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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: September 30, 2024

 

or

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number 000-55997

 

SHARING SERVICES GLOBAL CORPORATION

(Exact name of registrant as specified in its charter)

 

Nevada   30-0869786

(State or other jurisdiction of

incorporation or organization)

  

(I.R.S. Employer

Identification No.)

 

5200 Tennyson Parkway, Suite 400, Plano, Texas   75024
(Address of principal executive offices)   (Zip Code)

 

(469) 304-9400

(Registrant’s telephone number, including area code)

 

None

 

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange in which registered
None   None   None

 

Indicate by check mark 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. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or 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 ☐
Non-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 No ☒

 

As of November 13, 2024, there were 309,652 shares of the issuer’s common stock outstanding.

 

 

 

 
 

 

TABLE OF CONTENTS

 

PART I—FINANCIAL INFORMATION 4
Item 1. Financial Statements 4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 22
Item 3. Quantitative and Qualitative Disclosures About Market Risk 27
Item 4. Controls and Procedures 27
   
PART II—OTHER INFORMATION 28
Item 1. Legal Proceedings 28
Item 1A. Risk Factors 28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 28
Item 3. Defaults Upon Senior Securities 28
Item 4. Mine Safety Disclosures 28
Item 5. Other Information 28
Item 6. Exhibits 29
Signatures 30

 

2
 

 

In this Quarterly Report, references to “the Company,” “Sharing Services,” “our company,” “we,” “our,” “ours,” and “us” refer to Sharing Services Global Corporation and its consolidated subsidiaries unless otherwise indicated or the context otherwise requires.

 

cautionary notice regarding forward-looking statements

 

Statements in this Quarterly Report and in any documents incorporated by reference herein which are not purely historical, or which depend upon future events, may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements generally contain words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “potential,” “project,” “target,” “can,” “could,” “may,” “should,” “will,” “will likely,” “would,” or the negative of such words and/or similar expressions. However, not all forward-looking statements contain these words.

 

Readers should not place undue reliance upon the Company’s forward-looking statements since such statements speak only as of the date they were made. Such forward-looking statements may refer to events that ultimately do not occur, or may occur to a different extent, or occur at a different time than such forward-looking statements describe. Except to the extent required by federal securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements contained in this Quarterly Report and in any documents incorporated by reference herein, whether as a result of new information, future events, or otherwise. The Company acknowledges that all forward-looking statements involve risks and uncertainties that could cause actual events and/or results to differ materially from the events and/or results described in the forward-looking statements.

 

3
 

 

PART I—FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

The following unaudited financial statements: condensed consolidated balance sheet as of September 30, 2024, condensed consolidated statements of operations and comprehensive loss for the six months ended September 30, 2024 and 2023, condensed consolidated statements of cash flows, and condensed consolidated statements of changes in stockholders’ deficit for the six months ended September 30, 2024 and 2023, are those of Sharing Services Global Corporation and its subsidiaries.

 

Index to Unaudited Condensed Consolidated Financial Statements

 

  Page
   
Condensed consolidated balance sheets as of September 30, 2024, and March 31, 2024 5
   
Condensed consolidated statements of operations and comprehensive loss for the three and six months ended September 30, 2024 and 2023 6
   
Condensed consolidated statements of cash flows for the six months ended September 30, 2024 and 2023 7
   
Condensed consolidated statements of changes in stockholders’ deficit for the six months ended September 30, 2024 and 2023 8
   
Notes to the unaudited condensed consolidated financial statements 9

 

4
 

 

SHARING SERVICES GLOBAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   As of September 30, 2024   As of March 31, 2024 
    (Unaudited)      
ASSETS          
Current Assets          
Cash and cash equivalents  $729,576   $894,206 
Trade accounts receivable, net   295,232    280,793 
Other receivable   1,800,000    1,800,000 
Inventory, net   1,224,961    1,318,662 
Other current assets, net   169,683    132,674 
Total Current Assets   4,219,452    4,426,335 
Property and equipment, net   164,470    239,943 
Right-of-use assets, net   378,565    403,107 
Intangible assets   330,568    402,144 
Other assets   1,164,175    1,163,385 
TOTAL ASSETS  $6,257,230   $6,634,914 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current Liabilities          
Accounts payable  $1,227,288   $1,304,046 
Accrued and other current liabilities   2,945,056    2,611,951 
Accrued sales commission payable   1,676,147    1,742,309 
State and local taxes payable   1,565,017    1,545,463 
Other borrowings   1,685,000    1,200,000 
Convertible notes payable, related parties   267,653    262,782 
Total Current Liabilities   9,366,161    8,666,551 
Non-current convertible notes payable, related parties   743,481    324,521 
Lease liability, long-term   361,149    416,277 
TOTAL LIABILITIES   10,470,791    9,407,349 
Commitments and contingencies   -    - 
STOCKHOLDERS’ DEFICIT          
           
Series A convertible preferred stock, $0.0001 par value, 100,000,000 shares designated, 3,100,000 shares issued and outstanding   310    310 
Series C convertible preferred stock, $0.0001 par value, 10,000,000 shares designated, 3,220,000 shares issued and outstanding   322    322 
Series D preferred stock, $0.0001 par value, 26,000 shares issued and outstanding   3    3 
Common stock, $0.0001 par value, 1,990,000,000 shares authorized; 309,652 shares and 269,214 shares issued and outstanding as of September 30, 2024 and March 31, 2024*   31    27 
Additional paid in capital   110,737,460    110,737,464 
Shares to be issued   12,146    12,146 
Accumulated deficit   (114,602,627)   (113,167,915)
Accumulated other comprehensive loss   (361,206)   (354,792)
TOTAL STOCKHOLDERS’ DEFICIT   (4,213,561)   (2,772,435)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT  $6,257,230   $6,634,914 

 

*Retrospectively restated for the 1,400-to-1 reverse stock split on September 13, 2024.

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

5
 

 

SHARING SERVICES GLOBAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS 

(Unaudited)

 

                 
   For the Three Months Ended   For the Six Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
Net sales  $2,084,658   $2,408,704   $4,306,182   $5,286,825 
Cost of goods sold   624,132    669,803    1,300,984    1,515,632 
Gross profit   1,460,526    1,738,901    3,005,198    3,771,193 
Operating expenses                    
Selling and marketing expenses   651,538    743,057    1,287,782    2,164,545 
General and administrative expenses   1,443,534    2,116,240    2,989,132    4,403,312 
Total operating expenses   2,095,072    2,859,297    4,276,914    6,567,857 
Operating loss   (634,546)   (1,120,396)   (1,271,716)   (2,796,664)
Other income (expense):                    
Change in fair value of embedded derivatives   363,566    -    176,169    - 
Interest expense, net   (161,795)   (1,963,267)   (309,459)   (2,869,077)
Other income   -    1,800,000    -    1,800,000 
Loss on extinguishment of debt   -    (188,842)   -    (38,209)
Unrealized loss on investment   -    -    -    (78,632)
Other non-operating income (expense), net   (33,370)   5,613    (29,706)   103,434 
Total other income (expense), net   168,401    (346,496)   (162,996)   (1,082,484)
Loss before income taxes   (466,145)   (1,466,892)   (1,434,712)   (3,879,148)
Income tax expense   -    (12,102)   -    - 
Net loss  $(466,145)  $(1,454,790)  $(1,434,712)  $(3,879,148)
                     
Other comprehensive loss, net of tax:                    
Currency translation adjustments   (14,350)   (22,435)   (6,414)   (27,604)
Total other comprehensive loss   (14,350)   (22,435)   (6,414)   (27,604)
Comprehensive loss  $(480,495)  $(1,477,225)  $(1,441,126)  $(3,906,752)
                     
Loss per share:                    
Basic and diluted*  $(1.68)  $(5.40)  $(5.26)  $(14.51)
                     
Weighted average shares:                    
Basic and diluted*   276,686    269,214    272,971    267,295 

 

*Retrospectively restated for the 1,400-to-1 reverse stock split on September 13, 2024.

