Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
May 31, 2017 | Aug. 28, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | INFINITY DISTRIBUTION INC. | |
Entity Central Index Key | 1,646,916 | |
Document Type | 10-K | |
Document Period End Date | May 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --05-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 0 | |
Entity Common Stock, Shares Outstanding | 10,540,000 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,017 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | May 31, 2017 | May 31, 2016 |
Current assets: | ||
Cash | $ 2,430 | $ 4,710 |
Prepaid expenses | 30,000 | 40,000 |
Inventory | 6,052 | |
Total current assets | 38,482 | 44,710 |
Fixed assets, net | 1,972 | 2,367 |
Total assets | 40,454 | 47,077 |
Current liabilities: | ||
Accounts payable | 415 | 6,425 |
Accounts payable - related party | 7,645 | 7,509 |
Accrued executive compensation | 279,955 | 126,905 |
Accrued interest payable - related party | 9,588 | 5,013 |
Notes payable | 1,000 | |
Notes payable - related party | 46,600 | |
Convertible debt - related party, net of discount | 91,500 | 91,500 |
Total current liabilities | 436,703 | 237,352 |
Total liabilities | 436,703 | 237,352 |
Stockholders' deficit: | ||
Common stock, $0.001 par value, 100,000,000 shares authorized, 10,540,000 and 10,540,000 shares issued and 10,530,000 and 10,540,000 oustanding as of May 31, 2017 and 2016, respectively | 10,540 | 10,540 |
Additional paid in capital | 80,910 | 80,910 |
Treasury stock | (1,000) | |
Accumulated deficit | (486,699) | (281,725) |
Total stockholders' equity | (396,249) | (190,275) |
Total liabilities and stockholders' equity | $ 40,454 | $ 47,077 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | May 31, 2017 | May 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 10,540,000 | 10,540,000 |
Common stock, outstanding | 10,530,000 | 10,540,000 |
STATEMENT OF OPERATIONS
STATEMENT OF OPERATIONS - USD ($) | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Income Statement [Abstract] | ||
Revenue | ||
Operating expenses: | ||
Depreciation | 395 | 394 |
Executive compensation | 153,750 | 156,500 |
General and administrative | 15,596 | 24,476 |
Professional fees | 30,658 | 46,353 |
Total operating expenses | 200,399 | 227,723 |
Other expense: | ||
Interest expense - related party | (4,575) | (29,611) |
Total other expense | (4,575) | (29,611) |
Net loss | $ (204,974) | $ (257,334) |
Weighted average number of common shares outstanding - basic (in shares) | 10,532,274 | 10,303,579 |
Net loss per share - basic (in dollars per share) | $ (0.02) | $ (0.02) |
STATEMENT OF STOCKHOLDERS' DEFI
STATEMENT OF STOCKHOLDERS' DEFICIT - USD ($) | Preferred Shares [Member] | Common Shares [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at May. 31, 2015 | $ 10,000 | $ 27,450 | $ (24,391) | $ 13,059 | ||
Beginning balance (in shares) at May. 31, 2015 | 10,000,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock for cash | $ 54,000 | 53,460 | 54,000 | |||
Issuance of common stock for cash (In shares) | 540,000 | |||||
Net loss | (257,334) | (257,334) | ||||
Ending balance at May. 31, 2016 | $ 10,540 | 80,910 | (281,725) | (190,275) | ||
Ending balance (in shares) at May. 31, 2016 | 10,540,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Purchase treasury stock | (1,000) | |||||
Net loss | (204,974) | (204,974) | ||||
Ending balance at May. 31, 2017 | $ 10,540 | $ 80,910 | $ (1,000) | $ (486,699) | $ (396,249) | |
Ending balance (in shares) at May. 31, 2017 | 10,540,000 |
STATEMENT OF CASH FLOWS
STATEMENT OF CASH FLOWS - USD ($) | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (204,974) | $ (257,334) |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Stock issued for services | ||
Amortization of beneficial conversion feature | 0 | 25,023 |
Depreciation | 395 | 394 |
Changes in operating assets and liabilities: | ||
Decrease in prepaid expenses | 10,000 | 20,000 |
(Increase) in inventory | (6,052) | |
(Decrease) in accounts payable | (6,010) | (3,575) |
Increase in accounts payable - related party | 136 | 7,509 |
Increase in accrued executive compensation | 153,050 | 126,905 |
Increase in accrued interest payable - related party | 4,575 | 4,588 |
Net cash used in operating activities | (48,880) | (76,490) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of fixed assets | (2,761) | |
Net cash used in investing activities | (2,761) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from notes payable | 2,000 | |
