,245 Coffee school $ 12,425 £ 9,500 $ 20,357 £ 14,183 Management fees $ 498,751 £ 381,327 $ 439,947 £ 306,517 Hot sauce (a) $ - £ 0 $ - £ 0 Total $ 4,180,483 £ 3,196,245 $ 3,869,517 £ 2,695,945 (a) For the year ended August 31, 2016, due to the reverse merger on September 1, 2016, are not reflective on this table. Direct costs of revenue: For the year ended For the year ended August 31, 2017 August 31, 2016 Coffee and complementary food products $ 3,479,372 £ 2,660,202 $ 2,316,912 £ 1,619,427 Coffee school $ 1,319 £ 1,008 $ 2,061 £ 1,388 Management fees $ 152,900 £ 116,902 $ 139,268 £ 93,781 Hot sauce (a) $ - £ 0 $ - £ 0 Total $ 3,633,591 £ 2,778,112 $ 2,458,240 £ 1,714,595 (a) For the year ended August 31, 2016, due to the reverse merger on September 1, 2016, are not reflective on this table. |
CAPITAL LEASE OBLIGATIONS (Tabl
CAPITAL LEASE OBLIGATIONS (Tables) | 12 Months Ended |
Aug. 31, 2017 | |
Capital Lease Obligations Tables | |
Capital lease obligations | DEPT-UK August 31, 2017 2016 Computer equipment $ 57,128 $ 36,839 Office equipment 20,420 22,972 Site equipment and machinery 355,914 198,532 Site furniture, fixtures and fittings 233,669 160,072 Total fixed assets 667,131 418,415 Less: Accumulated depreciation 240,246 180,874 Fixed assets, net $ 426,885 $ 237,541 |
Capital lease obligations future minimum payment | Aggregate future minimum rentals under capital leases are as follows: Year ended August 31, 2018 $ 116,146 2019 88,906 2020 65,083 2021 50,564 2022 13,543 Total 334,242 Less: Interest 15,157 Present value of minimum lease payments 319,085 Less: Current portion of capital lease obligations 116,146 Capital lease obligations, net of current portion $ 202,939 |
NATURE OF OPERATIONS AND SUMM36
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |||
Aug. 31, 2017 | Aug. 31, 2016 | Jul. 08, 2016 | Aug. 31, 2015 | |
State of incorporation | State of Nevada | |||
Date of incorporation | Jul. 22, 2014 | |||
Restricted common stock, shares | 115,000,000 | |||
Restricted common stock, value | $ 200,000 | |||
Restricted common stock percentage of total shares | 75.80% | |||
Advertising expense | $ 39,628 | $ 27,395 | ||
Exchange rate | the exchange rate between U.S. Dollars and British Pounds was US$1.2886604425 = £1.00, and the weighted average exchange rate for the year ended August 31, 2017 was US$1.3079355980 = £1.00. As of August 31, 2016, the exchange rate between U.S. Dollars and British Pounds was US$1.318 = £1.00. | |||
Net income (loss) | $ (1,425,846) | 27,325 | ||
Working capital deficit | (770,349) | |||
Accumulated deficit | (2,766,367) | (1,340,521) | ||
Shareholders' equity | 461,970 | 550,063 | $ (726,175) | |
Cash used in operating activities | $ 731,424 | $ 173,902 | ||
Computer Equipment [Member] | ||||
Estimated useful lives of assets | 3 years | |||
Office Equipment [Member] | ||||
Estimated useful lives of assets | 5 years | |||
Sep. 1, 2016 [Member] | ||||
Promissory note issued | $ 320,000 | |||
Shares acquired for cancellation | 115,000,000 | |||
Allesch-Taylor [Member] | Sep. 1, 2016 [Member] | ||||
Restricted common stock, shares | 170,000,000 | |||
Business Acquisition, Percentage of Voting Interests Acquired | 99.80% | |||
Initially shares | 110,000,000 | |||
Common stock shares reserved for future issuance | 60,000,000 | |||
Coffee and Social Affairs Limited [Member] | Sep. 1, 2016 [Member] | ||||
Business Acquisition, Percentage of Voting Interests Acquired | 99.80% |
ENTRY INTO A DEFINITIVE AGREE37
ENTRY INTO A DEFINITIVE AGREEMENT (Details) | Aug. 31, 2017USD ($) |
Consideration given | |