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

6
 

 

SHARING SERVICES GLOBAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

 

    2024    2023 
  

For the Six months Ended

September 30,

 
    2024    2023 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(1,434,712)  $(3,879,148)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   147,010    307,499 
Stock-based compensation   -    (148,267)
Amortization of debt discount and other   -    2,015,542 
Change in fair value of embedded derivatives   (176,169)   - 
Loss on extinguishment of debt   -    38,209 
Bad debt expense   -    177,115 
Provision for obsolete inventory   -    2,112 
Non-cash other income   -    (1,800,000)
Changes in operating assets and liabilities:          
Accounts receivable   (14,439)   (337,659)
Inventory   93,701    (784,928)
Other current assets   (37,758)   742,337 
Accounts payable   (76,758)   57,396 
Income taxes payable   19,554    - 
Lease liability   (30,587)   768 
Accrued and other liabilities   266,942    638,719 
Net Cash Used in Operating Activities  $(1,243,216)  $(2,970,305)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from loan payable   -    1,200,000 
Proceeds from issuance of convertible notes, related parties   600,000    - 
Net proceeds from issuance of promissory notes   485,000    - 
Net Cash Provided by Financing Activities   1,085,000    1,200,000 
           
IMPACT OF CURRENCY RATE CHANGES ON CASH   (6,414)   160,759 
Decrease in cash and cash equivalents   (164,630)   (1,609,546)
Cash and cash equivalents, beginning of period   894,206    2,994,885 
Cash and cash equivalents, end of period  $729,576   $1,385,339 
           
Supplemental cash flow information          
Cash paid for interest  $148,538   $24,279 
Cash paid for income taxes  $-   $550 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

7
 

 

SHARING SERVICES GLOBAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT 

(Unaudited)

 

   Shares   Value   Shares   Value   Shares   Value   Shares   Value*   Capital *   Issued   Stock   Deficit   Loss   Total 
  

Series A Preferred Stock

   Series C Preferred  Stock   Series D Preferred  Stock   Common Stock*                   Accumulated     
   Number       Number       Number       Number       Additional   Shares           Other     
   of   Par   of   Par   of   Par   of   Par   Paid in   to be   Treasury   Accumulated   Comprehensive     
   Shares   Value   Shares   Value   Shares   Value   Shares   Value   Capital*   Issued   Stock   Deficit   Loss   Total 
Balance - March 31, 2024   3,100,000   $310    3,220,000   $322    26,000   $3    269,214   $27   $110,737,460   $12,146    -   $(113,167,915)  $(354,792)  $(2,772,439)
Fractional shares as a result of reverse stock split   

-

    

-

    

-

    

-

    

-

    

-

    

40,438

    4    

-

    

-

    

-

    

-

    

-

   $4 
Currency translation adjustments   -    -    -    -    -    -    -    -    -    -    -    -    (6,414)  $(6,414)
Net loss   -    -    -    -    -    -    -    -    -    -    -    (1,434,712)   -   $(1,434,712)
Balance - September 30, 2024   3,100,000   $310    3,220,000  $322    26,000  $3    309,652   $31   $110,737,460   $12,146    -   $(114,602,627)  $(361,206)  $(4,213,561)

 

   Series A Preferred Stock   Series C Preferred  Stock   Series D Preferred  Stock   Common Stock*                   Accumulated     
   Number       Number       Number       Number       Additional   Shares           Other     
   of   Par   of   Par   of   Par   of   Par   Paid in   to be   Treasury   Accumulated   Comprehensive     
   Shares   Value   Shares   Value   Shares   Value   Shares   Value   Capital*   Issued   Stock   Deficit   Loss   Total 
Balance - March 31, 2023   3,100,000   $310    3,220,000   $322    -   $-    248,556   $25   $84,654,482   $12,146   $(626,187)  $(106,456,378)  $(308,305)  $(22,723,585)
Cancellation of treasury stock   -    -    -    -    -    -    -    -    (626,187)   -    626,187    -    -    - 
Common stock issued for debt modification   -    -    -    -    26,000    3    -    -    26,169,365    -    -    -    -    26,169,368 
Common stock issued to settle accrued interest payable   -    -    -    -    -    -    20,658    2    539,804    -    -    -    -    539,806 
Currency translation adjustments   -    -    -    -    -    -    -    -    -    -    -    -    (27,604)   (27,604)
Net loss   -    -    -    -    -    -    -    -    -    -    -    (3,879,148)   -    (3,879,148)
Balance - September 30, 2023   3,100,000   $310    3,220,000  $322    26,000  $3    269,214   $27   $110,737,464   $12,146    -   $(110,335,526)  $(335,909)  $78,837 

 

*Retrospectively restated for the 1,400-to-1 reverse stock split on September 13, 2024.

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

8
 

 

SHARING SERVICES GLOBAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 1 – ORGANIZATION AND BUSINESS

 

Description of Operations

 

Sharing Services Global Corporation (“Sharing Services,” “SHRG”) and its subsidiaries (collectively, the “Company”) aim to build shareholder value by developing or investing in innovative emerging businesses and technologies that augment the Company’s products and services portfolio, business competencies, and geographic reach. Sharing Services was incorporated in the State of Nevada in April 2015. The Company’s main business activities include:

 

● Sale of Health and Wellness Products - The Company markets its health and wellness products primarily through an independent sales force, using a direct selling business model under the proprietary brand “HCo.” Currently, The Happy Co. TM markets and distributes its health and wellness products primarily in the United States (the “U.S.”) and Canada.
   
  The Company generates substantially all of its revenue from the sale of health and wellness products.
   
● Sale of Member-Based Travel Services - Through its subsidiary, Global Travel Destinations, the Company established a subscription-based travel services business under the proprietary brand MyTravelVentures (“MTV”) in May 2022. MTV provides entrepreneurial opportunities to its subscribers by capitalizing on both the direct selling model and the retail travel business model. The MTV services are designed to offer discount for travel relating to airfare, cruises, hotels, resorts, time shares and rental cars for destinations throughout the world for people of all ages, demographics, and economic backgrounds.
   
  The Company is in the process of revamping its travel services business and has temporarily suspended its MTV business operation to prepare for its re-launch in the first quarter of 2025.

 

In August 2021, Sharing Services and Hapi Café, Inc, a company affiliated with Heng Fai Ambrose Chan, a Director of the Company, entered into a Master Franchise Agreement (the “MFA”) pursuant to which Sharing Services acquired the exclusive franchise rights in North America to the brand “Hapi Café.” Under the terms of the MFA, Sharing Services, directly or through its subsidiaries, has the right to operate no less than five corporate-owned stores and can offer to the public sub-franchise rights to own and operate other stores, subject to the terms and conditions contained in the MFA. The Company plans to open up Hapi Café in Dallas and the New York City, and it is in the process of identifying and evaluating suitable locations.

