Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Nov. 30, 2018 | Feb. 21, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | INFINITY DISTRIBUTION INC. | |
Entity Central Index Key | 0001646916 | |
Document Type | 10-Q | |
Document Period End Date | Nov. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --05-31 | |
Entity File Number | 000-55018 | |
Entity Incorporation State Country Code | NV | |
Entity Reporting Status Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 11,315,666 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 |
BALANCE SHEETS (unaudited)
BALANCE SHEETS (unaudited) - USD ($) | Nov. 30, 2018 | May 31, 2018 |
Current assets: | ||
Cash | $ 3,329 | $ 2,759 |
Inventory | 6,052 | |
Total current assets | 3,329 | 8,811 |
Fixed assets, net | 1,381 | 1,578 |
Total assets | 4,710 | 10,389 |
Current liabilities: | ||
Accounts payable | 8,096 | 7,138 |
Accounts payable - related party | 3,024 | 2,724 |
Accrued executive compensation | 690,955 | 552,955 |
Accrued interest payable - related party | 16,457 | 14,163 |
Notes payable - related party | 49,625 | 48,065 |
Convertible debt - related party | 91,500 | 91,500 |
Total current liabilities | 859,657 | 716,545 |
Commitments and Contingencies (Note 10) | ||
Total liabilities | 859,657 | 716,545 |
Stockholders' deficit: | ||
Preferred stock | ||
Common stock, $0.001 par value, 100,000,000 shares authorized, 11,248,333 and 11,175,000 shares issued and 11,248,333 and 11,165,000 outstanding as of November 30, 2018 and May 31, 2018, respectively | 11,248 | 11,175 |
Additional paid in capital | 2,277,819 | 143,775 |
Stock payable | 4,500 | |
Treasury stock | (1,000) | |
Accumulated deficit | (3,149,614) | (860,106) |
Total stockholders' deficit | (854,947) | (706,156) |
Total liabilities and stockholders' deficit | 4,710 | 10,389 |
Preferred Shares Series A [Member] | ||
Stockholders' deficit: | ||
Preferred stock | 100 | |
Total stockholders' deficit | 100 | |
Convertible Preferred Stock Series B [Member] | ||
Stockholders' deficit: | ||
Preferred stock | 1,000 | |
Total stockholders' deficit | $ 1,000 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Nov. 30, 2018 | May 31, 2018 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 3,900,000 | 3,900,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 11,248,333 | 11,175,000 |
Common stock, outstanding | 11,248,333 | 11,165,000 |
Preferred Shares Series A [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 100,000 | 100,000 |
Preferred stock, issued | 100,000 | 0 |
Preferred stock, outstanding | 100,000 | 0 |
Convertible Preferred Stock Series B [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, issued | 1,000,000 | 0 |
Preferred stock, outstanding | 1,000,000 | 0 |
STATEMENT OF OPERATIONS (unaudi
STATEMENT OF OPERATIONS (unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2018 | Nov. 30, 2017 | Nov. 30, 2018 | Nov. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenue | ||||
Operating expenses: | ||||
Depreciation | 98 | 98 | 197 | 197 |
Executive compensation | 2,192,717 | 69,000 | 2,261,717 | 128,500 |
General and administrative | 2,888 | 6,847 | 6,200 | 10,320 |
Professional fees | 4,160 | 25,444 | 13,048 | 45,677 |
Inventory write-down | 6,052 | 6,052 | ||
Total operating expenses | 2,205,915 | 101,389 | 2,287,214 | 184,694 |
Other expense: | ||||
Interest expense - related party | (1,141) | (1,141) | (2,294) | (2,294) |
Total other expense | (1,141) | (1,141) | (2,294) | (2,294) |
Net loss | $ (2,207,056) | $ (102,530) | $ (2,289,508) | $ (186,988) |
Weighted average number of common shares outstanding - basic / dilutive (in shares) | 11,228,846 | 10,901,209 | 11,208,788 | 10,758,880 |
Net loss per share - basic / dilutive (in dollars per share) | $ (0.20) | $ (0.01) | $ (0.20) | $ (0.02) |
STATEMENT OF STOCKHOLDERS' DEFI
STATEMENT OF STOCKHOLDERS' DEFICIT (unaudited) - USD ($) | Preferred Shares Series A [Member] | Preferred Shares Series B [Member] | Preferred Shares [Member] | Common Shares [Member] | Additional Paid In Capital [Member] | Stock Payable [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Total |
Balance at beginning at May. 31, 2017 | $ 10,540 | $ 80,910 | $ (1,000) | $ (486,699) | $ (396,249) | ||||
Balance at beginning (in shares) at May. 31, 2017 | 10,540,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock for cash | $ 265 | 26,235 | 26,500 | ||||||
Issuance of common stock for cash (in shares) | 265,000 | ||||||||
Net loss | (84,458) | (84,458) | |||||||
Balance at end at Aug. 31, 2017 | $ 10,805 | 107,145 | (1,000) | (571,157) | (454,207) | ||||
Balance at end (in shares) at Aug. 31, 2017 | 10,805,000 | ||||||||