Common stock given | $ 207 |
Total consideration given | 207 |
Fair value of identifiable assets acquired and liabilities assumed | |
Inventory | 731 |
Notes payable | (32,547) |
Accounts payable | (6,043) |
Accrued expenses | (8,500) |
Total identifiable net liabilities | (46,359) |
Goodwill | 46,566 |
Total consideration | $ 207 |
ENTRY INTO A DEFINITIVE AGREE38
ENTRY INTO A DEFINITIVE AGREEMENT (Details Narrative) - USD ($) | 12 Months Ended | ||
Aug. 31, 2017 | Aug. 31, 2016 | Jul. 08, 2016 | |
Impairment expense | $ 46,566 | ||
Restricted common stock, shares | 115,000,000 | ||
Restricted common stock, value | $ 200,000 | ||
Restricted common stock percentage of total shares | 75.80% | ||
Allesch-Taylor [Member] | Sep. 1, 2016 [Member] | |||
Restricted common stock, shares | 170,000,000 | ||
Business Acquisition, Percentage of Voting Interests Acquired | 99.80% | ||
Initially shares | 110,000,000 | ||
Common stock shares reserved for future issuance | 60,000,000 | ||
Allesch-Taylor [Member] | April 6, 2017 [Member] | |||
Shares issued | 2,936,000 | ||
Shares issuable | 57,064,000 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details Narrative) - USD ($) | Aug. 31, 2017 | Aug. 31, 2016 |
Inventory | $ 47,477 | $ 40,323 |
Discontinued Operations [Member] | ||
Inventory | $ 731 |
RECEIVABLES (Details)
RECEIVABLES (Details) - USD ($) | Aug. 31, 2017 | Aug. 31, 2016 |
Receivables Details | ||
Trade receivables | $ 168,121 | $ 270,641 |
Loan receivable | 328,701 | 109,755 |
Allowance for doubtful accounts | (11,589) | |
Receivables, net | $ 496,822 | $ 368,807 |
RECEIVABLES (Details Narrative)
RECEIVABLES (Details Narrative) - USD ($) | Aug. 31, 2017 | Aug. 31, 2016 |
Receivables Details Narrative | ||
Receivables, net | $ 496,822 | $ 368,807 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Aug. 31, 2017 | Aug. 31, 2016 |
Total inventory | $ 47,477 | $ 40,323 |
Consumable products [Member] | ||
Total inventory | 17,894 | 8,500 |
Food and drinks [Member] | ||
Total inventory | 24,117 | 22,858 |
Retail products [Member] | ||
Total inventory | $ 5,466 | $ 8,965 |
INVENTORY (Details Narrative)
INVENTORY (Details Narrative) | Aug. 31, 2017USD ($)Integer | Aug. 31, 2016USD ($) |
Total inventory | $ | $ 47,477 | $ 40,323 |
No. of cases | Integer | 49 | |
No. of bottles per case | Integer | 12 | |
Coffee segment [Member] | ||
Total inventory | $ | $ 47,477 | $ 40,323 |
FIXED ASSETS (Details)
FIXED ASSETS (Details) - USD ($) | Aug. 31, 2017 | Aug. 31, 2016 |
Total fixed assets | $ 2,294,264 | $ 1,126,093 |
Less: Accumulated depreciation | 622,088 | 451,466 |
Fixed assets, net | 1,672,176 | 674,627 |
DEPT-UK [Member] | ||
Total fixed assets | 2,276,089 | 1,126,093 |
Less: Accumulated depreciation | 622,088 | 451,466 |
Fixed assets, net | 1,654,001 | 674,627 |
DEPT-IL [Member] | ||
Total fixed assets | 18,175 | |
Less: Accumulated depreciation | ||
Fixed assets, net | 18,175 | |
Computer Equipment [Member] | ||
Total fixed assets | 62,038 | 36,839 |
Computer Equipment [Member] | DEPT-UK [Member] | ||
Total fixed assets | 62,038 | 36,839 |
Computer Equipment [Member] | DEPT-IL [Member] | ||
Total fixed assets | ||
Office Equipment [Member] | ||
Total fixed assets | 22,526 | 22,972 |
Office Equipment [Member] | DEPT-UK [Member] | ||
Total fixed assets | 22,526 | 22,972 |
Office Equipment [Member] | DEPT-IL [Member] | ||
Total fixed assets | ||
Site equipment and machinery [Member] | ||
Total fixed assets | 366,661 | 198,532 |
Site equipment and machinery [Member] | DEPT-UK [Member] | ||
Total fixed assets | 366,661 | 198,532 |