 

Directly or through its subsidiaries, the Company from time to time will invest in emerging business in the direct selling industry, using a combination of debt and equity financing, in efforts to leverage the Company’s business competencies and to participate in the growth of these businesses. As part of the Company’s commitment to the success of these emerging businesses, the Company, directly or through its subsidiaries, also plans to offer non-traditional inventory financing, order fulfillment and logistic, CRM “Back Office” solutions, and other success-critical services to these businesses.

 

NOTE 2 – GOING CONCERN

 

The accompanying unaudited condensed consolidated financial statements have been prepared using generally accepted accounting principles in the United States of America (“GAAP”) applicable to a going concern, which contemplates the realization of assets and the liquidation of liabilities in the ordinary course of business. During the six months ended September 30, 2024 and 2023, the Company had a net loss was approximately $1.4 million and $3.9 million, respectively. In addition, as of September 30, 2024, the Company had accumulated deficit of $114.6 million and working capital deficiency of $5.1 million. These factors among other raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from significant shareholders sufficient to meet its minimal operating expenses and seeking third party equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

9
 

 

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The unaudited condensed consolidated interim financial statements included herein have been prepared in accordance with GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted as permitted pursuant to the rules and regulations of the SEC, although we believe that the disclosures made are adequate to make the information not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024. Unless so stated, the disclosures in the accompanying condensed consolidated financial statements do not repeal the disclosures in our consolidated financial statements for year ended March 31, 2024.

 

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. In connection with the Company reverse stock split that took place in September 2024, certain prior period financial information has been adjusted to conform with the current year’s presentation.

 

Use of Estimates and Assumptions

 

The preparation of financial statements in accordance with GAAP requires the use of judgment and requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosures about contingent assets and liabilities, if any. Matters that require the use of estimates and assumptions include, among others: the recoverability of trade accounts and notes receivable, the valuation of inventory, the useful lives of fixed assets, the assessment of long-lived assets for impairment, the nature and timing of satisfaction of multiple performance obligations resulting from contracts with customers, the allocation of the transaction price to multiple performance obligations in a sales transaction, the measurement and recognition of right-of-use assets and related lease liabilities, the valuation of share-based compensation awards, the provision for income taxes, the measurement and recognition of uncertain tax positions, the valuation of long-term debt, and the valuation of loss contingencies, if any. Actual results may differ from these estimates in amounts that may be material to our consolidated financial statements. Management of the Company believes that the estimates and assumptions used in the preparation of the unaudited condensed consolidated financial statements are reasonable.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents include recent customer remittances deposited with our merchant processors at the balance sheet date, which generally settle within 24 to 72 hours. As of September 30, 2024, and March 31, 2024, cash and cash equivalents included cash held by our merchant processors of approximately $50,000, respectively. In addition, as of September 30, 2024, and March 31, 2024, cash and cash equivalents held in bank accounts in foreign countries in the ordinary course of business were approximately $0.2 million and $0.4 million, respectively. Amounts held by our merchant processor or held in bank accounts located in foreign countries are generally not insured by any federal agency.

 

Trade Accounts Receivable and Allowance for Expected Credit Losses

 

The Company maintains an allowance for credit losses in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) ASC 326, and records the allowance for expected credit losses as an offset to assets such as accounts receivable. The expected credit losses are classified as general and administrative expenses in the consolidated statements of operations and comprehensive loss. The Company assesses collectability by reviewing receivables on a collective basis where similar characteristics exist, primarily based on the size and nature of specific receivables. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the receivable balances, credit quality of the counter party, and current and future economic conditions. On a quarterly basis, management determines if the allowance for credit losses is adequate, and adjusts the allowance, when necessary. Delinquent account balances are written-off against the allowance for credit losses after all means of collection have been exhausted and that the likelihood of collection is not probable. There was no change in the Company’s allowance for expected credit losses from March 31, 2024 to September 30, 2024.

 

Inventory

 

Inventory consists of finished goods and promotional materials and is stated at the lower of cost determined using the first-in, first-out (“FIFO”) method, or net realizable value. It includes direct product costs and certain shipping and handling costs, such as in-bound freight. When estimating the net realizable value of inventory, the Company considers several factors including estimates of future demand for the product, historical sales, the age and sales history of the inventory, and historic and anticipated changes in our product offerings.

 

The Company periodically assesses the realizability of its inventory based on evaluation of its inventory levels against historical and anticipated sales. Physical inventory counts are performed at all facilities on a quarterly basis. As of September 30, 2024 and March 31, 2024, the allowance for slowing moving or obsolete inventory were $1.6 million and $1.6 million, respectively, in connection with health and wellness products that were either damaged, expired, or slow-moving, based on the Company’s historical and anticipated sales

 

Cost of goods sold includes actual product costs, vendor rebates and allowances, if any, inventory shrinkage and certain shipping and handling costs, such as in-bound freight, associated with product sold. All other shipping and handling costs, including the cost to ship products to customers, are included in selling and marketing expenses in our consolidated statements of operations when incurred.

 

10
 

 

Other Receivable and Loan Payable

 

In July 2023, the Company, through its out-sourced payroll services provider (“Paychex”), submitted a claim to the Internal Revenue Services (“IRS”) for the Employee Retention Tax Credit (“ERTC”) based on its payroll records and other pertinent information. Refunds will be distributed based on IRS processing times and the total ERTC credit will be approximately $1.8 million. Since the likelihood of receiving the ERTC credit is probable and the amount is estimable, the Company has recorded its ERTC claim in Other Receivable. Despite the extended time delay in the processing of the ERTC claims by the IRS, the Company believes that its eligibility is reasonably assured and has not recorded any provision against the receivable.

 

Through the introduction of Paychex, the Company applied for an ERTC term loan (“Term Loan”) in August 2023 which objective is to serve as a bridge funding until the ERTC is collected. The Term Loan that was approved came to $1.2 million, and it was secured by the Company’s assets and all ERTC proceeds that the Company is entitled to receive from the IRS. Pursuant to the loan agreement with this lender (“Lender”), the first 12 months of the Term Loan is deemed the interest-only period. During such period, the Term Loan carried a 2% monthly interest, and the Company would make a monthly interest-only payment of $24,000 to the Lender. In September 2023, the Company received net proceeds of approximately $1.18 million which must be used solely and exclusively for working capital and other business purposes. In September 2024, on the 12th month anniversary of the Term Loan, the Term Loan was automatically extended to 36 months from the loan funding date. As a result, from September 2024 to August 2026 (the “loan amortization period”), the Company is required to pay $63,445.32 monthly over the 24-month period to pay down the principal and related interest which is calculated at 2% per month. The Term Loan was recorded as Other Borrowings.

 

In September 2024, the Company and the Lender entered into an agreement (the “Agreement”) whereby the Lender agreed to lend $500,000 to the Company in exchange for a repayment of interest and principal that could be as much as $635,000 using the Company’s assets as collateral (the “borrowing”). The Company has the option to paydown the borrowing early and recorded the $500,000 payment obligation as Other Borrowings. In accordance with the Agreement, and the Company would make 65 weekly payments of $9,769.23 each over a 15-month period to the Lender should the Company choose to repay the borrowing over the 15-month period. In September 2024, the Company received net proceeds of $489,000 ($500,000 less transaction fees of $11,000). During the month of September 2024, the Company made 2 weekly payments to the Lender totaled $19,538.46 of which $15,000 were recorded as a reduction of Other Borrowings and the balance as interest expenses.

