UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
For
the quarterly period ended
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
For the transition period from ____ to _____
Commission
file number:
(Name of Registrant in Its Charter)
State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
Indicate
by check whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act).
| Large accelerated filer ☐ | Accelerated filer ☐ | ||
| Smaller
reporting company |
Emerging
growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: shares of common stock at October 25,2022
OMNIA WELLNESS INC.
Index
| 2 |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet (Unaudited) - USD ($)
| Year Ended June 30, 2022 | Year Ended March 31, 2022 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | ( | ) | $ | ||||
| Accounts receivable | ||||||||
| Other receivable | ||||||||
| Due from related parties | ||||||||
| Inventory | ||||||||
| Total current assets | ||||||||
| Non-current assets: | ||||||||
| Fixed assets, net | ||||||||
| Intangible assets, net | ||||||||
| ROU assets, net | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Deposit liability | ||||||||
| Accrued interest | ||||||||
| Lease liability | ||||||||
| Warranty liability | ||||||||
| Royalty liability | ||||||||
| Nonconvertible notes, related party | ||||||||
| Nonconvertible notes | ||||||||
| Convertible notes, related party | ||||||||
| Convertible notes | ||||||||
| Senior secured notes | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities: | ||||||||
| Advances due to related party | ||||||||
| Lease liability | ||||||||
| Senior secured notes | ||||||||
| Nonconvertible notes, related party | ||||||||
| Nonconvertible notes | ||||||||
| Convertible notes | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Stockholders’ deficit: | ||||||||
| Stock Payable | ||||||||
| Stock Reserve | ||||||||
| Preferred stock; shares authorized; shares issued or outstanding | ||||||||
| Common stock; $ par value, shares authorized; and issued and outstanding, respectively | ||||||||
| Common Stock Subscribed $ par value subscribed common shares, and -- shares outstanding, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Stock Purchase Agreement Receivable | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
| 3 |
Statements of Operations (Unaudited) - USD ($)
| Year Ended | Year ended | |||||||
| June 30, 2022 | June 30, 2021 | |||||||
| Revenue | ||||||||
| Sales, net | $ | $ | ||||||
| Freight and delivery income | ||||||||
| Total revenue | ||||||||
| Cost of goods sold | ||||||||
| Cost of goods sold | ||||||||
| Total cost of goods sold | ||||||||
| Gross Profit | ||||||||
| Operating expenses: | ||||||||
| Warranty expense | ||||||||
| Depreciation and amortization | ||||||||
| Legal and professional fees | ||||||||
| Payroll expense | ||||||||
| Selling and marketing expense | ||||||||
| Consulting | ||||||||
| Consulting, related party | ||||||||
| Royalty expense | ||||||||
| General and administrative | ||||||||
| Research and development | ||||||||
| Total operating expenses | ||||||||
| Other (income) expense: | ||||||||
| Gain on PPP loan forgiven | ( | ) | ||||||
| Loss on debt settlement | ||||||||
| Interest expense and finance costs | ||||||||
| Total other (income) expense | ( | ) | ||||||
| Net loss | ( | ) | ( | ) | ||||
| Net loss per common share – basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average common shares outstanding-basic and diluted | ||||||||
| 4 |
Statements of Changes in Stockholders’ Deficit (Unaudited) - USD ($)
| Common Stock Shares | Common Stock Par Value | Common Stock Subscribed | Preferred Stock Shares | Preferred Stock Value | Stock Payable | Stock Reserve | Stock Purchase Agreement Receivable | Additional Paid-in Capital | Accumulated Deficit | Total | ||||||||||||||||||||||||||||||||||
| Balance, March 31, 2021 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Additional paid in capital | ||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2021 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Balance, March 31, 2022 | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||
| Reclass stock payable to Stock Reserve | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Reclass par value of shares and shares outstanding | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Beneficial conversion feature on convertible notes | - | |||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2022 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||
| 5 |
Statements of Cash Flows (Unaudited) - USD ($)
| For the Three Months Ended | For the Three Months Ended | |||||||
| June 30, 2022 | June 30, 2021 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | $ | |||||||
| BCF on convertible notes | $ | |||||||
| Loss on debt settlement | $ | |||||||
| Stock based compensation | $ | |||||||
| Amortization of ROU asset | $ | |||||||
| Amortization of warrants | $ | |||||||
| Discount on notes | $ | |||||||
| Royalty on sales | $ | |||||||
| Finance costs related to note payable | $ | |||||||
| Finance costs paid in stock | $ | |||||||
| Gain on PPP loan forgiven | $ | ( | ) | |||||
| Rent payments on lease liability | $ | ( | ) | |||||
| Bad debt expense | $ | |||||||
| Change in: | ||||||||
| Accounts receivables, net | $ | ( | ) | |||||
| Due from related parties | $ | ( | ) | |||||
| Inventory | $ | ( | ) | |||||
| Deposits | $ | ( | ) | |||||
| Advance payments on purchase of inventory, related party | $ | |||||||
| Accounts payable and accrued liabilities | $ | |||||||
| Interest payable | $ | |||||||
| Net cash used - operating activities | $ | ( | ) | ( | ) | |||
| Cash flows from investing activities: | ||||||||
| Purchase of fixed assets | ( | ) | ( | ) | ||||
| Payments on license agreement, related party | ||||||||
| Net cash used – investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Subscriptions receivable | ||||||||
| Proceeds from advances | ||||||||
| Proceeds from loans payable | ||||||||
| Payments on loans payable | ||||||||
| Payments on advances | ( | ) | ||||||
| decrease in Stock subscription payable | ( | ) | ||||||
| Increase in Stock Reserve | ||||||||
| Change in shareholders’ equity, net | ||||||||
| Change in common stock | ( | ) | ||||||
| Net cash provided - financing activities | ||||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash - beginning of year | ||||||||
| Cash - end of year | $ | ( | ) | $ | ||||
| 6 |
Omnia Wellness Inc. and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2022 and 2021
Note 1 Nature of Operations
Omnia
Wellness Inc. (the “Company”) was incorporated as a Nevada corporation on
On
March 5, 2020, the Company filed Amended and Restated Articles of Incorporation with the Secretary of State of the State of Nevada to,
among other things, (i) increase the Company’s authorized shares of common stock from to , (ii) create and
authorize shares of “blank check” preferred stock, and (iii) effect a
On
April 17, 2020, the Company entered into a Share Exchange and Reorganization Agreement (the “Exchange Agreement”) with Omnia
Wellness Corporation (formerly known as Bed Therapies Inc.), a Texas corporation (“Omnia Corp.”), and the beneficial stockholders
of Omnia Corp. to acquire
| 7 |
As of immediately prior to the closing of the Acquisition, the Company entered into an Assignment and Assumption Agreement with RZI Consulting LLC (the “Assignment Agreement”), pursuant to which RZI Consulting LLC assumed substantially all of the Company’s remaining assets and liabilities through the closing of the Acquisition. Accordingly, as of the closing of the Acquisition, the Company had no assets or liabilities (other than relating to general and administrative expenses).
Following the Acquisition, the Company, through its wholly owned subsidiary Omnia Corp., now develops and markets products for wellness and physical therapy markets, using patented dry-hydro therapy equipment that the Company plans to offer and sell in medical and fitness markets.
On
April 6, 2021,
The Company’s principal executive office is located at 999 18th St., Suite 3000, Denver, CO 80202, and its telephone number is 303-325-3738. The Company’s website address is www.omniawellness.com.
In March 2020 the World Health Organization declared COVID-19 a pandemic. The Company is still assessing the impact COVID-19 may have on its business, but there can be no assurance that this analysis will enable the Company to avoid part or all of any impact from the spread of COVID-19 or its consequences, including downturns in business sentiment generally. The extent to which the COVID-19 pandemic and global efforts to contain its spread will impact the Company’s operations will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the pandemic and the actions taken to contain or treat the COVID-19 pandemic.
Note 2 Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these financial statements are set out below.
Basis of Presentation - The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Principles of Consolidation - The consolidated financial statements include accounts of the Company’s wholly-owned subsidiary Omnia Wellness Corp., and Omnia Wellness Corp.’s wholly-owned subsidiary SolaJet™ Financing Company, LLC. All significant intercompany balances and transactions have been eliminated in consolidation.
Accounting Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and the accompanying notes. Such estimates and assumptions impact, among others, the following: the allowance for doubtful accounts, determination of impairment on investments and determination of recoverability of deferred tax assets. Actual results could differ from those estimates.
Risks and Uncertainties - The Company’s operations may be subject to significant risk and uncertainties including financial, operational, regulatory, and other risks associated with a start-up company, including the potential risk of business failure. See Note 3 regarding going concern matters.
| 8 |
Cash - In the consolidated statement of cash flows, cash includes cash in hand and other short-term highly liquid investments with original maturities of three months or less. The Company places its cash on deposit with financial institutions it believes to be of high quality.
Accounts
Receivable – Accounts receivable balances are established for amounts owed to the Company from its customers from the sale
of products and services. The Company closely monitors the collectability of outstanding accounts receivable and provide an allowance
for doubtful accounts based on estimated collections of outstanding amounts. The Company evaluated the accounts receivable and determined
no collection loss reserve was necessary. There were $
Related Party Transactions - The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the related parties include (a) affiliates of the Company (“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act); (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
Advance
Payments on Purchases of Inventory, related party - Advance payments on purchases of inventory consists of hydro-therapy beds
and related equipment that are held by DryRx, a company owned and controlled by the Chairman’s brother, under a Contract Services
Agreement until ownership is transferred, which is when a sale or use of the bed and equipment occurs, and beds are placed in service.
The value of the advance payments is stated at the lower of cost or market, determined using the first in, first-out method. Inventory
held by third parties in use, which is inventory installed at a third-party location and ownership is maintained by the Company, is re-classified
to fixed assets and depreciated over its useful life using the straight-line method of depreciation. All inventory held as advance payments
on purchases of inventory are available either for sale or for use to be installed at third-party locations and not transferred until
a transaction has occurred. The balance of advance payments on purchases of inventory was $
Fixed
Assets - Fixed assets are carried at cost less accumulated depreciation and amortization. Depreciation is computed using the
straight-line method over the estimated useful lives. The fixed assets include equipment placed in use at certain locations The accumulated
depreciation was calculated to be $
Patent
Cost - Patents with a finite useful life that are acquired through the license agreement are carried at cost less accumulated
amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives.
The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any impairment
changes being accounted for on an annual basis. The expected life of the current patent recorded is expected to be
Leases - Operating lease right of use (“ROU”) assets represent the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in operating expenses in the consolidated statements of operations.
License Payable, related party – License payable is the remaining balance due for the initial intangible asset cost. License payable is classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.
| 9 |
Warranty
Liability – For sales to customers, the Company provides a warranty on the beds sold which includes, a three-year warranty
on parts, a five-year warranty on the frame, three year warranty on parts, and a one year warranty on any labor. Warranty liability is
accrued and is estimated at
Beneficial Conversion Features – The Company accounts for convertible notes payable in accordance with ASC 470-20. A beneficial conversion feature is a non-detachable conversion feature that is “in the money” at the commitment date, which requires recognition of interest expense for underlying debt instruments and a deemed dividend for underlying equity instruments. A conversion option is in the money if the effective conversion price is lower than the commitment date fair value of a share into which it is convertible. As of June 30, 2022 and 2021, the Company did not have any conversion options that were in the money.
Derivatives – The Company accounts for derivative instruments in accordance with ASC815 and ASC470, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair of the derivative instruments depends on whether the derivatives qualify as hedging relationships and the types of relationships designated are based on the exposures hedged. At June 30, 2022 and 2021, the Company did not have any derivative instruments that were designated as hedges.
Revenue – Revenue Recognition Standard, ASC 606 is used by the Company to recognize revenue. ASC 606 standards were jointly issued by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). The five conditions of ASC 606 applied to revenue are: 1. Identify the contract with the customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to separate performance obligations; and 5. Recognize revenue as each performance obligation is satisfied.
The Company derives its revenues primarily from the usage fees and sales of hydrotherapy massage beds and installation services. Revenues from sales are recognized when the products are sold and delivered to its customers and the usage fees are earned based on subscription or actual usage. Sales Taxes and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. Shipping and handling fees charged to customers are reported within revenue.
Income Taxes – The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
The
Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25
addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial
statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely
than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carrybacks and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.
| 10 |
Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.
