Document and Entity Information
Document and Entity Information - USD ($) | 6 Months Ended | ||
Jan. 31, 2021 | May 17, 2021 | Jul. 31, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | BOOMER HOLDINGS, INC. | ||
Entity Central Index Key | 0001678746 | ||
Current Fiscal Year End Date | --01-31 | ||
Document Type | 10-KT | ||
Amendment Flag | false | ||
Document Period End Date | Jan. 31, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Address, State or Province | NV | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 84,072,292 | ||
Entity Common Stock, Shares Outstanding | 155,292,311 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jan. 31, 2021 | Jul. 31, 2020 |
Current Assets: | ||
Cash | $ 1,161,295 | $ 4,171,371 |
Accounts receivables, net of allowance for bad debt of $0 and $0, respectively | 8,559,268 | 3,006,952 |
Accounts receivables - related parties | 110,000 | 3,401 |
Inventories, net | 3,710,488 | 3,559,936 |
Other current assets | 392,598 | 294,826 |
Loans receivables - related parties | 0 | 50,585 |
Total current assets | 13,933,649 | 11,087,071 |
Non-current Assets: | ||
Property and equipment, net | 191,628 | 223,583 |
Right-of-use asset | 1,727,732 | 1,065,087 |
Total non-current assets | 1,919,360 | 1,288,670 |
Total assets | 15,853,009 | 12,375,741 |
Current Liabilities: | ||
Accounts payable | 3,561,730 | 8,899,200 |
Accounts payable - related party | 3,113,250 | 713,836 |
Factor payable | 7,001,629 | 2,224,863 |
Other current liabilities | 1,384,241 | 407,504 |
Accrued interest | 141,671 | 106,525 |
Unearned revenue | 116,759 | 7,049,264 |
Derivative liability | 110,039 | 0 |
Lines of credit from related parties | 447,500 | 1,013,625 |
Current portion of convertible note payables - related parties | 2,395,807 | 1,580,375 |
Current portion of notes payable | 293,198 | 1,802 |
Current portion of operating lease liabilities | 319,701 | 263,214 |
Current portion of finance lease liabilities | 43,073 | 0 |
Total current liabilities | 18,928,598 | 22,260,208 |
Operating lease liabilities, net of current portion | 1,254,362 | 866,884 |
Finance lease liabilities, net of current portion | 139,350 | 0 |
Notes payable, net of current portion | 204,502 | 506,699 |
Convertible note payables - related parties, net of current portion | 0 | 720,140 |
Total Liabilities | 20,526,812 | 24,353,931 |
Commitments and Contingencies | ||
Stockholders' Deficit: | ||
Common stock, $0.001 par value; 200,0000,000 shares authorized, 155,292,311 and 136,229,895 shares issued and outstanding, respectively | 155,292 | 138,925 |
Additional paid in capital | 4,026,051 | 4,042,418 |
Accumulated deficit | (8,855,146) | (16,159,533) |
Total stockholders' deficit | (4,673,803) | (11,978,190) |
Total liabilities and stockholders' deficit | $ 15,853,009 | $ 12,375,741 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jan. 31, 2021 | Jul. 31, 2020 |
Current Assets: | ||
Allowance for bad debt | $ 0 | $ 0 |
Stockholders' Deficit: | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued (in shares) | 155,292,311 | 136,229,895 |
Common stock, shares outstanding (in shares) | 155,292,311 | 136,229,895 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 6 Months Ended | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | Jul. 31, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | |||
Net revenue | $ 45,106,131 | $ 427,563 | $ 11,472,571 |
Cost of goods sold | 16,420,869 | 153,387 | 3,888,175 |
Gross profit | 28,685,262 | 274,176 | 7,584,396 |
Operating expenses: | |||
Advertising and marketing | 8,284,457 | 639,653 | 13,832,587 |
General and administrative | 7,058,291 | 530,706 | 3,854,396 |
Payroll and payroll taxes | 2,579,339 | 904,184 | 2,429,386 |
Professional fees | 2,736,804 | 967,382 | 1,974,360 |
Research and development | 0 | 16,485 | 17,024 |
Depreciation and amortization | 57,100 | 8,298 | 28,224 |
Rent | 343,144 | 198,095 | 624,882 |
Total operating expenses | 21,059,135 | 3,264,803 | 22,760,859 |
Income (loss) from operations | 7,626,127 | (2,990,627) | (15,176,463) |
Other income (expense): | |||
Interest expense | (58,356) | (84,590) | (253,618) |
Interest expense - related party | (238,384) | 0 | (89,440) |
Other expense | (35,000) | 0 | (56,580) |
Other income | 10,000 | 1,490 | 11,323 |
Total other expense, net | (321,740) | (83,100) | (388,315) |
Income (loss) before provision for income taxes | 7,304,387 | (3,073,727) | (15,564,778) |
Income tax provision | 0 | 0 | 0 |
Net income (loss) | $ 7,304,387 | $ (3,073,727) | $ (15,564,778) |
Earnings (loss) per share: | |||
Basic (in dollars per share) | $ 0.05 | $ (0.01) | $ (0.12) |
Diluted (in dollars per share) | $ 0.05 | $ (0.01) | $ (0.12) |
Weighted average number of common shares outstanding: | |||
Basic (in shares) | 148,436,710 | 238,475,188 | 124,600,609 |
Diluted (in shares) | 150,069,777 | 238,475,188 | 124,600,609 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) | Common Stock [Member] | Additional Paid-in-Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Jul. 31, 2019 | $ 520 | $ 519,480 | $ (594,755) | $ (74,755) |
Balance (in shares) at Jul. 31, 2019 | 30,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of stock | $ 138,405 | 3,522,938 | 0 | 3,661,343 |
Issuance of stock (in shares) | 136,199,895 | |||
Net income (loss) | $ 0 | 0 | (15,564,778) | (15,564,778) |
Balance at Jul. 31, 2020 | $ 138,925 | 4,042,418 | (16,159,533) | (11,978,190) |
Balance (in shares) at Jul. 31, 2020 | 136,229,895 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuances of stock as a result from previous unregistered shares from reverse merger shareholders | $ 16,119 | (16,119) | 0 | 0 |
Issuances of stock as a result from previous unregistered shares from reverse merger shareholders (in shares) | 18,814,416 | |||
Issuance of stock | $ 248 | (248) | 0 | $ 0 |
Issuance of stock (in shares) | 248,000 | 248,000 | ||
Net income (loss) | $ 0 | 0 | 7,304,387 | $ 7,304,387 |
Balance at Jan. 31, 2021 | $ 155,292 | $ 4,026,051 | $ (8,855,146) | $ (4,673,803) |
Balance (in shares) at Jan. 31, 2021 | 155,292,311 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2021 | Jul. 31, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 7,304,387 | $ (15,564,778) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation expense | 57,100 | 28,224 |
Noncash lease expense | (48,686) | 65,011 |
Accretion of debt discount | 80,847 | 0 |
Changes in assets and liabilities: | ||
Accounts receivables, net | (5,552,316) | (3,006,952) |
Accounts receivables, net - related party | (106,599) | (3,401) |
Other current assets | (97,772) | (292,892) |
Inventories, net | (150,552) | (3,506,212) |
Accounts payable | (5,337,470) | 8,739,331 |
Accounts payable - related party | 2,399,414 | 713,836 |
Other current liabilities | 976,737 | 106,525 |
Accrued interest | 35,146 | 390,766 |
Unearned revenue | (6,932,505) | 7,049,264 |
Net cash used in operating activities | (7,372,269) | (5,281,278) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (12,716) | (175,879) |
Loans provided on loans receivables to related parties | 0 | (822,119) |
Payment received from loans made to related parties | 50,585 | 773,133 |
Net cash provided by (used in) investing activities | 37,869 | (224,865) |
Cash flows from financing activities: | ||
Borrowing on factor payables | 34,167,575 | 2,967,528 |
Repayment on factor payables | (29,390,809) | (742,665) |
Borrowing on lines of credit - related parties | 95,000 | 2,221,363 |
Repayment on lines of credit - related parties | (661,125) | (1,317,738) |
Borrowing on convertible notes payable - related parties | 262,500 | 2,351,765 |
Repayment on convertible notes payable - related parties | (138,015) | (51,250) |
Borrowing on notes payable | 0 | 2,166,929 |
Repayment on notes payable | (10,802) | (1,658,428) |
Borrowing on note payable - related parties | 0 | 64,400 |
Repayment on note payable - related parties | 0 | (138,400) |
Proceeds from issuance of common stock | 0 | 3,661,343 |
Net cash provided by financing activities | 4,324,324 | 9,524,847 |
Net (decrease) increase in cash | (3,010,076) | 4,018,704 |
Cash - beginning of period | 4,171,371 | 152,667 |
Cash - end of period | 1,161,295 | 4,171,371 |
Cash paid during the period for: | ||
Interest | 162,353 | 236,533 |
Income taxes | 0 | 0 |
Non-cash investing and financing activities: | ||
Debt discount issued in conjunction with debt | $ 110,039 | $ 0 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 6 Months Ended |
Jan. 31, 2021 | |
DESCRIPTION OF BUSINESS [Abstract] | |
DESCRIPTION OF BUSINESS | 1. DESCRIPTION OF BUSINESS Boomer Naturals Holdings Inc. (the “Company”), through its wholly-owned subsidiary Boomer Naturals, Inc., a Nevada corporation, provides wellness solutions to multiple target markets through multiple sales channels, including PPE products, retail locations, e-commerce, and wholesale distribution networks. Boomer sells health and wellness products and services geared toward alleviating pain, anxiety and improving general wellness through our proprietary lines of Boomer Botanics products. Boomer Botanics formula is the first FDA-compliant alternative that fully supports the body’s central nervous system (“CNS”). This revolutionary breakthrough combines five natural and powerful ingredients that target the CNS. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jan. 31, 2021 | |
BASIS OF PRESENTATION [Abstract] | |
