Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Oct. 31, 2020 | Dec. 09, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | SHARING SERVICES GLOBAL Corp | |
Entity Central Index Key | 0001644488 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --04-30 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 196,810,833 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Oct. 31, 2020 | Apr. 30, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 10,646,501 | $ 11,742,728 |
Trade accounts receivable, net | 4,028,728 | 4,076,851 |
Notes receivable, net | 30,000 | 118,047 |
Inventory | 4,452,248 | 4,801,901 |
Other current assets | 1,571,965 | 1,034,979 |
Total Current Assets | 20,729,442 | 21,774,506 |
Property and equipment, net | 233,298 | 298,383 |
Right-of-use assets, net | 477,871 | 800,381 |
Deferred tax assets | 1,468,844 | 1,649,018 |
Other assets | 43,470 | 55,070 |
TOTAL ASSETS | 22,952,925 | 24,577,358 |
Current Liabilities | ||
Accounts payable | 664,183 | 771,050 |
Accrued sales commission payable | 5,012,956 | 7,983,536 |
Deferred sales revenues | 1,502,608 | 3,495,571 |
Employee stock warrants liability | 2,665,058 | 661,684 |
Settlement liability | 1,333,786 | 2,620,931 |
State and local taxes payable | 1,049,729 | 2,285,514 |
Accrued and other current liabilities | 2,072,183 | 2,117,485 |
Income taxes payable | 309,552 | 920,305 |
Current portion of convertible notes payable, net of unamortized debt discount of $4,640 in October 31 and $9,843 in April 30 | 95,360 | 90,157 |
Total Current Liabilities | 14,705,415 | 20,946,233 |
Lease liability, long-term | 42,595 | 343,948 |
Note payable | 1,040,400 | |
Convertible notes payable, net of unamortized debt discount of $19,373 at October 31 and $24,412 at April 30 | 30,627 | 25,588 |
TOTAL LIABILITIES | 15,819,037 | 21,315,769 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Additional paid in capital | 44,380,715 | 38,871,057 |
Shares to be issued | 14,032 | 11,785 |
Stock subscriptions receivable | (114,405) | (114,405) |
Treasury Stock | (1,532,355) | (1,532,355) |
Accumulated deficit | (35,634,717) | (33,992,697) |
Total Stockholders' Equity | 7,133,888 | 3,261,589 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 22,952,925 | 24,577,358 |
Series A Convertible Preferred Stock [Member] | ||
Stockholders' Equity | ||
Preferred stock, $0.0001 par value, 200,000,000 shares authorized: | 610 | 3,248 |
Series B Convertible Preferred Stock [Member] | ||
Stockholders' Equity | ||
Preferred stock, $0.0001 par value, 200,000,000 shares authorized: | 1,000 | |
Series C Convertible Preferred Stock [Member] | ||
Stockholders' Equity | ||
Preferred stock, $0.0001 par value, 200,000,000 shares authorized: | 338 | 349 |
Class A Shares [Member] | ||
Stockholders' Equity | ||
Common stock value | 19,670 | 12,607 |
Class B Shares [Member] | ||
Stockholders' Equity | ||
Common stock value | $ 1,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Oct. 31, 2020 | Apr. 30, 2020 |
Unamortized debt discount, current | $ 4,640 | $ 9,843 |
Unamortized debt discount, non-current | $ 19,373 | $ 24,412 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 200,000,000 | 200,000,000 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 6,100,000 | 32,478,750 |
Preferred stock, shares outstanding | 6,100,000 | 32,478,750 |
Series B Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 10,000,000 | |
Preferred stock, shares outstanding | 10,000,000 | |
Series C Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 3,380,000 | 3,380,000 |
Preferred stock, shares outstanding | 3,380,000 | 3,380,000 |
Class A Shares [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 196,700,833 | 126,072,386 |
Common stock, shares outstanding | 196,700,833 | 126,072,386 |
Class B Shares [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 10,000,000 | |
Common stock, shares outstanding | 10,000,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 19,450,347 | $ 38,850,453 | $ 41,339,507 | $ 74,332,371 |
Cost of goods sold | 5,059,607 | 11,436,308 | 10,948,633 | 21,487,765 |
Gross profit | 14,390,740 | 27,414,145 | 30,390,874 | 52,844,606 |
Operating expenses | ||||
Selling and marketing expenses | 8,769,088 | 19,015,783 | 18,370,919 | 34,843,882 |
General and administrative expenses | 3,209,542 | 4,517,530 | 10,754,763 | 14,143,732 |
Total operating expenses | 11,978,630 | 23,533,313 | 29,125,682 | 48,987,614 |
Operating earnings | 2,412,110 | 3,880,832 | 1,265,192 | 3,856,992 |
Other income (expense) | ||||
Interest expense, net | (8,271) | (145,787) | (17,399) | (471,737) |
Interest income, related party | 138,546 | 138,546 | ||
Litigation settlements and other non-operating income (expense) | (55,000) | (4,029,813) | (133,822) | (4,234,529) |
Total other income (expense), net | (63,271) | (4,037,054) | (151,221) | (4,567,720) |
Earnings (loss) before income taxes | 2,348,839 | (156,222) | 1,113,971 | (710,728) |
Income tax provision | 497,483 | 1,075,000 | 355,991 | 1,375,000 |
Net earnings (loss) | $ 1,851,356 | $ (1,231,222) | $ 757,980 | $ (2,085,728) |
Earnings (loss) per share: | ||||
Basic | $ 0.01 | $ (0.01) | $ 0.01 | $ (0.02) |
Diluted | $ 0.01 | $ (0.01) | $ 0 | $ (0.02) |
Weighted average shares: | ||||
Basic | 203,227,398 | 132,500,548 | 171,497,718 | 128,185,221 |
Diluted | 260,855,287 | 132,500,548 | 241,376,383 | 128,185,221 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | Apr. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
Net earnings (loss) | $ 1,851,356 | $ (1,231,222) | $ 757,980 | $ (2,085,728) | |
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: | |||||
Depreciation and amortization | 42,384 | 16,961 | 84,601 | 111,550 | |
Stock-based compensation expense | 2,003,374 | 5,640,252 | |||
Deferred income tax benefit | 501,156 | (66,622) | |||
Amortization of debt discount and other | 11,880 | 373,276 | |||
Loss on impairment of notes receivable | 313,794 | ||||
Loss on impairment of investment and other | 20,000 | 226,234 | |||
Changes in operating assets and liabilities: | |||||
Accounts receivable | 48,122 | 19,052 | |||
Inventory | 349,653 | (1,530,375) | |||
Other current assets | (536,986) | 26,182 | |||
Security deposits | 7,600 | ||||
Accounts payable | (106,867) | 526,152 | |||
Income taxes payable | (363,957) | 275,000 | |||
Accrued and other liabilities | (6,518,124) | 8,224,787 | |||
Net Cash (Used in) Provided by Operating Activities | (4,316,946) | 12,127,776 | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||
Payments for property and equipment | (19,516) | (114,038) | |||
Collection of notes receivable | 88,047 | ||||
Due to related parties and other | (8,400) | (5,637) | |||
Net Cash Provided by (Used in) Investing Activities | 60,131 | (119,675) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||
Proceeds from issuance of common stock | 3,019,688 | 1,300 | |||
Repayment of convertible notes payable | (755,000) | ||||
Repurchase of common stock | (899,500) | (500) | |||
Proceeds from issuance of promissory notes | 1,040,400 | ||||
Repayment of promissory notes payable | (2,376,062) | ||||
Net Cash Provided by (Used in) Financing Activities | 3,160,588 | (3,130,262) | |||
Increase (decrease) in cash and cash equivalents | (1,096,227) | 8,877,839 | |||
Cash and cash equivalents, beginning of period | 11,742,728 | 3,912,135 | $ 3,912,135 | ||
Cash and cash equivalents, end of period | $ 10,646,501 | $ 12,789,974 | 10,646,501 | 12,789,974 | $ 11,742,728 |
Supplemental cash flow information | |||||
Cash paid for interest | 3,606 | 493,708 | |||
Cash paid for income taxes | 416,093 | 1,147,620 | |||
Supplemented disclosure of non-cash investing and financing activities: | |||||
Settlement obligation satisfied with shares of common stock | 400,000 | ||||
Right-of-use assets recognized as lease liability | $ 1,385,871 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Series C Preferred Stock [Member] | Class A and Class B Common Stock [Member] | Additional Paid in Capital [Member] | Subscription Receivable [Member] | Shares to be Issued [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Total |
Balance at Apr. 30, 2019 | $ 4,288 | $ 1,000 | $ 352 | $ 11,408 | $ 31,870,020 | $ (114,405) | $ 21,000 | $ (33,111,921) | $ (1,318,258) | |
Balance, shares at Apr. 30, 2019 | 42,878,750 | 10,000,000 | 3,520,000 | 114,077,061 | ||||||
Common stock issued for cash | $ 3 | 7,497 | (7,500) | |||||||
Common stock issued for cash, shares | 30,000 | |||||||||
Common stock issued for professional services | $ 22 | 11,993 | (1,715) | 10,300 | ||||||
Common stock issued for professional services, shares | 215,325 | |||||||||
Conversions of preferred stock | $ (1,040) | $ (5) | $ 1,045 | |||||||
Conversions of preferred stock, shares | (10,400,000) | (50,000) | 10,450,000 | |||||||
Repurchase of common stock | $ (150) | (350) | (500) | |||||||
Repurchase of common stock, shares | (1,500,000) | |||||||||
Stock-based compensation expense | 5,640,252 | 5,640,252 | ||||||||
Stock warrants exercised | $ 1,000 | 1,000 | ||||||||
Stock warrants exercised, shares | 10,000,000 | |||||||||
Net earnings (loss) | (2,085,728) | (2,085,728) | ||||||||
Balance at Oct. 31, 2019 | $ 3,248 | $ 1,000 | $ 347 | $ 13,328 | 37,529,412 | (114,405) | 11,785 | (35,197,649) | 2,247,066 | |
Balance, shares at Oct. 31, 2019 | 32,478,750 | 10,000,000 | 3,470,000 | 133,272,386 | ||||||
Balance at Apr. 30, 2020 | $ 3,248 | $ 1,000 | $ 349 | $ 13,607 | 38,871,057 | (114,405) | 11,785 | (1,532,355) | (33,992,697) | 3,261,589 |
Balance, shares at Apr. 30, 2020 | 32,478,750 | 10,000,000 | 3,490,000 | 136,072,386 | ||||||
Common stock issued for cash | $ 3,000 | 5,397,000 | (2,400,000) | 3,000,000 | ||||||
Common stock issued for cash, shares | 30,000,000 | |||||||||
Conversions of preferred stock | $ (2,075) | $ (1,000) | $ (11) | $ 3,086 | ||||||
Conversions of preferred stock, shares | (20,750,000) | (10,000,000) | (110,000) | 30,860,000 | ||||||
Repurchase of common stock | $ (1,750) | (897,750) | $ (899,500) | |||||||
Repurchase of common stock, shares | (17,500,000) | (17,500,000) | ||||||||
Common stock issued upon settlement of litigation | $ 1,000 | 399,000 | $ 400,000 | |||||||
Common stock issued upon settlement of litigation, shares | 10,000,000 | |||||||||
Preferred stock retired | $ (563) | 563 | ||||||||
Preferred stock retired, shares | (5,628,750) | |||||||||
Conversion of interest payable | ||||||||||
Stock-based compensation expense | 1,186,554 | 1,186,554 | ||||||||
Proceeds from common stock warrants exercised | 19,688 | 19,688 | ||||||||
Stock warrants exercised | $ 727 | (575,709) | (17,441) | (592,423) | ||||||
Stock warrants exercised, shares | 7,268,447 | |||||||||
Net earnings (loss) | 757,980 | 757,980 | ||||||||
Balance at Oct. 31, 2020 | $ 610 | $ 338 | $ 19,670 | $ 44,380,715 | $ (114,405) | $ 14,032 | $ (1,532,355) | $ (35,634,717) | $ 7,133,888 | |
Balance, shares at Oct. 31, 2020 | 6,100,000 | 3,380,000 | 196,700,833 |
Description of Operations and B
Description of Operations and Basis of Presentation | 6 Months Ended |