Fair Value of Financial Instruments - From inception, the Company adopted ASC 820, Fair Value Measurements and Disclosures, which provides a framework for measuring fair value under GAAP. Fair value is defined 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 measurement date. The standard also expands disclosures about instruments measured at fair value and establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
| ● | Level 1: Quoted prices for identical assets and liabilities in active markets; | |
| ● | Level 2: Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and | |
| ● | Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
The carrying amounts of financial instruments including cash, accounts payable, warranty liability and notes payable approximated fair value as of June 30, and 2021 due to the relatively short maturity of the respective instruments.
Recently Issued Accounting Pronouncements -
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in ASU 2016-13 replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for fiscal years beginning after December 15, 2021, including interim periods within those years, and must be adopted under a modified retrospective method approach. Entities may adopt ASU 2016-13 earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those years. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company’s financial statements and disclosures.
Implementation of this ASU had no material impact on the consolidated financial statements.
In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock. For convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, the embedded conversion features no longer are separated from the host contract. ASU 2020-06 also removes certain conditions that should be considered in the derivatives scope exception evaluation under Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and clarify the scope and certain requirements under Subtopic 815-40. In addition, ASU 2020-06 improves the guidance related to the disclosures and earnings-per-share (EPS) for convertible instruments and contract in entity’s own equity. ASU 2020-06 is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Board specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. Implementation of this ASU had no material impact on the consolidated financial statements.
As of June 30, 2022, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.
| 11 |
Note 3 Going Concern
The Company adopted Accounting Standards Update No. 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). The Company’s financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the financial statements, the Company had an accumulated deficit at June 30, 2022 and 2020, a net loss and net cash used in operating activities for the reporting periods then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The Company is commencing operations to generate sufficient revenue; however, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds by way of a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of private offering. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Note 4 Related Parties
The
Company outsources its manufacturing pursuant to a Contract Services Agreement with DryRX, LLC dated as of January 1, 2020, which replaced
and superseded the Contract Services Agreement with DryRX, LLC dated as of July 22, 2018, which expired in accordance with its terms.
The Contract Services Agreement, among other things, provides that DryRX shall provide manufacturing and support services on behalf of
the Company, and shall be responsible for the manufacturing oversight and production operations of the Company’s products. In return,
the Company is obligated to pay to DryRX a fee equal to
Note 5 Fixed Assets
The carrying basis and accumulated depreciation of fixed assets at June 30, 2022 and 2021 is as follows:
| Useful Lives | June 30, 2022 | June 30, 2021 | ||||||||
| Equipment in use | $ | $ | ||||||||
| Vehicles and Trailers | ||||||||||
| Patent Costs | ||||||||||
| Building improvements | ||||||||||
| Less depreciation and amortization | ||||||||||
| Total fixed assets, net | $ | |||||||||
The
Company recorded depreciation expense of $
| 12 |
Note 6 License Agreement, Related Party
On
April 30, 2019, the Company entered worldwide exclusive license with Drywave Technologies, Inc. (“Drywave”), a Company owned
by Steve Howe. On the terms and conditions of the agreement, the Company received intellectual property rights to manufacture, use, and
offer for sale all the products related to the patents and trademarks for dry hydrotherapy therapy technologies. The license fee to acquire
the technology was $
| (a) | $ | |
| (b) | $ | |
| (c) | $ |
The
Company made all the required payments as of March 31, 2021.
filing.
The
company recorded the original license fee as an intangible asset as of April 30, 2019 and is amortizing the asset over the expected useful
life of the asset of
Note 7 Lease Liability
On
January 1, 2022, we adopted ASC Topic 842 – Leases. Under this new guidance, lessees are required to recognize assets and liabilities
on the balance sheet for the rights and obligations created by all leases. As of June 30, 2022 and 2021 the company recorded its ROU
lease liabilities of $
Lessee accounting
We
determine if an arrangement is or contains a lease at inception.
Under the guidance of ASC 842, operating leases are included in right-of-use assets, current lease liabilities, and noncurrent lease liabilities on our balance sheets. ROU assets and lease liabilities are recognized at commencement date based on the present value of the future minimum lease payments over the lease term. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at transition date in determining the present value of future payments. The ROU asset includes any lease payments made but excludes lease incentives and initial direct costs incurred, if any. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.
Lease extensions
Many leases have options to either extend or terminate the lease. In determining the lease term, we considered all available contract extensions that are reasonably certain of occurring.
Operating leases
The
Company has three operating leases, each with different terms.
| 13 |
The following table summarizes balance sheet data related to leases at June 30, 2022 and June 30, 2021:
| June 30, 2022 | June 30, 2021 | |||||||
| Assets | ||||||||
| Operating lease right of use assets #1 | $ | $ | ||||||
| Operating lease right of use assets #2 | ||||||||
| Operating lease right of use assets #3 | ||||||||
| Less accumulated depreciation | ( | ) | ||||||
| Total operating lease right of use assets | $ | $ | ||||||
| Liabilities | ||||||||
| Operating lease liability, current | ||||||||
| Operating lease liability, noncurrent | ||||||||
| Total lease liabilities | ||||||||
Operating
lease liability is presented net of lease payments. The Company is required to make monthly payments for each lease. During the fiscal
year ended June 30, 2022, the Company paid $
Note 8 Notes Payable
The following are the various notes payable of the Company:
Covid-19 PPP Loan
During
the year ended March 31, 2021, the Company entered into loans under the Paycheck Protection Program (“PPP”) sponsored by
the U.S. Small Business Administration (SBA) providing for proceeds of $
Senior Secured Notes
In
June 2021, the Company entered into a Senior Secured Note with Auctus Fund for $
On
July 14, 2021, the principal amount of the note was increased by $
Also
pursuant to the agreement, in connection with the issuance of the note, the Company issued two common stock purchase warrants (separately,
the “First Warrant” and the “Second Warrant” and together, the “Warrants”) to Auctus, each allowing
Auctus to purchase an aggregate of shares of the Company’s common stock. The Second Warrant is subject to cancellation
pursuant to the terms of the Auctus Note and may not be exercised until the Trigger Date (as defined in the Second Warrant). The Warrants
each have an exercise price of $
| 14 |
The
total fair value of the warrants was estimated on the issue date at $
| June 24, 2022 | ||||
| Market price of common stock on date of issuance | $ | |||
| Risk-free interest rate | % | |||
| Expected dividend yield | ||||
| Expected term (in years) | ||||
| Expected volatility | % | |||
On or about November 22, 2021, the Company triggered an event of default under the Auctus Note and related documents which entitled Auctus, among other things, to accelerate the due date of the unpaid principal amount of, and all accrued and unpaid interest on, the Auctus Note. On February 17, 2022, Auctus and the Company executed a Waiver Letter which waived such defaults effective as of November 22, 2021.
The note is secured by an Affidavit of Confession of Judgment and ranks senior over all existing and future indebtedness of the Borrower.
Nonconvertible Notes – Related Party
As
of June 30, 2022, the Company has issued $
| Interest Rate | Issuance Date | Maturity | June 30, 2022 | |||||||
| % | ||||||||||
| % | ||||||||||
| % | ||||||||||
| % | ||||||||||
| % | ||||||||||
| % | ||||||||||
| % | ||||||||||
| % | ||||||||||
| % | ||||||||||
| % | ||||||||||
| % | ||||||||||
| % | ||||||||||
| 15 |
Nonconvertible Notes
As
of June 30, 2022, the Company has issued $
| Interest Rate | Default Rate | Issuance Date | Maturity | June 30, 2022 | ||||||||||
| % | N/A | $ | ||||||||||||
| % | % | $ | ||||||||||||
| % | % | $ | ||||||||||||
| % | Additional | % | $ | |||||||||||
| % | Additional | % | $ | |||||||||||
| % | N/A | $ | ||||||||||||
| % | Additional | % | $ | |||||||||||
| % | Additional | % | $ | |||||||||||
| % | % | $ | ||||||||||||
| % | Additional | % | $ | |||||||||||
| % | Additional | % | $ | |||||||||||
| % | Additional | % | $ | |||||||||||
| % | Additional | % | $ | |||||||||||
| % | N/A | % | $ | |||||||||||
| % | N/A | % | $ | |||||||||||
| % | N/A | % | $ | |||||||||||
| N/A% | N/A | % | $ | |||||||||||
| $ | ||||||||||||||
Convertible Notes – Related Party
The
Company has issued $
Convertible Notes
As
of June 30, 2022, the Company has issued $
| Interest Rate | Conversion Rate | Issuance Date | Maturity | June 30, 2022 | ||||||||||||
| % | $ | $ | ||||||||||||||
| % | $ | $ | ||||||||||||||
| % | $ | $ | ||||||||||||||
| % | $ | $ | ||||||||||||||
| % | $ | $ | ||||||||||||||
| % | $ | $ | ||||||||||||||
| % | $ | $ | ||||||||||||||
| % | $ | $ | ||||||||||||||
| % | $ | * | $ | |||||||||||||
| % | $ | * | $ | |||||||||||||
| % | $ | * | $ | |||||||||||||
| % | $ | * | $ | |||||||||||||
| % | $ | * | $ | |||||||||||||
| % | $ | $ | ||||||||||||||
| % | $ | $ | ||||||||||||||
| % | $ | * | $ | |||||||||||||
| % | $ | * | $ | |||||||||||||
| % | $ | * | $ | |||||||||||||
|
| % | $ | * | $ | ||||||||||||
| % | $ | * | $ | |||||||||||||
| % | $ | * | $ | |||||||||||||
| % | $ | * | $ | |||||||||||||
| adjustment | $ | |||||||||||||||
| $ | ||||||||||||||||
| * |
The
Company evaluates these notes at commencement for beneficial conversion features and derivatives. As of June 30, 2022, the Company recorded
a beneficial conversion feature on the convertible notes of $
| 16 |
Note 9 Shareholders’ Equity
Common Stock - The Company is authorized to issue shares of common stock, par value $ per share. All shares of the Company’s common stock have equal rights and privileges with respect to voting, liquidation, and dividend rights. Each share of common stock entitles the holder thereof to:
| a. | One non-cumulative vote for each share held of record on all matters submitted to a vote of the stockholders; | |
| b. | To participate equally and to receive all such dividends as may be declared by the Board of Directors out of funds legally available; therefore, and | |
| c. | To participate pro rata in any distribution of assets available for distribution upon liquidation. |
Stockholders have no pre-emptive rights to acquire additional shares of common stock or any other securities. Common shares are not subject to redemption and carry no subscription or conversion rights.
Preferred Stock - On April 6, 2021, the Company increased its authorized shares of “blank check” preferred stock from to shares, which may be issued from time to time in one or more series and/or classes. shares of preferred stock have been issued or are outstanding as of December 31, 2021.
The Company has not declared or paid any dividends or returned any capital to common stock shareholders as of June 30, 2022, and 2021.
Note 10 Income Taxes
Income Tax Expense
For
the fiscal year ended June 30, 2022, the reconciliation between the income tax benefit computed by applying the statutory U.S. federal
income tax rate to the pre-tax loss before income taxes, and total income tax expense recognized in the financial statements is the change
in the valuation allowance. For the fiscal year ended June 30, 2020, and 2021, the Company did
NOL Carryforwards and Other Matters
The Company files income tax returns in the U.S. federal jurisdiction and the state of Colorado. The Company’s federal and state tax years for the 2018 fiscal year and forward are subject to examination by taxing authorities.
The
Company did
Note 11 Commitments and Contingencies
Off-Balance Sheet Arrangements - The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Leases
- The Company leases approximately
The
Company leases a warehouse facility of approximately
| 17 |
The
Company leases approximately
Licenses-
The Company entered into a Master Facility License Agreement in which space is currently leased at two fitness facilities to operate
equipment in use. The licenses have an initial term of 90 days and then are on a month-to-month basis. The rent is a fixed fee times
the number of beds that ware installed in the space. After six months, the rental fee also includes
Legal Matters - From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. During the periods ended June 30, 2022 and 2021, there are no proceedings in which the Company or any of its directors, officers or affiliates, or any registered or beneficial shareholders, is an adverse party or has a material interest adverse to its interest.
Note 12 Subsequent Events
The
Company entered into two loan agreements with Patrick Wanner, for the sum of $
Note 13 Restatement
The Company amended its Annual Report on Form 10-K for the fiscal year ended March 31, 2021 (the “Original Filing”), to restate its audited consolidated financial statements and related footnote disclosures to retroactively report an April 6, 2021, 15-1 forward stock split and delete the incorrect leases of inventory revenue disclosure statement for the period covered in the Original Filing.