Site equipment and machinery [Member] | DEPT-IL [Member] | ||
Total fixed assets | ||
Site fit out costs [Member] | ||
Total fixed assets | 1,606,067 | 707,678 |
Site fit out costs [Member] | DEPT-UK [Member] | ||
Total fixed assets | 1,588,480 | 707,678 |
Site fit out costs [Member] | DEPT-IL [Member] | ||
Total fixed assets | 17,587 | |
Site furniture, fixtures and fittings [Member] | ||
Total fixed assets | 236,972 | 160,072 |
Site furniture, fixtures and fittings [Member] | DEPT-UK [Member] | ||
Total fixed assets | 236,384 | 160,072 |
Site furniture, fixtures and fittings [Member] | DEPT-IL [Member] | ||
Total fixed assets | $ 588 |
FIXED ASSETS (Details Narrative
FIXED ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Fixed Assets Tables | ||
Total fixed assets | $ 2,294,264 | $ 1,126,093 |
Less: Accumulated depreciation | 622,088 | 451,466 |
Fixed assets, net | 1,672,176 | 674,627 |
Depreciation expense | $ 183,374 | $ 139,837 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Aug. 31, 2017 | Aug. 31, 2016 |
Total intangible assets | $ 29,428 | $ 21,088 |
Less: Accumulated amortization | 19,294 | 12,023 |
Intangible assets, net | 10,134 | 9,065 |
Website development [Member] | ||
Total intangible assets | $ 29,428 | $ 21,088 |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) | Aug. 31, 2017USD ($) |
Intangible Assets Details 1 | |
2,018 | $ 9,835 |
2,019 | 299 |
2,020 | |
2,021 | |
2,022 | |
Total | $ 10,134 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Intangible Assets Tables | ||
Intangible assets, net | $ 10,134 | $ 9,065 |
Amortization expense | $ 7,271 | $ 9,751 |
INVESTMENTS (Details Narrative)
INVESTMENTS (Details Narrative) | Aug. 31, 2017USD ($) | Jan. 12, 2017GBP (£) | Aug. 31, 2016USD ($) | Aug. 31, 2015GBP (£) |
Investments Details Narrative | ||||
Impaired investments | £ 4,000 | |||
Investments | $ 1,289 | £ 5,000 | $ 1,318 | |
Ownership of Radio Station Percentage | 5.00% |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | 12 Months Ended | ||
Aug. 31, 2017 | Aug. 31, 2016 | ||
Arch Investments [Member] | |||
Principal | [1] | $ 2,194 | |
Accrued Interest | [1] | ||
Total | [1] | 2,194 | |
Arch Investments One [Member] | |||
Principal | [1] | 5,067 | |
Accrued Interest | [1] | ||
Total | [1] | 5,067 | |
Arch Investments Two [Member] | |||
Principal | [1] | 5,065 | |
Accrued Interest | [1] | ||
Total | [1] | 5,065 | |
Arch Investments Three [Member] | |||
Principal | [1] | 15,873 | |
Accrued Interest | [1] | ||
Total | [1] | 15,873 | |
Arch Investments Four [Member] | |||
Principal | [1] | 4,349 | |
Accrued Interest | [1] | ||
Total | [1] | 4,349 | |
HSBC [Member] | |||
Principal | 106,871 | 18,368 | |
Accrued Interest | |||
Total | 106,871 | 18,368 | |
Current [Member] | |||
Principal | 139,419 | 18,368 | |
Accrued Interest | |||
Total | $ 139,419 | $ 18,368 | |
[1] | The balance for August 31, 2016 of $32,548 is not reflected on the balance sheet due to the reverse merger. The Company assumed this liability as a condition of the reverse merger. |
NOTES PAYABLE (Details 1)
NOTES PAYABLE (Details 1) - USD ($) | 12 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Deij Capital [Member] | ||
Principal | $ 70,079 | $ 39,540 |
Accrued Interest | ||
Total | 70,079 | 39,540 |
HSBC [Member] | ||
Principal | 302,847 | 170,257 |
Accrued Interest | ||
Total | 302,874 | 170,257 |
Non current [Member] | ||
Principal | 372,926 | 209,797 |
Accrued Interest | ||