 

Other Assets 

 

Other assets include a multi-user license and code of a back-office platform that was acquired for $1 million in 2022. This back-office platform is designed to facilitate the computation and processing of commission payments to distributors, and it requires customization in order for it to be operational. Costs associated with the customization and build out of the platform has been capitalized in accordance with ASC 350 - Capitalization on Internal-Use Software Costs.

 

Foreign Currency Translation 

 

The functional currency of each of our foreign operations is generally the respective local currency. Balance sheet accounts are translated into U.S. dollars (our reporting currency) at the rates of exchange in effect at the balance sheet date, while the results of operations and cash flows are generally translated using average exchange rates for the periods presented. Individual material transactions, if any, are translated using the actual rate of exchange on the transaction date. The resulting translation adjustments are reported in accumulated other comprehensive loss in our condensed consolidated balance sheets. In September 2021, the Company, through its wholly owned subsidiary, commenced operations in the Republic of Korea (South Korea).

 

   South Korean Won per 1 USD 
   2024   2023 
Exchange rate as of September 30th   1,312.45    1,352.92 
Average exchange rate for the six months ended   1,363.21    1,314.49 

 

11
 

 

Comprehensive Loss

 

For the six months ended September 30, 2024 and 2023, the Company’s comprehensive loss comprised of currency translation adjustments and net loss.

 

Revenue Recognition

 

The Company recognizes revenue in accordance with ASC Topic 606 when (or as) it transfers control of the promised goods and services to the customer in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services.

 

Revenue is recognized net of amounts due to taxing authorities (such as local and state sales tax). The Company’s customers place sales orders online and through the Company’s “back-office” operations, which creates a contract and establishes the transaction price. With respect to products sold, the Company’s performance obligation is satisfied upon receipt of the products by the customer. With respect to subscription-based revenue, including independent distributor membership fees, the Company’s performance obligation is satisfied over time (generally, up to one year). With respect to customer loyalty points awarded, the Company’s performance obligation is satisfied at the earliest of (a) the redemption or expiration date, or (b) when it is no longer probable the points will be redeemed. The Company assesses the probability an awards of customer loyalty points will be redeemed, based on its historic breakage rates. The timing of revenue recognition may differ from the time when the Company invoices the customer and/or collects payment. The Company has elected to treat shipping and handling costs as an activity to fulfill its performance obligations, rather than a separate performance obligation.

 

As of September 30, 2024 and March 31, 2024, deferred revenue associated with

 

● product invoiced but not received by customers at the balance sheet date was $93,119 and $80,404, respectively;
● unfulfilled performance obligations for services offered on a subscription basis was $31,579 and $37,774, respectively;
● unfulfilled performance obligations for customers’ right of return was $24,783 and $24,703, respectively; and
● customer loyalty points outstanding was $19,326 and $19,326, respectively.

 

During the six months ended September 30, 2024 and 2023, substantially all the Company’s consolidated net sales were from its sale of health and wellness products.

 

Sales Commissions

 

The Company recognizes sales commission expenses, when incurred, in accordance with GAAP. During the six months ended September 30, 2024 and 2023, sales commission expense, which is included in selling and marketing expenses in our condensed consolidated statements of operations and comprehensive loss, was approximately $1.2 million and $1.8 million, respectively.

 

Segment Reporting

 

The Company follows ASC Topic 280, Segment Reporting. The Company’s management reviews the Company’s consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole and has determined that the Company’s reportable segments are: (a) the sale of health and wellness products, and (b) the sale of member-based travel services.

 

Reverse Stock Split

 

On September 12, 2024, the Company received notice from the Financial Industry Regulatory Authority (“FINRA”) that it had announced the effectiveness of our 1,400-to-1 reverse stock split of the issued and outstanding shares of common stock (the “Reverse Split”), on FINRA’s daily list. The Reverse Split became effective at the open of market on September 13, 2024. As a result of the Reverse Split, every one thousand four hundred (1,400) shares of the issued and outstanding common stock of the Company were converted into one (1) share of common stock. All fractional shares created by the Reverse Split have been rounded up to the nearest whole share. Each shareholder received at least one share.

 

The Reverse Split does not affect the total number of shares of capital stock, including the Common Stock, that the Company is authorized to issue, or the par value of the Common Stock, which shall remain as set forth in the Articles of Incorporation. Certain of the Company’s outstanding securities, pursuant to which shares of Common Stock are issuable, will be adjusted as a result of the Reverse Split, as required by the terms of such securities.

 

In connection with the Reverse Split, the Company’s CUSIP has also changed to 81953103. Immediately prior to the Reverse Split, the Company had 376,328,885 shares of Common Stock issued and outstanding. Immediately following the Market Effective Date of the Reverse Split, the Company has 309,652 (which includes 40,438 shares issued to address fractional shares related to the Reverse Split) shares of Common Stock issued and outstanding.

 

The Reverse Split was approved by the Company’s Board of Directors on September 26, 2023, and was approved by the Company’s majority stockholders holding approximately 53.5% of the issued and outstanding common stock on October 30, 2023. On September 5, 2024, the Company filed with the Secretary of State of the State of Nevada a Certificate of Amendment to our Articles of Incorporation to reflect the Reverse Split.

 

Recently Issued Accounting Standards

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. The Company does not believe the adoption of this standard would have a material impact on disclosures within its consolidated financial statements.

 

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on its unaudited condensed consolidated financial statements.

 

12
 

 

NOTE 4 – LOSS PER SHARE

 

The Company calculates basic loss per share by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share is calculated similarly but reflects the potential impact of shares issuable upon the conversion or exercise of outstanding convertible preferred stock, convertible notes payable, if any, stock warrants and other commitments to issue common stock, except where the impact would be anti-dilutive.

 

The following table sets forth the computations of basic and diluted loss per share:

 

   2024   2023 
   Six Months Ended September 30, 
   2024   2023 
Net loss  $(1,434,712)  $(3,879,148)
Weighted average basic and diluted shares*   272,971    267,295 
Loss per share:*          
Basic and diluted  $(5.26)  $(14.51)

 

*Retrospectively restated for the 1,400-to-1 reverse stock split on September 13, 2024.