BASIS OF PRESENTATION | 2. BASIS OF PRESENTATION The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position and results of operations for the periods presented. The Company currently operates in one business segment. The Company is not organized by market and is managed and operated as one business. A single management team reports to the chief operating decision maker, the Chief Executive Officer, who comprehensively manages the entire business. The Company does not currently operate any separate lines of businesses or separate business entities. Change of year end The financial year end of the Company was changed from July 31 to January 31. Accordingly, the current financial statements are prepared for 6 months from August 1, 2020 to January 31, 2021 and as a result, the comparative amounts stated in the consolidated statement of operations, consolidated statement of cash flows, the consolidated statement of stockholders’ deficit, and the related notes to consolidated financial statements are not comparable. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jan. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management who are responsible for the integrity and objectivity of the financial statements. These accounting policies conform to generally accepted accounting principles (“GAAP”) as promulgated in the United States of America and have been consistently applied in the preparation of the financial statements. Consolidation The accompanying consolidated financial statements have been prepared in accordance with GAAP as promulgated in the United States of America and in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation. The consolidated financial statements include the account of Boomer Holdings, Inc. and a wholly owned subsidiary, Boomer Naturals, Inc. All intercompany accounts, transactions, and profits have been eliminated upon consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include, but are not limited to, the estimated useful lives of property and equipment, and patent and trademark, the ultimate collection of accounts receivable and accrued expenses. Actual results could materially differ from those estimates. Revenue Recognition The Company complies with the Revenue Recognition guidance in ASC 606. The Company records revenue when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the prices for the services performed and the collectability of those amounts. The Company has three segments of business: e-commerce, retail, and wholesale. All e-commerce and wholesale division recognize the sale at the time the product is shipped to the consumers and the items are shipped on the date of sales. Retail store locations recognize revenue at the time of the sale when the consumers take possession of the products, and the Company uses FOB shipping point, and items are shipped on the date of sales. The Company recognizes an allowance for estimated future sales returns in the period revenue is recorded, based on pending returns and historical return data, among other factors. As of January 31, 2021, the allowance for sales returns is estimated based upon historical experience and a provision for estimated returns is recorded as a reduction in sales in the relevant period. If actual results in the future vary from the Company’s estimates, the Company adjusts these estimates, which would affect net sales and earnings in the period such variances become known. Advertising and Marketing Expense Advertising and marketing costs are expensed as incurred. Advertising and marketing expense amounted to $8,284,457 and $13,832,587 for the six months ended January 31, 2021 and the year ended July 31, 2020, respectively. Comprehensive Income Comprehensive income is reported in accordance with FASB ASC Topic 220 “Comprehensive Income," which established standards for reporting and displaying comprehensive income and its components in a financial statement that is displayed with the same prominence as other financial statements. Total comprehensive income is defined as all changes in ' equity during a period, other than those resulting from investments by and distributions to (i.e., issuance of equity securities and dividends). Generally, total comprehensive income (loss) equals net income (loss) plus or minus adjustments for currency translation. There are no items other than net loss affecting comprehensive loss . Cash and Cash Equivalents The Company considers all deposits with financial institutions and all highly liquid investments with original maturities when purchased of three months or less to be cash equivalents. Accounts Receivable Accounts receivable are carried at original invoice amount less the allowance for doubtful accounts based on a review of all outstanding amounts at year end. Management determines the allowance for doubtful accounts based on a combination of write-off history, aging analysis, and any specific known troubled accounts. Trade receivables are written off when deemed uncollectible. Factoring Accounts Receivables The Company entered into factoring agreement with Prestige Capital Finance, LLC (“Factorer”) on June 24, 2020 and amended August 17, 2020. Under the agreement, the Company may factor its accounts receivables of up to 80% of the face value with maximum outstanding balance of $10.0 million and the fee ranges between 1% and 3% depending on the period when customers pay the outstanding accounts receivables. The Company had $5,804,682 and $171,690 of accounts receivables factored as of January 31, 2021 and July 31, 2020, respectively, had factor payable based on accounts receivables factored of $4,660,290 and $137,352 as of January 31, 2021 and July 31, 2020, respectively, and incurred approximately $2,660,500 and $193,000 of factor fees for the six months ended January 31, 2021 and the year ended July 31, 2020, respectively. Inventories Inventories primarily consist of finished goods and are stated at the lower of cost (first-in-first-out) or market. The Company maintains an allowance for potentially excess and obsolete inventories and inventories that are carried at costs that are higher than their estimated net realizable values. Property and Equipment Property and equipment consist of leasehold improvements, furniture and fixtures, machinery and equipment are stated at cost. Property and equipment are recorded at cost. Depreciation of property and equipment is provided using the straight-line method over the estimated useful lives of the assets, generally 5-7 year. Leasehold improvements are depreciated over the shorter of the useful life of the improvement or the lease term, including renewal periods that are reasonably assured. Impairment of Long-lived Assets In accordance with ASC 360, “Property, Plant, and Equipment,” the Company reviews for impairment of long-lived assets and certain identifiable intangibles whenever events or circumstances indicate that the carrying amount of assets may not be recoverable. The Company considers the carrying value of assets may not be recoverable based upon our review of the following events or changes in circumstances: the asset’s ability to continue to generate income from operations and positive cash flow in future periods; loss of legal ownership or title to the assets; significant changes in our strategic business objectives and utilization of the asset; or significant negative industry or economic trends. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset are less than its carrying amount. Fair Value of Financial Instruments The Company records its financial assets and liabilities at fair value, which is defined under the applicable accounting standards as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measure date. The Company uses valuation techniques to measure fair value, maximizing the use of observable outputs and minimizing the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation. As of January 31, 2021 and July 31, 2020, the Company believes that the carrying value of cash, account receivables, accounts payable, accrued expenses, and other current assets and liabilities approximate fair value due to the short maturity of theses financial instruments. The financial statements do not include any financial instruments at fair value on a recurring or non-recurring basis. Income Taxes Income taxes are accounted for under an asset and liability approach. This process involves calculating the temporary and permanent differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The temporary differences result in deferred tax assets and liabilities, which would be recorded on the Balance Sheets in accordance with ASC 740, which established financial accounting and reporting standards for the effect of income taxes. The likelihood that its deferred tax assets will be recovered from future taxable income must be assessed and, to the extent that recovery is not likely, a valuation allowance is established. Changes in the valuation allowance in a period are recorded through the income tax provision in the consolidated Statements of Operations. ASC 740-10-30 was adopted from the date of its inception. ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s consolidated financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740-10, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740-10 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a result of the implementation of ASC 740-10, and currently, the Company does not have a liability for unrecognized income tax benefits . Basic and diluted earnings per share Basic earnings (loss) per share are computed by dividing net earnings available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. I n periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive There were 1,633,067 and 0 potential dilutive securities outstanding for the six months ended January 31 , 2021 and the year ended Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are accounts receivable and other receivables arising from its normal business activities. The Company has a diversified customer base. The Company controls credit risk related to accounts receivable through credit approvals, credit limits and monitoring procedures. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectable accounts and, as a consequence, believes that its accounts receivable related credit risk exposure beyond such allowance is limited. The Company generates significant revenues derived from the PPE products which accounted for 94.8% of revenues , 2021. The Company had 1 and 2 customers that accounted for 98% and 92% of revenue , 2021 and and had related accounts receivable of $8,294,495 and $3,508,750 as of January 31, 2021 and July 31, 2020, respectively. The Company maintains its cash and cash equivalents with various credit institutions. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, deposits of up to $250,000 at FDIC-insured institutions are covered by FDIC insurance. At times, deposits may be in excess of the FDIC insurance limit; however, management does not believe the Company is exposed to any significant related credit risk. Leases Effective from August 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. On February 25, 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. ASC 842 requires that lessees recognize right of use assets and lease liabilities calculated based on the present value of lease payments for all lease agreements with terms that are greater than twelve months. ASC 842 distinguishes leases as either a finance lease or an operating lease that affects how the leases are measured and presented in the statement of operations and statement of cash flows. Recent Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes. Income Taxes Other recently issued accounting pronouncements did not, or are not believed by management to, have a material effect on our present or future consolidated financial statements. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jan. 31, 2021 | |
INVENTORIES [Abstract] | |
INVENTORIES | 4. INVENTORIES Inventories primarily consisted of finished goods in the amount of $3,710,488 and $3,559,936 as of January 31, 2021 and July 31, 2020, respectively. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Jan. 31, 2021 | |