The Company currently does not hold any leases of inventory and has removed this disclosure from the footnotes of the financial statements in the Amendment No. 1 to the Original Filing, instead providing that the Company derives its revenues primarily from the usage fees and sales of hydrotherapy massage beds and installation services. Revenues from sales are recognized when the products are sold and delivered to its customers and the usage fees are earned based on subscription or actual usage. Sales Taxes and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. Shipping and handling fees charged to customers are reported within revenue.
In addition, the weighted average earnings per share have been recalculated in the Consolidated Balance Sheets in the Amendment No. 1 to the Original Filing.
| 18 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward Looking Statements
The following discussion should be read in conjunction with our unaudited financial statements and related notes included in Item 1, “Financial Statements,” of this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended March 31, 2021. Certain information contained in this MD&A includes “forward-looking statements.” Statements which are not historical reflect our current expectations and projections about our future results, performance, liquidity, financial condition and results of operations, prospects and opportunities and are based upon information currently available to us and our management and their interpretation of what is believed to be significant factors affecting our existing and proposed business, including many assumptions regarding future events. Actual results, performance, liquidity, financial condition and results of operations, prospects and opportunities could differ materially and perhaps substantially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors, including those risks described in detail in the section entitled “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2021.
Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “should,” “would,” “will,” “could,” “scheduled,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “seek,” or “project” or the negative of these words or other variations on these words or comparable terminology.
In light of these risks and uncertainties, and especially given the nature of our existing and proposed business, there can be no assurance that the forward-looking statements contained in this section and elsewhere in this Quarterly Report on Form 10-Q will in fact occur. Potential investors should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.
Business
We develop and market products for wellness and physical therapy markets, using patented dry-hydro therapy equipment and other related modalities that we plan to offer and market in wellness, fitness and medical markets.
Our mission is to redefine the wellness industry by introducing affordable, “on demand” wellness memberships through a network of retail locations, which we refer to as BodyStop® Centers, which feature patented, touchless SOLAJET™ endokinetic therapy, a technology that we believe exceeds the capability and effect of hands-on massage. We seek to become the leading provider of therapeutic wellness treatments and the most recognized brand in the wellness category through the rapid and focused expansion of BodyStop® Relaxation Centers in key markets throughout the U.S. and Europe. The goal is not only to capture a significant share of the existing market but also to expand the wellness market as a whole by attracting a large segment of potential customers who are averse to human touch.
We plan to introduce a disruptive business model into the traditional wellness massage and spa industry by delivering the important benefits of our endokinetic therapies in a more affordable and convenient way. We have created a unique and expandable business model that we believe breaks through the main barriers of wellness treatments which include cost, scheduling, and quality/consistency.
Central to our business plan is the creation of the BodyStop® Relaxation Centers, which are premium, spa-like locations that can be located, and an appointment booked, by customers or “members” using a smartphone app or the web – massage on demand. We expect that each typical BodyStop® Relaxation Center will have six to ten patented dry-hydrotherapy SOLAJET™ systems, two Aquavive® contrast therapy units, one SolaSauna, a SolaPro percussive treatment tower, one full body cryo-therapy chamber, one HyperCryo® spot therapy unit, one SolaDerm® LED therapy system and an assisted TheraStretch® zone where customers can choose and receive private, deeply relaxing, consistent and therapeutic treatments with the multiple modalities available. We believe that the customized wellness experience provided at a BodyStop® is unequaled in our goal to provide the client the ability to “Feel Better Fast” at our one stop locations.
Our retail membership model is currently based upon a price from $5 to $10 per fifteen minute session on the modality of the customer’s choice. Due to our technology, we expect to operate the BodyStop® Relaxation Centers with a minimal amount of staffing, as well as potentially franchise BodyStop® Relaxation Centers to third parties to enhance the rate of growth. Based on projected usage rates determined by us after multiple years of product development and market testing, we estimate that a single BodyStop® center servicing up to 800 members, may generate approximately $1,000,000 in annual revenue with a target gross margin of approximately 60%.
| 19 |
Research and Development
To develop our proprietary technology and prepare our product for commercialization, Omnia Corp. and its founder and affiliates have spent multiple years designing and placing over 500 units in high volume usage commercial settings. This product verification program was important to validate the product’s reliability, performance, consumer features and production capacity. The Company is continuing to develop additional products to offer in the wellness market and will incur research and development expenses on an ongoing basis.
Products and Services
The SolaJet® Dry-Hydrotherapy System, is an exhilarating new wave in health and wellness. Inside, a powerful traveling water jet performs a relaxing full body Endo-Kinetic™ treatment but is also able to isolate to any part of the body at the touch of a button. Throughout this TOUCH-LESS self- administered session, the client remains clothed and dry.
The AquaVive, is the world’s first hyper-thermic massaging system that uses the penetrating power of water to both relax muscles with therapeutic heat or to quell inflammation with cooling to 40 degrees F. The AquaVive also provides gentle stretching and side to side movement.
The SolaPro, provides deep and rapid vibration which provides many individuals fast and advanced relief from aches and pains and helps promote faster recovery. Sola-Pro creates a targeted therapeutic effect. In the case of the SolaPro™, our “smooth- force” penetrating power can deliver gentle strength massage or powerful deep penetrating action.
SolaDerm, aids in the reduction of inflammation using cold therapy works by reducing blood flow to a particular area, which can significantly reduce swelling that causes pain, especially around a joint or a tendon. It can temporarily reduce nerve activity, which can also relieve pain. Compression assists in a similar manner through the restriction of blood flow and the reduction of swelling and fluid build-up.
HyperCryo Spot Cryotherapy, uses extremely cold temperatures in order to induce healing processes. Cryotherapy has been used to stimulate the body’s own natural ability to recover, repair, and rebuild. Using extremely cold temperatures over a short time has an effect much easier to administer than traditional ice packs used for cold therapy or treatment. Spot cryo targets a local area vs the whole body.
Full Body Cryotherapy, refers to the process of stimulating the body’s natural healing and recovery systems by applying extremely cold temperatures to the entire body. Eliminating pain, reducing inflammation, and improving the blood flow are just a few of its many possible positive benefits.
SolaSauna, is the only true full spectrum infrared saunas available offering advanced near, mid and far infrared technologies. Our robust True Wave™ Full Spectrum heating system provides all wavelengths 100% of the time to optimize your sauna session.
EarthCord. “Grounding” or natural diffusion refers to the health benefits of direct contact with the earth’s negative electrical field. As static electricity build up is discharged through direct skin contact, grounding to the earth may help rebalance electrons in the body to naturally optimize its electrical system, thus helping the user to relax and reduce inflammation.
BodyVibe. Whole body vibration can help reduce pain and stiffness by improving local circulation and even reverse the effects of limited mobility naturally. We believe that whole body vibration therapy is a great treatment prior to stretching or exercise, with gentle motion or aggressive vibration set to the user’s preference.
BodyStretch. Many people go through daily activity with stiff muscles resulting from sedentary lifestyles or overworked and stressed muscle. Stretching can help reestablish a more normalized muscle tone, relieving stiffness and soreness.
| 20 |
Plan of Operations
Relaxation Centers
The Company’s business model is to create a national chain of BodyStop® “Relaxation Centers”. Earlier Company focus groups have shown that individuals introduced to the proposed BodyStop® Relaxation Center concept had a high interest in the services offered. The Company also had similar results selling SOLAJET™ memberships in commercial settings with a compelling conversion rate for users to purchase a monthly massage membership. The Company believes this is a strong indication that retention or membership sales will be high once consumers experience a SOLAJET™ massage in a relaxing and stress-free environment. The Company’s first two BodyStop® locations are currently planned on Long Island, New York and at the LA Fitness in Fountain Valley, California, with an expected opening date of November, 2022.
For the BodyStop® Relaxation Centers, the Company continues to develop product branding and marketing using professional marketing agencies and intends to hire consultants to develop various store layouts and associated marketing concepts. The locations are intended to represent a “human oasis” or an affordable “recharge station” for our stressed-out world. The Company intends to work closely with franchise consultants during the testing and modeling of the centers to make certain any future franchise offering, if any, has the best opportunity to be successful.
After our Relaxation Centers have been in service for a reasonable test period, management plans to evaluate each location’s results and determine the proper course of action for the identification and installation of future locations. If results from the test market demonstrate that the concept is profitable and scalable, we intend to open approximately 50 to 100 Company-owned Relaxation Centers in the U.S. within the following 12 - 24 months, subject to the availability of funds. Following this, we expect to expand first into Europe. Our target is to have 1,000 Relaxation Centers in the U.S. and additional locations in Europe, within 6-8 years after the initial launch. We believe that there will be opportunities to expand the business into other areas worldwide, if and when we have the resources available.
Along with the retail and commercial elements of the business plan, we expect to launch a medical rental program targeting physical therapists and chiropractors, which we believe removes the cost factor that would otherwise prevent practitioners from purchasing our products - a major barrier of entry.
History
On April 17, 2020, we entered into the Exchange Agreement with Omnia Corp. and the beneficial stockholders of Omnia Corp. to acquire 100% of the issued and outstanding shares of capital stock of Omnia Corp. The transactions contemplated by the Exchange Agreement were consummated on January 5, 2021 and, pursuant to the terms of the Exchange Agreement, among other things, all outstanding Omnia Corp. Shares were exchanged for shares of our common stock, par value $0.001 per share, based on the exchange ratio of one share of our common stock for every one Omnia Corp. Share. Accordingly, we acquired 100% of Omnia Corp. in exchange for the issuance of 10,000,000 shares of our common stock and Omnia Corp. became our wholly-owned subsidiary. As of the Closing, Mr. Amer Samad, formerly our sole director and executive officer, agreed to cancel 52,656,888 (pre-stock split) shares of our common stock owned beneficially and of record by him as part of the conditions to Closing, which were cancelled immediately after the Closing. We also issued an aggregate of 1,269,665 shares of common stock on January 5, 2021 as a result of the conversion in accordance with their terms of outstanding convertible promissory notes in the aggregate principal amount of approximately $539,000.
As of immediately prior to the closing of the Acquisition, we entered into an Assignment and Assumption Agreement with RZI Consulting LLC (the “Assignment Agreement”), pursuant to which RZI Consulting LLC assumed substantially all of our remaining assets and liabilities through the closing of the Acquisition. Accordingly, as of the closing of the Acquisition, we had no assets or liabilities (other than relating to general and administrative expenses).
| 21 |
Significant Accounting Policies and Estimates
The discussion and analysis of the financial condition and results of operations are based upon the financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. On an on-going basis we review our estimates and assumptions. The estimates were based on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results are likely to differ from those estimates under different assumptions or conditions, but we do not believe such differences will materially affect our financial position or results of operations.
Results of Operations
We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.
We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
Fiscal Quarter Ended June 30, 2022 Compared to Fiscal Quarter Ended June 30, 2021
Revenues
Total revenue was $133,646 for the fiscal quarter ended June 30, 2022, compared to $37,121 for the fiscal quarter ended June 30, 2021. The increased revenue during the 2022 period is due to selling our subscription based share revenue program and obtaining customers who are in the process of opening many stores and are in need for our beds in there stores. The subscription based shared revenue program was just implemented in the first fiscal quarter of 2021.
Cost of Goods Sold
Total cost of goods sold was $20,966 for the fiscal quarter ended June 30, 2022, compared to $6,532 for the fiscal quarter ended June 30, 2021. The increase in cost of goods sold during the 2022 period is due to the increase sales of beds to customers and the increase in shipping and installation costs to the customers. .
Operating Expenses
Total operating expenses was $446,991 for the fiscal quarter ended June 30, 2022, compared to $590,704 for the fiscal quarter ended June 30, 2021. There was a decrease due to less spending within R&D Expense. During the first fiscal quarter of June 30, 2021 there was a reclass entry to move R&D as an intangible asset to expense creating an increase of $335,000. Offsetting this change, as of June 30, 2022 there is an increase in payroll expense, legal and professional fees, Royalty expense, and general and administrative expenses due to increased production and sales.