Proceeds from notes payable - related party | 54,300 | |
Repayments for notes payable - related party | (8,700) | |
Proceeds from the sale of common stock | 54,000 | |
Payments for purchase of treasury stock | (1,000) | |
Net cash provided by financing activities | 46,600 | 54,000 |
NET CHANGE IN CASH | (2,280) | (25,251) |
CASH AT BEGINNING OF PERIOD | 4,710 | 29,961 |
CASH AT END OF PERIOD | 2,430 | 4,710 |
SUPPLEMENTAL INFORMATION: | ||
Interest paid | ||
Income taxes paid |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
May 31, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization The Company was incorporated on May 8, 2015 (Date of Inception) under the laws of the State of Nevada, as Infinity Distribution, Inc. Nature of operations The Company is planning to import and export furniture, cacoa and home goods. Year end The Company’s year end is May 31. Cash and cash equivalents For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value. Inventory Inventories are stated at the lower of cost (average cost) or market (net realizable value). As of May 31, 2017, the Company had raw materials of $6,052. Fixed assets The Company records all property and equipment at cost less accumulated depreciation. Improvements are capitalized while repairs and maintenance costs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful life of the assets or the lease term, whichever is shorter. Leasehold improvements include the cost of the Company’s internal development and construction department. Depreciation periods are as follows: Furniture and equipment 7 years Revenue recognition We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the product or service has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of our fees is probable. The Company will record revenue when it is realizable and earned and the services have been rendered to the customers. Advertising costs Advertising costs are anticipated to be expensed as incurred; however there were no advertising costs included in general and administrative expenses for the years ended May 31, 2017 and 2016. Fair value of financial instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of May 31, 2017 and 2016. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand. Level 1: Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations. Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants. Stock-based compensation The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award. The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50. Earnings per share The Company follows ASC Topic 260 to account for the earnings per share. Basic earning per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earning per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. Income taxes The Company follows ASC Topic 740 for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As of May 31, 2017 and 2016, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material affect on the Company. The Company does not anticipate any significant changes to its total unrecognized tax benefits within the next 12 months. The Company classifies tax-related penalties and net interest as income tax expense. As of May 31, 2017 and 2016, no income tax expense has been incurred. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates. Recent pronouncements The Company has evaluated the recent accounting pronouncements through August 2017 and believes that none of them will have a material effect on the company’s financial statements. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
May 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 2 – GOING CONCERN The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and incurring start up costs and expenses. As a result, the Company incurred accumulated net losses from Inception (May 8, 2015) through the period ended May 31, 2017 of ($486,699). In addition, the Company’s development activities since inception have been financially sustained through debt and equity financing. The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. |
PREPAID EXPENSES
PREPAID EXPENSES | 12 Months Ended |
May 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES | NOTE 3 – PREPAID EXPENSES As of May 31, 2017 and 2016, the Company had prepaid expenses totaling $30,000 and $40,000, respectively. The prepaid professional fees will be expensed based on estimated percentage of completion for the services. During the years ended May 31, 2017 and 2016, the Company recorded amortization of $10,000 and $20,000, respectively. |