Balance at beginning at May. 31, 2017 | $ 10,540 | 80,910 | (1,000) | (486,699) | (396,249) | ||||
Balance at beginning (in shares) at May. 31, 2017 | 10,540,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (186,988) | ||||||||
Balance at end at Nov. 30, 2017 | $ 10,970 | 123,480 | (1,000) | (673,687) | (540,237) | ||||
Balance at end (in shares) at Nov. 30, 2017 | 10,970,000 | ||||||||
Balance at beginning at Aug. 31, 2017 | $ 10,805 | 107,145 | (1,000) | (571,157) | (454,207) | ||||
Balance at beginning (in shares) at Aug. 31, 2017 | 10,805,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock for cash | $ 165 | 16,335 | 16,500 | ||||||
Issuance of common stock for cash (in shares) | 165,000 | ||||||||
Net loss | (102,530) | (102,530) | |||||||
Balance at end at Nov. 30, 2017 | $ 10,970 | 123,480 | (1,000) | (673,687) | (540,237) | ||||
Balance at end (in shares) at Nov. 30, 2017 | 10,970,000 | ||||||||
Balance at beginning at May. 31, 2018 | $ 11,175 | 143,775 | (1,000) | (860,106) | (706,156) | ||||
Balance at beginning (in shares) at May. 31, 2018 | 11,175,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of preferred stock for prepaid royalties | $ 100 | $ 1,000 | 99,000 | 100,100 | |||||
Issuance of preferred stock for prepaid royalties (in shares) | 100,000 | 1,000,000 | |||||||
Issuance of common stock for cash | $ 43 | 6,457 | 6,500 | ||||||
Issuance of common stock for cash (in shares) | 43,333 | ||||||||
Cancel treasury stock | $ (10) | (990) | 1,000 | ||||||
Cancel treasury stock (in shares) | (10,000) | ||||||||
Net loss | (82,452) | (82,452) | |||||||
Balance at end at Aug. 31, 2018 | $ 100 | $ 1,000 | $ 11,208 | 248,242 | (942,558) | (682,008) | |||
Balance at end (in shares) at Aug. 31, 2018 | 100,000 | 1,000,000 | 11,208,333 | ||||||
Balance at beginning at May. 31, 2018 | $ 11,175 | 143,775 | (1,000) | (860,106) | (706,156) | ||||
Balance at beginning (in shares) at May. 31, 2018 | 11,175,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (2,289,508) | ||||||||
Balance at end at Nov. 30, 2018 | $ 100 | $ 1,000 | $ 11,248 | 2,277,819 | 4,500 | (3,149,614) | (854,947) | ||
Balance at end (in shares) at Nov. 30, 2018 | 100,000 | 1,000,000 | 11,248,333 | ||||||
Balance at beginning at Aug. 31, 2018 | $ 100 | $ 1,000 | $ 11,208 | 248,242 | (942,558) | (682,008) | |||
Balance at beginning (in shares) at Aug. 31, 2018 | 100,000 | 1,000,000 | 11,208,333 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock for cash | $ 40 | 5,960 | 4,500 | 10,500 | |||||
Issuance of common stock for cash (in shares) | 40,000 | ||||||||
Stock compensation to executives | 2,023,617 | 2,023,617 | |||||||
Net loss | (2,207,056) | (2,207,056) | |||||||
Balance at end at Nov. 30, 2018 | $ 100 | $ 1,000 | $ 11,248 | $ 2,277,819 | $ 4,500 | $ (3,149,614) | $ (854,947) | ||
Balance at end (in shares) at Nov. 30, 2018 | 100,000 | 1,000,000 | 11,248,333 |
STATEMENT OF CASH FLOWS (unaudi
STATEMENT OF CASH FLOWS (unaudited) - USD ($) | 6 Months Ended | |
Nov. 30, 2018 | Nov. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (2,289,508) | $ (186,988) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 197 | 197 |
Inventory write-down | 6,052 | |
Stock based executive compensation | 2,123,717 | |
Changes in operating assets and liabilities: | ||
Decrease in prepaid expenses | 20,000 | |
Increase in accounts payable | 958 | 4,623 |
Increase (decrease) in accounts payable - related party | 300 | (7,645) |
Increase in accrued executive compensation | 138,000 | 125,500 |
Increase in accrued interest payable - related party | 2,294 | 2,294 |
Net cash used in operating activities | (17,990) | (42,019) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Repayments for notes payable | (1,000) | |
Proceeds from notes payable - related party | 4,915 | |
Repayments for notes payable - related party | (3,355) | (1,650) |
Proceeds from the sale of common stock | 17,000 | 43,000 |
Net cash provided by financing activities | 18,560 | 40,350 |
NET CHANGE IN CASH | 570 | (1,669) |
CASH AT BEGINNING OF PERIOD | 2,759 | 2,430 |
CASH AT END OF PERIOD | 3,329 | 761 |
SUPPLEMENTAL INFORMATION: | ||
Interest paid | ||
