[X] |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
[ ] |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
99-0363802
|
(State of Incorporation)
|
(I.R.S. Employer Identification Number)
|
Large accelerated filer
|
[ ]
|
Accelerated filer
|
[ ]
|
Non-accelerated filer
|
[X ]
|
Smaller reporting company
|
[X]
|
Emerging Growth Company
|
[ ]
|
PART I — FINANCIAL INFORMATION
|
Page
|
|
Item 1.
|
Financial Statements:
|
|
Condensed Consolidated Balance Sheets as of October 31, 2019 (Unaudited) and April 30, 2019 (Audited)
|
3
|
|
Condensed Consolidated Statements of Operations for the Three and Six Month Periods Ended October 31, 2019 and 2018 (Unaudited)
|
4
|
|
Condensed Consolidated Statements of Shareholders Deficit for the Three and Six Months Ended October 31, 2019 and 2018 (Unaudited)
|
5
|
|
Condensed Consolidated Statements of Cash Flows for the Six Month Periods Ended October 31, 2019 and 2018 (Unaudited)
|
6
|
|
Notes to Condensed Consolidated Financial Statements
|
7
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
15
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
17
|
Item 4.
|
Controls and Procedures
|
17
|
PART II — OTHER INFORMATION
|
||
Item 1.
|
Legal Proceedings
|
18
|
Item 1A.
|
Risk Factors
|
18
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
18
|
Item 3.
|
Defaults upon Senior Securities
|
18
|
Item 4.
|
Mine Safety Disclosure
|
18
|
Item 5.
|
Other Information
|
18
|
Item 6.
|
Exhibits
|
18
|
Signatures
|
19
|
Defense Technologies International Corp.
|
||||||||
Condensed Consolidated Balance Sheets
|
||||||||
October 31,
2019
|
April 30,
2019
|
|||||||
ASSETS
|
(Unaudited)
|
(Audited)
|
||||||
Current assets:
|
||||||||
Cash
|
$
|
1,513
|
$
|
60
|
||||
Inventory
|
2,787
|
2,787
|
||||||
Prepaid
|
--
|
10,500
|
||||||
Total current assets
|
4,300
|
13,347
|
||||||
Deposit
|
3,000
|
--
|
||||||
Right of use lease
|
72,256
|
--
|
||||||
Total assets
|
$
|
79,556
|
$
|
13,347
|
||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued expense
|
$
|
303,246
|
$
|
283,489
|
||||
Accrued licenses agreement payable
|
61,300
|
36,300
|
||||||
Accrued interest and fees payable
|
122,425
|
209,981
|
||||||
Convertible notes payable, net of discount
|
752,360
|
959,800
|
||||||
Derivative liabilities
|
469,550
|
1,252,539
|
||||||
Payables – related parties
|
864,623
|
749,879
|
||||||
Customer deposits
|
45,695
|
--
|
||||||
Lease liability- current portion
|
35,946
|
--
|
||||||
Notes payable
|
429,226
|
429,226
|
||||||
Total current liabilities
|
3,084,371
|
3,921,214
|
||||||
Long term liabilities
|
||||||||
Lease liability – noncurrent
|
36,310
|
--
|
||||||
Total liabilities
|
3,120,681
|
3,921,214
|
||||||
Commitments and Contingencies
|
--
|
---
|
||||||
Stockholders’ deficit:
|
||||||||
Preferred stock, $0.0001 par value; 20,000,000 shares authorized, Series A – 2,925,369 and 2,925,369 shares issued and outstanding, respectively
|
292
|
292
|
||||||
Series B – 520,000 shares issued and outstanding, respectively
|
52
|
52
|
||||||
Common stock, $0.0001 par value; 200,000,000 shares authorized, 6,358,025, net of treasury and 5,022,244 shares issued and outstanding, respectively
|
636
|
502
|
||||||
Additional paid-in capital
|
5,818,331
|
5,496,972
|
||||||
Accumulated deficit
|
(8,716,910
|
)
|
(9,276,082
|
)
|
||||
Total
|
(2,897,943
|
)
|
(3,778,608
|
)
|
||||
Non-controlling interest
|
(143,526
|
)
|
(129,603
|
)
|
||||
Total stockholders’ deficit
|
(3,041,125
|
)
|
(3,908,211
|
)
|
||||
Total liabilities and stockholders’ deficit
|
$
|
79,556
|
$
|
13,347
|
Defense Technologies International Corp.
|
Condensed Consolidated Statements of Operations
|
(Unaudited)
|
Three Months ended
October 31,
|
Six Months Ended
October 31,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Expenses:
|
||||||||||||||||
General and administrative
|
$
|
189,840
|
$
|
252,747
|
$
|
411,662
|
$
|
421,497
|
||||||||
Total expenses
|
189,840
|
252,747
|
411,662
|
421,497
|
||||||||||||
Loss from operations
|
(189,840
|
)
|
(252,747
|
)
|
(411,662
|
)
|
(421,497
|
)
|
||||||||
Other income (expense):
|
||||||||||||||||
Interest expense
|
(5,558
|
)
|
(100,575
|
)
|
(50,082
|
)
|
(119,236
|
)
|
||||||||
Gain (loss) on derivative liability
|
(38,636
|
)
|
(1,036,410
|
)
|
824,396
|
1,214,992
|
||||||||||
Gain (loss) on extinguishment of debt
|
(9,910
|
)
|
(10,000
|
)
|
199,544
|
(10,000
|
)
|
|||||||||
Gain (loss) on cancellation of stock
|
96,517
|
--
|
96,517
|
--
|
||||||||||||
Interest- note discount
|
(43,916
|
)
|
(8,472
|
)
|
(49,241
|
)
|
(8,472
|
)
|
||||||||
Gain (loss) on notes
|
5,325
|
(5,244
|
)
|
(64,223
|
)
|
(7,596
|
)
|
|||||||||
Total other income (expense)
|
3,822
|
|
(1,160,701
|
)
|
956,911
|
1,069,688
|
||||||||||
Income (loss) before income taxes
|
(186,018
|
)
|
(1,413,448
|
)
|
545,249
|
648,191
|
||||||||||
Provision for income taxes
|
--
|
--
|
--
|
--
|
||||||||||||
Net income (loss) before non-controlling interest
|
(186,018
|
)
|
(1,413,448
|
)
|
545,249
|
648,191
|
||||||||||
Non- controlling interest in net loss of the consolidated subsidiary
|
5,769
|
3,872
|
13,923
|
9,967
|
||||||||||||
Net income (loss) attributed to the Company
|
$
|
(180,249
|
)
|
$
|
(1,409,576
|
)
|
$
|
559,172