Interest Expenses
Interest expense was $233,524 for the fiscal quarter ended June 30, 2022, compared to $126,831 for the fiscal quarter ended June 30, 2021. The increase in interest expense from 2021 is due to the Company issuing notes payable for funding current operations. The Company issued convertible notes during the period in the amount of $158,750, that convert into shares at a lower cost than the cost that was offered to the current market (the Beneficial Conversion Feature). The convertible notes convert within 12 months at an average of $.20/ share and were issued when the market for the shares ranged from $.17 to $.36/share. The Company is recognizing the cost for the price difference in those shares, which represents the share’s intrinsic value and is considered an additional cost of financing and is recorded as an interest expense for the period of $77,561. Finance lease costs are split, where amortization of the ROU asset is recorded in operating expenses and an implied interest component is recorded in interest expense. The ROU interest expense for the period is $4,313.
| 22 |
Net Income (Loss)
The net loss for the fiscal quarter ended June 30, 2022 was $(579,525), compared to a net loss for the fiscal quarter ended June 30, 2021 of $(390,032). The net loss of $(579,525) as of the fiscal quarter ended June 30, 2022 resulted in a loss per share of (0.00) compared to a net loss of $(390,032) as of June 30, 2021, resulting in a loss per share of (0.00).
Liquidity and Capital Resources
We have historically funded operations through the issuance of loans, evidenced by convertible and non-convertible promissory notes. Since inception, we have raised an aggregate of $9,993,908 through the sale of such promissory notes, of which approximately $6,042,955 principal amount remains outstanding and either is currently due and continuing to accrue default interest, or will be due in 2023
Based on our current burn rate, we need to raise additional capital in the short term to fund operations, including the opening of Relaxation Centers, and meet expected future liquidity requirements, as well as to repay our remaining existing total indebtedness of approximately $7,397,930, if not converted to equity, or we will be required to curtail or terminate some or all of our installations or our operations. We are continuously in discussions to raise additional capital, which may include or be a combination of convertible or term loans and equity which, if successful, will enable us to continue operations based on our current burn rate, for the next 12 months; however, we cannot give any assurance at this time that we will successfully raise all or some of such capital or any other capital. In addition, the COVID-19 pandemic has presented unprecedented challenges to businesses and the investing landscape around the world, including our business. Therefore, there can be no assurance that management’s plans will be successful. We may not be able to negotiate any such financing arrangements on acceptable terms, if at all. If we are unable to obtain additional funding on a timely basis, we may be required to curtail or terminate some or all of our product lines or our operations. Furthermore, at this time, we do not have an established source of funds sufficient to cover operating costs after January, 2023. Funds raised, if any, are anticipated to fund not just repayment of existing obligations, but our ongoing operations including validating the business model for Relaxation Centers, hiring additional personnel, and expanding the revenue share model with additional facilities.
We do not have available funds to repay currently due liabilities or note indebtedness that is expected to become due in 2023, and are exploring refinancing, extending the maturity date and/or converting some or all of such indebtedness into equity.
There can be no assurance that necessary debt or equity financing will be available, or will be available on terms acceptable to us, in which case we may be unable to meet our obligations or fully implement our business plan, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on recoverability and reclassification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.
Additionally, we will need additional funds to respond to business opportunities including potential acquisitions of complementary technologies, protect our intellectual property, develop new lines of business, and enhance our operating infrastructure. While we may need to seek additional funding for any such purposes, we may not be able to obtain financing on acceptable terms, or at all. In addition, the terms of our financings may be dilutive to, or otherwise adversely affect, holders of our common stock.
As a result of the COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have experienced extreme volatility, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. If equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive. Any of these actions could materially harm our business, results of operations and future prospects.
| 23 |
Cash Flows
The following table provides a summary of the net cash flow activity for each of the periods set forth below:
| Three months ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| Cash used in operating activities | $ | (117,451 | ) | $ | (630,586 | ) | ||
| Cash provided by investing activities | (34,300 | ) | (113,250 | ) | ||||
| Cash provided by financing activities | 148,750 | 1,045,914 | ||||||
| Change in cash | $ | (3,001 | ) | $ | 302,078 | |||
Cash used in operating activities for the three months ended June 30, 2022 was $(117,451). Cash used in operating activities for the three months ended June 30, 2021 was $(630,586). The decrease in cash used in our operating activities is associated to a large increase in accounts payable and accrued liabilities as we are working on obtaining capital for our operations. . As of June 30, 2022 operating cash flows included interest on beneficial conversion feature, amortization of the ROU Asset, and Royalty expense for DryRX and Drywave. . Additionally, in 2021 we received funding for a total of $588,891, pursuant to the federal Paycheck Protection Program under the Coronavirus Aid, Relief and Economic Security (CARES) Act, of which $294,066 was forgiven within the 3 months ending June 30, 2021.
Cash provided by investing activities for the three months ended June 30, 2022 was $(34,300), compared to $(113,250) for the three months ended June 30, 2021, which consisted of acquiring fixed assets.
Cash provided by financing activities for the three months ended June 30, 2022 was $148,750, compared to $1,045,914 for the three months ended June 30, 2021, which consisted of payments of advances, and proceeds from issuance of notes and advances
Going Concern
The independent auditors’ report accompanying our March 31, 2021, financial statements contain an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared “assuming that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
Our financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. We have incurred continuous losses from operations, have an accumulated deficit of $(11,591,567) and had a working capital deficit of $(7,146,976) at June 30, 2022, and have reported negative cash flows from operations since inception. In addition, we do not currently have the cash resources to meet our operating commitments for the next twelve months. Our ability to continue as a going concern must be considered in light of the problems, expenses, and complications frequently encountered by entrance into established markets and the competitive nature in which we operate.
Our ability to continue as a going concern is dependent on our ability to generate sufficient cash from operations to meet our cash needs and/or to raise funds to finance ongoing operations and repay debt. There can be no assurance, however, that we will be successful in our efforts to raise additional debt or equity capital and/or that our cash generated by any of our future operations will be adequate to meet our needs. These factors, among others, indicate that we may be unable to continue as a going concern for a reasonable period of time.
| 24 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable to smaller reporting companies.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
We maintain a system of disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). As required by Rule 13a-15(b) under the Exchange Act, management of the Company, under the direction of our principal executive officer and principal financial officer, reviewed and performed an evaluation of the effectiveness of design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of June 30, 2022. Based on that review and evaluation, our principal executive officer and principal financial officer concluded that as of June 30, 2022, our disclosure controls and procedures were not effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and were not effective to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.
Although we have begun to rectify these weaknesses by the hiring of an additional accounting personnel in August 2021, and intend to implement an independent board of directors and a full-time Chief Financial Officer once we have additional resources to do so, our remediation of these deficiencies is still ongoing.
Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting identified in connection with the evaluation we conducted of the effectiveness of our internal control over financial reporting as of June 30, 2022, that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
| 25 |
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
Not required for a Smaller Reporting Company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the quarter ended June 30, 2022, we issued an aggregate of 0 shares of our common stock to consultants as consideration for services. The securities were issued in private transactions in reliance upon an exemption from registration pursuant to Section 4(a)(2) of the Securities Act, as transactions not involving any public offering.
During the quarter ended June 30, 2022, we issued 0 shares of our common stock upon conversion of outstanding indebtedness held by a holder of our indebtedness. Such shares were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, as no general solicitation or advertising was used in the offer and sale of such securities.
During the quarter ended June 30, 2022, we issued 0 shares of our common stock upon conversion of outstanding indebtedness held by a holder of our indebtedness. Such shares were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, as no general solicitation or advertising was used in the offer and sale of such securities.
Item 3. Defaults Upon Senior Securities.
The Company is past due on payments due Auctus in 2022. The Company is in discussions with Auctus to bring the Senior Securities current under the terms of the note.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits
The exhibits listed below are hereby furnished to the SEC as part of this report
| 31.1 | Certification of Steve R. Howe, Executive Chairman |
| 31.2 | Certification of Andrew E. Trumbach, Chief Financial Officer |
| 32.1 | Certification of Steve Howe, Executive Chairman, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 32.2 | Certification of Andrew E. Trumbach, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 101.1 | Inline XBRL Instance - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH | Inline XBRL Taxonomy Extension Schema. |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation. |
| 101.DEF | Inline XBRL Taxonomy Extension Definition. |
| 101.LAB | Inline XBRL Taxonomy Extension Labels. |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
| 26 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, this 4th day of November 2022.
| OMNIA WELLNESS INC. | ||
| By: | /s/ Steve R. Howe | |
| Name: | Steve R. Howe | |
| Title: | Executive Chairman | |
| (principal executive officer) | ||
| By: | /s/ Andrew E. Trumbach | |
| Name: | Andrew E. Trumbach | |
| Title: | Chief Financial Officer | |
| (principal financial and accounting officer) | ||
| 27 |
Exhibit 31.1
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Steve R. Howe, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Omnia Wellness Inc.; | |
| 2. | Based upon my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
| 3. | Based upon my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
| 4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my 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 my 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 |
| 5. | I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| 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. |
| Date: November 4, 2022 | |
| /s/ Steve R. Howe | |
| Steve R. Howe | |
| Executive Chairman | |
| (principal executive officer) |
Exhibit 31.2
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Andrew E. Trumbach, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Omnia Wellness Inc.; | |
| 2. | Based upon my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
| 3. | Based upon my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
| 4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my 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 my 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 |
| 5. | I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| 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. |
| Date: November 4, 2022 | |
| /s/ Andrew E. Trumbach | |
| Andrew E. Trumbach | |
| Chief Financial Officer | |
| (principal financial and accounting officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Omnia Wellness Inc. (the “Company”) on Form 10-Q for the fiscal period ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steve R. Howe, Executive Chairman of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the company. |
| Date: November 4, 2022 | |
| /s/ Steve R. Howe | |
| Steve R. Howe | |
| Executive Chairman | |
| (principal executive officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Omnia Wellness Inc. (the “Company”) on Form 10-Q for the fiscal period ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Andrew E. Trumbach, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the company. |
| Date: November 4, 2022 | |
| /s/ Andrew E. Trumbach | |
| Andrew E. Trumbach | |
| Chief Financial Officer | |
| (principal financial and accounting officer) |
Consolidated Balance Sheet (Unaudited) (Parenthetical) - $ / shares |
Jun. 30, 2022 |
Mar. 31, 2022 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Preferred Stock, Shares Authorized | 150,000,000 | 150,000,000 |
| Preferred Stock, Shares Issued | 0 | 0 |
| Preferred Stock, Shares Outstanding | 0 | 0 |
| Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
| Common Stock, Shares Authorized | 1,500,000,000 | 1,500,000,000 |
| Common Stock, Shares, Issued | 231,505,146 | 232,222,818 |
| Common Stock, Shares, Outstanding | 231,505,146 | 232,222,818 |
| Common stock subscribed, par value | $ 0.001 | $ 0.001 |
| Common stock subscribed, shares outstanding | 2,500,000 | 0 |
Statements of Changes in Stockholders' Deficit (Unaudited) - USD ($) |
Common Stock [Member] |
Common Stock Subscribed [Member] |
Preferred Stock Shares [Member] |
Preferred Stock [Member] |
Stock Payable [Member] |
Stock Reserve [Member] |
Stock Purchase Agreement Receivables [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Total |
|---|---|---|---|---|---|---|---|---|---|---|
| Beginning balance, value at Mar. 31, 2021 | $ 14,900 | $ 2,065,923 | $ (5,489,464) | $ (3,408,641) | ||||||
| Beginning balance, shares at Mar. 31, 2021 | 224,227,107 | |||||||||
| Additional paid in capital | 430,123 | 430,123 | ||||||||
| Net loss | (390,032) | (390,032) | ||||||||
| Ending balance, value at Jun. 30, 2021 | $ 14,900 | 2,496,046 | (5,879,496) | (3,368,550) | ||||||
| Ending balance, shares at Jun. 30, 2021 | 224,227,107 | |||||||||
| Beginning balance, value at Mar. 31, 2022 | $ 232,223 | 2,500 | 642,867 | (410,000) | 5,344,318 | (11,012,042) | (5,200,134) | |||
| Beginning balance, shares at Mar. 31, 2022 | 232,222,818 | |||||||||
| Net loss | (579,525) | (579,525) | ||||||||
| Reclass stock payable to Stock Reserve | (412,500) | 412,500 | ||||||||
| Reclass par value of shares and shares outstanding | $ (718) | 718 | ||||||||
| Reclass par value of shares and shares outstanding, shares | (717,672) | |||||||||
| Beneficial conversion feature on convertible notes | 77,561 | 77,561 | ||||||||
| Ending balance, value at Jun. 30, 2022 | $ 231,505 | $ 2,500 | $ 230,367 | $ 412,500 | $ (410,000) | $ 5,422,597 | $ (11,591,567) | $ (5,702,098) | ||
| Ending balance, shares at Jun. 30, 2022 | 231,505,146 |
Nature of Operations |
3 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Nature of Operations | Note 1 Nature of Operations
Omnia Wellness Inc. (the “Company”) was incorporated as a Nevada corporation on March 2, 2016, by the filing of articles of incorporation with the Secretary of State of the State of Nevada under the name Glolex, Inc.