PROPERTY AND EQUIPMENT [Abstract] | |
PROPERTY AND EQUIPMENT | 5. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: January 31, 2021 July 31, 2020 Furniture and equipment $ 47,738 $ 46,134 Leasehold improvements 129,725 130,001 Computers 87,060 75,672 Total property and equipment 264,523 251,807 Less – accumulated depreciation (72,895 ) (28,224 ) Total property and equipment, net $ 191,628 $ 223,583 Depreciation expense on property and equipment amounted to $44,671 and $28,224 , 2021 and , respectively. |
ACCOUNTS PAYABLE - RELATED PART
ACCOUNTS PAYABLE - RELATED PARTIES | 6 Months Ended |
Jan. 31, 2021 | |
ACCOUNTS PAYABLE - RELATED PARTIES [Abstract] | |
ACCOUNTS PAYABLE - RELATED PARTIES | 6. ACCOUNTS PAYABLE – RELATED PARTIES On April 9, 2020, the Company entered into an Exclusive Distributorship Agreement with PhamVan Trading Co., Ltd. (the “Supplier”). Pursuant to the agreement, the Company is the exclusive distributor of the supplier’s PPE products in the United States. The Supplier in turn has exclusive manufacturing agreements with certain manufacturers that provide that the manufacturers will not sell these items to any other U.S. based customer provided that the Supplier orders an annual minimum of 1,500,000 masks from one manufacture and 750,000 masks from a second manufacturer, respectively. If the minimum amounts are not met, the agreements become non-exclusive for the U.S. market. Giang Thi Hoang, a member of the Company’s board of directors and holder of approximately 7.7% of the Company’s Common Stock, holds a minority equity position in the Supplier which is controlled by her sister and brother-in-law. At the time the Company entered into the agreement with the Supplier, Ms. Hoang was not yet a member of the board of directors. The Company purchased approximately $17,257,000 and $4,241,000 of inventory , 2021 and the year ended , respectively. The Company had accounts payable to related party in the amount of $3,113,250 and $713,836 as of January 31, 2021 and July 31, 2020, respectively. |
FACTOR PAYABLES
FACTOR PAYABLES | 6 Months Ended |
Jan. 31, 2021 | |
FACTOR PAYABLES [Abstract] | |
FACTOR PAYABLES | 7. FACTOR PAYABLES Factor payables consisted of the following: January 31, 2021 July 31, 2020 August 2020 (factor payable) $ 4,660,290 $ 137,352 November 2020 ($1,000,000 factor payable) 257,744 - November 2020 ($2,200,000 factor payable) 437,381 - November 2020 ($2,000,000 factor payable) 1,680,000 - June 2020 ($1,000,000 factor payable) - 742,871 July 2020 ($550,000 factor payable) - 460,825 July 2020 ($1,000,000 factor payable - 931,315 Total factor payables 7,035,415 2,272,363 Less – debt discount (33,786 ) (47,500 ) Less – current portion (7,001,629 ) (2,224,863 ) Total factor payables, net of current portion $ - $ - The Company entered into factoring agreements with Prestige Capital Finance, LLC, TVT Capital, LLC, and APEX Funding, LLC (“Factorers”) respectively, on June 2020, November 2020, and July 2020. Under the agreement with Prestige Capital, the Company may factor its accounts receivables of up to 80% of the face value with maximum outstanding balance of $10.0 million and the fee ranges between 1% and 3% depending on the period when customers pay the outstanding accounts receivables. Under the agreement with TVT Capital, the Company factor its accounts receivable at a fixed price with recourse and non-interest bearing of 17%. Under the agreement with APEX Funding, the Company factor its accounts receivable at a fixed price and non-interest bearing of 13%, which matured in November 2020 and fully paid off. The Company had $7,035,415 and $2,272,363 of accounts receivables factored as of January 31, 2021 and July 31, 2020, respectively, had factor payable based on accounts receivables factored of $7,035,415 and $2,272,363 as of January 31, 2021 and July 31, 2020, respectively, and incurred approximately $2,660,500 and $193,000 of factor fees for the six months ended January 31, 2021 and the year ended July 31, 2020, respectively. |
LINES OF CREDIT - RELATED PARTI
LINES OF CREDIT - RELATED PARTIES | 6 Months Ended |
Jan. 31, 2021 | |
LINES OF CREDIT - RELATED PARTIES [Abstract] | |
LINES OF CREDIT - RELATED PARTIES | 8. LINES OF CREDIT – RELATED PARTIES Lines of credit related parties consisted of the following: January 31, 2021 July 31, 2020 July 2020 ($1,000,000 line of credit) $ 447,500 $ 947,500 July 2019 ($66,125 line of credit) - 66,125 Total lines of credit – related parties $ 447,500 $ 1,013,625 Interest expense was $42,486 and $65,983 , 2021 and the year ended , respectively, for lines of credit from related parties. |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Jan. 31, 2021 | |
NOTES PAYABLE [Abstract] | |
NOTES PAYABLE | 9. NOTES PAYABLE Notes payable consisted of the following: January 31, 2021 July 31, 2020 August 2019 ($5,980 note payable) $ - $ 1,801 April 2020 ($159,000 note payable) 150,000 159,000 April 2020 ($347,700 note payable) 347,700 347,700 Total notes payable 497,700 508,501 Less – current portion (293,198 ) (1,802 ) Total notes payable, net of current portion $ 204,502 $ 506,699 Interest expense was $7,553 and $2,942 , 2021 and the year ended , respectively, for notes payable. For years ended January 31, Amount 2022 $ 293,198 2023 63,122 2024 5,172 2025 5,172 2026 5,172 Thereafter 125,864 Total $ 497,700 |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 6 Months Ended |
Jan. 31, 2021 | |
CONVERTIBLE NOTES PAYABLE [Abstract] | |
CONVERTIBLE NOTES PAYABLE | 10. CONVERTIBLE NOTES PAYABLE Convertible notes payable consisted of the following: January 31, 2021 July 31, 2020 January 2020 ($250,000 convertible note payable) $ 250,000 $ 260,070 January 2020 ($250,000 convertible note payable) 250,000 260,070 November 2019 ($100,000 convertible note payable) 100,000 105,375 March 2020 ($25,000 convertible note payable) 25,000 25,000 February 2019 ($500,000 convertible note payable) 500,000 500,000 February 2019 ($500,000 convertible note payable) 500,000 500,000 January 2020 ($100,000 convertible note payable) - 100,000 September 2019 ($100,000 convertible note payable) and December 2019 ($100,000 convertible note payable) 200,000 200,000 June 2020 ($50,000 convertible note payable) 50,000 50,000 September 2019 ($100,000 convertible note payable) and December 2019 ($200,000 convertible note payable) 300,000 300,000 October 2020 ($262,500 convertible note payable) 262,500 - Total convertible notes payable 2,437,500 2,300,515 Less: debt discount (41,693 ) - Less – current portion (2,395,807 ) (1,580,375 ) Total convertible notes payable, net of current portion $ - $ 720,140 Interest expense was $256,701 and $278,438 , 2021 and the year ended , respectively, for convertible notes payable. |
DERIVATIVE LIABILITY
DERIVATIVE LIABILITY | 6 Months Ended |
Jan. 31, 2021 | |
DERIVATIVE LIABILITY [Abstract] | |
DERIVATIVE LIABILITY | 11. DERIVATIVE LIABILITY Derivative liability consisted of the following: January 31, 2021 July 31, 2020 Beneficial conversion feature – convertible debt $ 110,039 $ - Total derivative liability $ 110,039 $ - On October 14, 2020, the Company issued a convertible promissory note for $262,500 to Harbor Gates Capital, LLC (“Harbor”) (the “Harbor Note”), due April 14, 2021 (the “Maturity Date”). The Harbor Note incurred a “guaranteed” interest charge of 10% of the principal sum and was due upon payback of the Harbor Note. The Harbor Note included an original issue discount of $12,500, netting the balance received by the Company from Harbor at $250,000. The Harbor transaction include investment incentives, which took the form of an obligation by the Company to issue Harbor 37,500 shares. Harbor at any time and from time to time can convert in whole or in part the outstanding and unpaid principal amount into shares of common stock, as defined in the Harbor Note; the conversion price shall become equal to a 70% of the lowest volume weighted average price of the Company’s common stock during the 15 consecutive trading days prior to the date on which Harbor elects to convert all or part of the Harbor Note (the “Default Provision”). Derivative financial instruments, as defined in ASC 815, “Accounting for Derivative Financial Instruments and Hedging Activities”, consist of financial instruments or other contracts that contain a notional amount and one or more underlying (e.g. interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or, in rare instances, assets. The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option at its fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. Based on ASC 815, the Company determined that the convertible debt contained embedded derivatives and valued the derivative using the Black-Scholes method. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates (such as volatility, estimated life and interest rates) that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of our common stock, which has a high-historical volatility. Since derivative financial instruments are initially and subsequently carried at fair values, the Company’s operating results will reflect the volatility in these estimate and assumption changes. The Company performs valuation of derivative instruments at the end of each reporting period. The fair value of derivative instruments is recorded and shown separately under current liabilities as these instruments can be converted anytime. Changes in fair value are recorded in the consolidated statement of income under other income (expenses). |
UNEARNED REVENUE
UNEARNED REVENUE | 6 Months Ended |
Jan. 31, 2021 | |
UNEARNED REVENUE [Abstract] | |
UNEARNED REVENUE | 12. UNEARNED REVENUE The Company had $116,759 and $7,049,264 in unearned revenue as of January 31, 2021 and July 31, 2020, respectively. This amount was comprised of customer deposit for an order that was fulfilled subsequent to the period end or customer orders that were shipped FOB Destination and had not been delivered as of period end. This revenue was recognized by the Company subsequent to the period end when delivered. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 6 Months Ended |
Jan. 31, 2021 | |
STOCKHOLDERS' DEFICIT [Abstract] | |