Total | $ 372,926 | $ 209,797 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | Jul. 01, 2014 | Feb. 01, 2010 | Jul. 28, 2016 | Aug. 31, 2017 | May 31, 2017 | Jan. 31, 2017 | Nov. 30, 2016 | Sep. 30, 2016 | Aug. 31, 2016 | Jun. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Jul. 31, 2015 | Apr. 30, 2015 | Jul. 31, 2014 |
Accrued interest | $ 59,561 | $ 95,226 | |||||||||||||
Notes payable - current | 139,419 | 18,368 | |||||||||||||
Notes payable - non current | 372,926 | 209,797 | |||||||||||||
Deij Capital [Member] | |||||||||||||||
Debt amount | $ 171,437 | ||||||||||||||
Debt Instrument, Term | 3 years | ||||||||||||||
Balance due converted into shares | $ 63,990 | $ 13,422 | $ 179,534 | ||||||||||||
Converted shares | 51,500 | 10,750 | 135,464 | ||||||||||||
Interest rate | 0.00% | ||||||||||||||
Outstanding principal | 70,079 | 39,540 | |||||||||||||
Accrued interest | $ 0 | 0 | |||||||||||||
Sep. 1, 2016 [Member] | |||||||||||||||
Acquired shares | 110,000,000 | ||||||||||||||
Atlantik [Member] | |||||||||||||||
Balance due converted into shares | $ 255,450 | ||||||||||||||
Converted shares | 192,745 | ||||||||||||||
Atlantik [Member] | Sep. 1, 2016 [Member] | |||||||||||||||
Debt amount | $ 320,000 | ||||||||||||||
Common shares acquired | 115,000,000 | ||||||||||||||
Atlantik [Member] | Transaction Two [Member] | |||||||||||||||
Repayment of principal | $ 300,000 | ||||||||||||||
Atlantik [Member] | Transaction One [Member] | |||||||||||||||
Repayment of principal | $ 20,000 | ||||||||||||||
Nami Shams [Member] | |||||||||||||||
Debt amount | $ 2,194 | ||||||||||||||
Outstanding principal | 2,194 | 2,194 | |||||||||||||
HSBC [Member] | |||||||||||||||
Debt amount | $ 437,992 | ||||||||||||||
Debt Instrument, Term | 4 years | ||||||||||||||
Interest rate | 4.50% | ||||||||||||||
Outstanding principal | 409,718 | 170,257 | |||||||||||||
Initially drawn | $ 115,767 | ||||||||||||||
Temporary loan | 18,368 | ||||||||||||||
Notes payable - current | 106,871 | ||||||||||||||
Notes payable - non current | 302,847 | ||||||||||||||
Nami Shams Four [Member] | |||||||||||||||
Debt amount | $ 4,349 | $ 4,349 | |||||||||||||
Outstanding principal | 4,349 | 4,349 | |||||||||||||
Nami Shams Three [Member] | |||||||||||||||
Debt amount | $ 15,873 | ||||||||||||||
Outstanding principal | 15,873 | 15,873 | |||||||||||||
Nami Shams Two [Member] | |||||||||||||||
Debt amount | $ 5,065 | ||||||||||||||
Outstanding principal | 5,065 | 5,065 | |||||||||||||
Nami Shams One [Member] | |||||||||||||||
Debt amount | $ 5,067 | ||||||||||||||
Outstanding principal | 5,067 | 5,067 | |||||||||||||
ICC [Member] | |||||||||||||||
Debt amount | $ 1,353,645 | ||||||||||||||
Debt Instrument, Term | 7 years | ||||||||||||||
Balance due converted into shares | $ 719,143 | ||||||||||||||
Converted shares | 542,617 | ||||||||||||||
Outstanding principal | $ 0 | $ 0 |
RELATED PARTIES TRANSACTIONS (D
RELATED PARTIES TRANSACTIONS (Details Narrative) | Jul. 01, 2014USD ($) | Feb. 01, 2010USD ($) | Aug. 31, 2017USD ($)$ / sharesshares | Aug. 31, 2017GBP (£) | Aug. 31, 2016USD ($)$ / sharesshares | Aug. 31, 2016GBP (£) | May 31, 2017USD ($)shares | Feb. 28, 2017USD ($)shares | Jan. 31, 2017USD ($) | Jan. 25, 2017USD ($)shares | Jan. 23, 2017USD ($)shares | Jan. 12, 2017GBP (£) | Nov. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2016USD ($) | Jul. 08, 2016USD ($)shares | Jun. 30, 2016USD ($)shares | Jan. 31, 2016USD ($) | Oct. 31, 2015USD ($) | Aug. 31, 2015GBP (£) | Jul. 31, 2015USD ($) | Apr. 30, 2015USD ($) | Mar. 26, 2015$ / shares | Jul. 31, 2014USD ($) |
Accrued interest | $ 59,561 | $ 95,226 | |||||||||||||||||||||