On June 25, 2019, Maksim Charniak, the Company’s then sole executive officer and director and the owner of shares (pre- stock split) of the Company’s common stock, sold all his shares of common stock of the Company to Amer Samad, resulting in a change of control of the Company. As part of that transaction, Mr. Charniak resigned from all of his officer and director positions, and Mr. Samad was appointed as the Chief Executive Officer, President, Chief Financial Officer and Secretary of the Company, and was appointed to the Board of Directors of the Company. Mr. Samad also purchased 1,167,937 shares (pre-stock split) of the Company’s common stock in a series of private transactions, resulting in Mr. Samad owning 4,167,937 shares (pre-stock split) of the Company’s common stock, or approximately 95.6% of the issued and outstanding common stock of the Company.
On March 5, 2020, the Company filed Amended and Restated Articles of Incorporation with the Secretary of State of the State of Nevada to, among other things, (i) increase the Company’s authorized shares of common stock from to , (ii) create and authorize shares of “blank check” preferred stock, and (iii) effect a 12.6374:1 forward stock split of the common stock. In addition, on March 16, 2020, the Company filed a Certificate of Amendment to its Amended and Restated Articles of Incorporation with the Secretary of State of the State of Nevada to change the name of the Company from Glolex Inc. to Omnia Wellness Inc. On April 15, 2020, the stock of the Company began trading on the OTC Pink market under the symbol “OMWS”.
On April 17, 2020, the Company entered into a Share Exchange and Reorganization Agreement (the “Exchange Agreement”) with Omnia Wellness Corporation (formerly known as Bed Therapies Inc.), a Texas corporation (“Omnia Corp.”), and the beneficial stockholders of Omnia Corp. to acquire 100% of the issued and outstanding shares of capital stock of Omnia Corp. The transactions contemplated by the Exchange Agreement were consummated on January 5, 2021, and, pursuant to the terms of the Exchange Agreement, among other things, all outstanding shares of common stock of Omnia Corp., no par value, or the Omnia Corp. Shares, were exchanged for shares of the Company’s common stock, par value $ per share, based on the exchange ratio of one share of the Company’s common stock for every one Omnia Corp. Share. The Company refers herein to the transactions contemplated by the Exchange Agreement, collectively, as the Acquisition. Accordingly, the Company acquired 100% of Omnia Corp. in exchange for the issuance of 10,000,000 (not adjusted to reflect the Company’s 15:1 forward stock split on April 6, 2021) shares of the Company’s common stock and Omnia Corp. became the Company’s wholly owned subsidiary. As of the closing of the Acquisition (the “Closing”), Mr. Samad, resigned as an officer and director of the Company and agreed to cancel (pre-stock split) shares of the Company’s common stock owned beneficially and of record by him as part of the conditions to Closing, which were cancelled immediately following the Closing. The Company also issued an aggregate of (pre-stock split) shares of common stock on January 5, 2021, as a result of the conversion in accordance with their terms of outstanding convertible promissory notes in the aggregate principal amount of approximately $539,000.
As of immediately prior to the closing of the Acquisition, the Company entered into an Assignment and Assumption Agreement with RZI Consulting LLC (the “Assignment Agreement”), pursuant to which RZI Consulting LLC assumed substantially all of the Company’s remaining assets and liabilities through the closing of the Acquisition. Accordingly, as of the closing of the Acquisition, the Company had no assets or liabilities (other than relating to general and administrative expenses).
Following the Acquisition, the Company, through its wholly owned subsidiary Omnia Corp., now develops and markets products for wellness and physical therapy markets, using patented dry-hydro therapy equipment that the Company plans to offer and sell in medical and fitness markets.
On April 6, 2021, the Company filed a Certificate of Change with the Secretary of State of the State of Nevada to (i) increase the Company’s authorized shares of common stock from to , (ii) increase the Company’s authorized shares of “blank check” preferred stock from to , and (iii) effect a 1:15 forward stock split of the common stock.
The Company’s principal executive office is located at 999 18th St., Suite 3000, Denver, CO 80202, and its telephone number is 303-325-3738. The Company’s website address is www.omniawellness.com.
In March 2020 the World Health Organization declared COVID-19 a pandemic. The Company is still assessing the impact COVID-19 may have on its business, but there can be no assurance that this analysis will enable the Company to avoid part or all of any impact from the spread of COVID-19 or its consequences, including downturns in business sentiment generally. The extent to which the COVID-19 pandemic and global efforts to contain its spread will impact the Company’s operations will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the pandemic and the actions taken to contain or treat the COVID-19 pandemic.
|
Summary of Significant Accounting Policies |
3 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | ||||||||||
| Accounting Policies [Abstract] | ||||||||||
| Summary of Significant Accounting Policies | Note 2 Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these financial statements are set out below.
Basis of Presentation - The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Principles of Consolidation - The consolidated financial statements include accounts of the Company’s wholly-owned subsidiary Omnia Wellness Corp., and Omnia Wellness Corp.’s wholly-owned subsidiary SolaJet™ Financing Company, LLC. All significant intercompany balances and transactions have been eliminated in consolidation.
Accounting Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and the accompanying notes. Such estimates and assumptions impact, among others, the following: the allowance for doubtful accounts, determination of impairment on investments and determination of recoverability of deferred tax assets. Actual results could differ from those estimates.
Risks and Uncertainties - The Company’s operations may be subject to significant risk and uncertainties including financial, operational, regulatory, and other risks associated with a start-up company, including the potential risk of business failure. See Note 3 regarding going concern matters.
Cash - In the consolidated statement of cash flows, cash includes cash in hand and other short-term highly liquid investments with original maturities of three months or less. The Company places its cash on deposit with financial institutions it believes to be of high quality.
Accounts Receivable – Accounts receivable balances are established for amounts owed to the Company from its customers from the sale of products and services. The Company closely monitors the collectability of outstanding accounts receivable and provide an allowance for doubtful accounts based on estimated collections of outstanding amounts. The Company evaluated the accounts receivable and determined no collection loss reserve was necessary. There were $201,699 and $63,738 in outstanding accounts receivable as of June 30, 2022 and 2021 respectively.
Related Party Transactions - The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the related parties include (a) affiliates of the Company (“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act); (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
Advance Payments on Purchases of Inventory, related party - Advance payments on purchases of inventory consists of hydro-therapy beds and related equipment that are held by DryRx, a company owned and controlled by the Chairman’s brother, under a Contract Services Agreement until ownership is transferred, which is when a sale or use of the bed and equipment occurs, and beds are placed in service. The value of the advance payments is stated at the lower of cost or market, determined using the first in, first-out method. Inventory held by third parties in use, which is inventory installed at a third-party location and ownership is maintained by the Company, is re-classified to fixed assets and depreciated over its useful life using the straight-line method of depreciation. All inventory held as advance payments on purchases of inventory are available either for sale or for use to be installed at third-party locations and not transferred until a transaction has occurred. The balance of advance payments on purchases of inventory was $0 and $40,000 as of June 30, 2022, and 2021, respectively.
Fixed Assets - Fixed assets are carried at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives. The fixed assets include equipment placed in use at certain locations The accumulated depreciation was calculated to be $217,980 and $146,698 as of June 30, 2022, and 2021, respectively.
Patent Cost - Patents with a finite useful life that are acquired through the license agreement are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any impairment changes being accounted for on an annual basis. The expected life of the current patent recorded is expected to be 10 years. The accumulated amortization was calculated to be $600,125 and $450,050 as of June 30, 2022, and 2021, respectively.
Leases - Operating lease right of use (“ROU”) assets represent the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in operating expenses in the consolidated statements of operations.
License Payable, related party – License payable is the remaining balance due for the initial intangible asset cost. License payable is classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.
Warranty Liability – For sales to customers, the Company provides a warranty on the beds sold which includes, a three-year warranty on parts, a five-year warranty on the frame, three year warranty on parts, and a one year warranty on any labor. Warranty liability is accrued and is estimated at 5% of monthly sales and adjusted for actual repairs, replacements, and warranties as they are incurred. The Company periodically assesses the adequacy of our recorded warranty liability and book adjustments as claims data and experience warrants.
Beneficial Conversion Features – The Company accounts for convertible notes payable in accordance with ASC 470-20. A beneficial conversion feature is a non-detachable conversion feature that is “in the money” at the commitment date, which requires recognition of interest expense for underlying debt instruments and a deemed dividend for underlying equity instruments. A conversion option is in the money if the effective conversion price is lower than the commitment date fair value of a share into which it is convertible. As of June 30, 2022 and 2021, the Company did not have any conversion options that were in the money.
Derivatives – The Company accounts for derivative instruments in accordance with ASC815 and ASC470, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair of the derivative instruments depends on whether the derivatives qualify as hedging relationships and the types of relationships designated are based on the exposures hedged. At June 30, 2022 and 2021, the Company did not have any derivative instruments that were designated as hedges.
Revenue – Revenue Recognition Standard, ASC 606 is used by the Company to recognize revenue. ASC 606 standards were jointly issued by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). The five conditions of ASC 606 applied to revenue are: 1. Identify the contract with the customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to separate performance obligations; and 5. Recognize revenue as each performance obligation is satisfied.
The Company derives its revenues primarily from the usage fees and sales of hydrotherapy massage beds and installation services. Revenues from sales are recognized when the products are sold and delivered to its customers and the usage fees are earned based on subscription or actual usage. Sales Taxes and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. Shipping and handling fees charged to customers are reported within revenue.
Income Taxes – The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de- recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.
The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carrybacks and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.
Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.
Fair Value of Financial Instruments - From inception, the Company adopted ASC 820, Fair Value Measurements and Disclosures, which provides a framework for measuring fair value under GAAP. Fair value is defined 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 measurement date. The standard also expands disclosures about instruments measured at fair value and establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
The carrying amounts of financial instruments including cash, accounts payable, warranty liability and notes payable approximated fair value as of June 30, and 2021 due to the relatively short maturity of the respective instruments.
Recently Issued Accounting Pronouncements -
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in ASU 2016-13 replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for fiscal years beginning after December 15, 2021, including interim periods within those years, and must be adopted under a modified retrospective method approach. Entities may adopt ASU 2016-13 earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those years. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company’s financial statements and disclosures.
Implementation of this ASU had no material impact on the consolidated financial statements.
In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock. For convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, the embedded conversion features no longer are separated from the host contract. ASU 2020-06 also removes certain conditions that should be considered in the derivatives scope exception evaluation under Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and clarify the scope and certain requirements under Subtopic 815-40. In addition, ASU 2020-06 improves the guidance related to the disclosures and earnings-per-share (EPS) for convertible instruments and contract in entity’s own equity. ASU 2020-06 is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Board specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. Implementation of this ASU had no material impact on the consolidated financial statements.
As of June 30, 2022, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.
|
Going Concern |
3 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Going Concern | Note 3 Going Concern
The Company adopted Accounting Standards Update No. 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). The Company’s financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the financial statements, the Company had an accumulated deficit at June 30, 2022 and 2020, a net loss and net cash used in operating activities for the reporting periods then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The Company is commencing operations to generate sufficient revenue; however, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds by way of a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of private offering. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
|
Related Parties |
3 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Related Party Transactions [Abstract] | |
| Related Parties | Note 4 Related Parties
The Company outsources its manufacturing pursuant to a Contract Services Agreement with DryRX, LLC dated as of January 1, 2020, which replaced and superseded the Contract Services Agreement with DryRX, LLC dated as of July 22, 2018, which expired in accordance with its terms. The Contract Services Agreement, among other things, provides that DryRX shall provide manufacturing and support services on behalf of the Company, and shall be responsible for the manufacturing oversight and production operations of the Company’s products. In return, the Company is obligated to pay to DryRX a fee equal to 10% of net sales less cost-of-goods-sold and all expenses associated with the services. DryRX is owned and controlled by Steve Howe’s brother. As at June 30, 2022, the Company has recorded a royalty liability of $127,140 and is on the consolidated balance sheet. No royalty has been paid as of the date of this filing.