|
658,158
|
|||||||
Net income (loss) per common share:
|
||||||||||||||||
Basic
|
$
|
(0.03
|
)
|
$
|
(0.68
|
)
|
$
|
0.09
|
$
|
0.38
|
||||||
Diluted
|
$
|
(0.03
|
)
|
$
|
(0.68
|
)
|
$
|
0.01
|
$
|
0.16
|
||||||
Weighted average common shares outstanding:
|
||||||||||||||||
Basic
|
5,766,950
|
2,083,095
|
5,730,368
|
1,716,403
|
||||||||||||
Diluted
|
5,766,950
|
2,083,095
|
44,884,736
|
4,136,181
|
Preferred Stock
|
|
Additional |
Non- | Total | ||||||||||||||||||||||||||||||||||||
Series A | Series B | Common Stock | Paid-In |
Accumulated |
Controlling | Stockholders’ | ||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Interest
|
Deficit
|
|||||||||||||||||||||||||||||||
Balance, April 30, 2018
|
3,277,369
|
$
|
327
|
520,000
|
$
|
52
|
1,283,758
|
$
|
128
|
$
|
5,076,110
|
$
|
(9,745,809
|
)
|
$
|
(15,596
|
)
|
$
|
(4,684,787
|
)
|
||||||||||||||||||||
Common stock issued for debt
|
--
|
--
|
--
|
--
|
224,062
|
23
|
39,755
|
--
|
--
|
39,778
|
||||||||||||||||||||||||||||||
Common stock for service
|
--
|
--
|
--
|
--
|
150,000
|
15
|
44,985
|
--
|
--
|
45,000
|
||||||||||||||||||||||||||||||
Common stock for conversion of preferred shares
|
(200,000
|
)
|
(20
|
)
|
--
|
--
|
2,000,000
|
200
|
(180
|
)
|
--
|
--
|
--
|
|||||||||||||||||||||||||||
Adjustment to preferred shares
|
(152,000
|
)
|
(15
|
)
|
--
|
--
|
--
|
--
|
15
|
--
|
--
|
--
|
||||||||||||||||||||||||||||
Debt discount
|
--
|
--
|
--
|
--
|
--
|
--
|
73,313
|
--
|
--
|
73,313
|
||||||||||||||||||||||||||||||
Net loss
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
658,158
|
(9,967
|
)
|
648,191
|
|||||||||||||||||||||||||||||
Balance, October 31, 2018
|
2,925,369
|
$
|
292
|
520,000
|
$
|
52
|
3,657,820
|
$
|
366
|
$
|
5,233,998
|
$
|
(9,087,651
|
)
|
$
|
(25,563
|
)
|
$
|
(3,878,505
|
)
|
||||||||||||||||||||
Balance, July 31, 2018
|
3,277,369
|
$
|
327
|
520,000
|
$
|
52
|
1,507,820
|
$
|
151
|
$
|
5,115,505
|
$
|
(7,678,075
|
)
|
$
|
(21,691
|
)
|
$
|
(2,583,386
|
)
|
||||||||||||||||||||
Common stock issued for service
|
--
|
--
|
--
|
--
|
150,000
|
15
|
44,985
|
--
|
--
|
45,000
|
||||||||||||||||||||||||||||||
Common stock for conversion of Preferred shares
|
(200,000
|
)
|
(20
|
)
|
--
|
--
|
2.000,000
|
200
|
180
|
--
|
--
|
--
|
||||||||||||||||||||||||||||
Adjustment to preferred shares miss recorded
|
(152,000
|
)
|
(15
|
)
|
--
|
--
|
--
|
--
|
15
|
--
|
--
|
--
|
||||||||||||||||||||||||||||
Debt discount
|
--
|
--
|
--
|
--
|
--
|
---
|
73,313
|
--
|
--
|
73,313
|
||||||||||||||||||||||||||||||
Net loss
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
(1,409,576
|
)
|
(3,872
|
)
|
(1,413,448
|
)
|
|||||||||||||||||||||||||||
Balance October 31, 2018
|
2,925,369
|
$
|
292
|
520,000
|
$
|
52
|
3,657,820
|
$
|
366
|
$
|
5,233,998
|
$
|
(9,087,651
|
)
|
$
|
(25,563
|
)
|
$
|
(3,878,505
|
)
|
||||||||||||||||||||
Balance July 31, 2019 (Restated)
|
2,925,369
|
$
|
292
|
520,000
|
$
|
52
|
5,508,294
|
$
|
551
|
$
|
5,616,696
|
$
|
(8,536,661
|
)
|
$
|
(137,757
|
)
|
$
|
(3,057,171
|
)
|
||||||||||||||||||||
Common stock issued for debt
|
--
|
--
|
--
|
--
|
818,773
|
82
|
65,578
|
--
|
--
|
65,660
|
||||||||||||||||||||||||||||||
Common stock issued for service
|
--
|
--
|
--
|
--
|
253,200
|
25
|
33,154
|
--
|
--
|
33,179
|
||||||||||||||||||||||||||||||
Common stock issued for service cancelled
|
--
|
--
|
--
|
--
|
(408,333
|
)
|
(41
|
)
|
(96,478
|
)
|
--
|
--
|
(96,517
|
)
|
||||||||||||||||||||||||||
Common stock issued for accounts payable
|
---
|
--
|
--
|
--
|
186,091
|
19
|
50,226
|
--
|
--
|
50,245
|
||||||||||||||||||||||||||||||
Retirement of derivative at conversion
|
--
|
--
|
--
|
--
|
--
|
149,153
|
--
|
--
|
149,153
|
|||||||||||||||||||||||||||||||
Net income (loss)
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
(180,249
|
)
|
(5,769
|
)
|
(186,018
|
)
|
|||||||||||||||||||||||||||
Balance October 31, 2019
|
2,925,369
|
$
|
292
|
520,000
|
$
|
52
|
6,358,015
|
$
|
636
|
$
|
5,818,331
|
$
|
(8,716,910
|
)
|
$
|
(143,526
|
)
|
$
|
(3,041,125
|
)
|
||||||||||||||||||||
Balance April 30, 2019 (Restated)
|
2,925,369
|
$
|
292
|
520,000
|
$
|
52
|
$
|
5,022,244
|
$
|
502
|
$
|
5,496,972
|
$
|
(9,276,082
|
)
|
$
|
(129,603
|
)
|
$
|
(3,908,211
|
)
|
|||||||||||||||||||
Common stock issued for service
|
--
|
--
|
578,200
|
58
|
113,721
|
--
|
--
|
113,779
|
||||||||||||||||||||||||||||||||
Common stock issued for service cancelled
|
(408,333
|
)
|
(41
|
)
|
(96,476
|
)
|
--
|
--
|
(96,517
|
)
|
||||||||||||||||||||||||||||||
Common stock issued for debt conversion
|
--
|
--
|
979,823
|
98
|
104,735
|
--
|
--
|
104,833
|
||||||||||||||||||||||||||||||||
Common stock for accounts payable
|
--
|
--
|
--
|
--
|
186,091
|
19
|
50,226
|
--
|
--
|
50,245
|
||||||||||||||||||||||||||||||
Retirement of derivative at conversion
|
--
|
--
|
--
|
--
|
--
|
--
|
149,153
|
--
|
--
|
149,153
|
||||||||||||||||||||||||||||||
Net income (loss)
|
--
|
--
|
--
|
--
|
--
|
559,172
|
(13,923
|
)
|
545,249
|
|||||||||||||||||||||||||||||||
Balance October 31, 2019
|
2,925,369
|
$
|
292
|
520,000
|
$
|
52
|
6,358,025
|
$
|
636
|
$
|
5,818,331
|
$
|
(8,716,910
|
)
|
$
|
(143,526
|
)
|
$
|
(3,041,125
|
)
|
Defense Technologies International Corp.