Common stock, shares issued | shares | 150,036,000 | 0 | |||||||||||||||||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||
Impaired investments | £ | £ 4,000 | ||||||||||||||||||||||
Investments | $ 1,289 | $ 1,318 | £ 5,000 | ||||||||||||||||||||
Accounts payable | 849,642 | 610,101 | |||||||||||||||||||||
Bad debt expense | 423,680 | ||||||||||||||||||||||
Net receivable and payable expense | 417,436 | ||||||||||||||||||||||
Cash advances receivable | 328,703 | ||||||||||||||||||||||
Allesch-Taylor [Member] | |||||||||||||||||||||||
Balance due converted into shares | $ 298,969 | $ 257,997 | $ 6,310 | $ 374,479 | |||||||||||||||||||
Converted shares | shares | 232,000 | 200,000 | 5,000 | 300,000 | |||||||||||||||||||
Remaining balance for promissory note | $ 300,000 | ||||||||||||||||||||||
Common stock, shares issued | shares | 300,000 | ||||||||||||||||||||||
Common stock, par value | $ / shares | $ 1 | ||||||||||||||||||||||
The Roastery Department [Member] | |||||||||||||||||||||||
Sales | $ 530,780 | 328,924 | |||||||||||||||||||||
Purchases of cakes, value | £ | £ 217,418 | £ 123,705 | |||||||||||||||||||||
Nami Shams [Member] | |||||||||||||||||||||||
Debt amount | $ 2,194 | ||||||||||||||||||||||
Outstanding principal | 2,194 | 2,194 | |||||||||||||||||||||
Forgiveness of Debt | $ 6,302 | ||||||||||||||||||||||
Total purchase price | $ 200,000 | ||||||||||||||||||||||
Common shares sale | shares | 115,000,000 | ||||||||||||||||||||||
Holding percentage | 75.80% | ||||||||||||||||||||||
Atlantik [Member] | |||||||||||||||||||||||
Balance due converted into shares | $ 255,450 | ||||||||||||||||||||||
Converted shares | shares | 192,745 | ||||||||||||||||||||||
Atlantik [Member] | Transaction One [Member] | |||||||||||||||||||||||
Repayment of principal | $ 20,000 | ||||||||||||||||||||||
Atlantik [Member] | Transaction Two [Member] | |||||||||||||||||||||||
Repayment of principal | 300,000 | ||||||||||||||||||||||
Nami Shams Four [Member] | |||||||||||||||||||||||
Debt amount | $ 4,349 | $ 4,349 | |||||||||||||||||||||
Outstanding principal | 4,349 | 4,349 | |||||||||||||||||||||
Nami Shams Three [Member] | |||||||||||||||||||||||
Debt amount | $ 15,873 | ||||||||||||||||||||||
Outstanding principal | 15,873 | 15,873 | |||||||||||||||||||||
Nami Shams Two [Member] | |||||||||||||||||||||||
Debt amount | $ 5,065 | ||||||||||||||||||||||
Outstanding principal | 5,065 | 5,065 | |||||||||||||||||||||
Nami Shams One [Member] | |||||||||||||||||||||||
Debt amount | $ 5,067 | ||||||||||||||||||||||
Outstanding principal | $ 5,067 | 5,067 | |||||||||||||||||||||
Sep. 1, 2016 [Member] | |||||||||||||||||||||||
Acquired shares | shares | 110,000,000 | ||||||||||||||||||||||
Additionally shares for directors | shares | 60,000,000 | ||||||||||||||||||||||
Sep. 1, 2016 [Member] | Atlantik [Member] | |||||||||||||||||||||||
Debt amount | $ 320,000 | ||||||||||||||||||||||
Common stock, par value | $ / shares | $ 0.0027 | ||||||||||||||||||||||
Common shares acquired | shares | 115,000,000 | ||||||||||||||||||||||
Allesch-Taylor [Member] | April 6, 2017 [Member] | |||||||||||||||||||||||
Additionally shares for directors | shares | 8,976,875 | ||||||||||||||||||||||
Approval for shares issuance | shares | 2,936,000 | ||||||||||||||||||||||
Allesch-Taylor [Member] | Sep. 1, 2016 [Member] | |||||||||||||||||||||||
Common stock, par value | $ / shares | $ 0.0027 | ||||||||||||||||||||||
Agreed valuation | $ / shares | $ 1 | ||||||||||||||||||||||
ICC [Member] | |||||||||||||||||||||||
Debt amount | $ 1,353,645 | ||||||||||||||||||||||
Debt Instrument, Term | 7 years | ||||||||||||||||||||||