Income taxes paid |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Nov. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended May 31, 2018 and notes thereto included in the Company’s Form 10-K filed with the SEC on September 13, 2018. The Company follows the same accounting policies in the preparation of interim reports. Results of operations for the interim period are not indicative of annual results. The condensed balance sheet at May 31, 2018 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles in the U.S. for complete financial statements. 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 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 cost, not to exceed fair market value. The cost of the Company’s inventory of $0 and $6,052 at November 30, 2018 and May 31, 2018, respectively has been determined using the first-in first-out (FIFO) method. During the six months ended November 30, 2018, the Company recognized a write-down of the inventory in the amount of $6,052 due to slow movement. 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 The Company recognizes revenue in accordance with generally accepted accounting principles as outlined in the Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts with Customers, which requires five steps to evaluate revenue recognition: (i) identify the contract with the customer; (ii) identity the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity satisfied a performance obligation. 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 three and six months ended November 30, 2018 or November 30, 2017. Fair value of financial instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of November 30, 2018 and May 31, 2018. 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: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets. Level 2: Financial Accounting Standards Board (“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. The Company did not have Level 1 – 3 estimates of fair value during the three and six months ended November 30, 2018. Stock-based compensation The Company records stock based compensation in accordance with the guidance in FASB Accounting Standards Codification (“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 ASC 718-10 and the conclusions reached by the 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 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. There are 13,598,560 and 3,446,060 additional shares issuable in connection with outstanding stock payable and convertible debts which would be considered dilutive as of November 30, 2018 and November 30 ,2017, respectively. Diluted earnings (loss) per share have not been presented for the three and six months ending November 30, 2018 and November 30, 2017, since the effect of the assumed issuances would have an anti-dilutive effect. 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 September 2019 and believes that none of them will have a material effect on the company’s financial statements except for the one below. In February 2016, the FASB issued ASU 2016-02, “Leases” (“ASC 842”). The guidance requires lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Lessor accounting is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. Existing sale-leaseback guidance, including guidance for real estate, is replaced with a new model applicable to both lessees and lessors. ASC 842 is effective for fiscal years beginning after December 15, 2018. |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Nov. 30, 2018 | |
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. The Company has not yet generated revenues from operations. 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 net losses for the six months ended November 30, 2018 of $2,289,508 and has an accumulated deficit of $3,149,614. 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. Management’s plans are to raise funds through the sale of equity or entering into debt transactions to finance the operating and capital requirements of the Company. 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. |
LICENSING AGREEMENT- RELATED PA
LICENSING AGREEMENT- RELATED PARTY | 6 Months Ended |
Nov. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
LICENSING AGREEMENT- RELATED PARTY | NOTE 3 – Licensing Agreement – Related Party On August 31, 2018, the Company issued 100,000 shares of Preferred Stock – Series A and 1,000,000 shares of Preferred Stock – Series B related to a license agreement with the Company’s CEO, Raul Mansueto. The license agreement was granted to the Company for the right to use the licensed vehicle windshield cover. The license agreement is effective from January 1, 2018 until December 21, 2020. The Company’s CEO, Raul Mansueto, owns the patent rights (no. US 9,688,129 B2) of intellectual property related to vehicle windshield cover and granted the Company an exclusive license to use the patent’s intellectual property to manufacture, sell, and market such products. A total of 10 million units of the patented product will be subjected to royalty fees at a $1.00 per unit. The fair value of the shares was $2,123,717 and was based on the value of the common stock into which it is convertible (Note 7). The Company evaluated the fair value of the royalties and the fair value of the securities and in accordance with non-cash transaction guidance, determined the fair value of the securities was the most readily determinable, and therefore recognized the fair value of the securities as executive compensation. |