|
Condensed Consolidated Statements of Cash Flows
|
(Unaudited)
|
Six Months Ended
October 31,
|
||||||||
2019
|
2018
|
|||||||
Net income (loss)
|
$
|
545,249
|
$
|
648,191
|
||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||
Common shares issued for services
|
113,779
|
45,000
|
||||||
Common stock issued for service cancelled
|
(96,517
|
)
|
--
|
|||||
Amortization of debt discount to interest expense
|
49,241
|
(21,529
|
)
|
|||||
(Gain) loss on derivative liability
|
(824,396
|
)
|
(1,204,747
|
)
|
||||
(Gain) loss on debt extinguishment
|
(199,544
|
)
|
--
|
|||||
Loss on note
|
64,223
|
8,093
|
||||||
Operating lease expense
|
19,281
|
--
|
||||||
Change in operating assets and liabilities:
|
||||||||
Prepaid
|
7,500
|
--
|
||||||
( Increase) decrease in inventory
|
(2,787
|
)
|
||||||
Increase (decrease) in accounts payable
|
131,479
|
56,752
|
||||||
Operating lease liability
|
(19,281
|
)
|
--
|
|||||
Customer deposits
|
45,695
|
(3,000
|
)
|
|||||
Increase in payables – related parties
|
114,744
|
154,531
|
||||||
Net cash provided by (used in) operating activities
|
(48,547
|
)
|
(319,496
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Repayment of convertible notes payable
|
(65,000
|
)
|
(190,100
|
)
|
||||
Proceeds from convertible notes
|
115,000
|
280,000
|
||||||
Proceeds from notes payable
|
--
|
300,000
|
||||||
Repayment of notes payable
|
--
|
(10,000
|
)
|
|||||
Net cash provided by (used in) financing activities
|
50,000
|
379,900
|
||||||
Net increase (decrease) in cash
|
1,453
|
60,404
|
||||||
Cash at beginning of period
|
60
|
8
|
||||||
Cash at end of period
|
$
|
1,513
|
$
|
60,412
|
||||
Supplement Disclosures
|
||||||||
Interest Paid
|
$
|
--
|
$
|
--
|
||||
Income tax Paid
|
$
|
--
|
$
|
--
|
||||
Noncash financing and investing activities
|
||||||||
Common stock issued for the conversion of preferred shares
|
$
|
--
|
$
|
200
|
||||
Common stock issued for convertible debt
|
$
|
104,833
|
$
|
39,779
|
||||
Note payable issued for accounts payable
|
$
|
50,245
|
$
|
114,226
|
||||
Retirement of derivative liability on conversion
|
$
|
149,153
|
$
|
--
|
||||
Accrued interest paid through repayment of notes
|
$
|
--
|
$
|
90,037
|
Level 1 –
|
Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in
sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.
|
Level 2 –
|
Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date and includes those financial
instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors,
and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be
derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate
swaps, options and collars.
|
Level 3 –
|
Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in
management’s best estimate of fair value.
|
Level 1
|
Level 2
|
Level 3
|
||||||||||
Fair value of derivative liability as of April 30, 2019
|
$
|
--
|
$
|
--
|
$
|
1,252,539
|
||||||
Debt discount related to new debt
|
--
|
--
|
(8,984
|
)
|
||||||||
Retirement of derivative at conversion
|
--
|
--
|
(149,153
|
)
|
||||||||
Change in fair value of the derivative
|
--
|
--
|
(824,396
|
)
|
||||||||
Gain on debt extinguishment
|
--
|
--
|
199,544
|
|||||||||
Balance at October 31, 2019
|
$
|
--
|
$
|
--
|
$
|
469,550
|
Risk-free interest rate
|
2.39%
|
Expected life in years
|
0.25 to 0.85
|
Dividend yield
|
0%
|
Expected volatility
|
460.00%
|
Shares |
Weighted Average Exercise Price |
Weighted Average
Remaining Contract Term (Years) |
Aggregate Intrinsic Value |
|||||||||||||
Outstanding at April 30, 2019
|
850,000
|
$
|
1.14
|
2.75
|
$
|
816,000
|
||||||||||
Granted
|
--
|
$
|
--
|
|||||||||||||
Exercised
|
--
|
$
|
--
|
|||||||||||||
Forfeited or expired
|
--
|
$
|
--
|
|||||||||||||
Outstanding and exercisable at October 31, 2019
|
850,000
|
$
|
1.14
|
2.50
|
$
|
799,000
|
a)
|
Administration Agreement with EMAC Handel’s AG, renewed effective May 1, 2017 for a period of three years. Monthly fee for administration services of $5,000, office rent of $250 and office supplies of $125.