The Company entered into a Consulting Agreement with Massagewave, Inc., owned and controlled by Steve Howe, to assist with business development and administrative activities. The agreement was entered into on May 1, 2018 and had required monthly payments of $15,000 per month. The agreement expired on April 30, 2020, with renewal options. The agreement was renewed under the same terms and conditions and will expire April 30, 2023. The Company incurred consulting expense, related party of $46,000 and $0 as of June 30, 2022, and 2021, respectively. The due to and due from accounts are to various investors and related parties above for business related activities.
|
Fixed Assets |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fixed Assets | Note 5 Fixed Assets
The carrying basis and accumulated depreciation of fixed assets at June 30, 2022 and 2021 is as follows:
The Company recorded depreciation expense of $73,786 and $70,479 for the years ended June 30, 2022, and 2021, respectively.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
License Agreement, Related Party |
3 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | ||||||||||
| License Agreement Related Party | ||||||||||
| License Agreement, Related Party | Note 6 License Agreement, Related Party
On April 30, 2019, the Company entered worldwide exclusive license with Drywave Technologies, Inc. (“Drywave”), a Company owned by Steve Howe. On the terms and conditions of the agreement, the Company received intellectual property rights to manufacture, use, and offer for sale all the products related to the patents and trademarks for dry hydrotherapy therapy technologies. The license fee to acquire the technology was $2,000,000, and was paid as follows:
The Company made all the required payments as of March 31, 2021. After payment of the $2,000,000 License Fee and not later than April 30, 2020, the Company began paying to Drywave a royalty of 3% of Net Sales beginning May 1, 2020 and continuing for the longer of the period in which there are valid patent claims or ten years. The Company is performing on this agreement. As at June 30, 2022, the Company has recorded a royalty liability of $31,954 and is on the consolidated balance sheet. No royalty has been paid as of the date of this filing.
The company recorded the original license fee as an intangible asset as of April 30, 2019 and is amortizing the asset over the expected useful life of the asset of 10 years. The Company recorded amortization expense of $50,025 and $50,025 for the three months ended June 30, 2022 and 2021, respectively.
|
Lease Liability |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lease Liability | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lease Liability | Note 7 Lease Liability
On January 1, 2022, we adopted ASC Topic 842 – Leases. Under this new guidance, lessees are required to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases. As of June 30, 2022 and 2021 the company recorded its ROU lease liabilities of $158,154 and $, respectively.
Lessee accounting
We determine if an arrangement is or contains a lease at inception. Our assessment is based on (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period and (3) whether we have the right to direct the use of the asset. Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for the majority of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any one of these criteria. The lease classification affects the expense recognition in the income statement. Operating lease costs are recorded entirely in operating expenses. Finance lease costs are split, where amortization of the ROU asset is recorded in operating expenses and an implied interest component is recorded in interest expense.
Under the guidance of ASC 842, operating leases are included in right-of-use assets, current lease liabilities, and noncurrent lease liabilities on our balance sheets. ROU assets and lease liabilities are recognized at commencement date based on the present value of the future minimum lease payments over the lease term. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at transition date in determining the present value of future payments. The ROU asset includes any lease payments made but excludes lease incentives and initial direct costs incurred, if any. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.
Lease extensions
Many leases have options to either extend or terminate the lease. In determining the lease term, we considered all available contract extensions that are reasonably certain of occurring.
Operating leases
The Company has three operating leases, each with different terms. Lease 1 entered into on July 23, 2020 is effective for 3 years and 1 month from the commencement date. The lease requires adjustment upon the annual commencement date with an increase to the monthly rent by 3%. Lease 2 entered into on February 24, 2021 is effective for 3 years and 1 month from the commencement date. The lease requires monthly increases until the monthly amount reaches $5,000, then a 3% annual increase thereafter. Upon notice, the lease can be renewed for an additional two-year term at a rate 5% higher than set on schedule A of the lease. Lease 3 entered into on April 22, 2021 is effective for 3 years and 1 month from the commencement date. The lease may be renewed with renewal options to be determined at that time.
The following table summarizes balance sheet data related to leases at June 30, 2022 and June 30, 2021:
Operating lease liability is presented net of lease payments. The Company is required to make monthly payments for each lease. During the fiscal year ended June 30, 2022, the Company paid $21,409 towards the lease liability and $4,313 in interest expense.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Payable |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Payable | Note 8 Notes Payable
The following are the various notes payable of the Company:
Covid-19 PPP Loan During the year ended March 31, 2021, the Company entered into loans under the Paycheck Protection Program (“PPP”) sponsored by the U.S. Small Business Administration (SBA) providing for proceeds of $588,891. The PPP loans were made pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and was administered by the SBA. The interest rate on the PPP loans were 1.0%. The PPP loans were unsecured and contained customary events of default relating to, among other things, payment defaults, making materially false and misleading representations to the SBA or the Lender, or breaching the terms of the PPP Loan. The occurrence of an event of default may result in the repayment of all amounts outstanding, collection of all amounts owing from the Company, or filing suit and obtaining judgment against the Company. In May 2021, $294,066 was forgiven, with another $146,200 forgiven in August 2021 and the remaining $148,625 forgiven in October 2021, resulting in a gain on forgiveness of $593,546 including interest during the year ended March 31, 2022.
Senior Secured Notes
In June 2021, the Company entered into a Senior Secured Note with Auctus Fund for $650,000, discounted $55,000, resulting in net proceeds of $595,000, with a maturity date of June 23, 2022. The note bears interest of 12% per annum with the first twelve months of interest to be due and payable on the issue date of the note. Interest of $78,000 was expensed during the year ended March 31, 2022. Any principal amount or interest on this note which is not paid when due shall bear interest at the rate of the lesser of (i) sixteen percent (16%) per annum and (ii) the maximum amount permitted by law from the due date thereof until the same is paid.
On July 14, 2021, the principal amount of the note was increased by $25,000 in return for a one-time waiver by the Lender of one of the covenants under the note, bringing the balance of the note to $675,000.
Also pursuant to the agreement, in connection with the issuance of the note, the Company issued two common stock purchase warrants (separately, the “First Warrant” and the “Second Warrant” and together, the “Warrants”) to Auctus, each allowing Auctus to purchase an aggregate of shares of the Company’s common stock. The Second Warrant is subject to cancellation pursuant to the terms of the Auctus Note and may not be exercised until the Trigger Date (as defined in the Second Warrant). The Warrants each have an exercise price of $0.15 per share, subject to customary adjustments (including anti-dilution adjustments), and may be exercised at any time until the three-year anniversary of the Warrants; provided, however, in the event the Company repays the Auctus Note in its entirety on or prior to the maturity date, the Second Warrant shall automatically expire and may only be exercised in the event it does not so automatically expire. The Warrants include a cashless exercise provision as set forth therein.
The total fair value of the warrants was estimated on the issue date at $513,827 using the following weighted average assumptions:
On or about November 22, 2021, the Company triggered an event of default under the Auctus Note and related documents which entitled Auctus, among other things, to accelerate the due date of the unpaid principal amount of, and all accrued and unpaid interest on, the Auctus Note. On February 17, 2022, Auctus and the Company executed a Waiver Letter which waived such defaults effective as of November 22, 2021.
The note is secured by an Affidavit of Confession of Judgment and ranks senior over all existing and future indebtedness of the Borrower.
Nonconvertible Notes – Related Party
As of June 30, 2022, the Company has issued $1,994,655 in notes payable to investors, of which $1,852,735 is due in the short term and $141,920 is due in the long term. The following table reflects the nonconvertible notes related party outstanding as of June 30, 2022.
Nonconvertible Notes
As of June 30, 2022, the Company has issued $1,955,137 in notes payable to investors, of which $1,765,219 is due in the short term and $189,918 is due in the long term. The following table reflects the nonconvertible notes outstanding as of March 31, 2022.
Convertible Notes – Related Party
The Company has issued $29,970 in convertible notes payable to a related party, bearing an annual interest rate of 4% and a default interest rate of an additional 2%. The note was due December 30, 2020 unless sooner paid in full or converted in accordance with the terms of Conversion, (the “Maturity Date”) provided, however, that if a Qualified IPO (as defined below) does not occur on or before the Maturity Date, the Maturity Date shall be extended automatically for an additional one-year period and, during such period, the notes will bear interest at an annual rate of eight percent (8%). At June 30, 2022 and 2021, the Company had $29,970 and $29,970, respectively, in outstanding convertible notes – related party.
Convertible Notes
As of June 30, 2022, the Company has issued $1,388,193 in convertible notes payable to investors, of which $1,318,193 is due in the short term and $70,000 is due in the long term.. The following table reflects the convertible notes outstanding as of June 30, 2022.
The Company evaluates these notes at commencement for beneficial conversion features and derivatives. As of June 30, 2022, the Company recorded a beneficial conversion feature on the convertible notes of $991,636 compared to $-0- at June 30, 2021.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders’ Equity |
3 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | ||||||||||
| Equity [Abstract] | ||||||||||
| Shareholders’ Equity | Note 9 Shareholders’ Equity
Common Stock - The Company is authorized to issue shares of common stock, par value $ per share. All shares of the Company’s common stock have equal rights and privileges with respect to voting, liquidation, and dividend rights. Each share of common stock entitles the holder thereof to:
Stockholders have no pre-emptive rights to acquire additional shares of common stock or any other securities. Common shares are not subject to redemption and carry no subscription or conversion rights.
Preferred Stock - On April 6, 2021, the Company increased its authorized shares of “blank check” preferred stock from to shares, which may be issued from time to time in one or more series and/or classes. shares of preferred stock have been issued or are outstanding as of December 31, 2021.
The Company has not declared or paid any dividends or returned any capital to common stock shareholders as of June 30, 2022, and 2021.
|
Income Taxes |
3 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Note 10 Income Taxes
Income Tax Expense
For the fiscal year ended June 30, 2022, the reconciliation between the income tax benefit computed by applying the statutory U.S. federal income tax rate to the pre-tax loss before income taxes, and total income tax expense recognized in the financial statements is the change in the valuation allowance. For the fiscal year ended June 30, 2020, and 2021, the Company did not recognize any current income tax expense or benefit due to a full valuation allowance on its deferred income tax assets.
NOL Carryforwards and Other Matters
The Company files income tax returns in the U.S. federal jurisdiction and the state of Colorado. The Company’s federal and state tax years for the 2018 fiscal year and forward are subject to examination by taxing authorities.
The Company did not have any unrecognized tax benefits as of June 30, 2022, and 2021. The Company’s policy is to account for any interest expense and penalties for unrecognized tax benefits as part of the income tax provision. The Company does not anticipate that unrecognized tax benefits will significantly increase or decrease within the next twelve months.
|
Commitments and Contingencies |
3 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies | Note 11 Commitments and Contingencies
Off-Balance Sheet Arrangements - The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Leases - The Company leases approximately 200 square feet on a month-to-month basis. Under the lease, the lease term continues for 12 months and may be terminated upon 30 days prior notice from the landlord or, by the Company, upon 30 days prior written notice. As needed, additional space can be leased in the same building the Company currently utilizes.
The Company leases a warehouse facility of approximately 1,500 square feet utilized as a service location for Southern California clients. Under the lease, the lease term continues for 37 months and may be terminated upon 90 days prior notice from the landlord or, by the Company, upon 90 days prior written notice.
The Company leases approximately 4,500 square feet for the location of the new BodyStop™ located in the state of NY. The lease term is for 3 years and commenced on December 1, 2021 after substantial completion of the build out has been completed. The terms of the lease state the annual rent will increase by 3% and a renewal option is available 60 days prior to the end of the lease for an additional 2 years with a 5% annual increase in rent thereafter.
Licenses- The Company entered into a Master Facility License Agreement in which space is currently leased at two fitness facilities to operate equipment in use. The licenses have an initial term of 90 days and then are on a month-to-month basis. The rent is a fixed fee times the number of beds that ware installed in the space. After six months, the rental fee also includes 2% of gross revenue generated under the license. Subsequent to June 30, 2021, the rental fee on the two facilities was modified to eliminate a fixed fee rental to a percentage of gross revenues. The term was also modified so the initial term of each License granted be effective as of such license’s grant date and shall continue for a period of two years, unless sooner terminated. At the expiration of a license term, the applicable license shall automatically expire and terminate unless prior to the expiration of the license term, the parties enter into a mutually agreed upon agreement for licensee to continue providing services within the applicable facility.