 

The following potentially dilutive securities and instruments were outstanding as of September 30, 2024, and 2023, but excluded from the table above:

 

   2024   2023 
   As of September 30, 
   2024   2023 
Convertible notes payable   363,646    - 
Stock warrants   149,035    - 
Convertible preferred stock   6,320,000    6,320,000 
Total potential incremental shares   6,832,681    6,320,000 

 

13
 

 

NOTE 5 – INVENTORY, NET 

 

Inventory consists of the following:

 

  

September 30,

2024

  

March 31,

2024

 
   As of 
  

September 30,

2024

  

March 31,

2024

 
Finished goods  $2,785,620   $2,878,569 
Promotional items   5,940    5,940 
Raw materials   77,902    77,902 
Allowance for obsolescence   (1,644,501)   (1,643,749)
Inventory, net  $1,224,961   $1,318,662 

 

The following table reflects the activity in the allowance for inventory obsolescence for the periods presented:

 

   2024   2023 
  

Six months ended

September 30,

 
   2024   2023 
Balance at beginning of period  $1,643,749   $880,926 
Provision for estimated obsolescence   (7,938)   2,112 
Write-offs   -    (1,170)
Currency translation adjustment   8,690    - 
Balance at end of period  $1,644,501   $881,868 

 

NOTE 6 – OTHER CURRENT ASSETS, NET 

 

Other current assets consist of the following:

  

       
   As of 
  

September 30,

2024

  

March 31,

2024

 
Inventory-related deposits  $278,313   $252,867 
Prepaid insurance and other operational expenses   43,051    31,598 
Deposits for sales events   23,960    23,850 
Subtotal   345,324    308,315 
Allowance for losses   (175,641)   (175,641)
Other current assets  $169,683   $132,674 

 

As of September 30, 2024 and March 31, 2024, the allowance for losses in connection with certain inventory-related deposits for which recoverability is $175,641.

 

14
 

 

NOTE 7 – PROPERTY AND EQUIPMENT, NET 

 

Property and equipment consist of the following:

  

       
   As of 
  

September 30,

2024

  

March 31,

2024

 
Computer software  $1,024,274   $1,024,274 
Furniture and fixtures   285,632    285,732 
Computer equipment   220,364    220,264 
Leasehold improvements and other   399,306    399,306 
Total property and equipment   1,929,576    1,929,576 
Accumulated depreciation and amortization   (1,765,106)   (1,689,633)
Property and equipment, net  $164,470   $239,943 

 

Depreciation and amortization expense in connection with the Company’s property and equipment for the three months ended September 30, 2024 and 2023 was $42,696 and $88,823, respectively. For the six months ended September 30, 2024 and 2023 was $75,473 and $212,844, respectively.

 

NOTE 8 – ACCRUED AND OTHER CURRENT LIABILITIES

 

Accrued and other current liabilities consist of the following:

   

       
   As of 
  

September 30,

2024

  

March 31,

2024

 
Deferred sales revenues  $168,806   $162,207 
Liability associated with uncertain tax positions   925,786    925,786 
Accrued interest payable   41,000    5,833 
Payroll and employee benefits   215,598    206,426 
Lease liability, current portion   52,392    21,909 
Other accruals   1,541,474    1,289,790 
Accrued and other current liabilities  $2,945,056   $2,611,951 

 

Lease liability, current portion, represents obligations due within one year under operating leases for office space, automobiles, and office equipment. Other accruals include primarily operational accruals.

 

15
 

 

NOTE 9 – CONVERTIBLE NOTES PAYABLE, RELATED PARTIES 

 

Convertible notes payable consists of the following:

  

Issuance Date  Maturity
Date		  Interest
Rate		   Price
(per share)		       
          Conversion   As of 
Issuance Date  Maturity
Date		  Interest
Rate		   Price
(per share)		  

September 30,

2024

  

March 31,
2024

 
January 2024  July 2024   10%   See below   $            250,000   $250,000 
March 2024  March 2027   6%  $0.0012    250,000    250,000 
May 2024  May 2027   8%   0.0020    250,000    

-

 
June 2024  June 2027   8%   0.0020    250,000    

-

 
August 2024  August 2027   8%   0.0020    100,000    

-

 
Total convertible notes payable                1,100,000    500,000 
Change in fair value of embedded derivatives                (88,866)   87,303 
Subtotal                1,011,134    587,303 
Less: current portion                267,653    262,782 
Long-term convertible notes payable               $743,481   $324,521 

 

16
 

 

On January 17, 2024, the Company executed a convertible promissory note for $250,000 with Alset Inc, a Texas corporation (“Alset”) and a shareholder of the Company. The convertible promissory note (“Alset Note”) bears a 10% interest per annum and had an origination fee of $25,000 which is payable in cash or convertible into common shares of the Company at the option of Alset. The note and related accrued interest shall be due and payable in full on the earliest of (i) six months from the date of issuance; (ii) the acceleration of the Alset Note upon an occurrence of an event of default (as defined in the Alset Note); (iii) the third business day after the holder has delivered the Company a written demand for payment of the Alset Note; or (iv) upon the Company’s successful listing on The Nasdaq Stock Market LLC. Alset may, at its option, at any time during the term of the Alset Note, redeem a portion or all amounts of outstanding principal amount, without incurring penalties, additional interest, or other fees or charges. The Alset Note was replaced by a new securities purchase agreement dated November 12, 2024 (See Note 16).

 

On March 18, 2024, the Company entered into a securities purchase agreement with HWH International Inc., a Delaware corporation (“HWH”) whereby the Company issued to HWH (i) a convertible promissory note in an aggregate principal amount of $250,000.00 which shall be convertible into 208,333,333 shares of the Company’s common stock at the option of HWH and (ii) a common stock purchase warrant agreement which shall be exercisable into up to 208,333,333 shares of the Company’s common stock for an aggregate purchase price of $250,000. The convertible promissory note (the “HWH Note”) bears a 6% interest per annum and had a commitment fee of $15,000. The note, together with any accrued interest reduced by any unamortized prepaid interest shall, at the discretion of HWH, either be repaid in cash and/or convert into shares of common stock of the Company at a conversion rate of $0.0012 per share; and it shall be due and payable in full on the earliest of: (i) the third anniversary of the note; (ii) the acceleration of the note upon the occurrence of an event of default (as defined in the note); or (iii) on the fifth business day after HWH has delivered to the Company a written demand for payment of this Note. The Company may, at its option, at any time during the term of the HWH Note, redeem a portion or all amounts of outstanding Principal Amount, without incurring penalties, additional interest, or other fees or charges. The purchase price of one share of common stock of the Company under this warrant shall be equal to $0.0012. The exercise period for each warrant will be five years from the date of this warrant.

 

On May 9, 2024, the Company entered into a securities purchase agreement (the “May HWH SPA”) with HWH whereby the Company issued to HWH a convertible promissory note (the “May HWH Note”) in an aggregate principal amount of $250,000, for a purchase price of $250,000. The May HWH Note bears interest at 8% per annum, contains a commitment fee of $20,000, and at the option of HWH, convertible into 125,000,000 shares of Common Stock. The May HWH Note, together with any accrued interest, reduced by any unamortized prepaid interest shall, at the discretion of HWH, either be repaid in cash and/or convert into shares of Common Stock of the Company at a conversion rate of $0.002 per share; due and payable in full on the earliest of: (i) the third anniversary of the May HWH Note; (ii) the acceleration of the May HWH Note upon the occurrence of an event of default (as defined in the May HWH Note); or (iii) on the fifth business day after HWH has delivered to the Company a written demand for payment of the May HWH Note. The Company may, at its option, at any time during the term of the May HWH Note, redeem a portion or all amounts of outstanding principal amount, without incurring penalties, additional interest, or other fees or charges.