STOCKHOLDERS' DEFICIT | 13. STOCKHOLDERS’ DEFICIT During the six months ended January 31, 2021, the Company issued 248,000 shares of the Company’s common stock previously unissued as of July 31, 2020. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jan. 31, 2021 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | 14. EARNINGS PER SHARE FASB ASC Topic 260, Earnings Per Share Basic earnings (loss) per share are computed by dividing net earnings available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. I n periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive There were 1,633,067 and 0 potential dilutive securities outstanding for the six months ended January 31, 2021 and the year ended July 31, 2020, respectively. The potential dilutive securities for the year ended July 31, 2020 are zero as they would have an anti-dilutive effect. The following table sets forth the computation of basic and diluted net income per share: Six Months Ended January 31, 2021 Year Ended July 31, 2021 Net income (loss) attributable to the common stockholders $ 7,304,387 $ (15,564,778 ) Basic weighted average outstanding shares of common stock 148,436,710 124,600,609 Dilutive effect of convertible notes payable 1,633,067 - Diluted weighted average common stock and common stock equivalents 150,069,777 124,600,609 Net income (loss) per share Basic $ 0.05 $ (0.12 ) Diluted $ 0.05 $ (0.12 ) |
INCOME TAX PROVISION
INCOME TAX PROVISION | 6 Months Ended |
Jan. 31, 2021 | |
INCOME TAX PROVISION [Abstract] | |
INCOME TAX PROVISION | 15. INCOME TAX PROVISION The Company did not have material income tax provision (benefit) because of net loss and valuation allowances against deferred income tax provision , 2021 and the year ended . A reconciliation of the Company’s effective tax rate to the statutory federal rate is as follows: January 31, 2021 July 31, 2020 Statutory federal rate 21.0 % 21.0 % State income taxes net of federal income tax benefit and others 0.0 % 0.0 % Permanent differences for tax purposes and others 0.1 % 0.0 % Change in valuation allowance (21.1 )% (21.0 )% Effective tax rate 0.0 % 0.0 % The income tax benefit differs from the amount computed by applying the U.S. federal statutory tax rate of 21%, primarily due to the change in the valuation allowance and state income tax benefit, offset by nondeductible expenses. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of deferred tax assets and liabilities are as follows: January 31, 2021 July 31, 2020 Deferred tax assets: Net operating losses $ 1,849,677 $ 3,268,603 Other temporary differences - - Total deferred tax assets 1,849,677 3,268,603 Less – valuation allowances (1,849,677 ) (3,268,603 ) Total deferred tax assets, net of valuation allowances $ - $ - The Company had available net operating loss carryovers of approximately $8,781,786 and $15,564,778 as of January 31, 2021 and July 31, 2020, respectively. Per the Tax Cuts and Jobs Act (TCJA) implemented in 2018, the two-year carryback provision was removed and now allows for an indefinite carryforward period. The TCJA’S limitations of 80% of taxable income applied to all NOL’s incurred in tax years beginning after December 31, 2017. The Coronavirus Aid, Relief and Economic Security Act (“CARES”) suspends the 80% taxable icome limitation, allowing an NOL carryforward to fully offset taxable income in the tax years beginning before January 1, 2021. As a result, net operating loss may be applied against future taxable income and expires at various dates subject to certain limitations. The Company has a deferred tax asset arising substantially from the benefits of such net operating loss deduction and has recorded a valuation allowance for the full amount of this deferred tax asset since it is more likely than not that some or all of the deferred tax asset may not be realized. The Company files income tax returns in the U.S. federal jurisdiction and is subject to income tax examinations by federal tax authorities for tax year ended 2019 and later and not subject to Nevada authorities for tax year ended 2019 and later. The Company currently is not under examination by any tax authority. The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. As of January 31, 2021, the Company has no accrued interest or penalties related to uncertain tax positions. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jan. 31, 2021 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | 16. RELATED PARTY TRANSACTIONS The Company had the following related party transactions: • Purchases and Accounts Payables • The Company purchased approximately $17,257,000 and $4,241,000 of inventory , 2021 and , respectively. The Company had accounts payable to related party in the amount of $3,113,250 and $713,836 as of January 31, 2021 and July 31, 2020, respectively. • Line of Credit • Notes Payable (related parties) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jan. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 17. COMMITMENTS AND CONTINGENCIES Leases The Company adopted ASC 842 as of August 1, 2019. The Company has an operating lease for the Company’s warehouse and lease ROU assets of $ 1,816,774 and operating and finance lease liabilities of $1,840,087 as of August 1, 2019. The Company leases its offices and other facilities, vehicles, and office equipment under long-term, non-cancelable operating and finance leases. Some leases include options to purchase, terminate, or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised. We do not recognize ROU assets and lease liabilities for leases with terms at inception of twelve months or less. At inception, we determine if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. Some of our arrangements contain lease components (e.g., minimum rent payments) and non-lease components (e.g., services). We have elected to account for these lease and non-lease components as separate components. We are also electing not to apply the recognition requirements to short-term leases of twelve months or less. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. The Company utilizes its incremental borrowing rate in determining the present value of lease payments unless the implicit rate is readily determinable. The Company’s incremental borrowing rate is 17% based on borrowings. The operating lease ROU asset includes any lease payments made and excludes lease incentives. Our variable lease payments primarily consist of lease payments resulting from changes in the consumer price index. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. ROU assets and lease payments may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Finance leases are recorded as an asset and an obligation at an amount equal to the present value of the minimum lease payments during the lease term. Amortization expense and interest expense associated with finance leases are included in selling, general, and administrative expense and interest expense, respectively, on the consolidated statements of operations. The Company adopted ASC 842 under the simplified transition method. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods. The Company entered into the following operating facility leases: • Cheyenne Fairways • Cheyenne Technology Center – • Losee Industrial Park In accordance with ASC 842, the components of lease expense were as follows: Six Months Ended January 31, Year Ended July 31, 2021 2020 Operating lease expense $ 284,400 $ 307,659 Finance lease cost Amortization of right-of-use assets $ 17,987 $ 9,493 Interest on lease liabilities $ 6,955 $ 4,751 Total finance lease cost $ 24,942 $ 14,244 Total lease expense $ 309,342 $ 321,903 In accordance with ASC 842, other information related to leases was as follows: Cash paid for amounts included in the measurement of lease liabilities: Six Months ended January 31, 2021 Year Ended July 31, 2020 Operating cash flows from lease liabilities Operating cash flows from finance leases $ 6,735 $ 4,686 Operating cash flows from operating leases $ 269,669 $ 312,858 Financing cash flows from finance leases $ 20,965 $ 9,766 Non-cash activity: Right-of-use assets obtained in exchange for lease obligations Finance leases $ 111,415 100,063 Operating leases $ 313,180 $ 1,505,884 Weighted-average remaining lease term—finance leases 3.8 years 4.5 years Weighted-average remaining lease term—operating leases 4.3 years 5.1 years Weighted-average discount rate—finance leases 17.8 % 23.5 % Weighted-average discount rate—operating leases 17.0 % 17.0 % In accordance with ASC 842, maturities of lease liabilities as of January 31, 2021 were as follows: Year ending: 2022 $ 734,499 2023 742,285 2024 612,724 2025 367,917 2026 343,125 Thereafter 201,887 Total undiscounted cash flows $ 3,002,437 Lease liabilities—current $ 362,774 Lease liabilities—long-term $ 1,393,712 Lease liabilities—total $ 1,756,486 Difference between undiscounted and discounted cash flows $ 1,245,951 Legal The Company is subject to various legal proceedings from time to time as part of its business. As of January 31, 2021, the Company was not currently party to any legal proceedings or threatened legal proceedings, the adverse outcome of which, individually or in the aggregate, it believes would have a material adverse effect on its business, financial condition and results of operations. Guarantees T he Co mpa ny ’ s $2.7 million line of credit is pe r so na l l y g ua ra nte e d b y th e Co m pan y ’ s President . |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jan. 31, 2021 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | 18. SUBSEQUENT EVENTS On April 21, 2020, the Company received loan proceeds in the amount of $347,700 under the Paycheck Protection Program (“PPP”) from Cross River Bank, Inc. (“Lender”). The PPP was established as part of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent, and utilities, and maintains its payroll levels. The PPP note of $347,700 was forgiven in April 2021. From February through April 2021, the Company entered into Merchant Cash Advance Agreements (“Agreements”) with APEX Funding Source for receivables purchased totaling $4,432,000 with a purchase price totaling $3,200,000. The Company will remit weekly payments totaling $233,433 until repaid. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jan. 31, 2021 | |
BASIS OF PRESENTATION [Abstract] | |
Basis of Presentation | The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position and results of operations for the periods presented. |
Segment Reporting | The Company currently operates in one business segment. The Company is not organized by market and is managed and operated as one business. A single management team reports to the chief operating decision maker, the Chief Executive Officer, who comprehensively manages the entire business. The Company does not currently operate any separate lines of businesses or separate business entities. |