Oct. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Operations and Basis of Presentation | NOTE 1 –DESCRIPTION OF OPERATIONS AND BASIS OF PRESENTATION Sharing Services Global Corporation (“Sharing Services”, “we,” or the “Company”), formerly Sharing Services, Inc., markets and distributes its health and wellness products primarily in the United States and Canada. The Company is an emerging growth company and was incorporated in the State of Nevada in April 2015. It markets and distributes its products and services through its wholly owned subsidiaries, using a marketing strategy driven by a form of direct selling. The Company does not operate retail stores. It markets its products and services through an independent contractor sales force, which it refers to as “Elepreneurs,” and using its proprietary websites, including: www.elevacity.com In 2019, Sharing Services, Inc. changed its corporate name to Sharing Services Global Corporation to better reflect the Company’s strategic intent to grow its business globally. In connection with the name change, the Company adopted the over-the-counter trading symbol “SHRG.” The condensed consolidated interim financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted as permitted pursuant to the rules and regulations of the SEC, although we believe that the disclosures made are adequate to make the information not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2020. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Oct. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2 –SIGNIFICANT ACCOUNTING POLICIES We adhere to the same accounting policies in the preparation of our condensed consolidated interim financial statements as we do in the preparation of our full year consolidated financial statements. As permitted under GAAP, interim accounting for certain expenses, including our provision for income taxes, is based on full-year assumptions. Reclassifications Certain reclassifications have been made to the prior year data to conform with the current period’s presentation. Comprehensive Income For the fiscal periods included in this Quarterly Report, the only component of the Company’s comprehensive income is the Company’s net earnings. Accordingly, the Company does not present a consolidated statement of comprehensive income. Use of Estimates and Assumptions The preparation of financial statements in accordance with GAAP requires the use of judgment and requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosures about contingent assets and liabilities, if any. Matters that require the use of estimates and assumptions include: the recoverability of accounts receivable, the valuation of inventory, the useful lives of fixed assets, the assessment of long-lived assets for impairment, the nature and timing of satisfaction of performance obligations resulting from contracts with customers, allocation of the transaction price to multiple performance obligations in a sales transaction, the measurement and recognition of right-of-use assets and related lease liabilities, the valuation of stock-based compensation awards, the measurement and recognition of uncertain tax positions, and the valuation of loss contingencies, if any. Actual results may differ from these estimates in amounts that may be material to our consolidated financial statements. We believe that the estimates and assumptions used in the preparation of our consolidated financial statements are reasonable. However, we believe that the public’s fear of exposure to and/or the actual impact of the COVID-19 virus, as well as past actions taken to mitigate the spread of the virus, have had and continue to have a materially adverse impact on the economy of the U. S. and Canada, and has resulted in a significant number of workers becoming unemployed or underemployed in both countries. Consumer demand for discretionary products such as ours is sensitive to downturns in the economy, increases in unemployment, or decreases in perceived employment security. The full impact on our business of changes in consumer demand resulting from the current economic downturn, increased unemployment, reduced consumer confidence, and public fear of exposure to the virus cannot reasonably be determined, but the impact may be significant and protracted. Accordingly, it is possible that estimates made in the Company’s consolidated financial statements have been, or will be, materially impacted as a result of these uncertainties. These may include, among other things, estimates regarding losses on inventory, impairment losses related to long-lived assets, the nature and timing of satisfaction of performance obligations resulting from contracts with customers, and the valuation of loss contingencies. Revenue Recognition The Company derives revenue only from the sale of its products and services and recognizes revenue net of amounts due to taxing authorities (such as local and state sales tax). Our customers place sales orders online and through our “back-office” operations, which creates a contract and establishes the transaction price. The Company recognizes revenue when (or as) it transfers control of the promised goods and services to the customer. With respect to products sold, our performance obligation is satisfied upon receipt of the products by the customer. With respect to subscription-based revenue, including Elepreneurs membership fees, our performance obligation is satisfied over time (up to one year). The timing of our revenue recognition may differ from the time when we invoice the customer and/or collect payment. The Company has elected to treat shipping and handling costs as an activity to fulfill its performance obligations, rather than a separate performance obligation. Deferred sales revenue associated with product invoiced but not received by customers at the balance sheet date was $1.1 million and $2.7 million as of October 31, 2020 and April 30, 2020, respectively. In addition, as of October 31, 2020 and April 30, 2020, deferred sales revenue associated with our unfulfilled performance obligations for services offered on a subscription basis was $260,182 and $433,386, and deferred sales revenue associated with our performance obligations for customers’ right of return was $120,914 and $263,117, respectively. Deferred sales revenue is expected to be recognized over one year. During the six months ended October 31, 2020, no individual customer, or related group of customers, represents 10% or more of our consolidated net sales, and approximately 45% of our consolidated net sales were to recurring customers (which we refer to as “SmartShip” sales), approximately 28% were to new customers and approximately 27% were to our independent distributors. During the six months ended October 31, 2020 and 2019, approximately 94% and 95%, respectively, of our consolidated net sales are to our customers and/or independent distributors located in the United States. During the six months ended October 31, 2020, approximately 99% of our consolidated net sales are from our health and wellness products (including approximately 5% from the sale of coffee and coffee-related products, 48% from the sale of other Nutraceutical products, and approximately 46% from the sale of all other health and wellness products). During the six months ended October 31, 2019, approximately 98% of our consolidated net sales are from the sale of our Elevate product line (including 25% from the sales of coffee and coffee-related products, 52% from the sale of other Nutraceutical products, and approximately 21% from the sale of all other health and wellness products). During both the six months ended October 31, 2020 and 2019, product purchases from one supplier accounted for approximately 98% of our total product purchases. Sales Commissions The Company recognizes sales commission expense, when incurred, in accordance with GAAP. During the three months ended October 31, 2020 and 2019, sales commission expense was $8.4 million and $18.2 million, respectively. During the six months ended October 31, 2020 and 2019, sales commission expense was $17.8 million and $33.6 million, respectively. In the six months ended October 31, 2020, the Company issued to members of its independent sales force who had been offered stock warrants under the 2019 Sales-Related Warrants program more fully discussed in Note 2 of the Notes to Consolidated Financial Statements for our fiscal year ended April 30, 2020 and met other qualifications (mainly related to remaining active distributors), fully vested warrants to purchase up to 3,747,600 shares its common stock with an estimated aggregate fair value of $1.4 million (the “2020 Sales-Related Warrants”). The 2020 Sales-Related Warrants are exercisable for a period of one year from the issuance date at the exercise price of $0.01 per share. The rights conferred by the 2020 Sales-Related Warrants are not subject to service conditions and all other conditions necessary to earn the award have been satisfied. The Company deems the fair value of the warrants granted to members of its independent contractor sales force to be an element of sales compensation expense. The Company recognized incremental sales compensation expense of $140,911 in connection with stock warrants issued under the 2020 Sales-Related Warrants program to holders of unexercised equity-based awards under the predecessor plan that are deemed modified, as defined by GAAP. In addition, the Company recognized sales compensation expense of $1,045,644 in connection with stock warrants issued under the 2020 Sales-Related Warrants program to participants of the predecessor plan who had not yet accepted the terms of the 2019 Sales-Related Warrants (but accepted the new award). Further, in the six months ended October 31, 2020, the Company derecognized sales compensation expense of $1.1 million in connection with stock warrants previously offered under the 2019 Sales-Related Warrants program that were terminated or forfeited, including warrants no longer deemed probable of exercise. At October 31, 2020 and April 30, 2020, accrued sales compensation payable was $5,012,957 and $7,983,536, respectively, including $101,510 and $1,290,477, respectively, in estimated sales compensation contingently payable with stock warrants in connection with the 2019 Sales-Related Warrants program. Recently Issued Accounting Standards - Recently Adopted In November 2019, the FASB issued ASU No. 2019-08, Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements – Share-based Consideration Payable to a Customer Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-based Payment Accounting In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Fair Value Measurement Recently Issued Accounting Standards - Pending Adoption In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes |
Fair Value Measurements of Fina
Fair Value Measurements of Financial Instruments | 6 Months Ended |