FIXED ASSETS
FIXED ASSETS | 12 Months Ended |
May 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | NOTE 4 – FIXED ASSETS The following is a summary of fixed assets: May 31, May 31, 2017 2016 Furniture and equipment $ 2,761 $ 2,761 Fixed assets, total 2,761 2,761 Less: accumulated depreciation (789 ) (394 ) Fixed assets, net $ 1,972 $ 2,367 Depreciation expense for the years ended May 31, 2017 and 2016 was $395 and $394, respectively. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
May 31, 2017 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 5 – NOTES PAYABLE During the year ended May 31, 2017, the Company received loans totaling $2,000 and the Company repaid a total of $1,000. The loan is due upon demand and bears 0% interest. |
NOTES PAYABLE - RELATED PARTY
NOTES PAYABLE - RELATED PARTY | 12 Months Ended |
May 31, 2017 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE - RELATED PARTY | NOTE 6 – NOTES PAYABLE – RELATED PARTY During the year ended May 31, 2017, the Company received loans totaling $50,950 from an officer, director and shareholder of the Company and the Company repaid a total of $5,000. The loan is due upon demand and bears 0% interest. As of May 31, 2017, the balance owed was $45,950. During the year ended May 31, 2017, the Company received loans totaling $3,350 from an officer, director and shareholder of the Company and the Company repaid a total of $2,700. The loan is due upon demand and bears 0% interest. |
CONVERTIBLE DEBT - RELATED PART
CONVERTIBLE DEBT - RELATED PARTY | 12 Months Ended |
May 31, 2017 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBT - RELATED PARTY | NOTE 7 – CONVERTIBLE DEBT – RELATED PARTY On April 24, 2015, the Company executed a convertible promissory note with an officer and director for $35,000. The unsecured note bears interest at 5% per annum with principal and interest due on the earlier of March 19, 2016 or the next equity financing. The debt is convertible at a discount of 30% of the price per share of the securities sold in the next equity financing. The debt discount was valued at $10,500 and was recorded to additional paid in capital and will be amortized over the life of the loan. As of the date of this filing, the loans are in default. On May 8, 2015, the Company executed a convertible promissory note with an officer and director for $35,000. The unsecured note bears interest at 5% per annum with principal and interest due on the earlier of March 19, 2016 or the next equity financing. The debt is convertible at a discount of 30% of the price per share of the securities sold in the next equity financing. The debt discount was valued at $10,500 and was recorded to additional paid in capital and will be amortized over the life of the loan. As of the date of this filing, the loans are in default. On May 11, 2015, the Company executed a convertible promissory note with an officer and director for $21,500. The unsecured note bears interest at 5% per annum with principal and interest due on the earlier of March 19, 2016 or the next equity financing. The debt is convertible at a discount of 30% of the price per share of the securities sold in the next equity financing. The debt discount was valued at $6,450 and was recorded to additional paid in capital and will be amortized over the life of the loan. As of the date of this filing, the loans are in default. Interest expense for the years ended May 31, 2017 and 2016 was $4,575 and $4,588, respectively. Amortization of the beneficial conversion feature for the years ended May 31, 2017 and 2016 was $0 and $25,023, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
May 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 8 – INCOME TAXES At May 31, 2017 and 2016, the Company had a federal operating loss carryforwards of approximately $487,000 and $282,000, respectively, which begins to expire in 2035. Components of net deferred tax assets, including a valuation allowance, are as follows at May 31, 2017 and 2016: 2017 2016 Deferred tax assets: Net operating loss carryforward $ 170,000 $ 99,000 Total deferred tax assets 170,000 99,000 Less: Valuation allowance (170,000 ) (99,000 ) Net deferred tax assets $ - $ - The valuation allowance for deferred tax assets as of May 31, 2017 and 2016 was $170,000 and $99,000, respectively, which will begin to expire in 2035. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of May 31, 2017 and 2016 and maintained a full valuation allowance. Reconciliation between the statutory rate and the effective tax rate is as follows at May 31, 2017 and 2016: 2017 2016 Federal statutory rate (35.0 )% (35.0 )% State taxes, net of federal benefit (0.00 )% (0.00 )% Change in valuation allowance 35.0 % 35.0 % Effective tax rate 0.0 % 0.0 % |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