FIXED ASSETS
FIXED ASSETS | 6 Months Ended |
Nov. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | NOTE 4 – FIXED ASSETS The following is a summary of fixed assets: November 30, 2018 Furniture and equipment $ 2,761 Fixed assets, total 2,761 Less: accumulated depreciation (1,380 ) Fixed assets, net $ 1,381 Depreciation expense for the six months ended November 30, 2018 and November 30, 2017 were $197 and $197, respectively. |
NOTES PAYABLE - RELATED PARTY
NOTES PAYABLE - RELATED PARTY | 6 Months Ended |
Nov. 30, 2018 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE - RELATED PARTY | NOTE 5 – NOTES PAYABLE – RELATED PARTY As of November 30, 2018, the balance owed to an officer, director and shareholder of the Company was $44,995. The loan is due upon demand and bears 0% interest. During the six months ended November 30, 2018 the individual loaned additional amounts totaling $1,500 and received repayments totaling $1,455. As of November 30, 2018, the balance owed to an officer, director and shareholder of the Company was $4,630. The loan is due upon demand and bears 0% interest. During the six months ended November 30, 2018 the individual loaned additional amounts totaling $3,415 and received repayments totaling $1,900. |
CONVERTIBLE DEBT - RELATED PART
CONVERTIBLE DEBT - RELATED PARTY | 6 Months Ended |
Nov. 30, 2018 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBT - RELATED PARTY | NOTE 6 – 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 was amortized over the life of the loan. The debt discount was fully amortized as of November 30, 2018. As of November 30, 2018 and May 31, 2018, the loan is 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. The debt discount was fully amortized as of November 30, 2018. As of November 30, 2018 and May 31, 2018 , the loan is 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. The debt discount was fully amortized as of November 30, 2018. As of November 30, 2018 and May 31, 2018, the loan is in default. Interest expense for the three and six months ended November 30, 2018 is $1,141 and $2,294. Interest expense for the three and six months ended November 30, 2017 is $1,141 and $2,294. |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) | 6 Months Ended |
Nov. 30, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY (DEFICIT) | NOTE 7 – STOCKHOLDERS’ (DEFICIT) The Company is authorized to issue 100,000,000 shares of its $0.001 par value common stock and 5,000,000 shares of its $0.001 par value preferred stock. On August 8, 2018, the Company designated 100,000 shares of preferred stock – Series A and 1,000,000 shares of preferred stock – Series B. The preferred stock - Series A has voting rights of 1,000 to 1. The preferred stock – Series A is not convertible into common stock and does not have redemption rights. The preferred stock – Series B is convertible into common stock at a conversion rate of 1 to 10. The Company shall have the right at any time prior to conversion to redeem any shares of preferred stock – Series B at a price per share equal to the face amount ($1.00). Preferred Stock During the three months ended August 31, 2018, the Company issued 100,000 shares of preferred stock – Series A and 1,000,000 shares of preferred stock – Series B in exchange for the prepaid royalties as part of the license agreement with Raul Mansueto (Note 3). Common Stock During the three months ended August 31, 2018, the Company sold 43,333 shares of common stock at $0.15 per share for a total of $6,500. The Company cancelled the 10,000 shares that were in treasury. During the three months ended November 30, 2018, the Company sold 70,000 shares of common stock at $0.15 per share for a total of $10,500. As of November 30, 2018, the Company has not yet issued 30,000 shares of common stock sold for cash and recorded a stock payable of $4,500. The shares were issued on December 3, 2018. |
WARRANTS AND OPTIONS
WARRANTS AND OPTIONS | 6 Months Ended |
Nov. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