Extraordinary expenses are invoiced by EMAC on a quarterly basis. The fee may be paid in cash and or with common stock.
|
b)
|
Service Agreement signed April 25, 2016 with Merrill W. Moses, President, Director and CEO, for services of $7,500 per
month beginning May 2016 and the issuance of 233 restricted common shares of the Company. The fees may be paid in cash and or with common stock.
|
c)
|
Service Agreement signed May 20, 2016 with Charles C. Hooper, Director, for services of $5,000 per month beginning May
2016 and the issuance of 233 restricted common shares of the Company. The fees may be paid in cash and or with common stock.
|
d)
|
Administration and Management Agreement of PSSI signed January 12, 2017 with EMAC Handel Investments AG, for general
fees of $5,000 per month, office rent of $250 and telephone of $125 beginning January 2017, the issuance of 2,000 common shares of PSSI and a 12% royalty calculated on defines sales revenues payable within 10 days after the monthly sales.
|
e)
|
Service Agreement of PSSI signed January 12, 2017 with Merrill W. Moses, President, Director and CEO, for services of
$2,500 per month beginning February 2017 and the issuance of 333 common shares of PSSI.
|
f)
|
Business Development and Consulting Agreement of PSSI signed January 15, 2017 with WSMG Advisors, Inc., for finder’s
fees of 10% of funding raised for PSSI and the issuance of 1,000 common shares of PSSI.
|
•
|
Royalty payments of 5% of gross sale from the license agreement will be calculated and paid quarterly with a minimum of $12,500 paid each quarter.
|
•
|
All payment will be in US dollars or stock of the Company and or its subsidiary. The value of the stock will be a discount to market of 25% of the average trading price for
the 10 days prior to conversion. The number of shares received by Control Capture prior to any reverse split are anti-dilutive.
|
•
|
Invoices for parts and materials will be billed separate of the license fees noted above.
|
Fiscal Year
|
||||
2020
|
$
|
19,500
|
||
2021
|
$
|
39,000
|
||
2022
|
19,500
|
|||
Total
|
$
|
78,000
|
Exhibit No.
|
Description of Exhibit
|
31.1
|
|
32.1
|
|
101 INS*
|
XBRL Instance Document
|
101SCH*
|
XBRL Taxonomy Extension Schema
|
101 CAL*
|
XBRL Taxonomy Extension Calculation Linkbase
|
101 DEF*
|
XBRL Taxonomy Extension Definition Linkbase
|
101 LAB*
|
XBRL Taxonomy Extension Label Linkbase
|
101 PRE*
|
XBRL Taxonomy Extension Presentation Linkbase
|
DEFENSE TECHNOLOGIES INTERNATIONAL CORP.
|
|
Date: December 18, 2019
|
By: /S/ MERRILL W. Moses
|
Merrill W. Moses
|
|
|
Chief Executive Officer
|
Acting Chief Financial Officer
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c. |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
|
d. |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
7. Fair Value Measurements and Derivative Liabilities: Schedule of Derivative Liability Related to the Conversion Feature (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2019 | |||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||
Schedule of Derivative Liability Related to the Conversion Feature |
|
1. Nature of Operations and Continuation of Business: Reclassification (Policies) |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Policies | |
Reclassification | Reclassification
The Company has restated the number of shares outstanding and subsequent amount related to the change in shares as of October 31, 2019 due to the cancellation of common shares that were accounted for but not issued. In addition the Company had granted the conversion of 283,135 shares of Series A preferred shares into 2,831,350 of common shares but the conversion was never completed so the shares in the shareholders deficit has been restated accordingly. |
12. Subsequent Events (Details) |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Subsequent Event 1 | |
Subsequent Event, Description | On November 1, 2019 the Company issued a convertible note to Adar Alef, LLC for $40,700. The note matures on October 31, 2020 bearing interest at the rate of 7% per annum. The note is convertible into common stock of the Company after 180 days at the rate of 70% of the lowest trading price for twenty days prior to conversion. The note may be repaid to the issuer within 180 days from issuance at variable premium rates of 115% to135% above face value. |
Subsequent Event 2 | |
Subsequent Event, Description | On November 12, 2019 the Company issued a convertible note to Jefferson Street Capital, LLC for $41,250. The note matures on November 12, 2020 bearing interest at the rate of 8% per annum. The note is convertible into common stock of the Company after 180 days at the rate of 60% of the lowest trading price for twenty days prior to conversion. The note may be repaid to the issuer within 180 days from issuance at variable premium rates of 115% to 135% above face value. |
Subsequent Event 3 | |
Subsequent Event, Description | On November 1, 2019 the Company issued a convertible note to Platinum Point Capital, LLC for $41,250. The note matures on November 12, 2020 bearing interest at the rate of 8% per annum. The note is convertible into common stock of the Company after 180 days at the rate of 60% of the lowest trading price for twenty days prior to conversion. The note may be repaid to the issuer within 180 days from issuance at variable premium rates of 115% to 135% above face value. |
Subsequent Event 4 | |
Subsequent Event, Description | On November 11, 2019 the Company issued 100,000 shares of common stock with a value of $20,000 for the conversion of a $20,000 note payable. |
Subsequent Event 5 | |
Subsequent Event, Description | On November 19, 2019 the Company 20,000 shares of common stock to two entities with a value of $3,000 for the issuance of convertible debt. |
Subsequent Event 6 | |
Subsequent Event, Description | During November 2019 the Company issued 458,571 shares of common stock with a value of $30,304 for the conversion of debt. |
Subsequent Event 7 | |
Subsequent Event, Description | On December 3, 2019 the Company filed an S-8 registering 200,000 share of common stock with a value of $80,000 that were issued for accounts payable. |
2. Going Concern |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Notes | |
2. Going Concern | NOTE- 2: GOING CONCERN
These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America applicable to a going concern. Through October 31, 2019, the Company has no revenues, has accumulated deficit of $8,716,910 and a working capital deficit of $3,080,071 and expects to incur further losses in the development of its business. The Company has not yet established an ongoing source of revenue sufficient to cover operating costs, which raises substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.