May 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERs' EQUITY | NOTE 9 – STOCKHOLDERS’ EQUITY The Company is authorized to issue 100,000,000 shares of its $0.001 par value common stock. Common stock During the year ended May 31, 2016, the Company sold 540,000 shares of common stock for cash of $54,000. During January 2017, the Company repurchased 10,000 shares of common stock from an investor for $1,000. |
WARRANTS AND OPTIONS
WARRANTS AND OPTIONS | 12 Months Ended |
May 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
WARRANTS AND OPTIONS | NOTE 10 – WARRANTS AND OPTIONS As of May 31, 2017 and 2016, there were no warrants or options outstanding to acquire any additional shares of common stock. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
May 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11 – RELATED PARTY TRANSACTIONS As of May 31, 2017 and 2016, the Company had accounts payable totaling $7,645 and $7,509, due to two officers, directors and shareholders. As of May 31, 2017, the Company had loans totaling $46,600 due to officers and directors. As of May 31, 2017 and 2016, the Company had loans totaling $91,500 and $91,500, respectively, and accrued interest totaling $9,588 and $5,013, respectively, due to an officer and director. As of the date of this filing, the loans are in default. During the years ended May 31, 2017 and 2016, the Company had executive compensation for two officers totaling $153,750 and $156,500, respectively. As of May 31, 2017 and 2016, the accrued executive compensation balance was $279,955 and $126,905, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
May 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 12 – SUBSEQUENT EVENTS During the months ended June and July 2017, the Company issued 150,000 shares of common stock to three investors for $15,000. Effective July 1, 2017, the Company agreed to compensate its officers at a rate of $15,000 and $8,000 per month of which 50% is due in cash and 50% is due in shares of common stock. |
SUMMARY OF SIGNIFICANT ACCOUN19
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
May 31, 2017 | |
Accounting Policies [Abstract] | |
Organization | Organization The Company was incorporated on May 8, 2015 (Date of Inception) under the laws of the State of Nevada, as Infinity Distribution, Inc. |
Nature of operations | Nature of operations The Company is planning to import and export furniture, cacoa and home goods. |
Year end | Year end The Company’s year end is May 31. |
Cash and cash equivalents | Cash and cash equivalents For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value. |
Inventory | Inventory Inventories are stated at the lower of cost (average cost) or market (net realizable value). As of May 31, 2017, the Company had raw materials of $6,052. |
Fixed assets | Fixed assets The Company records all property and equipment at cost less accumulated depreciation. Improvements are capitalized while repairs and maintenance costs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful life of the assets or the lease term, whichever is shorter. Leasehold improvements include the cost of the Company’s internal development and construction department. Depreciation periods are as follows: Furniture and equipment 7 years |
Revenue recognition | Revenue recognition We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the product or service has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of our fees is probable. The Company will record revenue when it is realizable and earned and the services have been rendered to the customers. |
Advertising costs | Advertising costs Advertising costs are anticipated to be expensed as incurred; however there were no advertising costs included in general and administrative expenses for the years ended May 31, 2017 and 2016. |
Fair value of financial instruments | Fair value of financial instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of May 31, 2017 and 2016. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand. Level 1: Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations. Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants. |
Stock-based compensation | Stock-based compensation The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award. The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50. |