WARRANTS AND OPTIONS | NOTE 8 – WARRANTS AND OPTIONS As of November 30, 2018, there were no warrants or options outstanding to acquire any additional shares of common stock. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Nov. 30, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 9 – RELATED PARTY TRANSACTIONS As of November 30, 2018, the Company had loans totaling $4,630 and accounts payable of $3,024 due to an individual who is an officer, director and shareholder. As of November 30, 2018, the Company had loans totaling $44,995, convertible debt of $91,500 and accrued interest totaling $16,457 due to an individual who is an officer, director and shareholder. As of November 30, 2018, the convertible debt is in default. The Company had executive compensation for two officers of $2,192,717 for the three months ended November 30 ,2018, as compared with $69,000 for the same period ended 2017. The Company had executive compensation for two officers of $2,261,717 for the six months ended November 30, 2018, as compared with $128,500 for the same period ended 2017. As of November 30, 2018, the accrued executive compensation balance was $690,955. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Nov. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 - COMMITMENTS AND CONTINGENCIES As of November 30, 2018, we did not have any known commitments or contingencies other than our notes payable. Legal matter contingencies The Company believes, based on current knowledge and after consultation with counsel, that it is not currently party to any material pending proceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company. Provisions for losses are established in accordance with ASC 450, “Contingencies” when warranted. Once established, such provisions are adjusted when there is more information available of when an event occurs requiring a change. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Nov. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 11 – SUBSEQUENT EVENTS Subsequent to November 30, 2018, the Company issued a total of 30,000 shares of common stock and reduced stock payable by $4,500. Additionally, the Company sold 44,000 shares of common stock for $6,600. Subsequent to November 30, 2018, the Company received a total of $13,972 in loans from the officers and directors of the Company. The loans are due upon demand and bear 0% interest. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Nov. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended May 31, 2018 and notes thereto included in the Company’s Form 10-K filed with the SEC on September 13, 2018. The Company follows the same accounting policies in the preparation of interim reports. Results of operations for the interim period are not indicative of annual results. The condensed balance sheet at May 31, 2018 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles in the U.S. for complete financial statements. |
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 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 cost, not to exceed fair market value. The cost of the Company’s inventory of $0 and $6,052 at November 30, 2018 and May 31, 2018, respectively has been determined using the first-in first-out (FIFO) method. During the six months ended November 30, 2018, the Company recognized a write-down of the inventory in the amount of $6,052 due to slow movement. |
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 The Company recognizes revenue in accordance with generally accepted accounting principles as outlined in the Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts with Customers, which requires five steps to evaluate revenue recognition: (i) identify the contract with the customer; (ii) identity the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity satisfied a performance obligation. |
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 three and six months ended November 30, 2018 or November 30, 2017. |
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 November 30, 2018 and May 31, 2018. 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: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets. Level 2: Financial Accounting Standards Board (“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. The Company did not have Level 1 – 3 estimates of fair value during the three and six months ended November 30, 2018. |
Stock-based compensation | Stock-based compensation The Company records stock based compensation in accordance with the guidance in FASB Accounting Standards Codification (“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 ASC 718-10 and the conclusions reached by the 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 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. There are 13,598,560 and 3,446,060 additional shares issuable in connection with outstanding stock payable and convertible debts which would be considered dilutive as of November 30, 2018 and November 30 ,2017, respectively. Diluted earnings (loss) per share have not been presented for the three and six months ending November 30, 2018 and November 30, 2017, since the effect of the assumed issuances would have an anti-dilutive effect. |