Balance due converted into shares | $ 719,143 | ||||||||||||||||||||||
Converted shares | shares | 542,617 | ||||||||||||||||||||||
Outstanding principal | $ 0 | 0 | |||||||||||||||||||||
Dee light [Member] | |||||||||||||||||||||||
Purchases of cakes, value | $ 194,352 | 132,508 | |||||||||||||||||||||
Ownership percentage | 50.00% | ||||||||||||||||||||||
Due to related party | $ 70,165 | 56,102 | |||||||||||||||||||||
Deij Capital [Member] | |||||||||||||||||||||||
Debt amount | $ 171,437 | ||||||||||||||||||||||
Debt Instrument, Term | 3 years | ||||||||||||||||||||||
Balance due converted into shares | $ 63,990 | $ 13,422 | $ 179,534 | ||||||||||||||||||||
Converted shares | shares | 51,500 | 10,750 | 135,464 | ||||||||||||||||||||
Interest rate | 0.00% | ||||||||||||||||||||||
Outstanding principal | 70,079 | 39,540 | |||||||||||||||||||||
Accrued interest | 0 | 0 | |||||||||||||||||||||
Facility loan | $ 171,437 | ||||||||||||||||||||||
Accounts payable | 12,045 | 5,390 | |||||||||||||||||||||
Deij Capital [Member] | Director and Owner [Member] | |||||||||||||||||||||||
Payables to related party | 70,079 | 39,540 | |||||||||||||||||||||
Roastery Department [Member] | |||||||||||||||||||||||
Receivables to related party | 1,198,811 | 1,198,811 | |||||||||||||||||||||
Payables to related party | 452,674 | 452,674 | |||||||||||||||||||||
Lopez [Member] | Chief Executive Officer [Member] | |||||||||||||||||||||||
Payables to related party | 893 | 2,985 | |||||||||||||||||||||
Allesch-Taylor [Member] | Chairman [Member] | |||||||||||||||||||||||
Payables to related party | $ 41,174 | $ 0 | |||||||||||||||||||||
Deij Capital One [Member] | |||||||||||||||||||||||
Balance due converted into shares | $ 63,990 | ||||||||||||||||||||||
Converted shares | shares | 51,500 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) | 12 Months Ended | |||||||||||||||
Aug. 31, 2017USD ($)$ / sharesshares | Aug. 31, 2017£ / shares | May 31, 2017USD ($)shares | Feb. 28, 2017USD ($)shares | Jan. 25, 2017USD ($)shares | Jan. 23, 2017USD ($)shares | Jan. 12, 2017GBP (£) | Nov. 30, 2016USD ($)$ / sharesshares | Aug. 31, 2016USD ($)$ / sharesshares | Aug. 31, 2016£ / shares | Jul. 08, 2016USD ($)shares | Jun. 30, 2016USD ($)shares | Aug. 31, 2015GBP (£) | Mar. 26, 2015$ / sharesshares | Jul. 01, 2014USD ($) | Feb. 01, 2010USD ($) | |
Common stock, shares authorized | 250,000,000 | 250,000,000 | 75,000,000 | |||||||||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||
Change in authorized common stock | 250,000,000 | |||||||||||||||
Common stock, shares issued | 150,036,000 | 0 | ||||||||||||||
Restricted common stock, shares | 115,000,000 | |||||||||||||||
Restricted common stock, value | $ | $ 200,000 | |||||||||||||||
Restricted common stock percentage of total shares | 75.80% | |||||||||||||||
Preference shares, shares authorized | 25,000,000 | 25,000,000 | ||||||||||||||
Preference shares, par value | £ / shares | £ 1 | £ 1 | ||||||||||||||
Investments | $ 1,289 | £ 5,000 | $ 1,318 | |||||||||||||
Impaired investments | £ | £ 4,000 | |||||||||||||||
Sep. 1, 2016 [Member] | ||||||||||||||||
Acquired shares | 110,000,000 | |||||||||||||||
Additionally shares for directors | 60,000,000 | |||||||||||||||
Sep. 1, 2016 [Member] | Allesch-Taylor [Member] | ||||||||||||||||
Common stock, par value | $ / shares | $ 0.0027 | |||||||||||||||
Restricted common stock, shares | 170,000,000 | |||||||||||||||
Common stock shares reserved for future issuance | 60,000,000 | |||||||||||||||
April 6, 2017 [Member] | Allesch-Taylor [Member] | ||||||||||||||||