Management plans to continue to provide for the Company's capital needs during the year ending April 30, 2020 by issuing debt and equity securities and by the continued support of its related parties. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. |
1. Nature of Operations and Continuation of Business: Inventory (Details) - USD ($) |
Oct. 31, 2019 |
Apr. 30, 2019 |
---|---|---|
Details | ||
Inventory | $ 2,787 | $ 2,787 |
Condensed Consolidated Statement of Operations - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2019 |
Oct. 31, 2018 |
Oct. 31, 2019 |
Oct. 31, 2018 |
|
Expenses: | ||||
General and administrative | $ 189,840 | $ 252,747 | $ 411,662 | $ 421,497 |
Total operating expenses | 189,840 | 252,747 | 411,662 | 421,497 |
Loss from operations | (189,840) | (252,747) | (411,662) | (421,497) |
Other income (expense): | ||||
Interest expense | (5,558) | (100,575) | (50,082) | (119,236) |
Gain (loss) on derivative liability | (38,636) | (1,036,410) | 824,396 | 1,214,992 |
Gain (loss) on extinguishment of debt | (9,910) | (10,000) | 199,544 | (10,000) |
Gain (loss) on cancellation of stock | 96,517 | 0 | 96,517 | 0 |
Interest - note discount | (43,916) | (8,472) | (49,241) | (8,472) |
Gain (loss) on notes | 5,325 | (5,244) | (64,223) | (7,596) |
Total other income (expense) | 3,822 | (1,160,701) | 956,911 | 1,069,688 |
Income (loss) before income taxes | (186,018) | (1,413,448) | 545,249 | 648,191 |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net income (loss) before non-controlling interest | (186,018) | (1,413,448) | 545,249 | 648,191 |
Non- controlling interest in net loss of the consolidated subsidiary | 5,769 | 3,872 | 13,923 | 9,967 |
Net income (loss) attributed to the Company | $ (180,249) | $ (1,409,576) | $ 559,172 | $ 658,158 |
Net income (loss) per common share: | ||||
Basic net income (loss) per common share | $ (0.03) | $ (0.68) | $ 0.09 | $ 0.38 |
Diluted net income (loss) per common share | $ (0.03) | $ (0.68) | $ 0.01 | $ 0.16 |
Weighted average common shares outstanding: | ||||
Basic weighted average common shares outstanding | 5,766,950 | 2,083,095 | 5,730,368 | 1,716,403 |
Diluted weighted average common shares outstanding | 5,766,950 | 2,083,095 | 44,884,736 | 4,136,181 |
3. Investments (Details) |
Oct. 31, 2019
USD ($)
|
---|---|
Details | |
Investments | $ 378,600 |
1. Nature of Operations and Continuation of Business: Consolidation and Non-Controlling Interest (Policies) |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Policies | |
Consolidation and Non-Controlling Interest | Consolidation and Non-Controlling Interest
These consolidated financial statements include the accounts of the Company, and its majority-owned subsidiary, PSSI, from its formation on January 12, 2017 to date. All inter-company transactions and balances have been eliminated. |
9. Stock Options and Warrants |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||
Notes | |||||||||||||||||||||||||||||||||||||||||||
9. Stock Options and Warrants | NOTE 9: STOCK OPTIONS AND WARRANTS
During the year ended April 30, 2019 the Company issued 600,000 options and 250,000 warrants with a conversion price of $0.70 to $2.50 to 5 individuals. The options have a three year term and the warrants a three and one half term and are convertible into the common shares of the Company.
A summary of the Companys stock options and warrants as of October 31, 2019, and changes during the three months then ended is as follows:
|
5. Notes Payable |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Notes | |
5. Notes Payable | NOTE 5: NOTES PAYABLE
On July 6, 2018 the Company signed an investment agreement with a third party. Under the terms of the agreement the Company receive $250,000 through the Company attorneys trust account. On July 12, 2018 the Company received the $250,000 less wire and legal payment of $10,045. In addition the note holder will receive a royalty of 5% up to $250,000 and then a royalty of 3.5% for two years thereafter. The note holder will receive 150,000 shares of the Companys common stock plus 100,000 warrants to purchase common shares within three years at $2.50 per share.
On January 26, 2019 the Company approved a loan from Brian McLain of $275,000. The note is convertible into common stock of the Company and is non-dilutive for 2 years from date of the note. In addition the Company granted the lender 100,000 warrants convertible into common shares at $1.00 per share. As of October 31, 2019, $25,000 of the loan was funded by the lender.
As of October 31, 2019 and April 30, 2019 the outstanding balances of notes payable was $429,226, respectively. |
1. Nature of Operations and Continuation of Business: Reclassification (Details) |
6 Months Ended |
---|---|
Oct. 31, 2019
shares
| |
Common Stock Issuance 3 | |
Stock Issued During Period, Shares, New Issues | 2,831,350 |
4. Related Party Transactions (Details) - USD ($) |
Oct. 31, 2019 |
Apr. 30, 2019 |
---|---|---|
Details | ||
Payables - related parties | $ 864,623 | $ 749,879 |
3. Investments |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Notes | |
3. Investments | NOTE 3: INVESTMENTS
Effective January 12, 2017, Passive Security Scan, Inc. ("PSSI") was incorporated in the state of Utah as subsidiary controlled by the Company. The Company transferred to PSSI its exclusive world-wide license to the defense, detection and protection security products previously acquired by the Company for 17,500 shares of PSSI valued at $378,600 for 76.28% of PSSI. The balance of PSSI was acquired by four individuals and entities. The Company plans to continue the development of the technology and conduct all sales and marketing activities in PSSI. The investment was impaired as of April 30, 2019. |
8. Equity |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Notes | |
8. Equity | NOTE 8: EQUITY
Common Stock
During the six month period ended October 31, 2018, the Company issued 224,062 shares of its common stock in the conversion of debt of $39,778.
On May 10, 2019 the Company issued 150,000 shares of common stock to First Fire Financial as part of a debt settlement with a value of $37,501.
On May 20, 2019 the Company approved the issuance of 2,831,350 shares of its common stock for the conversion of 283,135 for Series A preferred with a value of $28. As of October 31, 2019 the Common shares had not been issued and the conversion had not been completed.
During the six months ended October 31, 2019 the Company issued 979,823 shares of common stock with a value of $104,833 for debt.
During the six months ended October 31, 2019 the Company issued 186,091 shares of common stock with a value of $50,245 for accounts payable.