Legal Matters - From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. During the periods ended June 30, 2022 and 2021, there are no proceedings in which the Company or any of its directors, officers or affiliates, or any registered or beneficial shareholders, is an adverse party or has a material interest adverse to its interest.
|
Subsequent Events |
3 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | Note 12 Subsequent Events
The Company entered into two loan agreements with Patrick Wanner, for the sum of $50,000.00 and interest, due in the second quarter of 2023.
|
Restatement |
3 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Accounting Changes and Error Corrections [Abstract] | |
| Restatement | Note 13 Restatement
The Company amended its Annual Report on Form 10-K for the fiscal year ended March 31, 2021 (the “Original Filing”), to restate its audited consolidated financial statements and related footnote disclosures to retroactively report an April 6, 2021, 15-1 forward stock split and delete the incorrect leases of inventory revenue disclosure statement for the period covered in the Original Filing.
The Company currently does not hold any leases of inventory and has removed this disclosure from the footnotes of the financial statements in the Amendment No. 1 to the Original Filing, instead providing that the Company derives its revenues primarily from the usage fees and sales of hydrotherapy massage beds and installation services. Revenues from sales are recognized when the products are sold and delivered to its customers and the usage fees are earned based on subscription or actual usage. Sales Taxes and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. Shipping and handling fees charged to customers are reported within revenue.
In addition, the weighted average earnings per share have been recalculated in the Consolidated Balance Sheets in the Amendment No. 1 to the Original Filing. |
Summary of Significant Accounting Policies (Policies) |
3 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | ||||||||||
| Accounting Policies [Abstract] | ||||||||||
| Basis of Presentation | Basis of Presentation - The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
|
|||||||||
| Principles of Consolidation | Principles of Consolidation - The consolidated financial statements include accounts of the Company’s wholly-owned subsidiary Omnia Wellness Corp., and Omnia Wellness Corp.’s wholly-owned subsidiary SolaJet™ Financing Company, LLC. All significant intercompany balances and transactions have been eliminated in consolidation.
|
|||||||||
| Accounting Estimates | Accounting Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and the accompanying notes. Such estimates and assumptions impact, among others, the following: the allowance for doubtful accounts, determination of impairment on investments and determination of recoverability of deferred tax assets. Actual results could differ from those estimates.
|
|||||||||
| Risks and Uncertainties | Risks and Uncertainties - The Company’s operations may be subject to significant risk and uncertainties including financial, operational, regulatory, and other risks associated with a start-up company, including the potential risk of business failure. See Note 3 regarding going concern matters.
|
|||||||||
| Loss Per Common Share |
|
|||||||||
| Cash | Cash - In the consolidated statement of cash flows, cash includes cash in hand and other short-term highly liquid investments with original maturities of three months or less. The Company places its cash on deposit with financial institutions it believes to be of high quality.
|
|||||||||
| Accounts Receivable | Accounts Receivable – Accounts receivable balances are established for amounts owed to the Company from its customers from the sale of products and services. The Company closely monitors the collectability of outstanding accounts receivable and provide an allowance for doubtful accounts based on estimated collections of outstanding amounts. The Company evaluated the accounts receivable and determined no collection loss reserve was necessary. There were $201,699 and $63,738 in outstanding accounts receivable as of June 30, 2022 and 2021 respectively.
|
|||||||||
| Related Party Transactions | Related Party Transactions - The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the related parties include (a) affiliates of the Company (“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act); (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
|
|||||||||
| Advance Payments on Purchases of Inventory, related party | Advance Payments on Purchases of Inventory, related party - Advance payments on purchases of inventory consists of hydro-therapy beds and related equipment that are held by DryRx, a company owned and controlled by the Chairman’s brother, under a Contract Services Agreement until ownership is transferred, which is when a sale or use of the bed and equipment occurs, and beds are placed in service. The value of the advance payments is stated at the lower of cost or market, determined using the first in, first-out method. Inventory held by third parties in use, which is inventory installed at a third-party location and ownership is maintained by the Company, is re-classified to fixed assets and depreciated over its useful life using the straight-line method of depreciation. All inventory held as advance payments on purchases of inventory are available either for sale or for use to be installed at third-party locations and not transferred until a transaction has occurred. The balance of advance payments on purchases of inventory was $0 and $40,000 as of June 30, 2022, and 2021, respectively.
|
|||||||||
| Fixed Assets | Fixed Assets - Fixed assets are carried at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives. The fixed assets include equipment placed in use at certain locations The accumulated depreciation was calculated to be $217,980 and $146,698 as of June 30, 2022, and 2021, respectively.
|
|||||||||
| Patent Cost | Patent Cost - Patents with a finite useful life that are acquired through the license agreement are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any impairment changes being accounted for on an annual basis. The expected life of the current patent recorded is expected to be 10 years. The accumulated amortization was calculated to be $600,125 and $450,050 as of June 30, 2022, and 2021, respectively.
|
|||||||||
| Leases | Leases - Operating lease right of use (“ROU”) assets represent the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in operating expenses in the consolidated statements of operations.
|
|||||||||
| License Payable, related party | License Payable, related party – License payable is the remaining balance due for the initial intangible asset cost. License payable is classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.
|
|||||||||
| Warranty Liability | Warranty Liability – For sales to customers, the Company provides a warranty on the beds sold which includes, a three-year warranty on parts, a five-year warranty on the frame, three year warranty on parts, and a one year warranty on any labor. Warranty liability is accrued and is estimated at 5% of monthly sales and adjusted for actual repairs, replacements, and warranties as they are incurred. The Company periodically assesses the adequacy of our recorded warranty liability and book adjustments as claims data and experience warrants.
|
|||||||||
| Beneficial Conversion Features | Beneficial Conversion Features – The Company accounts for convertible notes payable in accordance with ASC 470-20. A beneficial conversion feature is a non-detachable conversion feature that is “in the money” at the commitment date, which requires recognition of interest expense for underlying debt instruments and a deemed dividend for underlying equity instruments. A conversion option is in the money if the effective conversion price is lower than the commitment date fair value of a share into which it is convertible. As of June 30, 2022 and 2021, the Company did not have any conversion options that were in the money.
|
|||||||||
| Derivatives | Derivatives – The Company accounts for derivative instruments in accordance with ASC815 and ASC470, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair of the derivative instruments depends on whether the derivatives qualify as hedging relationships and the types of relationships designated are based on the exposures hedged. At June 30, 2022 and 2021, the Company did not have any derivative instruments that were designated as hedges.
|
|||||||||
| Revenue | Revenue – Revenue Recognition Standard, ASC 606 is used by the Company to recognize revenue. ASC 606 standards were jointly issued by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). The five conditions of ASC 606 applied to revenue are: 1. Identify the contract with the customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to separate performance obligations; and 5. Recognize revenue as each performance obligation is satisfied.
The Company derives its revenues primarily from the usage fees and sales of hydrotherapy massage beds and installation services. Revenues from sales are recognized when the products are sold and delivered to its customers and the usage fees are earned based on subscription or actual usage. Sales Taxes and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. Shipping and handling fees charged to customers are reported within revenue.
|
|||||||||
| Income Taxes | Income Taxes – The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de- recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.
The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carrybacks and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.
Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.
|
|||||||||
| Fair Value of Financial Instruments | Fair Value of Financial Instruments - From inception, the Company adopted ASC 820, Fair Value Measurements and Disclosures, which provides a framework for measuring fair value under GAAP. Fair value is defined 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 measurement date. The standard also expands disclosures about instruments measured at fair value and establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
The carrying amounts of financial instruments including cash, accounts payable, warranty liability and notes payable approximated fair value as of June 30, and 2021 due to the relatively short maturity of the respective instruments.
|
|||||||||
| Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements -
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in ASU 2016-13 replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for fiscal years beginning after December 15, 2021, including interim periods within those years, and must be adopted under a modified retrospective method approach. Entities may adopt ASU 2016-13 earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those years. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company’s financial statements and disclosures.
Implementation of this ASU had no material impact on the consolidated financial statements.
In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock. For convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, the embedded conversion features no longer are separated from the host contract. ASU 2020-06 also removes certain conditions that should be considered in the derivatives scope exception evaluation under Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and clarify the scope and certain requirements under Subtopic 815-40. In addition, ASU 2020-06 improves the guidance related to the disclosures and earnings-per-share (EPS) for convertible instruments and contract in entity’s own equity. ASU 2020-06 is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Board specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. Implementation of this ASU had no material impact on the consolidated financial statements.
As of June 30, 2022, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements. |
Fixed Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Fixed Assets | The carrying basis and accumulated depreciation of fixed assets at June 30, 2022 and 2021 is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Liability (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lease Liability | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Balance Sheet Related To Leases | The following table summarizes balance sheet data related to leases at June 30, 2022 and June 30, 2021:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Payable (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Fair Value of the Warrants |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Nonconvertible Notes Related Party |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Nonconvertible Notes Non Related |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Convertible Notes |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature of Operations (Details Narrative) - USD ($) |
3 Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
Apr. 06, 2021 |
Jan. 05, 2021 |
Apr. 17, 2020 |
Mar. 05, 2020 |
Jun. 25, 2019 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Mar. 04, 2020 |
|
| Entity incorporation, date of incorporation | Mar. 02, 2016 | |||||||
| Entity Incorporation, State or Country Code | NV | |||||||
| Common stock, shares authorized | 100,000,000 | 1,500,000,000 | 1,500,000,000 | 75,000,000 | ||||
| Preferred stock authorized | 150,000,000 | 150,000,000 | ||||||
| Stockholders equity description | 12.6374:1 | |||||||
| Common stock, par value | $ 0.001 | $ 0.001 | ||||||
| Minimum [Member] | ||||||||
| Common stock, shares authorized | 100,000,000 | |||||||
| Preferred stock authorized | 10,000,000 | |||||||
| Maximum [Member] | ||||||||
| Common stock, shares authorized | 1,500,000,000 | |||||||
| Preferred stock authorized | 150,000,000 | |||||||
| Exchange Agreement [Member] | Mr. Amer Samad [Member] | Bed Therapies Inc [Member] | ||||||||