Oct. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements of Financial Instruments | NOTE 3 – FAIR VALUE MEASURENTS OF FINANCIAL INSTRUMENTS Our financial instruments consist of cash equivalents, if any, accounts receivable, notes receivable, investments in unconsolidated entities, accounts payable and notes payable. The carrying amounts of cash equivalents, if any, trade accounts receivable, notes receivable and accounts payable approximate their respective fair values due to the short-term nature of these financial instruments. Consistent with the valuation hierarchy contained in ASC Topic 820, we categorized certain of our financial assets and liabilities as follows: October 31, 2020 Total Level 1 Level 2 Level 3 Assets Notes receivable $ 30,000 $ - $ - $ 30,000 Total assets $ 30,000 $ - $ - $ 30,000 Liabilities Note Payable $ 1,040,400 $ - $ - $ 1,040,400 Convertible notes payable 125,987 - - 125,987 Total liabilities $ 1,166,387 $ - $ - $ 1,166,387 April 30, 2020 Total Level 1 Level 2 Level 3 Assets Notes receivable $ 118,047 $ - $ - $ 118,047 Investments in unconsolidated entities 20,000 - - 20,000 Total assets $ 138,047 $ - $ - $ 138,047 Liabilities Convertible notes payable $ 115,745 $ - $ - $ 115,745 Total liabilities $ 115,745 $ - $ - $ 115,745 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 6 Months Ended |
Oct. 31, 2020 | |
Earnings (loss) per share: | |
Earnings (Loss) Per Share | NOTE 4 – EARNINGS (LOSS) PER SHARE We calculate basic earnings (loss) per share by dividing net earnings (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share is calculated similarly but reflects the potential impact of shares issuable upon the conversion or exercise of outstanding convertible preferred stock, convertible notes payable, stock warrants and other commitments to issue common stock, except where the impact would be anti-dilutive. The calculation of diluted earnings per share also reflects an adjustment to net earnings for the potential reduction to the reporting period’s interest expense, net of applicable income tax, that would result if the Company’s convertible notes payable were converted at the beginning of the period. The following table sets forth the computations of basic and diluted earnings (loss) per share: Three Months Ended October 31, Six Months Ended October 31, 2020 2019 2020 2019 Net earnings (loss), as reported $ 1,851,356 $ (1,231,222 ) $ 757,980 $ (2,085,728 ) After tax interest adjustment 6,354 - 11,594 - Net earnings (loss), if-converted basis $ 1,857,710 $ (1,231,222 ) $ 769,574 $ (2,085,728 ) Weighted average basic shares 203,227,398 132,500,548 171,497,718 128,185,221 Dilutive securities and instruments: Convertible preferred stock 18,476,413 - 31,304,851 - Convertible notes 10,406,100 - 10,406,100 - Stock options and warrants 28,745,376 - 28,167,714 - Weighted average diluted shares 260,855,287 132,500,548 241,376,383 128,185,221 Earnings (loss) per share: Basic $ 0.01 $ (0.01 ) $ 0.00 $ (0.02 ) Diluted $ 0.01 $ (0.01 ) $ 0.00 $ (0.02 ) The following potentially dilutive securities and instruments were outstanding during the three and six months ended October 31, 2019 but excluded from the calculation of loss per share because their impact would be anti-dilutive: Convertible notes 69,259,756 Convertible preferred stock 46,285,924 Stock warrants 21,585,167 Total incremental shares 137,130,847 |
Notes Receivable
Notes Receivable | 6 Months Ended |
Oct. 31, 2020 | |
Receivables [Abstract] | |
Notes Receivable | NOTE 5 – NOTES RECEIVABLE In the fiscal year 2020, the Company received a promissory note for $58,047 from a prior merchant payment processor in connection with amounts owed to the Company. At October 31, 2020, the note was paid in full. At April 30, 2020, the principal balance of $58,047 remained outstanding. In the fiscal year 2019, the Company received a promissory note for $106,404 from a prior merchant payment processor in connection with amounts owed to the Company. In the fiscal year 2020, the Company and the issuer of the promissory notes engaged in negotiations aimed at settling this balance. In January 2020, the Company recognized an impairment loss of $46,404 in connection therewith. At October 31, 2020 and April 30, 2020, the principal balance of $30,000 and $60,000, respectively, remains outstanding. |
Other Current Assets
Other Current Assets | 6 Months Ended |
Oct. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | NOTE 6 – OTHER CURRENT ASSETS Other current assets consist of the following: October 31, 2020 April 30, 2020 Prepaid expenses, including $878,315 for inventory-related deposits as of October 31 $ 1,188,578 $ 404,089 Right to recover asset 33,621 76,103 Employee advances and other 349,766 554,787 $ 1,571,965 $ 1,034,979 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Oct. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 7 – PROPERTY AND EQUIPMENT Property and equipment consist of the following: October 31, 2020 April 30, 2020 Furniture and fixtures $ 230,685 $ 224,239 Computer equipment and software 168,563 155,493 Leasehold improvements 106,877 106,877 Office equipment 31,652 31,652 Total property and equipment 537,777 518,261 Accumulated depreciation and amortization (304,479 ) (219,878 ) Property and equipment, net $ 233,298 $ 298,383 Depreciation and amortization expense were $42,384 and $16,961 for the three months ended October 31, 2020 and 2019, respectively, and, for the six months ended October 31, 2020 and 2019, $84,601 and $47,242, respectively. |
Note Payable
Note Payable | 6 Months Ended |
Oct. 31, 2020 | |
Debt Disclosure [Abstract] | |
Note Payable | NOTE 8 - NOTE PAYABLE In May 2020, the Company was granted a loan (the “PPP Loan”) by a commercial bank in the amount of $1,040,400, pursuant to the Paycheck Protection Program features of the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”) bears interest at an annual rate of 1.0%. The may be prepaid without penalty, at the option of the Company, at any time prior to maturity. Proceeds from loans granted under the CARES Act are intended to be used for payroll, costs to continue employee group health care benefits, rent, utilities, and certain other qualified costs (“qualifying expenses”). The Company used the loan proceeds for qualifying expenses. The Company’s borrowings under the may be eligible for loan forgiveness if used for qualifying expenses incurred during the “covered period,” as defined in the CARES Act, except that the amount of loan forgiveness is limited to the qualifying expenses incurred during the 8-week period commencing on the loan effective date. In addition, the amount of any loan forgiveness may be reduced if there is a decrease in the average number of full-time equivalent employees of the Company during the covered period as compared to the comparable period in the prior calendar year. The Company anticipates that some or all of its obligation under the PPP Loan will qualify for loan forgiveness. The Company’s indebtedness, after any such loan forgiveness, is payable in 18 equal monthly installments commencing on December 13, 2020, with all amounts due and payable by the maturity date. At October 31, 2020, note . |
Accrued and Other Current Liabi
Accrued and Other Current Liabilities | 6 Months Ended |
Oct. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accrued and Other Current Liabilities | NOTE 9 - ACCRUED AND OTHER CURRENT LIABILITIES Accrued and other current liabilities consist of the following: October 31, 2020 April 30, 2020 Payroll and employee benefits $ 340,696 $ 1,199,950 Lease liability, current portion 457,430 476,950 Accrued interest payable 23,204 15,419 Other operational accruals, including accrued severance expense of $1,005,000 as of October 31 1,250,853 425,166 $ 2,072,183 $ 2,117,485 Lease liability, current portion, represent obligations due withing one year under operating leases for office space, automobiles, and office equipment. |
Convertible Notes Payable
Convertible Notes Payable | 6 Months Ended |
Oct. 31, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | NOTE 10 - CONVERTIBLE NOTES PAYABLE Convertible notes payable consists of the following: Conversion Price Issuance Date Maturity Date (per share) October 31, 2020 April 30, 2020 October 2017 October 2022 $ 0.15 $ 50,000 $ 50,000 April 2018 April 2021 $ 0.01 100,000 100,000 Total convertible notes payable 150,000 150,000 Less: unamortized debt discount and deferred financing fees 24,013 34,255 125,987 115,745 Less: current portion of convertible notes payable 95,360 90,157 Long-term convertible notes payable $ 30,627 $ 25,588 The Company’s convertible notes are convertible, at the option of the holder, into shares of the Company’s common stock at the conversion prices shown above. Borrowings on the Company’s convertible notes bear interest at the annual rate of 12%, except as otherwise indicated below. Pursuant to the terms of the Company’s convertible note dated October 6, 2017, the Company is currently reviewing the conversion terms of the note. Accordingly, the conversion price shown on the table above is subject to change as a result of such review. This is a related party note. Please see Note 13 for more details. In December 2019, the Company and the holder of the Company’s convertible note dated April 13, 2018 (the “April 2018 Note”) entered into an amendment to the underlying promissory note. Pursuant to the amendment, the parties extended the maturity date of the note to April 2021. In addition, after giving effect to the amendment, the April 2018 Note is non-interest bearing. All other terms of the April 2018 Note remain unchanged. During the three months ended October 31, 2020 and 2019, interest expense in connection with the Company’s convertible notes was $1,512 and $16,802, respectively, excluding amortization of debt discount of $5,120 and $2,519, respectively. During the six months ended October 31, 2020 and 2019, interest expense in connection with the Company’s convertible notes was $3,025 and $43,711, respectively, excluding amortization of debt discount of $10,242 and $5,040, respectively. These amounts are included in interest expense in our consolidated statements of operations. |
Leases
Leases | 6 Months Ended |
Oct. 31, 2020 | |
Leases [Abstract] | |
Leases | NOTE 11 – LEASES The Company leases space for its corporate headquarters, and additional office and warehouse space, under lease agreements classified as “operating leases’” as defined in ASC Topic 842. The Company’s real estate lease agreements have remaining terms varying from one to two years, offer the Company customary renewal options, and contain provisions for customary common area maintenance (CAM) assessments by the lessor. The following information pertains to the Company’s leases as of the balance sheet dates indicated: Assets Classification October 31, 2020 April 30, 2020 Operating leases Right-of-use assets, net $ 477,871 $ 800,381 Total leased assets $ 477,871 $ 800,381 Liabilities Operating leases Accrued and other current liabilities $ 457,430 $ 476,950 Operating leases Lease liability, long-term 42,595 343,948 Total lease liability $ 500,025 $ 820,898 The following information pertains to the Company’s leases for the periods indicated: Three Months Ended October 31, Lease cost Classification 2020 2019 Operating lease cost General and administrative expenses $ 130,275 $ 148,066 Operating lease cost Depreciation and amortization - - Operating lease cost Interest expense, net - - Total lease cost $ 130,275 $ 148,066 Six Months Ended October 31, Lease cost Classification 2020 2019 Operating lease cost General and administrative expenses $ 270,498 $ 298,782 Operating lease cost Depreciation and amortization - - Operating lease cost Interest expense, net - - Total lease cost $ 270,498 $ 298,782 The Company’s lease liability is payable as follows: Twelve months ending October 31, 2021 $ 457,430 2022 42,595 2023-2025 - Thereafter - Total lease liability $ 500,025 |