Change of year end | Change of year end The financial year end of the Company was changed from July 31 to January 31. Accordingly, the current financial statements are prepared for 6 months from August 1, 2020 to January 31, 2021 and as a result, the comparative amounts stated in the consolidated statement of operations, consolidated statement of cash flows, the consolidated statement of stockholders’ deficit, and the related notes to consolidated financial statements are not comparable. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jan. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Consolidation | Consolidation The accompanying consolidated financial statements have been prepared in accordance with GAAP as promulgated in the United States of America and in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation. The consolidated financial statements include the account of Boomer Holdings, Inc. and a wholly owned subsidiary, Boomer Naturals, Inc. All intercompany accounts, transactions, and profits have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include, but are not limited to, the estimated useful lives of property and equipment, and patent and trademark, the ultimate collection of accounts receivable and accrued expenses. Actual results could materially differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company complies with the Revenue Recognition guidance in ASC 606. The Company records revenue when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the prices for the services performed and the collectability of those amounts. The Company has three segments of business: e-commerce, retail, and wholesale. All e-commerce and wholesale division recognize the sale at the time the product is shipped to the consumers and the items are shipped on the date of sales. Retail store locations recognize revenue at the time of the sale when the consumers take possession of the products, and the Company uses FOB shipping point, and items are shipped on the date of sales. The Company recognizes an allowance for estimated future sales returns in the period revenue is recorded, based on pending returns and historical return data, among other factors. As of January 31, 2021, the allowance for sales returns is estimated based upon historical experience and a provision for estimated returns is recorded as a reduction in sales in the relevant period. If actual results in the future vary from the Company’s estimates, the Company adjusts these estimates, which would affect net sales and earnings in the period such variances become known. |
Advertising and Marketing Expense | Advertising and Marketing Expense Advertising and marketing costs are expensed as incurred. Advertising and marketing expense amounted to $8,284,457 and $13,832,587 for the six months ended January 31, 2021 and the year ended July 31, 2020, respectively. |
Comprehensive Income | Comprehensive Income Comprehensive income is reported in accordance with FASB ASC Topic 220 “Comprehensive Income," which established standards for reporting and displaying comprehensive income and its components in a financial statement that is displayed with the same prominence as other financial statements. Total comprehensive income is defined as all changes in ' equity during a period, other than those resulting from investments by and distributions to (i.e., issuance of equity securities and dividends). Generally, total comprehensive income (loss) equals net income (loss) plus or minus adjustments for currency translation. There are no items other than net loss affecting comprehensive loss . |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all deposits with financial institutions and all highly liquid investments with original maturities when purchased of three months or less to be cash equivalents. |
Accounts Receivable | Accounts Receivable Accounts receivable are carried at original invoice amount less the allowance for doubtful accounts based on a review of all outstanding amounts at year end. Management determines the allowance for doubtful accounts based on a combination of write-off history, aging analysis, and any specific known troubled accounts. Trade receivables are written off when deemed uncollectible. |
Factoring Accounts Receivables | Factoring Accounts Receivables The Company entered into factoring agreement with Prestige Capital Finance, LLC (“Factorer”) on June 24, 2020 and amended August 17, 2020. Under the agreement, the Company may factor its accounts receivables of up to 80% of the face value with maximum outstanding balance of $10.0 million and the fee ranges between 1% and 3% depending on the period when customers pay the outstanding accounts receivables. The Company had $5,804,682 and $171,690 of accounts receivables factored as of January 31, 2021 and July 31, 2020, respectively, had factor payable based on accounts receivables factored of $4,660,290 and $137,352 as of January 31, 2021 and July 31, 2020, respectively, and incurred approximately $2,660,500 and $193,000 of factor fees for the six months ended January 31, 2021 and the year ended July 31, 2020, respectively. |
Inventories | Inventories Inventories primarily consist of finished goods and are stated at the lower of cost (first-in-first-out) or market. The Company maintains an allowance for potentially excess and obsolete inventories and inventories that are carried at costs that are higher than their estimated net realizable values. |
Property and Equipment | Property and Equipment Property and equipment consist of leasehold improvements, furniture and fixtures, machinery and equipment are stated at cost. Property and equipment are recorded at cost. Depreciation of property and equipment is provided using the straight-line method over the estimated useful lives of the assets, generally 5-7 year. Leasehold improvements are depreciated over the shorter of the useful life of the improvement or the lease term, including renewal periods that are reasonably assured. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets In accordance with ASC 360, “Property, Plant, and Equipment,” the Company reviews for impairment of long-lived assets and certain identifiable intangibles whenever events or circumstances indicate that the carrying amount of assets may not be recoverable. The Company considers the carrying value of assets may not be recoverable based upon our review of the following events or changes in circumstances: the asset’s ability to continue to generate income from operations and positive cash flow in future periods; loss of legal ownership or title to the assets; significant changes in our strategic business objectives and utilization of the asset; or significant negative industry or economic trends. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset are less than its carrying amount. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company records its financial assets and liabilities at fair value, which is defined under the applicable accounting standards as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measure date. The Company uses valuation techniques to measure fair value, maximizing the use of observable outputs and minimizing the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation. As of January 31, 2021 and July 31, 2020, the Company believes that the carrying value of cash, account receivables, accounts payable, accrued expenses, and other current assets and liabilities approximate fair value due to the short maturity of theses financial instruments. The financial statements do not include any financial instruments at fair value on a recurring or non-recurring basis. |
Income Taxes | Income Taxes Income taxes are accounted for under an asset and liability approach. This process involves calculating the temporary and permanent differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The temporary differences result in deferred tax assets and liabilities, which would be recorded on the Balance Sheets in accordance with ASC 740, which established financial accounting and reporting standards for the effect of income taxes. The likelihood that its deferred tax assets will be recovered from future taxable income must be assessed and, to the extent that recovery is not likely, a valuation allowance is established. Changes in the valuation allowance in a period are recorded through the income tax provision in the consolidated Statements of Operations. ASC 740-10-30 was adopted from the date of its inception. ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s consolidated financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740-10, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740-10 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a result of the implementation of ASC 740-10, and currently, the Company does not have a liability for unrecognized income tax benefits . |
Basic and Diluted Earnings Per Share | Basic and diluted earnings per share Basic earnings (loss) per share are computed by dividing net earnings available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. I n periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive There were 1,633,067 and 0 potential dilutive securities outstanding for the six months ended January 31 , 2021 and the year ended |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are accounts receivable and other receivables arising from its normal business activities. The Company has a diversified customer base. The Company controls credit risk related to accounts receivable through credit approvals, credit limits and monitoring procedures. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectable accounts and, as a consequence, believes that its accounts receivable related credit risk exposure beyond such allowance is limited. The Company generates significant revenues derived from the PPE products which accounted for 94.8% of revenues , 2021. The Company had 1 and 2 customers that accounted for 98% and 92% of revenue , 2021 and and had related accounts receivable of $8,294,495 and $3,508,750 as of January 31, 2021 and July 31, 2020, respectively. The Company maintains its cash and cash equivalents with various credit institutions. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, deposits of up to $250,000 at FDIC-insured institutions are covered by FDIC insurance. At times, deposits may be in excess of the FDIC insurance limit; however, management does not believe the Company is exposed to any significant related credit risk. |
Leases | Leases Effective from August 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. On February 25, 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. ASC 842 requires that lessees recognize right of use assets and lease liabilities calculated based on the present value of lease payments for all lease agreements with terms that are greater than twelve months. ASC 842 distinguishes leases as either a finance lease or an operating lease that affects how the leases are measured and presented in the statement of operations and statement of cash flows. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes. Income Taxes Other recently issued accounting pronouncements did not, or are not believed by management to, have a material effect on our present or future consolidated financial statements. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jan. 31, 2021 | |