| Stockholders equity description | the Company filed a Certificate of Change with the Secretary of State of the State of Nevada to (i) increase the Company’s authorized shares of common stock from 100,000,000 to 1,500,000,000, (ii) increase the Company’s authorized shares of “blank check” preferred stock from 10,000,000 to 150,000,000, and (iii) effect a 1:15 forward stock split of the common stock | |||||||
| Blank Check [Member] | ||||||||
| Preferred stock authorized | 10,000,000 | |||||||
| Maksim Charniak [Member] | ||||||||
| Equity method investment description | On June 25, 2019, Maksim Charniak, the Company’s then sole executive officer and director and the owner of 3,000,000 shares (pre- stock split) of the Company’s common stock, sold all his shares of common stock of the Company to Amer Samad, resulting in a change of control of the Company. As part of that transaction, Mr. Charniak resigned from all of his officer and director positions, and Mr. Samad was appointed as the Chief Executive Officer, President, Chief Financial Officer and Secretary of the Company, and was appointed to the Board of Directors of the Company. Mr. Samad also purchased 1,167,937 shares (pre-stock split) of the Company’s common stock in a series of private transactions, resulting in Mr. Samad owning 4,167,937 shares (pre-stock split) of the Company’s common stock, or approximately 95.6% of the issued and outstanding common stock of the Company | |||||||
| Mr. Amer Samad [Member] | ||||||||
| Stock issued during period shares stock splits | 3,000,000 | |||||||
| Ownership percentage | 95.60% | |||||||
| Bed Therapies Inc [Member] | Exchange Agreement [Member] | ||||||||
| Stock issued during period shares stock splits | 1,269,665 | |||||||
| Ownership percentage | 100.00% | |||||||
| Stockholders equity description | Accordingly, the Company acquired 100% of Omnia Corp. in exchange for the issuance of 10,000,000 (not adjusted to reflect the Company’s 15:1 forward stock split on April 6, 2021) shares of the Company’s common stock and Omnia Corp. became the Company’s wholly owned subsidiary. As of the closing of the Acquisition (the “Closing”), Mr. Samad, resigned as an officer and director of the Company and agreed to cancel 52,656,888 | |||||||
| Common stock, par value | $ 0.001 | |||||||
| Debt conversion, converted instrument, amount | $ 539,000 | |||||||
| Bed Therapies Inc [Member] | Exchange Agreement [Member] | Mr. Amer Samad [Member] | ||||||||
| Cancellation of stock split | 52,656,888 |
Summary of Significant Accounting Policies (Details Narrative) - USD ($) |
3 Months Ended | ||
|---|---|---|---|
Apr. 30, 2019 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Accounting Policies [Abstract] | |||
| Number of anti-dilutive common stock | 231,505,146 | 224,227,107 | |
| Accounts receivable | $ 201,699 | $ 63,738 | |
| Advances on inventory | 0 | 40,000 | |
| Accumulated depreciation | $ 217,980 | 146,698 | |
| Intangible asset expected life | 10 years | 10 years | |
| Accumulated amortization | $ 600,125 | $ 450,050 | |
| Monthly sales, percent | 5.00% | ||
| Income tax descripition | The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de- recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures | ||
Schedule of Fixed Assets (Details) - USD ($) |
3 Months Ended | |
|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Property, Plant and Equipment [Line Items] | ||
| Less depreciation and amortization | $ 818,105 | $ 596,748 |
| Total fixed assets, net | $ 1,926,527 | 1,957,584 |
| Equipment [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Useful lives | 5 years | |
| Fixed assets, gross | $ 394,620 | 359,000 |
| Vehicles and Trailers [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Useful lives | 5 years | |
| Fixed assets, gross | $ 60,266 | 60,266 |
| Patent Costs [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Useful lives | 10 years | |
| Fixed assets, gross | $ 2,001,000 | 2,001,000 |
| Building Improvements [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Useful lives | 40 years | |
| Fixed assets, gross | $ 288,746 | $ 134,066 |
Fixed Assets (Details Narrative) - USD ($) |
3 Months Ended | |
|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Property, Plant and Equipment [Abstract] | ||
| Depreciation expense | $ 73,786 | $ 70,479 |
License Agreement, Related Party (Details Narrative) - USD ($) |
3 Months Ended | 12 Months Ended | ||||
|---|---|---|---|---|---|---|
Mar. 02, 2020 |
Oct. 30, 2019 |
Apr. 30, 2019 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Mar. 31, 2021 |
|
| Defined Benefit Plan Disclosure [Line Items] | ||||||
| Payment to acquire technology | $ 1,450,000 | $ 200,000 | $ 350,000 | |||
| Payment of escrow fee | $ 1,000 | |||||
| Royalty liability | $ 31,954 | |||||
| Finite-lived intangible asset, useful life | 10 years | 10 years | ||||
| Amortization of intangible assets | $ 50,025 | $ 50,025 | ||||
| Drywave Technologies, Inc. [Member] | ||||||
| Defined Benefit Plan Disclosure [Line Items] | ||||||
| Related Party Transaction, Description of Transaction | After payment of the $2,000,000 License Fee and not later than April 30, 2020, the Company began paying to Drywave a royalty of 3% of Net Sales beginning May 1, 2020 and continuing for the longer of the period in which there are valid patent claims or ten years. The Company is performing on this agreement. As at June 30, 2022, the Company has recorded a royalty liability of $31,954 and is on the consolidated balance sheet. No royalty has been paid as of the date of this | |||||
| Drywave Technologies, Inc. [Member] | License Agreement [Member] | ||||||
| Defined Benefit Plan Disclosure [Line Items] | ||||||
| Accounts Payable, Related Parties | $ 2,000,000 | |||||
Schedule of Balance Sheet Related To Leases (Details) - USD ($) |
Jun. 30, 2022 |
Mar. 31, 2022 |
Jun. 30, 2021 |
|---|---|---|---|
| Assets | |||
| Operating lease right of use assets | |||
| Less accumulated depreciation | (125,815) | ||
| Total operating lease right of use assets | 138,648 | $ 160,197 | |
| Liabilities | |||
| Operating lease liability, current | 102,934 | 99,464 | |
| Operating lease liability, noncurrent | 55,220 | $ 80,099 | |
| Total lease liabilities | 158,154 | ||
| Operating Lease Right Of Use Assets One [Member] | |||
| Assets | |||
| Operating lease right of use assets | 71,401 | ||
| Operating Lease Right Of Use Assets Two [Member] | |||
| Assets | |||
| Operating lease right of use assets | 145,855 | ||
| Operating Lease Right Of Use Assets Three [Member] | |||
| Assets | |||
| Operating lease right of use assets | $ 47,207 |
Lease Liability (Details Narrative) - USD ($) |
3 Months Ended | |
|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
| Operating lease liabilities | $ 158,154 | |
| Lessee, operating lease, description | Our assessment is based on (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period and (3) whether we have the right to direct the use of the asset. Leases are classified as either finance leases or operating leases | |
| Cash paid for lease | $ 21,409 | |
| Interest expense | $ 4,313 | |
| Lease One Agreement [Member] | ||
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
| Lessee, operating lease, description | Lease 1 entered into on July 23, 2020 is effective for 3 years and 1 month from the commencement date. The lease requires adjustment upon the annual commencement date with an increase to the monthly rent by 3% | |
| Lease Two Agreement [Member] | ||
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
| Lessee, operating lease, description | Lease 2 entered into on February 24, 2021 is effective for 3 years and 1 month from the commencement date. The lease requires monthly increases until the monthly amount reaches $5,000, then a 3% annual increase thereafter. Upon notice, the lease can be renewed for an additional two-year term at a rate 5% higher than set on schedule A of the lease | |
| Cash paid for lease | $ 5,000 | |
| Lease Three Agreement [Member] | ||
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
| Lessee, operating lease, description | Lease 3 entered into on April 22, 2021 is effective for 3 years and 1 month from the commencement date. The lease may be renewed with renewal options to be determined at that time |
Notes Payable (Details Narrative) - USD ($) |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 14, 2021 |
Jun. 24, 2021 |
Oct. 31, 2021 |
Aug. 31, 2021 |
Jun. 30, 2021 |
May 31, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 30, 2020 |
|
| Short-Term Debt [Line Items] | |||||||||||
| Interest rate, percentage | 1.00% | ||||||||||
| Ppp loan forgiveness | $ 148,625 | $ 146,200 | $ 294,066 | $ 296,914 | $ 593,546 | ||||||
| Secured Debt | 675,000 | ||||||||||
| Fair Value Adjustment of Warrants | $ 513,827 | ||||||||||
| Debt instrument, convertible, beneficial conversion feature | $ 991,636 | 0 | |||||||||
| Convertible Notes Payable [Member] | Related Party [Member] | |||||||||||
| Short-Term Debt [Line Items] | |||||||||||
| Annual interest rate | 4.00% | ||||||||||
| Notes Payable, Related Parties | $ 29,970 | $ 29,970 | 29,970 | ||||||||
| Debt instrument default interest rate | 2.00% | ||||||||||
| Convertible Notes Payable [Member] | Related Party [Member] | IPO [Member] | |||||||||||
| Short-Term Debt [Line Items] | |||||||||||
| Annual interest rate | 8.00% | ||||||||||
| Investor [Member] | Convertible Notes Payable [Member] | |||||||||||
| Short-Term Debt [Line Items] | |||||||||||
| Convertible debt | $ 1,388,193 | ||||||||||
| Auctus Fund LLC [Member] | Warrant [Member] | Securities Purchase Agreement [Member] | |||||||||||
| Short-Term Debt [Line Items] | |||||||||||
| Stock Issued During Period, Shares, New Issues | 4,333,333 | ||||||||||
| Warrants exercise price | $ 0.15 | ||||||||||
| Paycheck Protection Program Loan [Member] | |||||||||||
| Short-Term Debt [Line Items] | |||||||||||
| Proceeds from loan | $ 588,891 | ||||||||||
| Senior Secured Note [Member] | |||||||||||
| Short-Term Debt [Line Items] | |||||||||||
| Principal amount | $ 25,000 | ||||||||||
| Secured Debt | $ 675,000 | ||||||||||
| Senior Secured Note [Member] | Auctus Fund LLC [Member] | |||||||||||
| Short-Term Debt [Line Items] | |||||||||||
| Principal amount | 650,000 | 650,000 | |||||||||
| Discount amount | 55,000 | $ 55,000 | |||||||||
| Proceeds from issuance of senior long-term debt | $ 595,000 | ||||||||||
| Maturity date | Jun. 23, 2022 | ||||||||||
| Annual interest rate | 12.00% | 12.00% | |||||||||
| Interest expense | $ 78,000 | ||||||||||
| Debt instrument, description | Any principal amount or interest on this note which is not paid when due shall bear interest at the rate of the lesser of (i) sixteen percent (16%) per annum and (ii) the maximum amount permitted by law from the due date thereof until the same is paid | ||||||||||
| Nonconvertible Notes Related Party [Member] | |||||||||||
| Short-Term Debt [Line Items] | |||||||||||
| Unsecured notes payable | 1,994,655 | ||||||||||
| Nonconvertible Notes Related Party [Member] | Investor [Member] | |||||||||||
| Short-Term Debt [Line Items] | |||||||||||
| Unsecured notes payable | 1,994,655 | ||||||||||
| Unsecured Debt, Current | 1,852,735 | ||||||||||
| Unsecured Long-term Debt, Noncurrent | 141,920 | ||||||||||
| Nonconvertible Notes [Member] | Investor [Member] | |||||||||||
| Short-Term Debt [Line Items] | |||||||||||
| Notes Payable | 1,955,137 | ||||||||||
| Notes Payable, Current | 1,765,219 | ||||||||||
| Notes Payable, Noncurrent | 189,918 | ||||||||||
| Convertible Notes [Member] | |||||||||||
| Short-Term Debt [Line Items] | |||||||||||
| Unsecured notes payable | 1,388,193 | ||||||||||
| Convertible Notes [Member] | Investor [Member] | |||||||||||
| Short-Term Debt [Line Items] | |||||||||||
| Notes Payable, Current | 1,318,193 | ||||||||||
| Notes Payable, Noncurrent | $ 70,000 | ||||||||||
Shareholders’ Equity (Details Narrative) - $ / shares |
Jun. 30, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
Apr. 06, 2021 |
Apr. 05, 2021 |
Mar. 05, 2020 |
Mar. 04, 2020 |
|---|---|---|---|---|---|---|---|
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
| Common stock, shares authorized | 1,500,000,000 | 1,500,000,000 | 100,000,000 | 75,000,000 | |||
| Common stock, par value | $ 0.001 | $ 0.001 | |||||
| Preferred Stock, Shares Authorized | 150,000,000 | 150,000,000 | |||||
| Preferred Stock, Shares Issued | 0 | 0 | |||||
| Preferred Stock, Shares Outstanding | 0 | 0 | |||||
| Common Stock [Member] | |||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
| Preferred Stock, Shares Authorized | 150,000,000 | 10,000,000 | |||||
| Preferred Stock, Shares Issued | 0 | ||||||
| Preferred Stock, Shares Outstanding | 0 |
Income Taxes (Details Narrative) - USD ($) |
3 Months Ended | |
|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Income Tax Disclosure [Abstract] | ||
| Current income tax expense benefit | $ 0 | $ 0 |
| Unrecognized tax benefits | $ 0 | $ 0 |
Commitments and Contingencies (Details Narrative) |
3 Months Ended |
|---|---|
|
Jun. 30, 2022
ft²
| |
| Lessee, Lease, Description [Line Items] | |
| Area of land | 200 |
| Lease description | Our assessment is based on (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period and (3) whether we have the right to direct the use of the asset. Leases are classified as either finance leases or operating leases |
| Master Facility License Agreement [Member] | |
| Lessee, Lease, Description [Line Items] | |
| Gross revenue percentage | 2.00% |
| Warehouse Facility [Member] | |
| Lessee, Lease, Description [Line Items] | |
| Area of land | 1,500 |
| Body Stop [Member] | |
| Lessee, Lease, Description [Line Items] | |
| Area of land | 4,500 |
| Lease term | 3 years |
| Lease description | The terms of the lease state the annual rent will increase by 3% and a renewal option is available 60 days prior to the end of the lease for an additional 2 years with a 5% annual increase in rent thereafter. |
Subsequent Events (Details Narrative) |
Jun. 30, 2022
USD ($)
|
|---|---|
| Two Loan Agreements [Member] | Patrick Wanner [Member] | |
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
| Debt principal amount | $ 50,000 |
=.A'N4FLK ?BETC6UL'OX<*&G*Q*30P/.J\YRY%[K^0Z
M3'QK;S[@Z=U9/Q:<(CJQ*CHQ/.N\!KV7J88'T5_AJG9R.N#8=R E6DE/D9U8
ME9T8'GORKCI6@M>#X08_]?O]GZU@IXA,K(I,#$\ZMS)_SOKD>,9=V
MG2X][PT[ZWW(SMZ*FAEZ^4)C2GSS9EDLKI5'R\7,<;Z$UZDN+U9"WW,S&VJ$>G6[7 [[O;K';ZK__VNT_'.CBWY3+;R
MF6CE\TW&-XQS-B\5M$