Income Taxes
Income Taxes | 6 Months Ended |
Oct. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 12 – INCOME TAXES The Company is an emerging growth company and, prior to its fiscal quarter ended October 31, 2018, had not generated earnings from its operations or pre-tax earnings. During its fiscal year ended April 30, 2020, the Company’s consolidated operating earnings were $9.7 million and, during its fiscal year ended April 30, 2019, the Company had a consolidated operating loss of $1.0 million. The Company believes that it is probable it will utilize its available net operating losses entirely in the foreseeable future. During the three months ended October 31, 2020, the Company recognized a current benefit for federal income taxes of $200,000, a provision for state and local income taxes of $196,327 and a deferred income tax provision of $501,156. During the six months ended October 31, 2020, the Company recognized a current provision for federal income taxes of $108,300, a provision for state and local income taxes of $314,312 and a deferred income tax benefit of $66,621. In addition, during the fiscal year ended April 30, 2020, the Company recognized a current provision for income taxes of $2.1 million and deferred income tax benefits of $1.6 million. For the six months ended October 31, 2020, our income tax rate reconciliation is as follows: Federal statutory rate 21.0 % State income taxes and franchise tax 28.2 % Stock-based compensation and other (17.2 )% Effective tax rate 32.0 % Our consolidated provision for (benefit from) income taxes is as follows: Three Months Ended October 31, 2020 Six Months Ended October 31, 2020 Current: Federal $ (200,000 ) $ 108,300 State and local 196,327 314,312 Total current (3,673 ) 422,612 Deferred: Federal 501,156 (66,621 ) State and local - - Total deferred 501,156 (66,621 ) Total consolidated income tax provision $ 497,483 $ 355,991 As of October 31, 2020, our deferred tax asset (liability) is as follows: Gross deferred tax asset: Stock-based compensation $ 1,200,299 Accruals and reserves not currently deductible 268,545 Total deferred tax assets 1,468,844 Total deferred tax liability - Total consolidated deferred tax assets, net $ 1,468,844 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Oct. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 13 - RELATED PARTY TRANSACTIONS Decentralized Sharing Systems, Inc. On July 22, 2020, the Company and Chan Heng Fai Ambrose, a Director of the Company, entered into a Stock Purchase and Share Subscription Agreement (the “SPA Agreement”) pursuant to which Mr. Chan agreed to invest $3.0 million in the Company in exchange for 30.0 million shares of the Company’s Class A Common Stock and a fully vested Stock Warrant to purchase up to 10.0 million shares of the Company’s Class A Common Stock at an exercise price of $0.20 per share. On the issuance date, the closing price for the Company’s common stock was $0.177 per share and the Company recognized a deemed dividend of $2.4 million. Simultaneously with the SPA Agreement, Mr. Chan and Decentralized Sharing Systems, Inc. (“DSS”), a subsidiary of Document Security Systems, Inc., and, together with Document Security Systems, Inc., a major shareholder of the Company, entered into an Assignment and Assumption Agreement pursuant to which Mr. Chan assigned to DSS all interests in the SPA Agreement. On July 23, 2020, the Company issued 30.0 million shares of its Class A Common Stock to DSS, an “accredited investor” as defined in the Securities Act, pursuant to the SPA Agreement. Under the terms of the SPA Agreement, the shares of Class A Common Stock issued to DSS are subject to a one (1) year restriction. The Stock Warrant issued pursuant to the SPA Agreement expires on the third anniversary from the issuance date, unless exercised earlier. As of October 31, 2020, DSS and its affiliates owned 74.1 million shares of the Company’s Class A Common Stock, excluding 10.0 million shares issuable upon the exercise of warrants held by DSS. Mr. Chan, a Director of the Company, also serves on the Board of Directors of DSS and its parent, Document Security Systems, Inc. In addition, John (“JT”) Thatch, the President, CEO and Interim Chairman of the Board of Directors of the Company, also serves on the Board of Directors of Document Security Systems, Inc. Further, Frank D. Heuszel, a Director of the Company, also serves on the Board of Directors of DSS and its parent, Document Security Systems, Inc. In October 2017, the Company issued a convertible note in the principal amount of $50,000 to HWH International, Inc (“HWH”). HWH is affiliated with Chan Heng Fai Ambrose, who in April 2020 became a Director of the Company. The note matures in October 2022. Please see Note 10 above for more details. Bear Bull Market Dividends, Inc. On July 22, 2020, the Company, Bear Bull Market Dividends, Inc. (“BBMD”), a purported shareholder of the Company, Kenyatto Montez Jones (“Jones”), and MLM Mafia, Inc. (“MLM”) entered into a Settlement Accommodation Agreement [Including Stock Disposition And Release Provisions] (the “SAA”) pursuant to which the relevant parties agreed to settle all prior disputes between the Company, on the one part, and BBMD and Jones, on the other, concerning the status of BBMD as a valid shareholder of the Company, and the ownership, operation, management and control of the Company, all of which has been the subject of various pending lawsuits. In addition, the parties agreed to dismiss such pending lawsuits and exchanged customary mutual releases. In August 2020, as provided under the SAA, the Disputed Stock, as defined in the SAA, was converted into 25.0 million shares of the Company’s Class A Common Stock (the “Converted Stock”). In addition, under the terms of the SAA and the related Securities Escrow And Disposition Agreement, in August 2020, MLM purchased from BBMD 20.0 million shares of the Converted Stock at the purchase price of $0.0525 per share (or $1,050,000). Further, as provided under the SAA and the related Securities Escrow And Disposition Agreement, the Company repurchased from MLM 17.5 million shares of the Converted Stock at the repurchase price of $0.0514 per share (or $899,500) in cash and the Company has retired the 17.5 million shares repurchased. After these transactions, BBMD remained the holder of 5.0 million shares of the Company’s Class A Common Stock and MLM remained the holder of 2.5 million shares of the Company’s Class A Common Stock. The Company recognized the repurchased shares as treasury stock in accordance with GAAP. In October 2020, the Company retired the 17.5 million repurchased shares, pursuant to Nevada Revised Statutes, Section 78.283. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Oct. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 14 - STOCKHOLDERS’ EQUITY Preferred Stock Series A Convertible Preferred Stock October 31, 2020 Series B Convertible Preferred Stock Series C Convertible Preferred Stock October 31, 2020 Common Stock During the six months ended October 31, 2020 During the six months ended October 31, 2020, the holders of 10,000,000 shares of the Company’s Series B preferred stock and 10,000,000 shares of the Company’s Class B common stock converted their holdings into 20,000,000 shares of the Company’s Class A common stock. In addition, during the six months ended October 31, 2020, as discussed above, BBMD, then the purported holder of 20,000,000 shares of the Company’s Series A preferred stock, converted such holdings into 20,000,000 shares of the Company’s Class A common stock. Further, during the six months ended October 31, 2020, the holder of 750,000 shares of the Company’s Series A preferred stock converted such holdings into 750,000 shares of the Company’s Class A common stock and holders of 110,000 shares of the Company’s Series C preferred stock converted such holdings into 110,000 shares of the Company’s Class A common stock. As discussed above, during the six months ended October 31, 2020, the Company repurchased 17.5 million shares of the Converted Stock for cash and retired such repurchased shares. As of October 31, 2020 In August 2020, as more fully discussed in Note 13 above, BBMD, then the purported holder of 2,500,000 shares of the Company’s Class B common stock, converted such holdings into 2,500,000 shares of the Company’s Class A common stock. In addition, in September 2020, the Company and Alchemist agreed to convert 7,500,000 shares of the Company’s Class B common stock then held by Alchemist into 7,500,000 shares of the Company’s Class A common stock. As of October 31, 2020, no shares of the Company’s Class B common stock remain outstanding. Stock Warrants The following table summarizes the activity relating to the Company’s warrants during the six months ended October 31, 2020: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Term Outstanding at April 30, 2020 26,883,933 $ 0.04 4.2 Warrants granted 29,275,800 $ 0.15 Warrants exercised (10,780,200 ) $ 0.0017 Outstanding at October 31, 2020 45,379,533 $ 0.11 4.0 The following table summarizes certain information relating to outstanding and exercisable warrants: Warrants Outstanding at October 31, 2020 Warrants Outstanding Warrants Exercisable Weighted Weighted Weighted Number of Contractual Exercise Number of Exercise 13,000,000 4.3 $ 0.0001 13,000,000 $ 0.0001 16,500,000 5.4 $ 0.13 10,906,580 $ 0.13 10,000,000 2.7 $ 0.20 10,000,000 $ 0.20 1,298,800 .4 $ 0.25 1,298,800 $ 0.25 2,180,000 2.6 $ 0.04 2,180,000 $ 0.04 1,967,400 .9 $ 0.01 1,967,400 $ 0.01 333,333 1.9 $ 0.15 333,333 $ 0.15 100,000 1.4 $ 3.00 100,000 $ 3.00 During the six months ended October 31, 2020, as more fully discussed in Note 13 above, the Company issued a fully vested Stock Warrant to purchase up to 10.0 million shares of the Company’s Class A Common Stock at an exercise price of $0.20 per share to DSS. In addition, during the six months ended October 31, 2020, the Company issued 5,488,247 shares of its Class A common stock in connection with warrants to purchase 9,000,000 shares exercised by Company employees and 1,780,200 shares of its Class A common stock in connection with the exercise of warrants by Company distributors. The 5,488,247 shares issued to employees are net of shares retained to satisfy the related exercise price and employee payroll tax obligations. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Oct. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 15 - COMMITMENTS AND CONTINGENCIES Legal Proceedings The Company from time to time is involved in various claims and lawsuits incidental to the conduct of its business in the ordinary course. We do not believe that the ultimate resolution of these matters will have a material adverse impact on our consolidated financial position, results of operations or cash flows. Acquisition-Related Contingencies In October 2017, the Company entered into a pursuant to which it acquired a 25% equity interest in 561 LLC. the , in May 2018, the Company increased its cumulative equity interest in 561 LLC to 40% the , the sellers one year has passed from and In October 2017, the Company entered into a pursuant to which it acquired a 25% equity interest in America Approved Commercial LLC (“AAC”). the , in May 2018, the Company increased its cumulative equity interest in AAC to 40% the , the sellers one year has passed from and Legal Proceedings – Other Matters The Company from time to time is involved in various claims and lawsuits incidental to the conduct of its business in the ordinary course. We do not believe that the ultimate resolution of these matters will have a material adverse impact on our consolidated financial position, results of operations or cash flows. (a) Cause No. 416-02428-2019; Sharing Services Global Corporation, f/k/a Sharing Services, Inc. v. XIP Technologies, LLC, th (b) Cause No. 296-03589-2019; Pruvit Ventures, Inc. v. Elevacity, LLC, th (c) Case No. A-19-802861-B; Sharing Services Global Corporation v. Bear Bull Market Dividends, Inc., Alchemist Holdings, LLC and Kenyatto M. Jones, (d) Case No. A-20-811265-C; Sharing Services Global Corporation v. Bear Bull Market Dividends, Inc., Research & Referral, BZ and Kenyatto M. Jones (e) Cause No. 219-04726-2019; Sharing Services Global Corporation v. Research & Referral, BZ th (f) Cause No. 366-04941-2019; Sharing Services Global Corporation, Elepreneurs U.S., LLC and Elevacity, LLC v. Robert Oblon th (g) Cause No. DC-19-20587; Sharing Services Global Corporation f/k/a Sharing Services, Inc. v. Amber-Lynn Beers-Hutchinson, n/k/a Amber-Lynn Cantrell nd (h) Cause No. 380-01007-2020; Elepreneurs Holdings, LLC v. Carissa Rogers and Barbie Williams th (i) Cause No. 429-04618-2020; Kevin Young v. Elepreneurs Holdings, LLC, Elepreneurs U.S., LLC, Elevacity Holdings, LLC, Elevacity U.S., LLC, and Sharing Services Global Corporation f/k/a Sharing Services, Inc. th (j) On December 4, 2019, Entrepreneur Media, Inc. filed a Notice of Opposition in response to the “Elepreneurs” trademark application filed by SHRG IP Holdings, LLC, a wholly owned subsidiary of the Company. This opposition proceeding is now pending before the Trademark Trial and Appeal Board of the United States Patent and Trademark Office. On April 13, 2020, SHRG IP Holdings, LLC filed an answer to the Notice of Opposition. A scheduling order has been entered and the parties have exchanged initial disclosures. This matter remains pending. (k) In March 2019, the Company engaged in preliminary discussions with various independent contractor distributors of its subsidiaries regarding a previously reported dispute concerning the issuance of stock warrants based on the satisfaction of certain individual sales production metrics. Please see Note 2 - SIGNIFICANT ACCOUNTING POLICIES - Sales Commissions for more information about the stock warrants liability associated with this matter. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Oct. 31, 2020 | |
Accounting Policies [Abstract] | |
Reclassifications | Reclassifications Certain reclassifications have been made to the prior year data to conform with the current period’s presentation. |
Comprehensive Income | Comprehensive Income For the fiscal periods included in this Quarterly Report, the only component of the Company’s comprehensive income is the Company’s net earnings. Accordingly, the Company does not present a consolidated statement of comprehensive income. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements in accordance with GAAP requires the use of judgment and requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosures about contingent assets and liabilities, if any. Matters that require the use of estimates and assumptions include: the recoverability of accounts receivable, the valuation of inventory, the useful lives of fixed assets, the assessment of long-lived assets for impairment, the nature and timing of satisfaction of performance obligations resulting from contracts with customers, allocation of the transaction price to multiple performance obligations in a sales transaction, the measurement and recognition of right-of-use assets and related lease liabilities, the valuation of stock-based compensation awards, the measurement and recognition of uncertain tax positions, and the valuation of loss contingencies, if any. Actual results may differ from these estimates in amounts that may be material to our consolidated financial statements. We believe that the estimates and assumptions used in the preparation of our consolidated financial statements are reasonable. However, we believe that the public’s fear of exposure to and/or the actual impact of the COVID-19 virus, as well as past actions taken to mitigate the spread of the virus, have had and continue to have a materially adverse impact on the economy of the U. S. and Canada, and has resulted in a significant number of workers becoming unemployed or underemployed in both countries. Consumer demand for discretionary products such as ours is sensitive to downturns in the economy, increases in unemployment, or decreases in perceived employment security. The full impact on our business of changes in consumer demand resulting from the current economic downturn, increased unemployment, reduced consumer confidence, and public fear of exposure to the virus cannot reasonably be determined, but the impact may be significant and protracted. Accordingly, it is possible that estimates made in the Company’s consolidated financial statements have been, or will be, materially impacted as a result of these uncertainties. These may include, among other things, estimates regarding losses on inventory, impairment losses related to long-lived assets, the nature and timing of satisfaction of performance obligations resulting from contracts with customers, and the valuation of loss contingencies. |
Revenue Recognition | Revenue Recognition The Company derives revenue only from the sale of its products and services and recognizes revenue net of amounts due to taxing authorities (such as local and state sales tax). Our customers place sales orders online and through our “back-office” operations, which creates a contract and establishes the transaction price. The Company recognizes revenue when (or as) it transfers control of the promised goods and services to the customer. With respect to products sold, our performance obligation is satisfied upon receipt of the products by the customer. With respect to subscription-based revenue, including Elepreneurs membership fees, our performance obligation is satisfied over time (up to one year). The timing of our revenue recognition may differ from the time when we invoice the customer and/or collect payment. The Company has elected to treat shipping and handling costs as an activity to fulfill its performance obligations, rather than a separate performance obligation. Deferred sales revenue associated with product invoiced but not received by customers at the balance sheet date was $1.1 million and $2.7 million as of October 31, 2020 and April 30, 2020, respectively. In addition, as of October 31, 2020 and April 30, 2020, deferred sales revenue associated with our unfulfilled performance obligations for services offered on a subscription basis was $260,182 and $433,386, and deferred sales revenue associated with our performance obligations for customers’ right of return was $120,914 and $263,117, respectively. Deferred sales revenue is expected to be recognized over one year. During the six months ended October 31, 2020, no individual customer, or related group of customers, represents 10% or more of our consolidated net sales, and approximately 45% of our consolidated net sales were to recurring customers (which we refer to as “SmartShip” sales), approximately 28% were to new customers and approximately 27% were to our independent distributors. During the six months ended October 31, 2020 and 2019, approximately 94% and 95%, respectively, of our consolidated net sales are to our customers and/or independent distributors located in the United States. During the six months ended October 31, 2020, approximately 99% of our consolidated net sales are from our health and wellness products (including approximately 5% from the sale of coffee and coffee-related products, 48% from the sale of other Nutraceutical products, and approximately 46% from the sale of all other health and wellness products). During the six months ended October 31, 2019, approximately 98% of our consolidated net sales are from the sale of our Elevate product line (including 25% from the sales of coffee and coffee-related products, 52% from the sale of other Nutraceutical products, and approximately 21% from the sale of all other health and wellness products). During both the six months ended October 31, 2020 and 2019, product purchases from one supplier accounted for approximately 98% of our total product purchases. |
Sales Commissions | Sales Commissions The Company recognizes sales commission expense, when incurred, in accordance with GAAP. During the three months ended October 31, 2020 and 2019, sales commission expense was $8.4 million and $18.2 million, respectively. During the six months ended October 31, 2020 and 2019, sales commission expense was $17.8 million and $33.6 million, respectively. In the six months ended October 31, 2020, the Company issued to members of its independent sales force who had been offered stock warrants under the 2019 Sales-Related Warrants program more fully discussed in Note 2 of the Notes to Consolidated Financial Statements for our fiscal year ended April 30, 2020 and met other qualifications (mainly related to remaining active distributors), fully vested warrants to purchase up to 3,747,600 shares its common stock with an estimated aggregate fair value of $1.4 million (the “2020 Sales-Related Warrants”). The 2020 Sales-Related Warrants are exercisable for a period of one year from the issuance date at the exercise price of $0.01 per share. The rights conferred by the 2020 Sales-Related Warrants are not subject to service conditions and all other conditions necessary to earn the award have been satisfied. The Company deems the fair value of the warrants granted to members of its independent contractor sales force to be an element of sales compensation expense. The Company recognized incremental sales compensation expense of $140,911 in connection with stock warrants issued under the 2020 Sales-Related Warrants program to holders of unexercised equity-based awards under the predecessor plan that are deemed modified, as defined by GAAP. In addition, the Company recognized sales compensation expense of $1,045,644 in connection with stock warrants issued under the 2020 Sales-Related Warrants program to participants of the predecessor plan who had not yet accepted the terms of the 2019 Sales-Related Warrants (but accepted the new award). Further, in the six months ended October 31, 2020, the Company derecognized sales compensation expense of $1.1 million in connection with stock warrants previously offered under the 2019 Sales-Related Warrants program that were terminated or forfeited, including warrants no longer deemed probable of exercise. At October 31, 2020 and April 30, 2020, accrued sales compensation payable was $5,012,957 and $7,983,536, respectively, including $101,510 and $1,290,477, respectively, in estimated sales compensation contingently payable with stock warrants in connection with the 2019 Sales-Related Warrants program. |