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 September 2019 and believes that none of them will have a material effect on the company’s financial statements except for the one below. In February 2016, the FASB issued ASU 2016-02, “Leases” (“ASC 842”). The guidance requires lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Lessor accounting is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. Existing sale-leaseback guidance, including guidance for real estate, is replaced with a new model applicable to both lessees and lessors. ASC 842 is effective for fiscal years beginning after December 15, 2018. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Nov. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of depreciation periods | Depreciation periods are as follows: Furniture and equipment 7 years |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 6 Months Ended |
Nov. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets | The following is a summary of fixed assets: November 30, 2018 Furniture and equipment $ 2,761 Fixed assets, total 2,761 Less: accumulated depreciation (1,380 ) Fixed assets, net $ 1,381 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Nov. 30, 2018 | Nov. 30, 2017 | Nov. 30, 2018 | Nov. 30, 2017 | Nov. 30, 2018 | Nov. 30, 2017 | May 31, 2018 |
Inventory | $ 6,052 | ||||||
Inventory write down | $ 6,052 | $ 6,052 | |||||
Additional shares issuable | 13,598,560 | 3,446,060 | |||||
Furniture And Equipment [Member] | |||||||
Depreciation periods | 7 years |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Nov. 30, 2018 | Aug. 31, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | Nov. 30, 2018 | Nov. 30, 2017 | May 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
Net loss | $ (2,207,056) | $ (82,452) | $ (102,530) | $ (84,458) | $ (2,289,508) | $ (186,988) | |
Accumulated deficit | $ (3,149,614) | $ (3,149,614) | $ (860,106) |
LICENSING AGREEMENT- RELATED _2
LICENSING AGREEMENT- RELATED PARTY (Details Narrative) | 6 Months Ended | ||||
Nov. 30, 2018USD ($)$ / Decimalshares | Nov. 30, 2017USD ($) | Aug. 31, 2018shares | Aug. 08, 2018shares | May 31, 2018shares | |
Preferred Stock, issued | 0 | 0 | |||
Royalty fees (per unit) | $ / Decimal | 1 | ||||
Total number of units for royalty fees | $ / Decimal | 10,000,000 | ||||
Fair value of the shares | $ | $ 2,123,717 | ||||
Preferred Shares Series A [Member] | |||||
Preferred Stock, issued | 100,000 | 100,000 | 0 | ||
Preferred Shares Series A [Member] | License Agreement [Member] | Raul Mansueto [Member] | |||||
Preferred Stock, issued | 100,000 | ||||
Convertible Preferred Stock Series B [Member] | |||||
Preferred Stock, issued | 1,000,000 | 0 | |||
Preferred Shares Series B [Member] | |||||
Preferred Stock, issued | 1,000,000 | ||||
Preferred Shares Series B [Member] | License Agreement [Member] | Raul Mansueto [Member] | |||||
Preferred Stock, issued | 100,000 |
FIXED ASSETS (Details)
FIXED ASSETS (Details) - USD ($) | Nov. 30, 2018 | May 31, 2018 |
Fixed assets, total | $ 2,761 | |
Less: accumulated depreciation | (1,380) | |
Fixed assets, net | 1,381 | $ 1,578 |
Furniture And Equipment [Member] | ||
Fixed assets, total | $ 2,761 |
FIXED ASSETS (Details Narrative
FIXED ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2018 | Nov. 30, 2017 | Nov. 30, 2018 | Nov. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 98 | $ 98 | $ 197 | $ 197 |
NOTES PAYABLE - RELATED PARTY (
NOTES PAYABLE - RELATED PARTY (Details Narrative) - USD ($) | 6 Months Ended | |
Nov. 30, 2018 | May 31, 2018 | |
Balance outstanding notes payable - related party | $ 49,625 | $ 48,065 |
Officer, Director And Shareholder [Member] | 0% Notes Payable [Member] | ||
Balance outstanding notes payable - related party | $ 44,995 | |
Description of notes maturity | The loan is due upon demand. | |
Additional individual loaned amounts | $ 1,500 | |
Received repayments | 4,315 | |
Officer, Director And Shareholder [Member] | 0% Notes Payable [Member] | ||
Balance outstanding notes payable - related party | $ 4,630 | |
Description of notes maturity | The loan is due upon demand. | |
Additional individual loaned amounts | $ 3,415 | |
Received repayments | $ 1,900 |
CONVERTIBLE DEBT - RELATED PA_2
CONVERTIBLE DEBT - RELATED PARTY (Details Narrative) - USD ($) | May 11, 2015 | May 08, 2015 | Apr. 24, 2015 | Nov. 30, 2018 | Nov. 30, 2017 | Nov. 30, 2018 | Nov. 30, 2017 |
Interest expense | $ 1,141 | $ 1,141 | $ 2,294 | $ 2,294 | |||
Officer And Director [Member] | 5% Convertible Promissory Note [Member] | |||||||