During the six month period ended October 31, 2019, the Company issued 578,200 shares of its common stock for service with a value of $113,779.
During the six month period ended October 31, 2019, the Company cancelled 408,333 shares of its common stock for service with a value of $96,517. The shares were cancelled as they had been authorized by the Company but never issued by the transfer agent thus the Company elected to cancel the shares. The cancellation resulted in a gain on cancellation of shares of $96,517.
Preferred Stock
The Company has 20,000,000 shares of $0.0001 par value preferred stock authorized and has designated Series A and Series B preferred stock. Each share of the Series A preferred stock is convertible into ten common shares and carries voting rights on the basis of 100 votes per share. Each share of the Series B preferred stock is convertible into ten common shares and carries no voting rights.
On May 20, 2019 the Company approved the issuance of 2,831,350 shares of its common stock for the conversion of 283,135 for Series A preferred with a value of $28. As of October 31, 2019 the Common shares had not been issued and the conversion had not been completed.
As of October 31, 2019 the Company had 2,925,369 Series A and 520,000 Series B preferred share issued and outstanding. |
4. Related Party Transactions |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Notes | |
4. Related Party Transactions | NOTE -4: RELATED PARTY TRANSACTIONS
Management and administrative services are currently compensated as per a Service Agreement between the Company and its Chief Executive Officer and Director executed on April 25, 2016 and a Service Agreement with the subsidiary PSSI executed on January 12, 2017, a Service Agreement between the Company and a Director executed on May 20, 2016, and an Administration Agreement with a related party executed on March 15, 2011 and renewed on May 1, 2017 plus the assumption of a Service Agreement with the subsidiary PSSI assumed on January 12, 2017, whereby the fee is based on services provided and invoiced by the related parties on a monthly basis and the fees are paid in cash when possible or with common stock. The Company also, from time to time, has some of its expenses paid by related parties with the intent to repay. These types of transactions, when incurred, result in payables to related parties in the Companys consolidated financial statements as a necessary part of funding the Companys operations.
As of October 31, 2019, and April 30, 2019, the Company had payable balances due to related parties totaling $864,623 and $749,879, respectively, which resulted from transactions with these related parties and other significant shareholders. |
12. Subsequent Events |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Notes | |
12. Subsequent Events | NOTE 12: SUBSEQUENT EVENTS
On November 1, 2019 the Company issued a convertible note to Adar Alef, LLC for $40,700. The note matures on October 31, 2020 bearing interest at the rate of 7% per annum. The note is convertible into common stock of the Company after 180 days at the rate of 70% of the lowest trading price for twenty days prior to conversion. The note may be repaid to the issuer within 180 days from issuance at variable premium rates of 115% to135% above face value.
On November 12, 2019 the Company issued a convertible note to Jefferson Street Capital, LLC for $41,250. The note matures on November 12, 2020 bearing interest at the rate of 8% per annum. The note is convertible into common stock of the Company after 180 days at the rate of 60% of the lowest trading price for twenty days prior to conversion. The note may be repaid to the issuer within 180 days from issuance at variable premium rates of 115% to 135% above face value.
On November 1, 2019 the Company issued a convertible note to Platinum Point Capital, LLC for $41,250. The note matures on November 12, 2020 bearing interest at the rate of 8% per annum. The note is convertible into common stock of the Company after 180 days at the rate of 60% of the lowest trading price for twenty days prior to conversion. The note may be repaid to the issuer within 180 days from issuance at variable premium rates of 115% to 135% above face value.
On November 11, 2019 the Company issued 100,000 shares of common stock with a value of $20,000 for the conversion of a $20,000 note payable.
On November 19, 2019 the Company 20,000 shares of common stock to two entities with a value of $3,000 for the issuance of convertible debt.
During November 2019 the Company issued 458,571 shares of common stock with a value of $30,304 for the conversion of debt.
On December 3, 2019 the Company filed an S-8 registering 200,000 share of common stock with a value of $80,000 that were issued for accounts payable.
The Company has evaluated subsequent events to determine events occurring after October 31, 2019 through December 18, 2019 that would have a material impact on the Companys financial results or require disclosure and have determined none exist other than those noted above in this footnote.
|
7. Fair Value Measurements and Derivative Liabilities: Fair Value of Financial Instruments, Policy (Policies) |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Policies | |
Fair Value of Financial Instruments, Policy | As defined in (Financial Accounting Standards Board ASC 820), fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilized the market data of similar entities in its industry or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. FASB ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).
The three levels of the fair value hierarchy are as follows:
Level 1 Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.
Level 2 - Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date and includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.
Level 3 Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in managements best estimate of fair value. |
1. Nature of Operations and Continuation of Business: Impairment of Long-lived Assets (Policies) |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Policies | |
Impairment of Long-lived Assets | Impairment of Long-Lived Assets
We continually monitor events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. On April 30, 2019 the Company elected to impair its licenses agreement of $378,600 so as of October 31, 2019, no impairment of asset was necessary. |
10. Contingencies and Commitments |
6 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2019 | |||||||||||||
Notes | |||||||||||||
10. Contingencies and Commitments | NOTE 10: COMMITMENTS AND CONTINGENCIES
The Company has the following material commitments as of October 31, 2019:
On May 30, 2018 the Company and Control Capture Systems, LLC amended their license agreement as follows;
|
6. Convertible Debt |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Notes | |
6. Convertible Debt | NOTE 6: CONVERTIBLE DEBT
On May 22, 2018 the Company signed an agreement with an investor for a loan of $25,000. The note is convertible 180 days after the date of the note to shares of the Companys common stock at $0.75 per share or a 25% discount to the 10 day trading average prior to conversion; whichever is lower. The total amount of the loan must be converted on the date of conversion. The note has an annual interest rate of 6%.
On July 10, 2018 RAB Investments AG agreed to buy the outstanding convertible debt from Jabro Funds for $35,000. The Company as part of the agreement paid Jabro Funds the $35,000 for the debt and considered it retired and paid in full.
During the six months ended October 31, 2018, the Company issued a total of 224,062 shares of its common stock in the conversion of $39,778 in convertible notes principal, accrued interest payable and fees.
On May 6, 2019 the Company issued an 8% convertible note to Black Ice Advisors, LLC for $57,500 which matures on May 6, 2020. The note redeemable at a premium up to 140% of the face value within 180 days of issuance or is convertible after 180 days to the Company common stock at 60% of the lowest trading price twenty days prior to conversion.