Recently Issued Accounting Standards - Recently Adopted | Recently Issued Accounting Standards - Recently Adopted In November 2019, the FASB issued ASU No. 2019-08, Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements – Share-based Consideration Payable to a Customer Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-based Payment Accounting In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Fair Value Measurement |
Recently Issued Accounting Standards - Pending Adoption | Recently Issued Accounting Standards - Pending Adoption In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes |
Fair Value Measurements of Fi_2
Fair Value Measurements of Financial Instruments (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets and Liabilities | Consistent with the valuation hierarchy contained in ASC Topic 820, we categorized certain of our financial assets and liabilities as follows: October 31, 2020 Total Level 1 Level 2 Level 3 Assets Notes receivable $ 30,000 $ - $ - $ 30,000 Total assets $ 30,000 $ - $ - $ 30,000 Liabilities Note Payable $ 1,040,400 $ - $ - $ 1,040,400 Convertible notes payable 125,987 - - 125,987 Total liabilities $ 1,166,387 $ - $ - $ 1,166,387 April 30, 2020 Total Level 1 Level 2 Level 3 Assets Notes receivable $ 118,047 $ - $ - $ 118,047 Investments in unconsolidated entities 20,000 - - 20,000 Total assets $ 138,047 $ - $ - $ 138,047 Liabilities Convertible notes payable $ 115,745 $ - $ - $ 115,745 Total liabilities $ 115,745 $ - $ - $ 115,745 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Earnings (loss) per share: | |
Schedule of Computations of Basic and Diluted Earnings Per Share | The following table sets forth the computations of basic and diluted earnings (loss) per share: Three Months Ended October 31, Six Months Ended October 31, 2020 2019 2020 2019 Net earnings (loss), as reported $ 1,851,356 $ (1,231,222 ) $ 757,980 $ (2,085,728 ) After tax interest adjustment 6,354 - 11,594 - Net earnings (loss), if-converted basis $ 1,857,710 $ (1,231,222 ) $ 769,574 $ (2,085,728 ) Weighted average basic shares 203,227,398 132,500,548 171,497,718 128,185,221 Dilutive securities and instruments: Convertible preferred stock 18,476,413 - 31,304,851 - Convertible notes 10,406,100 - 10,406,100 - Stock options and warrants 28,745,376 - 28,167,714 - Weighted average diluted shares 260,855,287 132,500,548 241,376,383 128,185,221 Earnings (loss) per share: Basic $ 0.01 $ (0.01 ) $ 0.00 $ (0.02 ) Diluted $ 0.01 $ (0.01 ) $ 0.00 $ (0.02 ) |
Summary of Potentially Dilutive Instruments Outstanding | The following potentially dilutive securities and instruments were outstanding during the three and six months ended October 31, 2019 but excluded from the calculation of loss per share because their impact would be anti-dilutive: Convertible notes 69,259,756 Convertible preferred stock 46,285,924 Stock warrants 21,585,167 Total incremental shares 137,130,847 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | Other current assets consist of the following: October 31, 2020 April 30, 2020 Prepaid expenses, including $878,315 for inventory-related deposits as of October 31 $ 1,188,578 $ 404,089 Right to recover asset 33,621 76,103 Employee advances and other 349,766 554,787 $ 1,571,965 $ 1,034,979 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment consist of the following: October 31, 2020 April 30, 2020 Furniture and fixtures $ 230,685 $ 224,239 Computer equipment and software 168,563 155,493 Leasehold improvements 106,877 106,877 Office equipment 31,652 31,652 Total property and equipment 537,777 518,261 Accumulated depreciation and amortization (304,479 ) (219,878 ) Property and equipment, net $ 233,298 $ 298,383 |
Accrued and Other Current Lia_2
Accrued and Other Current Liabilities (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Payables and Accruals [Abstract] | |
Summary of Accrued and Other Current Liabilities | Accrued and other current liabilities consist of the following: October 31, 2020 April 30, 2020 Payroll and employee benefits $ 340,696 $ 1,199,950 Lease liability, current portion 457,430 476,950 Accrued interest payable 23,204 15,419 Other operational accruals, including accrued severance expense of $1,005,000 as of October 31 1,250,853 425,166 $ 2,072,183 $ 2,117,485 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes Payable | Convertible notes payable consists of the following: Conversion Price Issuance Date Maturity Date (per share) October 31, 2020 April 30, 2020 October 2017 October 2022 $ 0.15 $ 50,000 $ 50,000 April 2018 April 2021 $ 0.01 100,000 100,000 Total convertible notes payable 150,000 150,000 Less: unamortized debt discount and deferred financing fees 24,013 34,255 125,987 115,745 Less: current portion of convertible notes payable 95,360 90,157 Long-term convertible notes payable $ 30,627 $ 25,588 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Leases [Abstract] | |
Schedule of Operating Lease Assets and Liabilities | The following information pertains to the Company’s leases as of the balance sheet dates indicated: Assets Classification October 31, 2020 April 30, 2020 Operating leases Right-of-use assets, net $ 477,871 $ 800,381 Total leased assets $ 477,871 $ 800,381 Liabilities Operating leases Accrued and other current liabilities $ 457,430 $ 476,950 Operating leases Lease liability, long-term 42,595 343,948 Total lease liability $ 500,025 $ 820,898 |
Schedule of Operating Lease Costs | The following information pertains to the Company’s leases for the periods indicated: Three Months Ended October 31, Lease cost Classification 2020 2019 Operating lease cost General and administrative expenses $ 130,275 $ 148,066 Operating lease cost Depreciation and amortization - - Operating lease cost Interest expense, net - - Total lease cost $ 130,275 $ 148,066 Six Months Ended October 31, Lease cost Classification 2020 2019 Operating lease cost General and administrative expenses $ 270,498 $ 298,782 Operating lease cost Depreciation and amortization - - Operating lease cost Interest expense, net - - Total lease cost $ 270,498 $ 298,782 |
Schedule of Operating Lease Liability Payable | The Company’s lease liability is payable as follows: Twelve months ending October 31, 2021 $ 457,430 2022 42,595 2023-2025 - Thereafter - Total lease liability $ 500,025 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Rate Reconciliation Rate | For the six months ended October 31, 2020, our income tax rate reconciliation is as follows: Federal statutory rate 21.0 % State income taxes and franchise tax 28.2 % Stock-based compensation and other (17.2 )% Effective tax rate 32.0 % |
Schedule of Provision for Income Taxes | Our consolidated provision for (benefit from) income taxes is as follows: Three Months Ended October 31, 2020 Six Months Ended October 31, 2020 Current: Federal $ (200,000 ) $ 108,300 State and local 196,327 314,312 Total current (3,673 ) 422,612 Deferred: Federal 501,156 (66,621 ) State and local - - Total deferred 501,156 (66,621 ) Total consolidated income tax provision $ 497,483 $ 355,991 |
Schedule of Deferred Tax Asset Liability | As of October 31, 2020, our deferred tax asset (liability) is as follows: Gross deferred tax asset: Stock-based compensation $ 1,200,299 Accruals and reserves not currently deductible 268,545 Total deferred tax assets 1,468,844 Total deferred tax liability - Total consolidated deferred tax assets, net $ 1,468,844 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Equity [Abstract] | |
Schedule of Warrant Activity | The following table summarizes the activity relating to the Company’s warrants during the six months ended October 31, 2020: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Term Outstanding at April 30, 2020 26,883,933 $ 0.04 4.2 Warrants granted 29,275,800 $ 0.15 Warrants exercised (10,780,200 ) $ 0.0017 Outstanding at October 31, 2020 45,379,533 $ 0.11 4.0 |
Summary of Warrant Outstanding and Exercisable Warrants | The following table summarizes certain information relating to outstanding and exercisable warrants: Warrants Outstanding at October 31, 2020 Warrants Outstanding Warrants Exercisable Weighted Weighted Weighted Number of Contractual Exercise Number of Exercise 13,000,000 4.3 $ 0.0001 13,000,000 $ 0.0001 16,500,000 5.4 $ 0.13 10,906,580 $ 0.13 10,000,000 2.7 $ 0.20 10,000,000 $ 0.20 1,298,800 .4 $ 0.25 1,298,800 $ 0.25 2,180,000 2.6 $ 0.04 2,180,000 $ 0.04 1,967,400 .9 $ 0.01 1,967,400 $ 0.01 333,333 1.9 $ 0.15 333,333 $ 0.15 100,000 1.4 $ 3.00 100,000 $ 3.00 |
Significant Accounting Polici_3
Significant Accounting Policies (Details Narrative) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Oct. 31, 2020USD ($) | Oct. 31, 2019USD ($) | Oct. 31, 2020USD ($)Supplier | Oct. 31, 2019USD ($)Supplier | Apr. 30, 2020USD ($)$ / sharesshares | |
Deferred sales revenue | $ 1,100,000 | $ 1,100,000 | $ 2,700,000 | ||
Sales commission expense | 8,400,000 | $ 18,200,000 | 17,800,000 | $ 33,600,000 | |
Sales commission payable | 5,012,956 | 5,012,956 | 7,983,536 | ||
2020 Sales-Related Warrants [Member] | |||||
Sales commission expense | $ 1,045,644 | ||||
Warrants to purchase | shares | 3,747,600 | ||||
Fair value of warrants | $ 1,400,000 | ||||
Warrants exercise price | $ / shares | $ 0.01 | ||||
Incremental sales compensation expense | $ 140,911 | ||||
2019 Sales-Related Warrants [Member] | |||||
Sales commission expense | 1,100,000 | ||||
Sales commission payable | 101,510 | $ 101,510 | 1,290,477 | ||
Sales Revenue, Net [Member] | Coffee and Coffee Related Products [Member] | |||||
Concentration risk, percentage | 5.00% | 25.00% | |||
Sales Revenue, Net [Member] | Other Nutraceutical Products [Member] | |||||
Concentration risk, percentage | 48.00% | 52.00% | |||
Sales Revenue, Net [Member] | Other Health and Wellness Products [Member] | |||||
Concentration risk, percentage | 46.00% | 21.00% | |||
Sales Revenue, Net [Member] | No Individual Customer [Member] | |||||
Concentration risk, percentage | 10.00% | ||||
Sales Revenue, Net [Member] | Recurring Customers [Member] | |||||
Concentration risk, percentage | 45.00% | ||||
Sales Revenue, Net [Member] | New Customer [Member] | |||||
Concentration risk, percentage | 28.00% | ||||
Sales Revenue, Net [Member] | Independent Distributors [Member] | |||||
Concentration risk, percentage | 27.00% | ||||
Sales Revenue, Net [Member] | Elevate Product Line [Member] | |||||
Concentration risk, percentage | 99.00% | 98.00% | |||
Purchases [Member] | One Supplier [Member] | |||||
Concentration risk, percentage | 98.00% | 98.00% | |||
Number of suppliers | Supplier | 1 | 1 | |||
Services Offered on Subscription Basis [Member] | |||||
Deferred sales revenue | 260,182 | $ 260,182 | 433,386 | ||
Customers Right of Return [Member] | |||||
Deferred sales revenue | $ 120,914 | $ 120,914 | $ 263,117 |
Fair Value Measurements of Fi_3
Fair Value Measurements of Financial Instruments - Summary of Financial Assets and Liabilities (Details) - USD ($) | Oct. 31, 2020 | Apr. 30, 2020 |
Notes receivable | $ 30,000 | $ 118,047 |
Investments in unconsolidated entities | 20,000 | |
Total assets | 30,000 | 138,047 |