 

On June 6, 2024, the Company entered into a securities purchase agreement (the “June HWH SPA”) with HWH whereby the Company issued to HWH a convertible promissory note (the “June HWH Note”) in an aggregate principal amount of $250,000, for a purchase price of $250,000. The June HWH Note bears interest at 8% per annum and contains a commitment fee of $20,000. The June HWH Note, together with any accrued interest, reduced by any unamortized prepaid interest shall, at the discretion of HWH, either be repaid in cash and/or converted into 2,500,000,000 shares of Common Stock at a conversion rate of $0.0001 per share; due and payable in full on the earliest of: (i) the third anniversary of the June HWH Note; (ii) the acceleration of the June HWH Note upon the occurrence of an event of default (as defined in the June HWH Note); or (iii) on the fifth business day after HWH has delivered to the Company a written demand for payment of the June HWH Note. The Company may, at its option, at any time during the term of the June HWH Note, redeem a portion or all amounts of outstanding principal amount, without incurring penalties, additional interest, or other fees or charges.

 

On June 19, 2024, the Company and HWH entered into an addendum to the June HWH SPA and June HWH Note to amend: (i) the number of shares of Common Stock convertible under the June HWH Note from 2,500,000,000 to 125,000,000; and (ii) the conversion rate from $0.0001 to $0.002.

 

On August 13, 2024, the Company entered into a securities purchase agreement (the “August HWH SPA”) with HWH whereby the Company issued to HWH a convertible promissory note (the “August HWH Note”) in an aggregate principal amount of $100,000, for a purchase price of $100,000. The August HWH Note bears interest at 8% per annum and contains a commitment fee of $8,000. The August HWH Note, together with any accrued interest, reduced by any unamortized prepaid interest shall, at the discretion of HWH, either be repaid in cash and/or converted into 50,000,000 shares of Common Stock at a conversion rate of $0.002 per share; due and payable in full on the earliest of: (i) the third anniversary of the August HWH Note; (ii) the acceleration of the August HWH Note upon the occurrence of an event of default (as defined in the August HWH Note); or (iii) on the fifth business day after HWH has delivered to the Company a written demand for payment of the August HWH Note. The Company may, at its option, at any time during the term of the August HWH Note, redeem a portion or all amounts of outstanding principal amount, without incurring penalties, additional interest, or other fees or charges.

 

In connection with the Reverse Split (see Note 3), the stock warrants issued to HWH in March 2024 could be exercised into 149,035 shares of the Company’s common stock; and if HWH were to convert the HWH Note, the March HWH Note, the May HWH Note, the June HWH Note and the August HWH Note into the Company’s common stock, the Company will be obligated to issue 363,646 shares of its common stock. During the six months ended September 30, 2024 and 2023, interest expense associated with the Company’s convertible notes was approximately $35,167 and $0.

 

17
 

 

NOTE 10 – INCOME TAXES  

 

The statutory rates for our domestic and our material foreign operations are as follows for the periods shown:

  

Country  2024   2023 
United States   21%   21%
Republic of Korea   21%   21%

 

Our consolidated effective income tax rate reconciliation is as follows:

  

   2024   2023 
   Six Months Ended
September 30,		 
   2024   2023 
Federal statutory rate   21.0%   21.0%
State and local income taxes        (0.3)
Permanent differences   0.8    0.8 
Change in valuation allowance for NOL carry-forwards   (21.0)   (21.0)
Stock warrant transactions and other items   -      
Effective income tax rate   0.8%   0.5%

 

Income taxes applicable to our foreign operations are not material in the periods presented.

 

NOTE 11 - RELATED PARTY TRANSACTIONS

 

Alset Inc.

 

On January 17, 2024, the Company executed a convertible promissory note for $250,000 with Alset Inc, a Texas corporation (“Alset”) and a shareholder of the Company. The convertible promissory note (“Alset Note”) bears a 10% interest per annum and had an origination fee of $25,000 which is payable in cash or convertible into common shares of the Company at the option of Alset. The note and related accrued interest shall be due and payable in full on the earliest of (i) six months from the date of issuance; (ii) the acceleration of the Alset Note upon an occurrence of an event of default (as defined in the Alset Note); (iii) the third business day after the holder has delivered the Company a written demand for payment of the Alset Note; or (iv) upon the Company’s successful listing on The Nasdaq Stock Market LLC. Alset may, at its option, at any time during the term of the Alset Note, redeem a portion or all amounts of outstanding principal amount, without incurring penalties, additional interest, or other fees or charges. The Alset Note was replaced by a new securities purchase agreement dated November 12, 2024 (See Note 16).

 

HWH International Inc.

 

On March 18, 2024, the Company entered into a securities purchase agreement with HWH International Inc., a Delaware corporation whereby the Company issued to HWH (i) a convertible promissory note in an aggregate principal amount of $250,000.00 which shall be convertible into 208,333,333 shares of the Company’s common stock at the option of HWH and (ii) a common stock purchase warrant agreement which shall be exercisable into up to 208,333,333 shares of the Company’s common stock for an aggregate purchase price of $250,000. The convertible promissory note (the “HWH Note”) bears a 6% interest per annum and had a commitment fee of $15,000. The note, together with any accrued interest reduced by any unamortized prepaid interest shall, at the discretion of HWH, either be repaid in cash and/or convert into shares of common stock of the Company at a conversion rate of $0.0012 per share; and it shall be due and payable in full on the earliest of: (i) the third anniversary of the note; (ii) the acceleration of the note upon the occurrence of an event of default (as defined in the note); or (iii) on the fifth business day after HWH has delivered to the Company a written demand for payment of this Note. The Company may, at its option, at any time during the term of the HWH Note, redeem a portion or all amounts of outstanding Principal Amount, without incurring penalties, additional interest, or other fees or charges. The purchase price of one share of common stock of the Company under this warrant shall be equal to $0.0012. The exercise period for each warrant will be five years from the date of this warrant. On June 19, 2024, the Company and HWH executed an amended to revise the conversion rate from $0.0001 to $0.002.

 

On May 9, 2024, the Company entered into a securities purchase agreement (the “May HWH SPA”) with HWH whereby the Company issued to HWH a convertible promissory note (the “May HWH Note”) in an aggregate principal amount of $250,000, for a purchase price of $250,000. The May HWH Note bears interest at 8% per annum, contains a commitment fee of $20,000, and at the option of HWH, convertible into 125,000,000 shares of Common Stock. The May HWH Note, together with any accrued interest, reduced by any unamortized prepaid interest shall, at the discretion of HWH, either be repaid in cash and/or convert into shares of Common Stock of the Company at a conversion rate of $0.002 per share; due and payable in full on the earliest of: (i) the third anniversary of the May HWH Note; (ii) the acceleration of the May HWH Note upon the occurrence of an event of default (as defined in the May HWH Note); or (iii) on the fifth business day after HWH has delivered to the Company a written demand for payment of the May HWH Note. The Company may, at its option, at any time during the term of the May HWH Note, redeem a portion or all amounts of outstanding principal amount, without incurring penalties, additional interest, or other fees or charges.

 

On June 6, 2024, the Company entered into a securities purchase agreement (the “June HWH SPA”) with HWH whereby the Company issued to HWH a convertible promissory note (the “June HWH Note”) in an aggregate principal amount of $250,000, for a purchase price of $250,000. The June HWH Note bears interest at 8% per annum and contains a commitment fee of $20,000. The June HWH Note, together with any accrued interest, reduced by any unamortized prepaid interest shall, at the discretion of HWH, either be repaid in cash and/or converted into 2,500,000,000 shares of Common Stock at a conversion rate of $0.0001 per share; due and payable in full on the earliest of: (i) the third anniversary of the June HWH Note; (ii) the acceleration of the June HWH Note upon the occurrence of an event of default (as defined in the June HWH Note); or (iii) on the fifth business day after HWH has delivered to the Company a written demand for payment of the June HWH Note. The Company may, at its option, at any time during the term of the June HWH Note, redeem a portion or all amounts of outstanding principal amount, without incurring penalties, additional interest, or other fees or charges.