On May 10, 2019 the Company entered into a settlement agreement with Firstfire Global for payment of the original note for $189,000 issued on July 18, 2016. Under the terms of the agreement the Company paid Firstfire $65,000 on May 10, 2019 and $10,000 to be paid on or before May 31, 2019. In addition Firstfire received 150,000 shares of the Company. As of October 31, 2019 the $10,000 was converted into 150,000 shares of common stock.
On July 11, 2019 the Company issued an 8% convertible note to GS Capital Partners, LLC for $58,000 which matures on July 11, 2020. The note redeemable at a premium up to 135% of the face value within 180 days of issuance or is convertible after 180 days to the Company common stock at 62% of the lowest trading price twenty days prior to conversion.
During the six months ended October 31, 2019 the Company issued 979,823 shares of common stock with a value of $104,833 for debt.
As of October 31, 2019, and April 30, 2019, the convertible debt outstanding, net of discount, was $752,360 and $959,800, respectively. |
1. Nature of Operations and Continuation of Business (Details) |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Details | |
Entity Incorporation, State Country Name | Delaware |
Entity Incorporation, Date of Incorporation | May 27, 1998 |
Stockholders' Equity, Reverse Stock Split | On January 19, 2018 the Board of Directors, with the approval of a majority of the shareholders, passed a resolution to effect a reverse split of the Companys outstanding common stock on a 1 share for 1,500 shares (1:1500) basis. The split became effective with FINRA on March 20, 2018, or as soon thereafter as practicable. The number of shares in the financials are reflective of the reverse split. |
Condensed Consolidated Balance Sheets - Parenthetical - $ / shares |
Oct. 31, 2019 |
Apr. 30, 2019 |
---|---|---|
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | |
Preferred Stock, Shares Authorized | 20,000,000 | |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 6,358,025 | 5,022,244 |
Common Stock, Shares, Outstanding | 6,358,025 | 5,022,244 |
Series A Preferred Stock | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 |
Preferred Stock, Shares Issued | 2,925,369 | 2,925,369 |
Preferred Stock, Shares Outstanding | 2,925,369 | 2,925,369 |
Series B Preferred Stock | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 |
Preferred Stock, Shares Issued | 520,000 | 520,000 |
Preferred Stock, Shares Outstanding | 520,000 | 520,000 |
1. Nature of Operations and Continuation of Business |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Notes | |
1. Nature of Operations and Continuation of Business | NOTE -1: BASIS OF PRESENTATION AND ORGANIZATION
Defense Technologies International Corp. (the "Company ") was incorporated in the State of Delaware on May 27, 1998. Effective June 15, 2016, the Company changed its name to Defense Technologies International Corp. from Canyon Gold Corp. to more fully represent the Company's expansion goals into the advanced technology sector.
On October 19, 2016, the Company entered into a Definitive Agreement with Controlled Capture Systems, LLC (CCS), representing the inventor of the technology and assets previously acquired by DTC, that included a new exclusive Patent License Agreement and Independent Contractor agreement. Under the license agreement with CCS, the Company acquired the world-wide exclusive rights and privileges to the CCS security technology, patents, products and improvements. The Company agreed to pay CCS an initial licensing fee of $25,000 and to pay ongoing royalties as defined in the Definitive Agreement. On May 30, 2018 the Company and Control Capture Systems, LLC amended their license agreement as follows (1) Royalty payments of 5% of gross sale from the license agreement will be calculated and paid quarterly with a minimum of $12,500 paid each quarter (2) All payment will be in US dollars or stock of the Company and or its subsidiary. The value of the stock will be a discount to market of 25% of the average trading price for the 10 days prior to conversion. The number of shares received by Control Capture prior to any reverse split are anti-dilutive (3) Invoices for parts and materials will be billed separate of the license fees noted above.
Effective January 12, 2017, Passive Security Scan, Inc. ("PSSI") was incorporated in the state of Utah as subsidiary controlled by the Company. The Company transferred to PSSI its exclusive world-wide license to the defense, detection and protection security products previously acquired by the Company. The Company currently owns 76.28% of PSSI with 23.72% acquired by several individuals and entities. The Company plans to continue the development of the technology and conduct all sales and marketing activities in PSSI.
On January 19, 2018 the Board of Directors, with the approval of a majority of the shareholders, passed a resolution to effect a reverse split of the Companys outstanding common stock on a 1 share for 1,500 shares (1:1500) basis. The split became effective with FINRA on March 20, 2018, or as soon thereafter as practicable. The number of shares in the financials are reflective of the reverse split.
Basis of Presentation
These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The Companys fiscal year end is April 30.
The interim condensed consolidated financial statements have been prepared without audit in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Securities and Exchange Commission (SEC) Form 10-Q. They do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these unaudited interim condensed consolidated financial statements should be read in conjunction with the Companys audited financial statements and notes thereto for the year ended April 30, 2019 included in its Annual Report on Form 10-K filed with the SEC.
The interim condensed consolidated financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Companys consolidated financial position as of October 31, 2019, the consolidated results of its operations and its consolidated cash flows for the six months ended October 31, 2019 and 2018 The results of operations for any interim period are not necessarily indicative of the results to be expected for the full fiscal year.
Consolidation and Non-Controlling Interest
These consolidated financial statements include the accounts of the Company, and its majority-owned subsidiary, PSSI, from its formation on January 12, 2017 to date. All inter-company transactions and balances have been eliminated.
Inventory
Inventories are stated at the lower of cost using the first-in, first-out (FIFO) cost method of accounting. Inventories as of October 31, 2019 consist of parts used in assembly of the units being sold with no work in progress or finished goods. As of October 31, 2019 and 2018 the value of the inventory was , respectively.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Impairment of Long-Lived Assets
We continually monitor events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. On April 30, 2019 the Company elected to impair its licenses agreement of $378,600 so as of October 31, 2019, no impairment of asset was necessary.
Reclassification
The Company has restated the number of shares outstanding and subsequent amount related to the change in shares as of October 31, 2019 due to the cancellation of common shares that were accounted for but not issued. In addition the Company had granted the conversion of 283,135 shares of Series A preferred shares into 2,831,350 of common shares but the conversion was never completed so the shares in the shareholders deficit has been restated accordingly.