Earnings per share | Earnings per share The Company follows ASC Topic 260 to account for the earnings per share. Basic earning per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earning per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. |
Income taxes | Income taxes The Company follows ASC Topic 740 for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As of May 31, 2017 and 2016, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material affect on the Company. The Company does not anticipate any significant changes to its total unrecognized tax benefits within the next 12 months. The Company classifies tax-related penalties and net interest as income tax expense. As of May 31, 2017 and 2016, no income tax expense has been incurred. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates. |
Recent pronouncements | Recent pronouncements The Company has evaluated the recent accounting pronouncements through August 2017 and believes that none of them will have a material effect on the company’s financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
May 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of depreciation periods | Depreciation periods are as follows: Furniture and equipment 7 years |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 12 Months Ended |
May 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets | The following is a summary of fixed assets: May 31, May 31, 2017 2016 Furniture and equipment $ 2,761 $ 2,761 Fixed assets, total 2,761 2,761 Less: accumulated depreciation (789 ) (394 ) Fixed assets, net $ 1,972 $ 2,367 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
May 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of net deferred tax assets | Components of net deferred tax assets, including a valuation allowance, are as follows at May 31, 2017 and 2016: 2017 2016 Deferred tax assets: Net operating loss carryforward $ 170,000 $ 99,000 Total deferred tax assets 170,000 99,000 Less: Valuation allowance (170,000 ) (99,000 ) Net deferred tax assets $ - $ - |
Schedule of reconciliation between the statutory rate and the effective tax rate | Reconciliation between the statutory rate and the effective tax rate is as follows at May 31, 2017 and 2016: 2017 2016 Federal statutory rate (35.0 )% (35.0 )% State taxes, net of federal benefit (0.00 )% (0.00 )% Change in valuation allowance 35.0 % 35.0 % Effective tax rate 0.0 % 0.0 % |
SUMMARY OF SIGNIFICANT ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
May 31, 2017 | |
Furniture And Equipment [Member] | |
Depreciation periods | 7 years |
SUMMARY OF SIGNIFICANT ACCOUN24
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | May 31, 2017USD ($) |
Accounting Policies [Abstract] | |
Inventory raw materials | $ 6,052 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | May 31, 2017 | May 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ (486,699) | $ (281,725) |
PREPAID EXPENSES (Details Narra
PREPAID EXPENSES (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 30,000 | $ 40,000 |
Increase in prepaid expense | $ 10,000 | $ 20,000 |
FIXED ASSETS (Details)
FIXED ASSETS (Details) - USD ($) | May 31, 2017 | May 31, 2016 |
Fixed assets, total | $ 2,761 | $ 2,761 |
Less: accumulated depreciation | (789) | (394) |
Fixed assets, net | 1,972 | 2,367 |
Furniture And Equipment [Member] | ||
Fixed assets, total | $ 2,761 | $ 2,761 |
FIXED ASSETS (Details Narrative
FIXED ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 395 | $ 394 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Proceeds from notes payable | $ 2,000 | |
0% Notes Payable [Member] | ||
Proceeds from notes payable | 2,000 | |
Repayments of notes payable | $ 1,000 | |
Description of notes maturity | The loan is due upon demand. |
NOTES PAYABLE - RELATED PARTY (
NOTES PAYABLE - RELATED PARTY (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Proceeds from notes payable - related party | $ 54,300 | |
Balance outstanding notes payable - related party | 46,600 | |
Officer, Director & Shareholder [Member] | 0% Notes Payable [Member] | ||
Proceeds from notes payable - related party | 50,950 | |
Repayments from notes payable | 5,000 | |
Balance outstanding notes payable - related party | $ 45,950 | |
Description of notes maturity | The loan is due upon demand. | |
Officer, Director & Shareholder [Member] | 0% Notes Payable [Member] | ||
Proceeds from notes payable - related party | $ 3,350 | |
Repayments from notes payable | $ 2,700 | |