 

On June 19, 2024, the Company and HWH entered into an addendum to the June HWH SPA and June HWH Note to amend: (i) the number of shares of Common Stock convertible under the June HWH Note from 2,500,000,000 to 125,000,000; and (ii) the conversion rate from $0.0001 to $0.002.

 

On August 13, 2024, the Company entered into a securities purchase agreement (the “August HWH SPA”) with HWH whereby the Company issued to HWH a convertible promissory note (the “August HWH Note”) in an aggregate principal amount of $100,000, for a purchase price of $100,000. The August HWH Note bears interest at 8% per annum and contains a commitment fee of $8,000. The August HWH Note, together with any accrued interest, reduced by any unamortized prepaid interest shall, at the discretion of HWH, either be repaid in cash and/or converted into 50,000,000 shares of Common Stock at a conversion rate of $0.002 per share; due and payable in full on the earliest of: (i) the third anniversary of the August HWH Note; (ii) the acceleration of the August HWH Note upon the occurrence of an event of default (as defined in the August HWH Note); or (iii) on the fifth business day after HWH has delivered to the Company a written demand for payment of the August HWH Note. The Company may, at its option, at any time during the term of the August HWH Note, redeem a portion or all amounts of outstanding principal amount, without incurring penalties, additional interest, or other fees or charges.

 

Mr. Chan, the Company’s chairman is the executive chairman and a director of HWH; Mr. Thatch, the Company’s chief executive officer (CEO) is the CEO of HWH.

 

18
 

 

NOTE 12 – LEASES

 

The Company leases space for its offices and warehouse space, under lease agreements classified as “operating leases” as defined in ASC Topic 842.

 

The Company leases space for its corporate headquarters, warehouse space, automobiles, and office and other equipment, under lease agreements classified as operating leases. The Company has remaining lease terms of approximately 1 to 10 years on the remaining Leases. Leases with an initial term in excess of 12 months are recognized on the consolidated balance sheet based on the present value of future lease payments over the defined lease term at the lease commencement date. Future lease payments were discounted using an implicit rate of 10% to 12% in connection with most leases.

 

The following information pertains to the Company’s leases as of the balance sheet dates indicated:

  

Assets  Classification      
      As of 
Assets  Classification  September 30, 2024   March 31, 2024 
Operating leases  Right-of-use assets, net  $378,565   $403,107 
Total lease assets     $378,565   $403,107 
              
Liabilities             
Operating leases  Accrued and other current liabilities  $52,392   $21,909 
Operating leases  Lease liability, long-term   361,149    416,277 
Total lease liabilities     $413,541   $438,186 

 

The following information pertains to the Company’s leases for the periods indicated:

  

Lease cost  Classification  2024   2023 
      Six Months Ended September 30, 
Lease cost  Classification  2024   2023 
Operating lease cost  General and administrative expenses  $52,273   $55,823 
Total lease cost     $52,273   $55,823 

 

The Company’s lease liabilities are payable as follows:

  

Twelve months ending September 30,  Amount 
2025  $25,016 
2026   102,842 
2027   105,621 
2028   108,400 
2029   111,180 
Thereafter   111,223 
Total remaining payments   564,282 
Less imputed interest   (150,741)
Total lease liability  $413,541 

 

19
 

 

NOTE 13 – COMMITMENTS AND CONTINGENCIES

 

Legal Matters in General

 

The Company has incurred several claims in the normal course of business. The Company believes such claims can be resolved without any material adverse effect on our consolidated financial position, results of operations, or cash flows.

 

The Company maintains certain liability insurance. However, certain costs of defending lawsuits are not covered by or only partially covered by its insurance policies, including claims that are below insurance deductibles. Additionally, insurance carriers could refuse to cover certain claims, in whole or in part. The Company accrues costs to defend itself from litigation as they are incurred.

 

The outcome of litigation is uncertain, and despite management’s view of the merits of any litigation, or the reasonableness of the Company’s estimates and reserves, the Company’s financial statements could nonetheless be materially affected by an adverse judgment. The Company believes it has adequately reserved for the contingencies arising from current legal matters where an outcome was deemed to be probable, and the loss amount could be reasonably estimated. No provision for legal matters was deemed necessary as of September 30, 2024.

 

Legal Proceedings

 

The Company from time to time is involved in various claims and lawsuits incidental to the conduct of its business in the ordinary course. We do not believe that the ultimate resolution of these matters will have a material adverse impact on our consolidated financial position, results of operations or cash flows. Case No. 4:20-cv-00946; Dennis Burback, Ken Eddy and Mark Andersen v. Robert Oblon, Jordan Brock, Jeff Bollinger, Four Oceans Global, LLC, Four Oceans Holdings, Inc., Alchemist Holdings, LLC, Elepreneurs U.S., LLC, Elevacity U.S., LLC, Sharing Services Global Corporation, Custom Travel Holdings, Inc., and Does 1-5, pending in the United States District Court for the Eastern District of Texas (the “Burback Lawsuit”). On December 11, 2020, three investors in Four Oceans Global, LLC filed a lawsuit against the Company, its affiliated entities, and other persons and entities related to an investment made by the three Plaintiffs in 2015. The Company and its affiliated entities filed an answer denying the three investors’ claims. Plaintiffs filed a First Amended Complaint on October 14, 2021. The Company and its affiliated entities responded in November 2021 by filing a Motion to Dismiss the claims contained in the Amended Complaint. The Motion was granted on July 20, 2022, by Court Order dismissing with prejudice the Company and all affiliated entities from the lawsuit. In early August 2022, Plaintiffs on their own motion moved to dismiss all claims against the remaining parties in the case to enable the Order of Dismissal to become an appealable, final Order. On September 7, 2022, Plaintiffs filed a Notice of Appeal to the United States Court of Appeals for the Fifth Circuit. The Plaintiffs filed their Proposed Sufficient Brief of Appellants with the Fifth Circuit on January 2, 2023. The Company filed a Response Brief on February 22, 2023. This case is now dismissed, as the Appeals Court decided not to hear the Appeal.

 

The company was informed that Jordan Brock who was a party to this lawsuit has filed for Bankruptcy. On January 5, 2024, the Debtor filed a voluntary petition in this Court for relief under Chapter 13 of the Bankruptcy Code. On April 18, 2024, the Debtor’s Chapter 13 bankruptcy case was converted to a case under Chapter 7 of the Bankruptcy Code. The Trustee (Christopher J. Moser) was appointed as the Chapter 7 trustee of the Debtor’s bankruptcy estate, and he continues to serve in that capacity.

 

The Trustee has filed a lawsuit against the Company Case No. 24-40057; Christopher J. Moser, Trustee v. Sharing Services Global Corporation (the “Adversary Proceeding”) asserting that Jordan Brock’s legal fees in the amount of $252,587.79 in which he allegedly spent to defend himself against the lawsuit should be the Company’s responsibility.