Net Income (Loss) per Common Share
Basic net income or loss per common share is calculated by dividing the Companys net income or loss by the weighted average number of common shares outstanding during the period. Diluted net income or loss per common share is calculated by dividing the Companys net income or loss by sum of the weighted average number of common shares outstanding and the dilutive potential common share equivalents then outstanding. Potential dilutive common share equivalents consist of shares issuable upon exercise of outstanding stock options and warrants, using the treasury stock method and the average market price per share during the period, and conversion of convertible debt, using the if converted method. As of October 31, 2019, the Company had potential shares issuable under convertible preferred shares, outstanding options, warrants and convertible debt for a total of 39,154,360. With the income in operations for the six-month period ended October 31, 2019, the additional shares were determined to be dilutive and were used in the calculation of net income per share on a diluted basis.
Recent Accounting Pronouncements
In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases (Topic 842)". The amendments in this ASU revise the accounting related to lessee accounting. Under the new guidance, lessees is required to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018 and are to be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. The Company has adopted the new accounting pronouncement and is recording a lease use asset and lease liability as of October 31, 2019. |
2. Going Concern (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 136 Months Ended | ||
---|---|---|---|---|---|
Oct. 31, 2019 |
Oct. 31, 2018 |
Oct. 31, 2019 |
Oct. 31, 2018 |
Oct. 31, 2019 |
|
Details | |||||
Net income (loss) attributed to the Company | $ 180,249 | $ 1,409,576 | $ (559,172) | $ (658,158) | $ 8,716,910 |
Working capital deficit | $ 3,080,071 | $ 3,080,071 | $ 3,080,071 |
7. Fair Value Measurements and Derivative Liabilities: Schedule of Assumptions Used (Tables) |
6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2019 | |||||||||
Tables/Schedules | |||||||||
Schedule of Assumptions Used |
|
1. Nature of Operations and Continuation of Business: Net Income (Loss) Per Common Share (Policies) |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Policies | |
Net Income (Loss) Per Common Share | Net Income (Loss) per Common Share
Basic net income or loss per common share is calculated by dividing the Companys net income or loss by the weighted average number of common shares outstanding during the period. Diluted net income or loss per common share is calculated by dividing the Companys net income or loss by sum of the weighted average number of common shares outstanding and the dilutive potential common share equivalents then outstanding. Potential dilutive common share equivalents consist of shares issuable upon exercise of outstanding stock options and warrants, using the treasury stock method and the average market price per share during the period, and conversion of convertible debt, using the if converted method. As of October 31, 2019, the Company had potential shares issuable under convertible preferred shares, outstanding options, warrants and convertible debt for a total of 39,154,360. With the income in operations for the six-month period ended October 31, 2019, the additional shares were determined to be dilutive and were used in the calculation of net income per share on a diluted basis. |
1. Nature of Operations and Continuation of Business: Inventory (Policies) |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Policies | |
Inventory | Inventory
Inventories are stated at the lower of cost using the first-in, first-out (FIFO) cost method of accounting. Inventories as of October 31, 2019 consist of parts used in assembly of the units being sold with no work in progress or finished goods. As of October 31, 2019 and 2018 the value of the inventory was , respectively. |
7. Fair Value Measurements and Derivative Liabilities: Schedule of Assumptions Used (Details) |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Fair Value Assumptions, Risk Free Interest Rate | 0.0239 |
Fair Value Assumptions, Expected Dividend Rate | 0.0000 |
Fair Value Assumptions, Expected Volatility Rate | 4.6000 |
Minimum | |
Fair Value Assumptions, Expected Term | 3 months |
Maximum | |
Fair Value Assumptions, Expected Term | 10 months 6 days |
11. Lease: Schedule of Future Minimum Lease Payments for Capital Leases (Details) |
Oct. 31, 2019
USD ($)
|
---|---|
Details | |
Capital Leases, Future Minimum Payments Due in Two Years | $ 19,500 |
Capital Leases, Future Minimum Payments Due in Three Years | 39,000 |
Capital Leases, Future Minimum Payments Due in Four Years | 19,500 |
Capital Leases, Future Minimum Payments Due | $ 78,000 |
1. Nature of Operations and Continuation of Business: Recent Accounting Pronouncements (Policies) |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements
In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases (Topic 842)". The amendments in this ASU revise the accounting related to lessee accounting. Under the new guidance, lessees is required to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018 and are to be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. The Company has adopted the new accounting pronouncement and is recording a lease use asset and lease liability as of October 31, 2019. |
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1. Nature of Operations and Continuation of Business: Use of Estimates (Policies) |
6 Months Ended |
---|---|
Oct. 31, 2019 | |
Policies | |
Use of Estimates | Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
9. Stock Options and Warrants: Disclosure of Share-based Compensation Arrangements by Share-based Payment Award (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award |
|
7. Fair Value Measurements and Derivative Liabilities: Schedule of Derivative Liability Related to the Conversion Feature (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Oct. 31, 2019 |
Oct. 31, 2018 |
Oct. 31, 2019 |
Oct. 31, 2018 |
Apr. 30, 2019 |
|
Retirement of derivative at conversion | $ 149,153 | $ 149,153 | $ 0 | ||
Gain (loss) on extinguishment of debt | (9,910) | $ (10,000) | 199,544 | $ (10,000) | |
Fair Value, Inputs, Level 3 | |||||
Derivative Liability | $ 469,550 | 469,550 | $ 1,252,539 | ||
Debt discount related to new debt | (8,984) | ||||
Retirement of derivative at conversion | (149,153) | ||||
Day one measurement of new debt | 0 | ||||
Change in fair value of the derivative | (824,396) | ||||
Gain (loss) on extinguishment of debt | $ 199,544 |
10. Contingencies and Commitments (Details) |
6 Months Ended |
---|---|
Oct. 31, 2019
USD ($)
| |
EMAC Handels Ag | |
Monthly fee for administration services | $ 5,000 |
Monthly fee for Office Rent | 250 |
Monthly fee for Office Supplies | 125 |
Merrill W Moses | |
Monthly fee for administration services | 2,500 |
Monthly Director's fee per Service Agreement | 7,500 |
Charles C Hooper | |
Monthly fee for administration services | 5,000 |
RAB Investments | |
Monthly fee for administration services | 5,000 |
Monthly fee for Office Rent | 250 |
Monthly fee for telephone | $ 125 |
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