PROPERTY AND EQUIPMENT [Abstract] | |
Property and Equipment | Property and equipment consisted of the following: January 31, 2021 July 31, 2020 Furniture and equipment $ 47,738 $ 46,134 Leasehold improvements 129,725 130,001 Computers 87,060 75,672 Total property and equipment 264,523 251,807 Less – accumulated depreciation (72,895 ) (28,224 ) Total property and equipment, net $ 191,628 $ 223,583 |
FACTOR PAYABLES (Tables)
FACTOR PAYABLES (Tables) | 6 Months Ended |
Jan. 31, 2021 | |
FACTOR PAYABLES [Abstract] | |
Factor Payables | Factor payables consisted of the following: January 31, 2021 July 31, 2020 August 2020 (factor payable) $ 4,660,290 $ 137,352 November 2020 ($1,000,000 factor payable) 257,744 - November 2020 ($2,200,000 factor payable) 437,381 - November 2020 ($2,000,000 factor payable) 1,680,000 - June 2020 ($1,000,000 factor payable) - 742,871 July 2020 ($550,000 factor payable) - 460,825 July 2020 ($1,000,000 factor payable - 931,315 Total factor payables 7,035,415 2,272,363 Less – debt discount (33,786 ) (47,500 ) Less – current portion (7,001,629 ) (2,224,863 ) Total factor payables, net of current portion $ - $ - |
LINES OF CREDIT - RELATED PAR_2
LINES OF CREDIT - RELATED PARTIES (Tables) | 6 Months Ended |
Jan. 31, 2021 | |
LINES OF CREDIT - RELATED PARTIES [Abstract] | |
Lines of Credit Related Parties | Lines of credit related parties consisted of the following: January 31, 2021 July 31, 2020 July 2020 ($1,000,000 line of credit) $ 447,500 $ 947,500 July 2019 ($66,125 line of credit) - 66,125 Total lines of credit – related parties $ 447,500 $ 1,013,625 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 6 Months Ended |
Jan. 31, 2021 | |
NOTES PAYABLE [Abstract] | |
Schedule of Debt | Notes payable consisted of the following: January 31, 2021 July 31, 2020 August 2019 ($5,980 note payable) $ - $ 1,801 April 2020 ($159,000 note payable) 150,000 159,000 April 2020 ($347,700 note payable) 347,700 347,700 Total notes payable 497,700 508,501 Less – current portion (293,198 ) (1,802 ) Total notes payable, net of current portion $ 204,502 $ 506,699 |
Maturities of Notes Payable | For years ended January 31, Amount 2022 $ 293,198 2023 63,122 2024 5,172 2025 5,172 2026 5,172 Thereafter 125,864 Total $ 497,700 |
CONVERTIBLE NOTES PAYABLE (Tabl
CONVERTIBLE NOTES PAYABLE (Tables) | 6 Months Ended |
Jan. 31, 2021 | |
CONVERTIBLE NOTES PAYABLE [Abstract] | |
Convertible Notes Payable | Convertible notes payable consisted of the following: January 31, 2021 July 31, 2020 January 2020 ($250,000 convertible note payable) $ 250,000 $ 260,070 January 2020 ($250,000 convertible note payable) 250,000 260,070 November 2019 ($100,000 convertible note payable) 100,000 105,375 March 2020 ($25,000 convertible note payable) 25,000 25,000 February 2019 ($500,000 convertible note payable) 500,000 500,000 February 2019 ($500,000 convertible note payable) 500,000 500,000 January 2020 ($100,000 convertible note payable) - 100,000 September 2019 ($100,000 convertible note payable) and December 2019 ($100,000 convertible note payable) 200,000 200,000 June 2020 ($50,000 convertible note payable) 50,000 50,000 September 2019 ($100,000 convertible note payable) and December 2019 ($200,000 convertible note payable) 300,000 300,000 October 2020 ($262,500 convertible note payable) 262,500 - Total convertible notes payable 2,437,500 2,300,515 Less: debt discount (41,693 ) - Less – current portion (2,395,807 ) (1,580,375 ) Total convertible notes payable, net of current portion $ - $ 720,140 |
DERIVATIVE LIABILITY (Tables)
DERIVATIVE LIABILITY (Tables) | 6 Months Ended |
Jan. 31, 2021 | |
DERIVATIVE LIABILITY [Abstract] | |
Derivative Liability | Derivative liability consisted of the following: January 31, 2021 July 31, 2020 Beneficial conversion feature – convertible debt $ 110,039 $ - Total derivative liability $ 110,039 $ - |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jan. 31, 2021 | |
EARNINGS PER SHARE [Abstract] | |
Computation of Basic and Diluted Net Income per Share | The following table sets forth the computation of basic and diluted net income per share: Six Months Ended January 31, 2021 Year Ended July 31, 2021 Net income (loss) attributable to the common stockholders $ 7,304,387 $ (15,564,778 ) Basic weighted average outstanding shares of common stock 148,436,710 124,600,609 Dilutive effect of convertible notes payable 1,633,067 - Diluted weighted average common stock and common stock equivalents 150,069,777 124,600,609 Net income (loss) per share Basic $ 0.05 $ (0.12 ) Diluted $ 0.05 $ (0.12 ) |
INCOME TAX PROVISION (Tables)
INCOME TAX PROVISION (Tables) | 6 Months Ended |
Jan. 31, 2021 | |
INCOME TAX PROVISION [Abstract] | |
Reconciliation of Effective Tax Rate to Statutory Federal Rate | A reconciliation of the Company’s effective tax rate to the statutory federal rate is as follows: January 31, 2021 July 31, 2020 Statutory federal rate 21.0 % 21.0 % State income taxes net of federal income tax benefit and others 0.0 % 0.0 % Permanent differences for tax purposes and others 0.1 % 0.0 % Change in valuation allowance (21.1 )% (21.0 )% Effective tax rate 0.0 % 0.0 % |
Deferred Tax Assets and Liabilities | The components of deferred tax assets and liabilities are as follows: January 31, 2021 July 31, 2020 Deferred tax assets: Net operating losses $ 1,849,677 $ 3,268,603 Other temporary differences - - Total deferred tax assets 1,849,677 3,268,603 Less – valuation allowances (1,849,677 ) (3,268,603 ) Total deferred tax assets, net of valuation allowances $ - $ - |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jan. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Components of Lease Expense | In accordance with ASC 842, the components of lease expense were as follows: Six Months Ended January 31, Year Ended July 31, 2021 2020 Operating lease expense $ 284,400 $ 307,659 Finance lease cost Amortization of right-of-use assets $ 17,987 $ 9,493 Interest on lease liabilities $ 6,955 $ 4,751 Total finance lease cost $ 24,942 $ 14,244 Total lease expense $ 309,342 $ 321,903 |
Other Information Related to Leases | In accordance with ASC 842, other information related to leases was as follows: Cash paid for amounts included in the measurement of lease liabilities: Six Months ended January 31, 2021 Year Ended July 31, 2020 Operating cash flows from lease liabilities Operating cash flows from finance leases $ 6,735 $ 4,686 Operating cash flows from operating leases $ 269,669 $ 312,858 Financing cash flows from finance leases $ 20,965 $ 9,766 Non-cash activity: Right-of-use assets obtained in exchange for lease obligations Finance leases $ 111,415 100,063 Operating leases $ 313,180 $ 1,505,884 Weighted-average remaining lease term—finance leases 3.8 years 4.5 years Weighted-average remaining lease term—operating leases 4.3 years 5.1 years Weighted-average discount rate—finance leases 17.8 % 23.5 % Weighted-average discount rate—operating leases 17.0 % 17.0 % |
Maturities of Lease Liabilities | In accordance with ASC 842, maturities of lease liabilities as of January 31, 2021 were as follows: Year ending: 2022 $ 734,499 2023 742,285 2024 612,724 2025 367,917 2026 343,125 Thereafter 201,887 Total undiscounted cash flows $ 3,002,437 Lease liabilities—current $ 362,774 Lease liabilities—long-term $ 1,393,712 Lease liabilities—total $ 1,756,486 Difference between undiscounted and discounted cash flows $ 1,245,951 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) | 6 Months Ended |
Jan. 31, 2021Segment | |
BASIS OF PRESENTATION [Abstract] | |
Number of operating segment | 1 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 6 Months Ended | 12 Months Ended | |
Jan. 31, 2021USD ($)Segmentshares | Jan. 31, 2020USD ($) | Jul. 31, 2020USD ($)shares | |
Revenue Recognition [Abstract] | |||
Number of business segments | Segment | 3 | ||
Advertising and Marketing Expense [Abstract] | |||
Advertising and marketing expense | $ 8,284,457 | $ 639,653 | $ 13,832,587 |
Factoring Accounts Receivables [Abstract] | |||
Maximum outstanding balance of accounts receivable that may be factored | 10,000,000 | ||
Accounts receivable factored | 5,804,682 | 171,690 | |
Factor payable based on accounts receivable factored | 4,660,290 | 137,352 | |
Factor fees | $ 2,660,500 | $ 193,000 | |
Basic and Diluted Earnings Per Share [Abstract] | |||
Potential dilutive securities outstanding (in shares) | shares | 1,633,067 | 0 | |
Concentration of Credit Risk [Abstract] | |||
Accounts receivables | $ 8,559,268 | $ 3,006,952 | |
Customer Concentration Risk [Member] | 1 Customer [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Accounts receivables | $ 8,294,495 | ||
Customer Concentration Risk [Member] | 2 Customers [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Accounts receivables | $ 3,508,750 | ||
Minimum [Member] | |||
Factoring Accounts Receivables [Abstract] | |||
Factoring fee percentage | 1.00% | ||
Property and Equipment [Abstract] | |||
Estimated useful lives | 5 years | ||
Maximum [Member] | |||
Factoring Accounts Receivables [Abstract] | |||
Percentage of accounts receivable that may be factored | 80.00% | ||
Factoring fee percentage | 3.00% | ||
Property and Equipment [Abstract] | |||
Estimated useful lives | 7 years | ||
Revenue [Member] | Product Concentration Risk [Member] | PPE Products [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Concentration of revenue percentage | 94.80% | ||
Revenue [Member] | Customer Concentration Risk [Member] | 1 Customer [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Concentration of revenue percentage | 98.00% | ||
Revenue [Member] | Customer Concentration Risk [Member] | 2 Customers [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Concentration of revenue percentage | 92.00% |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Jan. 31, 2021 | Jul. 31, 2020 |
INVENTORIES [Abstract] | ||
Inventories, net | $ 3,710,488 | $ 3,559,936 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2021 | Jul. 31, 2020 | |
Property and Equipment [Abstract] | ||
Total property and equipment | $ 264,523 | $ 251,807 |
Less - accumulated depreciation | (72,895) | (28,224) |
Total property and equipment, net | 191,628 | 223,583 |
Depreciation expense | 44,671 | 28,224 |
Furniture and Equipment [Member] | ||
Property and Equipment [Abstract] | ||
Total property and equipment | 47,738 | 46,134 |
Leasehold Improvements [Member] | ||
Property and Equipment [Abstract] | ||
Total property and equipment | 129,725 | 130,001 |
Computers [Member] | ||
Property and Equipment [Abstract] | ||