Note payable | 1,040,400 | |
Convertible notes payable | 125,987 | 115,745 |
Total liabilities | 1,166,387 | 115,745 |
Level 1 [Member] | ||
Notes receivable | ||
Investments in unconsolidated entities | ||
Total assets | ||
Note payable | ||
Convertible notes payable | ||
Total liabilities | ||
Level 2 [Member] | ||
Notes receivable | ||
Investments in unconsolidated entities | ||
Total assets | ||
Note payable | ||
Convertible notes payable | ||
Total liabilities | ||
Level 3 [Member] | ||
Notes receivable | 30,000 | 118,047 |
Investments in unconsolidated entities | 20,000 | |
Total assets | 30,000 | 138,047 |
Note payable | 1,040,400 | |
Convertible notes payable | 125,987 | 115,745 |
Total liabilities | $ 1,166,387 | $ 115,745 |
Earnings (Loss) Per Share - Sch
Earnings (Loss) Per Share - Schedule of Computations of Basic and Diluted Earnings Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
Net earnings (loss), as reported | $ 1,851,356 | $ (1,231,222) | $ 757,980 | $ (2,085,728) |
After tax interest adjustment | 6,354 | 11,594 | ||
Net earnings (loss), if-converted basis | $ 1,857,710 | $ (1,231,222) | $ 769,574 | $ (2,085,728) |
Weighted average basic shares | 203,227,398 | 132,500,548 | 171,497,718 | 128,185,221 |
Weighted average diluted shares | 260,855,287 | 132,500,548 | 241,376,383 | 128,185,221 |
Earnings (loss) per share: Basic | $ 0.01 | $ (0.01) | $ 0.01 | $ (0.02) |
Earnings (loss) per share: Diluted | $ 0.01 | $ (0.01) | $ 0 | $ (0.02) |
Convertible Preferred Stock [Member] | ||||
Weighted average diluted shares | 18,476,413 | 31,304,851 | ||
Convertible Notes [Member] | ||||
Weighted average diluted shares | 10,406,100 | 10,406,100 | ||
Stock Options and Warrants [Member] | ||||
Weighted average diluted shares | 28,745,376 | 28,167,714 |
Earnings (Loss) Per Share - Sum
Earnings (Loss) Per Share - Summary of Potentially Dilutive Instruments Outstanding (Details) - shares | 3 Months Ended | 6 Months Ended |
Oct. 31, 2019 | Oct. 31, 2019 | |
Total incremental shares | 137,130,847 | 137,130,847 |
Convertible Notes [Member] | ||
Total incremental shares | 69,259,756 | 69,259,756 |
Convertible Preferred Stock [Member] | ||
Total incremental shares | 46,285,924 | 46,285,924 |
Stock Warrants [Member] | ||
Total incremental shares | 21,585,167 | 21,585,167 |
Notes Receivable (Details Narra
Notes Receivable (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jan. 31, 2020 | Oct. 31, 2020 | Oct. 31, 2019 | Apr. 30, 2020 | Apr. 30, 2019 | |
Proceeds from notes receivable | $ 88,047 | ||||
Impairment loss | $ 46,404 | ||||
Promissory Note One [Member] | |||||
Principal of notes receivable | $ 58,047 | ||||
Promissory Note Two [Member] | |||||
Principal of notes receivable | $ 30,000 | 60,000 | |||
Merchant Processors [Member] | |||||
Proceeds from notes receivable | $ 58,047 | $ 106,404 |
Other Current Assets - Schedule
Other Current Assets - Schedule of Other Current Assets (Details) - USD ($) | Oct. 31, 2020 | Apr. 30, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses, including $878,315 for inventory-related deposits as of October 31 | $ 1,188,578 | $ 404,089 |
Right to recover asset | 33,621 | 76,103 |
Employee advances and other | 349,766 | 554,787 |
Other current assets | $ 1,571,965 | $ 1,034,979 |
Other Current Assets - Schedu_2
Other Current Assets - Schedule of Other Current Assets (Details) (Parenthetical) | Oct. 31, 2020USD ($) |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid inventory purchases | $ 878,315 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization expense | $ 42,384 | $ 16,961 | $ 84,601 | $ 111,550 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) | Oct. 31, 2020 | Apr. 30, 2020 |
Property, Plant and Equipment [Abstract] | ||
Furniture and fixtures | $ 230,685 | $ 224,239 |
Computer equipment and software | 168,563 | 155,493 |
Leasehold improvements | 106,877 | 106,877 |
Office equipment | 31,652 | 31,652 |
Total property and equipment | 537,777 | 518,261 |
Accumulated depreciation and amortization | (304,479) | (219,878) |
Property and equipment, net | $ 233,298 | $ 298,383 |
Note Payable (Details Narrative
Note Payable (Details Narrative) - USD ($) | 1 Months Ended | |
May 31, 2020 | Oct. 31, 2020 | |
Note payable principal amount | $ 1,040,400 | |
Accrued unpaid interest | $ 4,760 | |
Commercial Bank [Member] | PPP Loan [Member] | ||
Proceeds from loan | $ 1,040,400 | |
Debt instrument, maturity date | May 13, 2022 | |
Debt instrument, interest rate | 1.00% |
Accrued and Other Current Lia_3
Accrued and Other Current Liabilities - Summary of Accrued and Other Current Liabilities (Details) - USD ($) | Oct. 31, 2020 | Apr. 30, 2020 |
Payables and Accruals [Abstract] | ||
Payroll and employee benefits | $ 340,696 | $ 1,199,950 |
Lease liability, current portion | 457,430 | 476,950 |
Accrued interest payable | 23,204 | 15,419 |
Other operational accruals, including accrued severance expense of $1,005,000 as of October 31 | 1,250,853 | 425,166 |
Accrued and other current liabilities | $ 2,072,183 | $ 2,117,485 |
Accrued and Other Current Lia_4
Accrued and Other Current Liabilities - Summary of Accrued and Other Current Liabilities (Details) (Parenthetical) | 6 Months Ended |
Oct. 31, 2020USD ($) | |
Payables and Accruals [Abstract] | |
Accrued severance expense | $ 1,005,000 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
Interest expense | $ 8,271 | $ 145,787 | $ 17,399 | $ 471,737 | |
Convertible Notes [Member] | |||||
Convertible notes, annual interest rate | 12.00% | ||||
Interest expense | 1,512 | 16,802 | $ 3,025 | 43,711 | |
Amortization expense related to debt | $ 5,120 | $ 2,519 | $ 10,242 | $ 5,040 | |
April 2018 [Member] | |||||
Maturity date description | Extended the maturity date of the note to April 2021. |
Convertible Notes Payable - Sch
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Oct. 31, 2020 | Apr. 30, 2020 | |
Total convertible notes payable | $ 150,000 | $ 150,000 |
Less: unamortized debt discount and deferred financing fees | 24,013 | 34,255 |
Convertible notes payable, net | 125,987 | 115,745 |
Less: current portion of convertible notes payable | 95,360 | 90,157 |
Long-term convertible notes payable | $ 30,627 | $ 25,588 |
Maturity One [Member] | ||
Issuance Date | October 2017 | October 2017 |
Maturity Date | October 2022 | October 2022 |
Conversion Price (per share) | $ 0.15 | $ 0.15 |
Total convertible notes payable | $ 50,000 | $ 50,000 |
Maturity Two [Member] | ||
Issuance Date | April 2018 | April 2018 |
Maturity Date | April 2021 | April 2021 |
Conversion Price (per share) | $ 0.01 | $ 0.01 |
Total convertible notes payable | $ 100,000 | $ 100,000 |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Assets and Liabilities (Details) - USD ($) | Oct. 31, 2020 | Apr. 30, 2020 |
Operating leases, Right-of-use assets, net | $ 477,871 | $ 800,381 |
Operating leases, Accrued and other current liabilities | 457,430 | 476,950 |
Operating leases, Lease liability, long-term | 42,595 | 343,948 |
Lease Liability [Member] | ||
Operating leases, Right-of-use assets, net | 477,871 | 800,381 |
Total leased assets | 477,871 | 800,381 |
Operating leases, Accrued and other current liabilities | 457,430 | 476,950 |
Operating leases, Lease liability, long-term | 42,595 | 343,948 |
Total lease liability | $ 500,025 | $ 820,898 |
Leases - Schedule of Operatin_2
Leases - Schedule of Operating Lease Costs (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
Total lease cost | $ 130,275 | $ 148,066 | $ 270,498 | $ 298,782 |
General and Administrative Expenses [Member] | ||||
Total lease cost | 130,275 | 148,066 | 270,498 | 298,782 |
Depreciation and Amortization [Member] | ||||
Total lease cost | ||||
Interest Expense, Net [Member] | ||||
Total lease cost |
Leases - Schedule of Operatin_3
Leases - Schedule of Operating Lease Liability Payable (Details) | Oct. 31, 2020USD ($) |
Leases [Abstract] | |
2021 | $ 457,430 |
2022 | 42,595 |
2023-2025 | |
Thereafter | |
Total lease liability | $ 500,025 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Oct. 31, 2020 | Oct. 31, 2020 | Apr. 30, 2020 | Apr. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Operating earnings | $ 9,700,000 | $ 1,000,000 | ||
Current provision for federal income taxes | $ (200,000) | $ 108,300 | ||
Provision for state and local income taxes | 196,327 | 314,312 | ||
Deferred income tax provision | 501,156 | (66,621) | 1,600,000 | |
Current provision for income taxes | $ (3,673) | $ 422,612 | $ 2,100,000 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income tax Rate Reconciliation Rate (Details) | 6 Months Ended |
Oct. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Federal statutory rate | 21.00% |
State income taxes and franchise tax | 28.20% |
Stock-based compensation and other | (17.20%) |
Effective tax rate | 32.00% |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | Apr. 30, 2020 | |
Income Tax Disclosure [Abstract] | |||||
Current, Federal | $ (200,000) | $ 108,300 | |||
Current, State and local | 196,327 | 314,312 | |||
Total current | (3,673) | 422,612 | $ 2,100,000 | ||
Deferred, Federal | 501,156 | (66,621) | $ 1,600,000 | ||
Deferred, State and local | |||||
Total deferred | 501,156 | (66,622) | |||
Total consolidated income tax benefit | $ 497,483 | $ 1,075,000 | $ 355,991 | $ 1,375,000 |
Income Taxes - Schedule of Def
Income Taxes - Schedule of Deferred Tax Asset Liability (Details) | Oct. 31, 2020USD ($) |
Income Tax Disclosure [Abstract] | |
Stock-based compensation | $ 1,200,299 |
Accruals and reserves not currently deductible | 268,545 |
Total deferred tax assets | 1,468,844 |
Total deferred tax liability | |
Total consolidated deferred tax assets, net | $ 1,468,844 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Oct. 31, 2020 | Jul. 23, 2020 | Jul. 22, 2020 | Oct. 31, 2020 | Aug. 31, 2020 | Oct. 31, 2017 | Oct. 31, 2020 | Oct. 31, 2019 |
Number of shares purchased | 17,500,000 | |||||||
Number of shares purchased, amount | $ 899,500 | $ 500 | ||||||
HWH International, Inc [Member] | ||||||||
Debt instrument, face amount | $ 50,000 | |||||||
Maturity date, description | October 2022 | |||||||
Bear Bull Market Dividends, Inc. [Member] | ||||||||
Conversion of common stock shares converted | 20,000,000 | |||||||
Conversion purchase price per share | $ 0.0525 | |||||||
Conversion of shares, amount | $ 1,050,000 | |||||||
MLM Mafia, Inc [Member] | ||||||||
Conversion purchase price per share | $ 0.0514 | |||||||
Number of shares purchased | 17,500,000 | |||||||
Number of shares purchased, amount | $ 899,500 | |||||||
Number of intends to retire of shares repurchased | 17,500,000 | |||||||
Nevada Revised Statutes [Member] | ||||||||
Number of shares purchased | 17,500,000 | |||||||
Class A Shares [Member] | ||||||||
Number of shares issued | 30,000,000 | |||||||
Class A Shares [Member] | Stock Disposition and Release Provisions [Member] | ||||||||
Conversion of common stock shares converted | 25,000,000 | |||||||
Class A Shares [Member] | Bear Bull Market Dividends, Inc. [Member] | ||||||||
Remaining shares of converted shares | 5,000,000 | |||||||
Class A Shares [Member] | MLM Mafia, Inc [Member] | ||||||||
Remaining shares of converted shares | 2,500,000 | |||||||
Decentralized Sharing Systems, Inc [Member] | Class A Shares [Member] | ||||||||