Description of notes maturity | The loan is due upon demand. |
CONVERTIBLE DEBT - RELATED PA31
CONVERTIBLE DEBT - RELATED PARTY (Details Narrative) - USD ($) | May 11, 2015 | May 08, 2015 | Apr. 24, 2015 | May 31, 2017 | May 31, 2016 |
Interest expense | $ 4,575 | $ 4,588 | |||
Amortization of the beneficial conversion feature | $ 0 | $ 25,023 | |||
Officer & Director [Member] | 5% Convertible Promissory Note [Member] | |||||
Debt face amount | $ 35,000 | ||||
Description of maturity date | Due on the earlier of March 19, 2016 or the next equity financing. | ||||
Description of debt discount conversion basis | The debt is convertible at a discount of 30% of the price per share of the securities sold in the next equity financing. | ||||
Debt discount | $ 10,500 | ||||
Description of debt default | As of the date of this filing, the loans are in default. | ||||
Officer & Director [Member] | 5% Convertible Promissory Note [Member] | |||||
Debt face amount | $ 35,000 | ||||
Description of maturity date | Due on the earlier of March 19, 2016 or the next equity financing. | ||||
Description of debt discount conversion basis | The debt is convertible at a discount of 30% of the price per share of the securities sold in the next equity financing. | ||||
Debt discount | $ 10,500 | ||||
Description of debt default | As of the date of this filing, the loans are in default. | ||||
Officer & Director [Member] | 5% Convertible Promissory Note [Member] | |||||
Debt face amount | $ 21,500 | ||||
Description of maturity date | Due on the earlier of March 19, 2016 or the next equity financing. | ||||
Description of debt discount conversion basis | The debt is convertible at a discount of 30% of the price per share of the securities sold in the next equity financing. | ||||
Debt discount | $ 6,450 | ||||
Description of debt default | As of the date of this filing, the loans are in default. |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | May 31, 2017 | May 31, 2016 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 170,000 | $ 99,000 |
Total deferred tax assets | 170,000 | 99,000 |
Less: Valuation allowance | (170,000) | (99,000) |
Net deferred tax assets |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | (35.00%) | (35.00%) |
State taxes, net of federal benefit | (0.00%) | 0.00% |
Change in valuation allowance | 35.00% | 35.00% |
Effective tax rate | 0.00% | 0.00% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Federal operating loss carryforwards | $ 487,000 | $ 282,000 |
Description of expiration of valuation allowance | Expire in 2035 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 12 Months Ended | ||
May 31, 2016 | May 31, 2017 | Jan. 31, 2017 | |
Common stock, authorized | 100,000,000 | 100,000,000 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Value of shares issued | $ 54,000 | ||
Number of shares repurchased | 10,000 | ||
Value of shares repurchased | $ 1,000 | $ 1,000 | |
Common Shares [Member] | |||
Number of shares issued | 540,000 | ||
Value of shares issued | $ 54,000 |
RELATED TRANSACTIONS (Details N
RELATED TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Accounts payable - related party | $ 7,645 | $ 7,509 |
Notes payable - related party | 46,600 | |
Convertible debt - related party, net of discount | 91,500 | 91,500 |
Accrued executive compensation | 279,955 | 126,905 |
Executive compensation | 153,750 | 156,500 |
Two Officer Director And Shareholder [Member] | ||
Accounts payable - related party | 7,645 | 7,509 |
Officer Director And Shareholder [Member] | ||
Notes payable - related party | 46,600 | |
Officer & Director [Member] | 5% Convertible Promissory Note [Member] | ||
Convertible debt - related party, net of discount | 91,500 | 91,500 |
Accrued interest | 9,588 | 5,013 |
Two Officers [Member] | ||
Accrued executive compensation | 279,955 | 126,905 |
Executive compensation | $ 153,750 | $ 156,500 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Jul. 01, 2017 | Jul. 31, 2017 | May 31, 2017 | May 31, 2016 |
Value of shares issued | $ 54,000 | |||
Officers compensation, per month | $ 153,750 | $ 156,500 | ||
Subsequent Event [Member] | ||||
Officers compensation, per month | $ 15,000 | |||
Additional compensation, per month | $ 8,000 | |||
Percentage of officers compensation due in cash | 50.00% | |||
Percentage of officers compensation due in stock | 50.00% | |||
Subsequent Event [Member] | Three Investors [Member] | ||||
Number of shares issued | 150,000 | |||
Value of shares issued | $ 15,000 |