Total property and equipment | $ 87,060 | $ 75,672 |
ACCOUNTS PAYABLE - RELATED PA_2
ACCOUNTS PAYABLE - RELATED PARTIES (Details) | Apr. 09, 2020Mask | Jan. 31, 2021USD ($) | Jul. 31, 2020USD ($) |
ACCOUNTS PAYABLE - RELATED PARTIES [Abstract] | |||
Inventory purchased | $ | $ 17,257,000 | $ 4,241,000 | |
Accounts payable - related party | $ | $ 3,113,250 | $ 713,836 | |
Manufacturer One [Member] | |||
ACCOUNTS PAYABLE - RELATED PARTIES [Abstract] | |||
Number of masks ordered from manufacturers | Mask | 1,500,000 | ||
Manufacturer Two [Member] | |||
ACCOUNTS PAYABLE - RELATED PARTIES [Abstract] | |||
Number of masks ordered from manufacturers | Mask | 750,000 | ||
Director [Member] | Giang Thi Hoang [Member] | |||
ACCOUNTS PAYABLE - RELATED PARTIES [Abstract] | |||
Percentage of common stock | 7.70% |
FACTOR PAYABLES (Details)
FACTOR PAYABLES (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2021 | Jul. 31, 2020 | |
Factor Payable [Abstract] | ||
Less - current portion | $ (7,001,629) | $ (2,224,863) |
Factoring Agreements [Abstract] | ||
Maximum outstanding balance of accounts receivable that may be factored | 10,000,000 | |
Accounts receivable factored | 5,804,682 | 171,690 |
Factor fees | $ 2,660,500 | 193,000 |
Minimum [Member] | ||
Factoring Agreements [Abstract] | ||
Factoring fee percentage | 1.00% | |
Maximum [Member] | ||
Factoring Agreements [Abstract] | ||
Percentage of accounts receivable that may be factored | 80.00% | |
Factoring fee percentage | 3.00% | |
Factor Payable [Member] | ||
Factor Payable [Abstract] | ||
Factor payables | $ 7,035,415 | 2,272,363 |
Less - debt discount | (33,786) | (47,500) |
Less - current portion | (7,001,629) | (2,224,863) |
Total factor payables, net of current portion | 0 | 0 |
Factoring Agreements [Abstract] | ||
Accounts receivable factored | 7,035,415 | 2,272,363 |
Factor fees | 2,660,500 | 193,000 |
Factor Payable [Member] | Prestige Capital Finance, LLC [Member] | ||
Factoring Agreements [Abstract] | ||
Maximum outstanding balance of accounts receivable that may be factored | $ 10,000,000 | |
Factor Payable [Member] | Prestige Capital Finance, LLC [Member] | Minimum [Member] | ||
Factoring Agreements [Abstract] | ||
Factoring fee percentage | 1.00% | |
Factor Payable [Member] | Prestige Capital Finance, LLC [Member] | Maximum [Member] | ||
Factoring Agreements [Abstract] | ||
Percentage of accounts receivable that may be factored | 80.00% | |
Factoring fee percentage | 3.00% | |
August 2020 Factor Payable [Member] | ||
Factor Payable [Abstract] | ||
Factor payables | $ 4,660,290 | 137,352 |
November 2020 $1,000,000 Factor Payable Due March17, 2021 [Member] | ||
Factor Payable [Abstract] | ||
Factor payables | 257,744 | 0 |
November 2020 $1,000,000 Factor Payable Due March17, 2021 [Member] | TVT Capital, LLC [Member] | ||
Factor Payable [Abstract] | ||
Face amount | $ 1,000,000 | |
Maturity date | Mar. 17, 2021 | |
Interest rate | 17.00% | |
November 2020 $2,200,000 Factor Payable Due March 2, 2021 [Member] | ||
Factor Payable [Abstract] | ||
Factor payables | $ 437,381 | 0 |
November 2020 $2,200,000 Factor Payable Due March 2, 2021 [Member] | TVT Capital, LLC [Member] | ||
Factor Payable [Abstract] | ||
Face amount | $ 2,200,000 | |
Maturity date | Mar. 2, 2021 | |
Interest rate | 17.00% | |
November 2020 $2,000,000 Factor Payable Due August 18, 2021 [Member] | ||
Factor Payable [Abstract] | ||
Factor payables | $ 1,680,000 | 0 |
November 2020 $2,000,000 Factor Payable Due August 18, 2021 [Member] | TVT Capital, LLC [Member] | ||
Factor Payable [Abstract] | ||
Face amount | $ 2,000,000 | |
Maturity date | Aug. 18, 2021 | |
Interest rate | 17.00% | |
June 2020 $1,000,000 Factor Payable Due November 2, 2020 [Member] | ||
Factor Payable [Abstract] | ||
Factor payables | $ 0 | 742,871 |
Face amount | $ 1,000,000 | |
Maturity date | Nov. 2, 2020 | |
June 2020 $1,000,000 Factor Payable Due November 2, 2020 [Member] | TVT Capital, LLC [Member] | ||
Factoring Agreements [Abstract] | ||
Factoring fixed price | 17.00% | |
July 2020 $550,000 Factor Payable Due November 23, 2020 [Member] | ||
Factor Payable [Abstract] | ||
Factor payables | $ 0 | 460,825 |
July 2020 $550,000 Factor Payable Due November 23, 2020 [Member] | APEX Funding, LLC [Member] | ||
Factor Payable [Abstract] | ||
Face amount | $ 550,000 | |
Maturity date | Nov. 23, 2020 | |
Factoring Agreements [Abstract] | ||
Factoring fixed price | 13.00% | |
July 2020 $1,000,000 Factor Payable Due November 2, 2020 [Member] | ||
Factor Payable [Abstract] | ||
Factor payables | $ 0 | $ 931,315 |
July 2020 $1,000,000 Factor Payable Due November 2, 2020 [Member] | APEX Funding, LLC [Member] | ||
Factor Payable [Abstract] | ||
Face amount | $ 1,000,000 | |
Maturity date | Nov. 2, 2020 | |
Interest rate | 13.00% |
LINES OF CREDIT - RELATED PAR_3
LINES OF CREDIT - RELATED PARTIES (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | Jul. 31, 2020 | |
Lines of Credit Facility [Abstract] | |||
Total lines of credit | $ 2,700,000 | ||
Interest expense - related party | 238,384 | $ 0 | $ 89,440 |
Related Parties [Member] | |||
Lines of Credit Facility [Abstract] | |||
Total lines of credit | 447,500 | 1,013,625 | |
Interest expense - related party | 42,486 | 65,983 | |
Related Parties [Member] | Line of credit with maturity date of June 30, 2022 [Member] | |||
Lines of Credit Facility [Abstract] | |||
Total lines of credit | 447,500 | 947,500 | |
Line of credit, maximum borrowing capacity | $ 1,000,000 | ||
Line of credit, maturity date | Jun. 30, 2022 | ||
Line of credit, interest rate | 6.00% | ||
Related Parties [Member] | Line of Credit with Maturity Date of July 29, 2029 [Member] | |||
Lines of Credit Facility [Abstract] | |||
Total lines of credit | $ 0 | $ 66,125 | |
Line of credit, maximum borrowing capacity | $ 66,125 | ||
Line of credit, maturity date | Jul. 29, 2029 | ||
Line of credit, interest rate | 6.00% |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | Jul. 31, 2020 | |
Notes Payable to Related Parties [Abstract] | |||
Interest expense | $ 58,356 | $ 84,590 | $ 253,618 |
Non-Related Parties [Member] | Notes Payable [Member] | |||
Notes Payable to Related Parties [Abstract] | |||
Total notes payable | 497,700 | 508,501 | |
Less: current portion | (293,198) | (1,802) | |
Total notes payable - related parties, net of current portion | 204,502 | 506,699 | |
Interest expense | 7,553 | 2,942 | |
Future Minimum Payments [Abstract] | |||
2022 | 293,198 | ||
2023 | 63,122 | ||
2024 | 5,172 | ||
2025 | 5,172 | ||
2026 | 5,172 | ||
Thereafter | 125,864 | ||
Total | 497,700 | ||
Non-Related Parties [Member] | Notes Payable [Member] | August 2019 $5,980 Notes Payable with Maturity Date of December 01, 2020 [Member] | |||
Notes Payable to Related Parties [Abstract] | |||
Total notes payable | 0 | 1,801 | |
Face amount | $ 5,980 | ||
Maturity date | Dec. 1, 2020 | ||
Interest rate | 8.25% | ||
Non-Related Parties [Member] | Notes Payable [Member] | April 2020 $159,000 Note payable with maturity date of April 15, 2050 [Member] | |||
Notes Payable to Related Parties [Abstract] | |||
Total notes payable | $ 150,000 | 159,000 | |
Face amount | $ 159,000 | ||
Maturity date | Apr. 15, 2050 | ||
Interest rate | 3.75% | ||
Non-Related Parties [Member] | Notes Payable [Member] | April 2020 $347,700 Note payable with maturity date of April 14, 2022 [Member] | |||
Notes Payable to Related Parties [Abstract] | |||
Total notes payable | $ 347,700 | $ 347,700 | |
Face amount | $ 347,700 | ||
Maturity date | Apr. 14, 2022 | ||
Interest rate | 1.00% |
CONVERTIBLE NOTES PAYABLE (Deta
CONVERTIBLE NOTES PAYABLE (Details) | Oct. 14, 2020d | Jan. 31, 2021USD ($)d$ / shares | Jan. 31, 2020USD ($) | Jul. 31, 2020USD ($) |
Convertible Notes Payable [Abstract] | ||||
Interest expense | $ 58,356 | $ 84,590 | $ 253,618 | |
Convertible Notes Payable [Member] | ||||
Convertible Notes Payable [Abstract] | ||||
Total | 2,437,500 | 2,300,515 | ||
Less: debt discount | (41,693) | 0 | ||
Less: current portion | (2,395,807) | (1,580,375) | ||
Total convertible notes payable, net of current portion | 0 | 720,140 | ||
Number of trading days | d | 15 | |||
Interest expense | 256,701 | 278,438 | ||
Convertible Notes Payable [Member] | January 2020 $250,000 Convertible Note Payable Due January 4, 2022 [Member] | ||||
Convertible Notes Payable [Abstract] | ||||
Total | 250,000 | 260,070 | ||
Face amount | $ 250,000 | |||
Maturity date | Jan. 4, 2022 | |||
Interest rate | 12.00% | |||
Conversion price per share (in dollars per share) | $ / shares | $ 2 | |||
Convertible Notes Payable [Member] | January 2020 $250,000 Convertible Note Payable Due January 4, 2022 [Member] | ||||
Convertible Notes Payable [Abstract] | ||||
Total | $ 250,000 | 260,070 | ||
Face amount | $ 250,000 | |||
Maturity date | Jan. 4, 2022 | |||
Interest rate | 12.00% | |||
Conversion price per share (in dollars per share) | $ / shares | $ 2 | |||
Convertible Notes Payable [Member] | November 2019 $100,000 Convertible Note Payable Due May 19, 2021 [Member] | ||||
Convertible Notes Payable [Abstract] | ||||
Total | $ 100,000 | 105,375 | ||
Face amount | $ 100,000 | |||
Maturity date | May 19, 2021 | |||
Interest rate | 10.00% | |||
Conversion price per share (in dollars per share) | $ / shares | $ 5 | |||
Convertible Notes Payable [Member] | March 2020 $250,000 Convertible Note Payable Due March 30, 2021 [Member] | ||||
Convertible Notes Payable [Abstract] | ||||
Total | $ 25,000 | 25,000 | ||
Face amount | $ 25,000 | |||
Maturity date | Mar. 30, 2021 | |||
Interest rate | 6.00% | |||
Conversion price per share (in dollars per share) | $ / shares | $ 1.25 | |||
Convertible Notes Payable [Member] | February 2019 $500,000 Convertible Note Payable Due February 23, 2021 [Member] | ||||
Convertible Notes Payable [Abstract] | ||||
Total | $ 500,000 | 500,000 | ||
Face amount | $ 500,000 | |||
Maturity date | Feb. 23, 2021 | |||
Interest rate | 12.00% | |||
Conversion price per share (in dollars per share) | $ / shares | $ 2 | |||
Convertible Notes Payable [Member] | February 2019 $500,000 Convertible Note Payable Due February 23, 2021 [Member] | ||||
Convertible Notes Payable [Abstract] | ||||
Total | $ 500,000 | 500,000 | ||
Face amount | $ 500,000 | |||
Maturity date | Feb. 23, 2021 | |||
Interest rate | 12.00% | |||
Conversion price per share (in dollars per share) | $ / shares | $ 2 | |||
Convertible Notes Payable [Member] | January 2020 $100,000 Convertible Note Payable Due January 6, 2021 [Member] | ||||
Convertible Notes Payable [Abstract] | ||||
Total | $ 0 | 100,000 | ||
Face amount | $ 100,000 | |||
Maturity date | Jan. 6, 2021 | |||
Interest rate | 12.00% | |||
Conversion price per share (in dollars per share) | $ / shares | $ 2 | |||