Additionally shares for directors | 8,976,875 | |||||||||||||||
Shares issued | 2,936,000 | |||||||||||||||
Shares issuable | 57,064,000 | |||||||||||||||
Approval for shares issuance | 2,936,000 | |||||||||||||||
Deij Capital [Member] | ||||||||||||||||
Debt amount | $ | $ 171,437 | |||||||||||||||
Balance due converted into shares | $ | $ 63,990 | $ 13,422 | $ 179,534 | |||||||||||||
Converted shares | 51,500 | 10,750 | 135,464 | |||||||||||||
Deij Capital [Member] | ||||||||||||||||
Balance due converted into shares | $ | $ 36,300 | |||||||||||||||
Converted shares | 29,250 | |||||||||||||||
Allesch-Taylor [Member] | ||||||||||||||||
Common stock, par value | $ / shares | $ 1 | |||||||||||||||
Stockholders' Equity Note, Stock Split | Weighted average number of shares outstanding prior to the 115:1 forward split have been adjusted to reflect the stock split on a retroactive basis unless otherwise noted | |||||||||||||||
Remaining balance for promissory note | $ | $ 300,000 | |||||||||||||||
Common stock, shares issued | 300,000 | |||||||||||||||
Balance due converted into shares | $ | $ 298,969 | $ 257,997 | $ 6,310 | $ 374,479 | ||||||||||||
Converted shares | 232,000 | 200,000 | 5,000 | 300,000 | ||||||||||||
Common stock shares reserved for future issuance | 60,000,000 | |||||||||||||||
ICC [Member] | ||||||||||||||||
Debt amount | $ | $ 1,353,645 | |||||||||||||||
Balance due converted into shares | $ | $ 719,143 | |||||||||||||||
Converted shares | 542,617 | |||||||||||||||
Atlantik [Member] | ||||||||||||||||
Balance due converted into shares | $ | $ 255,450 | |||||||||||||||
Converted shares | 192,745 | |||||||||||||||
Atlantik [Member] | Sep. 1, 2016 [Member] | ||||||||||||||||
Debt amount | $ | $ 320,000 | |||||||||||||||
Common shares acquired | 115,000,000 | |||||||||||||||
Common stock, par value | $ / shares | $ 0.0027 |
COMMITMENTS AND CONTINGENCIES55
COMMITMENTS AND CONTINGENCIES (Details) | Aug. 31, 2017USD ($) |
Commitments And Contingencies Details | |
2,018 | $ 775,726 |
2,019 | 775,490 |
2,020 | 778,760 |
2,021 | 746,502 |
2,022 | 532,555 |
Future | 1,241,852 |
Total | $ 4,850,885 |
COMMITMENTS AND CONTINGENCIES56
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 12 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Commitments And Contingencies Details | ||
Rent expense | $ 463,655 | $ 418,193 |
INCOME TAX (Details)
INCOME TAX (Details) - USD ($) | 12 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Tax expense (benefit) at the statutory rate | ||
Federal | $ (45,553) | |
Non-U.S. | (367,468) | 9,291 |
State income taxes, net of federal income tax benefit | (3,606) | |
Non-deductible items | ||
Federal | 15,832 | |
Non-U.S. | 367,468 | (9,291) |
Change in valuation allowance | 33,327 | |
Total |
INCOME TAX (Details 1)
INCOME TAX (Details 1) - USD ($) | Aug. 31, 2017 | Aug. 31, 2016 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 30,140 | |
Less: Deferred tax asset valuation allowance | (30,140) | |
Total net deferred taxes |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Income Taxes Details Narrative | ||
Deferred tax assets valuation allowance | $ 30,140 | |
Expiry Date | 2,036 | |
Net operating loss carryforward | $ 88,646 | $ 0 |
Valuation allowance | 100.00% | |
Federal income tax rate | 34.00% |
CONCENTRATIONS (Details Narrati
CONCENTRATIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Concentrations Details Narrative | ||
Sales revenue | $ 557,416 | $ 451,261 |
Sale revenue, percentage | 13.30% | 16.70% |
Contract expiry date | Feb. 28, 2020 |