Debt face amount | $ 21,500 | $ 35,000 | $ 35,000 | ||||
Description of notes maturity | Due on the earlier of March 19, 2016 or the next equity financing. | Due on the earlier of March 19, 2016 or the next equity financing. | 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. | 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 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 | $ 10,500 | $ 10,500 | ||||
Description of debt default | The loan is in default. | The loan is in default. | The loan is in default. |
STOCKHOLDERS' (DEFICIT) (Detail
STOCKHOLDERS' (DEFICIT) (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Nov. 30, 2018 | Aug. 31, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | Nov. 30, 2018 | Aug. 08, 2018 | May 31, 2018 | |
Common stock, authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Preferred stock, authorized | 3,900,000 | 3,900,000 | 3,900,000 | ||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Preferred stock, issued | 0 | 0 | 0 | ||||
Value of shares issued | $ 10,500 | $ 6,500 | $ 16,500 | $ 26,500 | |||
Stock payable reduced | $ 4,500 | $ 4,500 | |||||
Common Shares [Member] | |||||||
Number of shares issued | 40,000 | 43,333 | 165,000 | 265,000 | |||
Share price (in dollars per share) | $ 0.15 | $ 0.15 | $ 0.15 | ||||
Value of shares issued | $ 40 | $ 43 | $ 165 | $ 265 | |||
Number of shares not yet issued | 30,000 | ||||||
Stock payable reduced | $ 4,500 | $ 4,500 | |||||
Treasury Stock, Common [Member] | |||||||
Number of share cancelled | 10,000 | ||||||
Preferred Shares Series A [Member] | |||||||
Preferred stock, authorized | 100,000 | 100,000 | 100,000 | ||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Preferred stock, issued | 100,000 | 100,000 | 100,000 | 0 | |||
Preferred stock, voting rights | The preferred stock - Series A has voting rights of 1,000 to 1. | ||||||
Preferred Shares Series A [Member] | License Agreement [Member] | Raul Mansueto [Member] | |||||||
Preferred stock, issued | 100,000 | ||||||
Preferred Shares Series B [Member] | |||||||
Preferred stock, issued | 1,000,000 | ||||||
Preferred stock, conversion | The preferred stock - Series B is convertible into common stock at a conversion rate of 1 to 10. The Company shall have the right at any time prior to conversion to redeem any shares of preferred stock - Series B at a price per share equal to the face amount ($1.00). | ||||||
Preferred Shares Series B [Member] | License Agreement [Member] | Raul Mansueto [Member] | |||||||
Preferred stock, issued | 100,000 | ||||||
Convertible Preferred Stock Series B [Member] | |||||||
Preferred stock, authorized | 1,000,000 | 1,000,000 | 1,000,000 | ||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Preferred stock, issued | 1,000,000 | 1,000,000 | 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Nov. 30, 2018 | Nov. 30, 2017 | Nov. 30, 2018 | Nov. 30, 2017 | May 31, 2018 | |
Notes payable - related party | $ 49,625 | $ 49,625 | $ 48,065 | ||
Accounts payable - related party | 3,024 | 3,024 | 2,724 | ||
Convertible debt - related party, net of discount | 91,500 | 91,500 | 91,500 | ||
Accrued executive compensation | 690,955 | 690,955 | $ 552,955 | ||
Executive compensation | 2,192,717 | $ 69,000 | 2,261,717 | $ 128,500 | |
Two Officers [Member] | |||||
Accrued executive compensation | 690,955 | 690,955 | |||
Executive compensation | 2,192,717 | $ 69,000 | 2,261,717 | $ 128,500 | |
Officer, Director And Shareholder [Member] | 0% Notes Payable [Member] | |||||
Notes payable - related party | 4,630 | 4,630 | |||
Accounts payable - related party | 3,024 | 3,024 | |||
Officer, Director And Shareholder [Member] | 0% Notes Payable [Member] | |||||
Notes payable - related party | 44,995 | 44,995 | |||
Convertible debt - related party, net of discount | 91,500 | 91,500 | |||
Accrued interest | $ 16,457 | $ 16,457 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Dec. 01, 2018 | Nov. 30, 2018 | Aug. 31, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2018 |
Stock payable reduced | $ 4,500 | |||||
Notes payable - related party | $ 49,625 | $ 48,065 | ||||
Common Shares [Member] | ||||||
Number of shares issued | 40,000 | 43,333 | 165,000 | 265,000 | ||
Stock payable reduced | $ 4,500 | |||||
Subsequent Event [Member] | Common Shares [Member] | ||||||
Number of shares issued | 30,000 | |||||
Stock payable reduced | $ 4,500 | |||||
Number of additional shares issued | 44,000 | |||||
Value of additional shares issued | $ 6,600 | |||||
Officer And Director [Member] | 0% Notes Payable [Member] | Subsequent Event [Member] | ||||||
Notes payable - related party | $ 13,972 | |||||
Description of notes maturity | The loan is due upon demand. |