Convertible Notes Payable [Member] | September 2019 $100,000 and December 2019 $100,000 Convertible Note Payable Due September 14, 2021 and December 24, 2021 [Member] | ||||
Convertible Notes Payable [Abstract] | ||||
Total | $ 200,000 | 200,000 | ||
Conversion price per share (in dollars per share) | $ / shares | $ 1 | |||
Convertible Notes Payable [Member] | September 2019 $100,000 Convertible Note Payable Due September 14, 2021 [Member] | ||||
Convertible Notes Payable [Abstract] | ||||
Face amount | $ 100,000 | |||
Maturity date | Sep. 14, 2021 | |||
Interest rate | 12.00% | |||
Convertible Notes Payable [Member] | December 2019 $100,000 Convertible Note Payable Due December 24, 2021 [Member] | ||||
Convertible Notes Payable [Abstract] | ||||
Face amount | $ 100,000 | |||
Maturity date | Dec. 24, 2021 | |||
Interest rate | 12.00% | |||
Convertible Notes Payable [Member] | June 2020 $50,000 Convertible Note Payable Due June 10, 2021 [Member] | ||||
Convertible Notes Payable [Abstract] | ||||
Total | $ 50,000 | 50,000 | ||
Face amount | $ 50,000 | |||
Maturity date | Jun. 10, 2021 | |||
Interest rate | 25.00% | |||
Conversion price per share (in dollars per share) | $ / shares | $ 2 | |||
Discount percentage | 20.00% | |||
Number of days for closing of share price | 30 days | |||
Convertible Notes Payable [Member] | September 2019 $100,000 and December 2019 $200,000 Convertible Note Payable Due September 14, 2021 and December 14, 2021 [Member] | ||||
Convertible Notes Payable [Abstract] | ||||
Total | $ 300,000 | 300,000 | ||
Conversion price per share (in dollars per share) | $ / shares | $ 1 | |||
Convertible Notes Payable [Member] | September 2019 $100,000 Convertible Note Payable Due September 14, 2021 [Member] | ||||
Convertible Notes Payable [Abstract] | ||||
Face amount | $ 100,000 | |||
Maturity date | Sep. 14, 2021 | |||
Interest rate | 12.00% | |||
Convertible Notes Payable [Member] | December 2019 $200,000 Convertible Note Payable Due December 14, 2021 [Member] | ||||
Convertible Notes Payable [Abstract] | ||||
Face amount | $ 200,000 | |||
Maturity date | Dec. 14, 2021 | |||
Interest rate | 12.00% | |||
Convertible Notes Payable [Member] | October 2020 $262,500 Convertible Note Payable Due April 15, 2021 [Member] | ||||
Convertible Notes Payable [Abstract] | ||||
Total | $ 262,500 | $ 0 | ||
Face amount | $ 262,500 | |||
Maturity date | Apr. 15, 2021 | |||
Interest rate | 10.00% | |||
Percentage of convertible notes | 70.00% | |||
Number of trading days | d | 15 |
DERIVATIVE LIABILITY (Details)
DERIVATIVE LIABILITY (Details) | Oct. 14, 2020USD ($)dshares | Jan. 31, 2021USD ($)shares | Jul. 31, 2020USD ($) |
Derivative Instruments [Abstract] | |||
Beneficial conversion feature - convertible debt | $ 110,039 | $ 0 | |
Total derivative liability | $ 110,039 | 0 | |
Issuance of common stock (in shares) | shares | 248,000 | ||
Convertible Promissory Note [Member] | |||
Derivative Instruments [Abstract] | |||
Long term debt, net of original issue discount | $ 2,437,500 | $ 2,300,515 | |
Number of consecutive trading days | d | 15 | ||
Convertible Promissory Note [Member] | Harbor Note [Member] | |||
Derivative Instruments [Abstract] | |||
Debt instrument, face amount | $ 262,500 | ||
Debt instrument, maturity date | Apr. 14, 2021 | ||
Debt instrument, interest rate | 10.00% | ||
Debt instrument, original issue discount | $ 12,500 | ||
Long term debt, net of original issue discount | $ 250,000 | ||
Issuance of common stock (in shares) | shares | 37,500 | ||
Discount percentage on conversion into common stock | 70.00% |
UNEARNED REVENUE (Details)
UNEARNED REVENUE (Details) - USD ($) | Jan. 31, 2021 | Jul. 31, 2020 |
UNEARNED REVENUE [Abstract] | ||
Unearned revenue | $ 116,759 | $ 7,049,264 |
STOCKHOLDERS' DEFICIT (Details)
STOCKHOLDERS' DEFICIT (Details) | 6 Months Ended |
Jan. 31, 2021shares | |
STOCKHOLDERS' DEFICIT [Abstract] | |
Common stock issued (in shares) | 248,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | Jul. 31, 2020 | |
EARNINGS PER SHARE [Abstract] | |||
Potential dilutive securities outstanding (in shares) | 1,633,067 | 0 | |
Potential of an anti-dilutive securities outstanding | 0 | ||
Computation of Basic and Diluted Net Income Per Share [Abstract] | |||
Net income (loss) attributable to the common stockholders | $ 7,304,387 | $ (3,073,727) | $ (15,564,778) |
Basic weighted average outstanding shares of common stock (in shares) | 148,436,710 | 238,475,188 | 124,600,609 |
Dilutive effect of convertible notes payable (in shares) | 1,633,067 | 0 | |
Diluted weighted average common stock and common stock equivalents (in shares) | 150,069,777 | 238,475,188 | 124,600,609 |
Net income (loss) per share [Abstract] | |||
Basic (in dollars per share) | $ 0.05 | $ (0.01) | $ (0.12) |
Diluted (in dollars per share) | $ 0.05 | $ (0.01) | $ (0.12) |
INCOME TAX PROVISION, Reconcili
INCOME TAX PROVISION, Reconciliation Effective Tax Rate to Statutory Federal Rate (Details) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2021 | Jul. 31, 2020 | |
Effective Income Tax Rate Reconciliation [Abstract] | ||
Statutory federal rate | 21.00% | 21.00% |
State income taxes net of federal income tax benefit and others | 0.00% | 0.00% |
Permanent differences for tax purposes and others | 0.10% | 0.00% |
Change in valuation allowance | (21.10%) | (21.00%) |
Effective tax rate | 0.00% | 0.00% |
INCOME TAX PROVISION, Component
INCOME TAX PROVISION, Components of Deferred Tax Assets and Liabilities (Details) - USD ($) | Jan. 31, 2021 | Jul. 31, 2020 |
Deferred tax assets [Abstract] | ||
Net operating losses | $ 1,849,677 | $ 3,268,603 |
Other temporary differences | 0 | 0 |
Total deferred tax assets | 1,849,677 | 3,268,603 |
Less - valuation allowance | (1,849,677) | (3,268,603) |
Total deferred tax assets, net of valuation allowances | $ 0 | $ 0 |
INCOME TAX PROVISION, Operating
INCOME TAX PROVISION, Operating Loss Carryforwards and Income Tax Uncertainties (Details) - USD ($) | Jan. 31, 2021 | Jul. 31, 2020 |
Income Tax [Abstract] | ||
Operating loss carryforwards | $ 8,781,786 | $ 15,564,778 |
Accrued interest or penalties related to uncertain tax positions | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | Apr. 09, 2020Mask | Jan. 31, 2021USD ($) | Jul. 31, 2020USD ($) |
Related Party Transaction [Abstract] | |||
Inventory purchased | $ | $ 17,257,000 | $ 4,241,000 | |
Accounts payable - related party | $ | $ 3,113,250 | $ 713,836 | |
Manufacturer One [Member] | |||
Related Party Transaction [Abstract] | |||
Number of masks ordered from manufacturers | Mask | 1,500,000 | ||
Manufacturer Two [Member] | |||
Related Party Transaction [Abstract] | |||
Number of masks ordered from manufacturers | Mask | 750,000 | ||
Director [Member] | Giang Thi Hoang [Member] | |||
Related Party Transaction [Abstract] | |||
Percentage of common stock | 7.70% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jan. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Operating Lease [Abstract] | |||
Operating lease right of use assets | $ 1,727,732 | $ 1,065,087 | |
Minimum lease period of options to extend | 1 year | ||
Percentage of incremental borrowing rate | 17.00% | ||
Initial lease payment | $ 269,669 | $ 312,858 | |
Cheyenne Fairways [Member] | |||
Operating Lease [Abstract] | |||
Operating facility lease term | 84 months | ||
Lease expiration date | Aug. 31, 2026 | ||
Initial lease payment | $ 21,057 | ||
Annual increase percentage | 2.50% | ||
Cheyenne Fairways [Member] | Minimum [Member] | |||
Operating Lease [Abstract] | |||
Operating facility lease term option to extend | 2 years | ||
Cheyenne Fairways [Member] | Maximum [Member] | |||
Operating Lease [Abstract] | |||
Operating facility lease term option to extend | 5 years | ||
Cheyenne Technology Center [Member] | |||
Operating Lease [Abstract] | |||
Operating facility lease term | 37 months | ||
Lease expiration date | Nov. 30, 2022 | ||
Annual increase percentage | 4.00% | ||
Losee Industrial Park [Member] | |||
Operating Lease [Abstract] | |||
Lease expiration date | Oct. 31, 2023 | ||
Initial lease payment | $ 9,345 | ||
Annual increase percentage | 3.00% | ||
ASU 2016-02 [Member] | |||
Operating Lease [Abstract] | |||
Operating lease right of use assets | $ 1,816,774 | ||
Operating lease liabilities | 1,840,087 | ||
Financing lease liabilities | $ 1,840,087 |
COMMITMENTS AND CONTINGENCIES,
COMMITMENTS AND CONTINGENCIES, Components of Lease Expense (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2021 | Jul. 31, 2020 | |
Lease Expense [Abstract] | ||
Operating lease expense | $ 284,400 | $ 307,659 |
Finance Lease Cost [Abstract] | ||
Amortization of right-of-use assets | 17,987 | 9,493 |
Interest on lease liabilities | 6,955 | 4,751 |
Total finance lease cost | 24,942 | 14,244 |
Total lease expense | $ 309,342 | $ 321,903 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES, Other Information Related to Leases (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2021 | Jul. 31, 2020 | |
Operating cash flows from lease liabilities [Abstract] | ||
Operating cash flows from finance leases | $ 6,735 | $ 4,686 |
Operating cash flows from operating leases | 269,669 | 312,858 |
Financing cash flows from finance leases | 20,965 | 9,766 |
Right-of-use assets obtained in exchange for lease obligations [Abstract] | ||
Finance leases | 111,415 | 100,063 |
Operating leases | $ 313,180 | $ 1,505,884 |
Weighted-average remaining lease term-finance leases | 3 years 9 months 18 days | 4 years 6 months |
Weighted-average remaining lease term-operating leases | 4 years 3 months 18 days | 5 years 1 month 6 days |
Weighted-average discount rate-finance leases | 17.80% | 23.50% |
Weighted-average discount rate-operating leases | 17.00% | 17.00% |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES, Maturities of Lease Liabilities (Details) | Jan. 31, 2021USD ($) |
Maturities of Lease Liabilities [Abstract] | |
2022 | $ 734,499 |
2023 | 742,285 |
2024 | 612,724 |
2025 | 367,917 |
2026 | 343,125 |
Thereafter | 201,887 |
Total undiscounted cash flows | 3,002,437 |
Lease liabilities - current | 362,774 |
Lease liabilities - long-term | 1,393,712 |
Lease liabilities - total | 1,756,486 |
Difference between undiscounted and discounted cash flows | 1,245,951 |
Guarantees [Abstract] | |
Line of credit facility amount | $ 2,700,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Apr. 21, 2020 | Apr. 30, 2021 | Apr. 30, 2021 |
Paycheck Protection Program [Member] | |||
Subsequent Events [Abstract] | |||
Loan proceeds | $ 347,700 | ||
Subsequent Event [Member] | Receivables Acquired [Member] | |||
Subsequent Events [Abstract] | |||
Receivables purchased | $ 4,432,000 | ||
Purchase price | 3,200,000 | ||
Periodic payment | $ 233,433 | ||
Subsequent Event [Member] | Paycheck Protection Program [Member] | |||
Subsequent Events [Abstract] | |||
Amount forgiven | $ 347,700 |