REVENUE CLASSES (Details)
REVENUE CLASSES (Details) - USD ($) | 12 Months Ended | ||
Aug. 31, 2017 | Aug. 31, 2016 | ||
Revenues | $ 4,180,483 | $ 3,869,517 | |
Direct costs of revenue | 3,633,591 | 2,458,240 | |
Coffee and complementary food products [Member] | |||
Revenues | 3,669,307 | 3,409,213 | |
Direct costs of revenue | 3,479,372 | 2,316,912 | |
Coffee school [Member] | |||
Revenues | 12,425 | 20,357 | |
Direct costs of revenue | 1,319 | 2,061 | |
Management fees [Member] | |||
Revenues | 498,751 | 439,947 | |
Direct costs of revenue | 152,900 | 139,268 | |
Hot sauce (a) [Member] | |||
Revenues | [1] | ||
Direct costs of revenue | [1] | ||
[1] | For the year ended August 31, 2016, due to the reverse merger on September 1, 2016, are not reflective on this table. |
MINORITY INTEREST (Details Narr
MINORITY INTEREST (Details Narrative) - USD ($) | Aug. 31, 2017 | Aug. 31, 2016 |
Minority interest | $ 2,142,804 | |
DEPT-UK [Member] | ||
Minority interest | $ 1,230 | $ 55 |
Minority interest rate | 0.20% |
CAPITAL LEASE OBLIGATIONS (Deta
CAPITAL LEASE OBLIGATIONS (Details) - USD ($) | Aug. 31, 2017 | Aug. 31, 2016 |
Total fixed assets | $ 2,294,264 | $ 1,126,093 |
Less: Accumulated depreciation | 622,088 | 451,466 |
Fixed assets, net | 1,672,176 | 674,627 |
Computer Equipment [Member] | ||
Total fixed assets | 62,038 | 36,839 |
Office Equipment [Member] | ||
Total fixed assets | 22,526 | 22,972 |
Site equipment and machinery [Member] | ||
Total fixed assets | 366,661 | 198,532 |
Site furniture, fixtures and fittings [Member] | ||
Total fixed assets | 236,972 | 160,072 |
Capital Lease Obligations [Member] | ||
Total fixed assets | 667,131 | 418,415 |
Less: Accumulated depreciation | 240,246 | 180,874 |
Fixed assets, net | 426,885 | 237,541 |
Capital Lease Obligations [Member] | Computer Equipment [Member] | ||
Total fixed assets | 57,128 | 36,839 |
Capital Lease Obligations [Member] | Office Equipment [Member] | ||
Total fixed assets | 20,420 | 22,972 |
Capital Lease Obligations [Member] | Site equipment and machinery [Member] | ||
Total fixed assets | 355,914 | 198,532 |
Capital Lease Obligations [Member] | Site furniture, fixtures and fittings [Member] | ||
Total fixed assets | $ 233,669 | $ 160,072 |
CAPITAL LEASE OBLIGATIONS (De64
CAPITAL LEASE OBLIGATIONS (Details 1) | Aug. 31, 2017USD ($) |
Year ended August 31, | |
2,018 | $ 116,146 |
2,019 | 88,906 |
2,020 | 65,083 |
2,021 | 50,564 |
2,022 | 13,543 |
Total | 334,242 |
Less: Interest | 15,157 |
Present value of minimum lease payments | 319,085 |
Less: Current portion of capital lease obligations | 116,146 |
Capital lease obligations, net of current portion | $ 202,939 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - shares | Oct. 06, 2017 | Oct. 30, 2017 | Aug. 31, 2017 | Nov. 30, 2016 | Aug. 31, 2016 |
Common stock, shares issued | 150,036,000 | 0 | |||
Allesch-Taylor [Member] | |||||
Common stock, shares issued | 300,000 | ||||
Common stock shares reserved for future issuance | 60,000,000 | ||||
Subsequent Event [Member] | Allesch-Taylor [Member] | |||||
Common stock, shares issued | 8,976,875 | 1,000,000 | |||
Common stock shares reserved for future issuance | 48,087,125 | 47,087,125 | |||
Description for common stock shares issuable | After this issuance, of the original 60,000,000 shares issuable, 48,087,125 remain issuable by no later than August 31, 2018 | After this issuance, of the second tranche of 60,000,000 shares issuable to Allesch-Taylor pursuant to the acquisition terms, 47,087,125 remain issuable to him by no later than August 31, 2018 |