Number of common stock were owned | 74,100,000 | |||||||
Number of shares issuable upon exercise of warrants | 10,000,000 | |||||||
Stock Purchase and Share Subscription Agreement [Member] | Class A Shares [Member] | ||||||||
Number of shares issued | 30,000,000 | |||||||
Stock Purchase and Share Subscription Agreement [Member] | Mr. Chan [Member] | ||||||||
Investment amount | $ 3,000,000 | |||||||
Stock Purchase and Share Subscription Agreement [Member] | Mr. Chan [Member] | Class A Shares [Member] | ||||||||
Number of common stock exchanged | 30,000,000 | |||||||
Warrants to purchase common stock | 10,000,000 | |||||||
Exercise price of warrants | $ 0.20 | |||||||
Share price per share | $ 0.177 | |||||||
Deemed dividend | $ 2,400,000 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | |||
Sep. 30, 2020 | Aug. 31, 2020 | Oct. 31, 2020 | Oct. 31, 2019 | Apr. 30, 2020 | |
Value of shares issued during period | $ 3,000,000 | ||||
Number of shares purchased | 17,500,000 | ||||
Decentralized Sharing Systems, Inc [Member] | |||||
Value of shares issued during period | $ 3,000,000 | ||||
Decentralized Sharing Systems, Inc [Member] | Warrant [Member] | |||||
Warrants to purchase common stock | 10,000,000 | ||||
Warrants exercise price | $ 0.20 | ||||
Series A Convertible Preferred Stock [Member] | |||||
Preferred stock, shares outstanding | 6,100,000 | 32,478,750 | |||
Series A Convertible Preferred Stock [Member] | Bear Bull Market Dividends, Inc. [Member] | |||||
Number of shares issued during period, shares | 20,000,000 | ||||
Preferred stock, shares outstanding | 6,100,000 | ||||
Series A Convertible Preferred Stock [Member] | Bear Bull Market Dividends, Inc. [Member] | Holders [Member] | |||||
Number of shares issued during period, shares | 750,000 | ||||
Class A Shares [Member] | |||||
Number of shares issued during period, shares | 30,000,000 | ||||
Common stock, shares issued | 196,700,833 | 126,072,386 | |||
Common stock, shares outstanding | 196,700,833 | 126,072,386 | |||
Class A Shares [Member] | Warrant [Member] | |||||
Warrants to purchase common stock | 5,488,247 | ||||
Class A Shares [Member] | Alchemist Holding, LLC [Member] | |||||
Conversion of shares | 7,500,000 | ||||
Class A Shares [Member] | Holders [Member] | |||||
Conversion of shares | 20,000,000 | ||||
Class A Shares [Member] | Robert Oblon [Member] | |||||
Number of shares issued during period, shares | 10,000,000 | ||||
Class A Shares [Member] | Employees [Member] | |||||
Number of shares issued during period, shares | 5,488,247 | ||||
Exercise of warrants | 5,488,247 | ||||
Class A Shares [Member] | Employees [Member] | Warrant [Member] | |||||
Value of shares issued during period | $ 9,000,000 | ||||
Class A Shares [Member] | Company Distributors [Member] | |||||
Exercise of warrants | 1,780,200 | ||||
Class A Shares [Member] | Company Distributors [Member] | Warrant [Member] | |||||
Value of shares issued during period | $ 1,780,200 | ||||
Class A Shares [Member] | Bear Bull Market Dividends, Inc. [Member] | |||||
Conversion of shares | 20,000,000 | 110,000 | |||
Class A Shares [Member] | Bear Bull Market Dividends, Inc. [Member] | Alchemist Holding, LLC [Member] | |||||
Conversion of shares | 7,500,000 | ||||
Class A Shares [Member] | Bear Bull Market Dividends, Inc. [Member] | Holders [Member] | |||||
Conversion of shares | 750,000 | ||||
Class A Shares [Member] | Bear Bull Market Dividends, Inc. [Member] | Purported Holder [Member] | |||||
Conversion of shares | 2,500,000 | 20,000,000 | |||
Class A Shares [Member] | Decentralized Sharing Systems, Inc [Member] | Warrant [Member] | |||||
Warrants to purchase common stock | 10,000,000 | ||||
Warrants exercise price | $ 0.20 | ||||
Series B Convertible Preferred Stock [Member] | |||||
Preferred stock, shares outstanding | 10,000,000 | ||||
Series B Convertible Preferred Stock [Member] | Bear Bull Market Dividends, Inc. [Member] | |||||
Number of shares issued during period, shares | 2,500,000 | ||||
Preferred stock, shares outstanding | |||||
Series B Convertible Preferred Stock [Member] | Bear Bull Market Dividends, Inc. [Member] | Alchemist Holding, LLC [Member] | |||||
Number of shares issued during period, shares | 7,500,000 | ||||
Class B Shares [Member] | |||||
Common stock, shares issued | 10,000,000 | ||||
Common stock, shares outstanding | 10,000,000 | ||||
Class B Shares [Member] | Holders [Member] | |||||
Conversion of shares | 10,000,000 | ||||
Class B Shares [Member] | Bear Bull Market Dividends, Inc. [Member] | |||||
Conversion of shares | 2,500,000 | ||||
Class B Shares [Member] | Alchemist [Member] | |||||
Number of shares issued during period, shares | 7,500,000 | ||||
Series C Convertible Preferred Stock [Member] | |||||
Preferred stock, shares outstanding | 3,380,000 | 3,380,000 | |||
Series C Convertible Preferred Stock [Member] | Bear Bull Market Dividends, Inc. [Member] | |||||
Number of shares issued during period, shares | 110,000 | ||||
Preferred stock, shares outstanding | 3,380,000 | ||||
Series B Preferred Stock [Member] | |||||
Number of shares issued during period, shares | |||||
Conversion of shares | (10,000,000) | ||||
Value of shares issued during period | |||||
Exercise of warrants | |||||
Number of shares purchased | |||||
Series B Preferred Stock [Member] | Holders [Member] | |||||
Number of shares issued during period, shares | 10,000,000 | ||||
Series A Preferred Stock [Member] | |||||
Number of shares issued during period, shares | |||||
Conversion of shares | (20,750,000) | (10,400,000) | |||
Value of shares issued during period | |||||
Exercise of warrants | |||||
Number of shares purchased | |||||
Series A Preferred Stock [Member] | Holders [Member] | |||||
Number of shares issued during period, shares | 750,000 | ||||
Conversion of shares | 750,000 | ||||
Series A Preferred Stock [Member] | Bear Bull Market Dividends, Inc. [Member] | Purported Holder [Member] | |||||
Number of shares issued during period, shares | 2,500,000 | 20,000,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Warrant Activity (Details) - Warrant [Member] | 6 Months Ended |
Oct. 31, 2020$ / sharesshares | |
Number of Warrants, Outstanding, Beginning of Period | shares | 26,883,933 |
Number of Warrants, Granted | shares | 29,275,800 |
Number of Warrants, Exercised | shares | (10,780,200) |
Number of Warrants, Outstanding, End of Period | shares | 45,379,533 |
Weighted Average Exercise Price, Outstanding, Beginning of Period | $ / shares | $ 0.04 |
Weighted Average Exercise Price, Granted | $ / shares | 0.15 |
Weighted Average Exercise Price, Exercised | $ / shares | 0.0017 |
Weighted Average Exercise Price, Outstanding, End of Period | $ / shares | $ 0.11 |
Weighted Average Remaining Term, Beginning of Period | 4 years 2 months 12 days |
Weighted Average Remaining Term, End of Period | 4 years |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Warrant Outstanding and Exercisable Warrants (Details) | 6 Months Ended |
Oct. 31, 2020$ / sharesshares | |
Warrant One [Member] | |
Number of shares, Warrants Outstanding | shares | 13,000,000 |
Weighted Average Remaining Contractual life (in years), Warrants Outstanding | 4 years 3 months 19 days |
Weighted Average Exercise Price, Warrants Outstanding | $ / shares | $ 0.0001 |
Number of shares, Warrants Exercisable | shares | 13,000,000 |
Weighted Average Exercise Price, Warrants Exercisable | $ / shares | $ 0.0001 |
Warrant Two [Member] | |
Number of shares, Warrants Outstanding | shares | 16,500,000 |
Weighted Average Remaining Contractual life (in years), Warrants Outstanding | 5 years 4 months 24 days |
Weighted Average Exercise Price, Warrants Outstanding | $ / shares | $ 0.13 |
Number of shares, Warrants Exercisable | shares | 10,906,580 |
Weighted Average Exercise Price, Warrants Exercisable | $ / shares | $ 0.13 |
Warrant Three [Member] | |
Number of shares, Warrants Outstanding | shares | 10,000,000 |
Weighted Average Remaining Contractual life (in years), Warrants Outstanding | 2 years 8 months 12 days |
Weighted Average Exercise Price, Warrants Outstanding | $ / shares | $ 0.20 |
Number of shares, Warrants Exercisable | shares | 10,000,000 |
Weighted Average Exercise Price, Warrants Exercisable | $ / shares | $ 0.20 |
Warrant Four [Member] | |
Number of shares, Warrants Outstanding | shares | 1,298,800 |
Weighted Average Remaining Contractual life (in years), Warrants Outstanding | 4 months 24 days |
Weighted Average Exercise Price, Warrants Outstanding | $ / shares | $ 0.25 |
Number of shares, Warrants Exercisable | shares | 1,298,800 |
Weighted Average Exercise Price, Warrants Exercisable | $ / shares | $ 0.25 |
Warrant Five [Member] | |
Number of shares, Warrants Outstanding | shares | 2,180,000 |
Weighted Average Remaining Contractual life (in years), Warrants Outstanding | 2 years 7 months 6 days |
Weighted Average Exercise Price, Warrants Outstanding | $ / shares | $ 0.04 |
Number of shares, Warrants Exercisable | shares | 2,180,000 |
Weighted Average Exercise Price, Warrants Exercisable | $ / shares | $ 0.04 |
Warrant Six [Member] | |
Number of shares, Warrants Outstanding | shares | 1,967,400 |
Weighted Average Remaining Contractual life (in years), Warrants Outstanding | 10 months 25 days |
Weighted Average Exercise Price, Warrants Outstanding | $ / shares | $ 0.01 |
Number of shares, Warrants Exercisable | shares | 1,967,400 |
Weighted Average Exercise Price, Warrants Exercisable | $ / shares | $ 0.01 |
Warrant Seven [Member] | |
Number of shares, Warrants Outstanding | shares | 333,333 |
Weighted Average Remaining Contractual life (in years), Warrants Outstanding | 1 year 10 months 25 days |
Weighted Average Exercise Price, Warrants Outstanding | $ / shares | $ 0.15 |
Number of shares, Warrants Exercisable | shares | 333,333 |
Weighted Average Exercise Price, Warrants Exercisable | $ / shares | $ 0.15 |
Warrant Eight [Member] | |
Number of shares, Warrants Outstanding | shares | 100,000 |
Weighted Average Remaining Contractual life (in years), Warrants Outstanding | 1 year 4 months 24 days |
Weighted Average Exercise Price, Warrants Outstanding | $ / shares | $ 3 |
Number of shares, Warrants Exercisable | shares | 100,000 |
Weighted Average Exercise Price, Warrants Exercisable | $ / shares | $ 3 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - $ / shares | 1 Months Ended | 6 Months Ended | ||
May 31, 2018 | Oct. 31, 2017 | Oct. 31, 2020 | Oct. 31, 2019 | |
Series A Preferred Stock [Member] | ||||
Number of shares converted into preferred stock | (20,750,000) | (10,400,000) | ||
Share Exchange Agreement [Member] | 561 LLC [Member] | ||||
Increased percentage of cumulative equity interest | 40.00% | |||
Stock closing bid price per share | $ 5 | |||
Share Exchange Agreement [Member] | 561 LLC [Member] | Series A Preferred Stock [Member] | ||||
Equity interest rate percentage | 25.00% | |||
Number of shares converted into preferred stock | 2,500,000 | 2,500,000 | ||
Number of additional shares issued | 2,500,000 | 2,500,000 | ||
Share Exchange Agreement [Member] | America Approved Commercial LLC [Member] | ||||
Equity interest rate percentage | 25.00% | |||
Increased percentage of cumulative equity interest | 40.00% | |||
Stock closing bid price per share | $ 5 |