 

The Company has been served with a Summons by the United States Bankruptcy Court; Eastern District of Texas; Christoper J. Moser (Trustee) in the Adversary Proceeding which the Company intends to challenge on several bases including the failure of Brock and related entities seeking indemnification to meet the standard of entitlement to the benefit of the mandatory indemnification provisions of the Nevada Revised Statutes , based in part on the provisions of the Amended Complaint in the Burback Lawsuit.

 

20
 

 

NOTE 14 - FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

 

The Company’s financial instruments consist of cash equivalents, if any, accounts receivable, notes receivable, accounts payable, and notes payable, including convertible notes. The carrying amounts of cash equivalents, if any, accounts receivable, notes receivable, and accounts payable approximate their respective fair values due to the short-term nature of these financial instruments.

 

The Company measures and discloses the fair value of its financial instruments under the provisions of ASC Topic 820 – Fair Value Measurement, as amended (“ASC 820”). The Company defines “fair value” as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level hierarchy for measuring fair value and requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There were no transfers between the levels of the fair value hierarchy during the periods covered by the accompanying consolidated financial statements.

 

Consistent with the valuation hierarchy contained in ASC Topic 820, we categorized certain of our financial assets and liabilities as follows:

 

                     
   As of September 30, 2024 
   Total   Level 1   Level 2   Level 3 
Liabilities                    
                     
Convertible notes payable  $1,011,134   $-   $1,011,134   $      - 
                     
Total liabilities  $1,011,134   $-   $1,011,134   $- 

 

                     
   As of March 31, 2024 
   Total   Level 1   Level 2   Level 3 
Liabilities                    
Convertible notes payable  $587,303   $-   $587,303   $     - 
Total liabilities  $587,303   $-   $587,303   $- 

 

NOTE 15 – SUBSEQUENT EVENTS 

 

On November 12 2024, the Company and Alset executed a securities purchase agreement and a convertible promissory note for $250,000 (the “New AEI Note”) to replace the Alset Note that was executed in January 2024. Pursuant to the New Note, the Parties agreed to carry forward the principal amount of $250,000 from the Alset Note, and Alset agreed to waive all interests (including any default interest) accrued on the principal amount under the Alset Note. The New AEI Note bears an 8% interest per annum, had an origination fee of $25,000 which is payable in cash or convertible into common shares of the Company at the option of Alset, and it may be converted into 2,500,000 shares of the Company’s common stock (representing a conversion rate of US$0.10 per share based on the closing market price of the Company’s common stock on September 30, 2024) at Alset’s option, The principal amount of this New AEI Note, plus any unpaid interest and fees, shall be due and fully payable by the earliest of (i) the second (2nd) anniversary of the New Alset Note; (ii) upon the occurrence of an Event of Default; or (iii) fifth (5th) business day after Alset has delivered to the Company a written demand for payment.

 

The Company has evaluated all subsequent events and transactions through the date that the condensed consolidated financial statements were available to be issued and noted no other subsequent events requiring financial statement recognition or disclosure.

 

21
 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

The following section discusses management’s views of the financial condition and the results of operations and cash flows of Sharing Services Global Corporation and consolidated subsidiaries. This section should be read in conjunction with: (a) our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024, and (b) our condensed consolidated financial statements included elsewhere in this Quarterly Report. This section may contain forward-looking statements. See “Cautionary Notice Regarding Forward-Looking Statements” above for a discussion of forward-looking statements.

 

Summary Results of Operations:

 

   Three Months Ended   Six Months Ended 
  

September 30,

2024

  

September 30,

2023

  

Increase

(Decrease)

  

%

Change

  

September 30,

2024

  

September 30,

2023

  

Increase

(Decrease)

  

%

Change

 
Net sales  $         2,084,658   $         2,408,704    (324,046)   -13.5%  $         4,306,182   $        5,286,825   $(980,643)   -18.5%
Gross profit   1,460,526    1,738,901    (278,375)   -16.0%   3,005,198    3,771,193    (765,995)   -20.3%
Operating expenses   (2,095,072)   (2,859,297)   764,225    -26.7%   (4.276,914)   (6,567,857)   2,290,943    -34.9%
Operating loss   (634,546)   (1,120,396)   485,850    -43.4%   (1,271,716)   (2,796,664)   1,524,948    -54.5%
Non-Operating income (expense), net   168,401    (346,496)   514,897    -148.6%   (162,996)   (1,082,484)   919,487    -84.9%
Loss before income taxes   (466,145)   (1,466,892)   1,000,747    -68.2%   (1,434,712)   (3,879,148)   2,444,436    -63.0%
Income tax expense   -    (12,102)   12,102    -100.0%   -    -    -    0.0%
Net loss  $(466,145)  $(1,454,790)  $988,645    -68.0%  $(1,434,712)  $(3,879,148)  $2,444,436    -63.0%

 

Highlights for the Three months ended September 30, 2024:

 

  ● For the three months ended September 30, 2024, our consolidated net sales decreased $0.3 million, or 13.5%, compared to the three months ended September 30, 2023.
     
  ● For the three months ended September 30, 2024, our consolidated gross profit decreased $0.3 million, or 16.0%, compared to the three months ended September 30, 2023. Our consolidated gross margin was 70.1% for the three months ended September 30, 2024, compared to 72.2% for the three months ended September 30, 2023.
     
  ● For the three months ended September 30, 2024, our consolidated operating expenses decreased $0.8 million, or 26.7% to 2.1 million, compared to the three months ended September 30, 2023.
     
  ● For the three months ended September 30, 2024, our consolidated operating loss was $0.6 million, compared to operating loss of $1.1 million for the three months ended September 30, 2023.
     
  ● For the three months ended September 30, 2024, our consolidated net non-operating income was $0.2 million, compared to net non-operating expense of $0.3 million for the three months ended September 30, 2023.
     
  ● For the three months ended September 30, 2024, our consolidated net loss was approximately $0.5 million, compared to $1.5 million for the three months ended September 30, 2023. For the three months ended September 30, 2024, our basic and diluted loss per share was $1.68 compared to $5.40 for the three months ended September 30, 2023.

 

22
 

 

Overview

 

Summary Description of Business

 

Sharing Services Global Corporation and subsidiaries (“Sharing Services”, “we,” or the “Company”) aim to build shareholder value by developing or acquiring businesses and technologies that increase the Company’s product and services portfolio, business competencies, and geographic reach.

 

Currently, the Company, through its subsidiaries, markets and distributes its health and wellness and other products primarily in the U.S. and Canada using a direct selling business model. In addition, the Company’s U.S. subsidiaries market our products and services through an independent sales force, using their proprietary websites, including: www.thehappyco.com.  

 

Sharing Services was incorporated in the State of Nevada on April 24, 2015.

 

As further discussed below, the Company intends to continue to grow its business both organically and by making strategic acquisitions from time to time of businesses and technologies that augment its product portfolio, complement its business competencies, and fit its growth strategy.

 

Financing Arrangements

 

Historically, the Company has funded a substantial portion of its liquidity and cash needs through the issuance of notes or convertible notes and borrowings under short-term financing arrangements, and issuance of equity securities. See “Liquidity and Capital Resources” below for additional information about the Company’s convertible notes and borrowings under short-term financing arrangements.

 

Industry and Business Trends

 

The information in “Industry and Business Trends” included in ITEM 1 — “Business” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024, is incorporated herein by reference.

 

Strategic Profitable Growth Initiatives

 

The Company intends to grow its business by pursuing a multipronged growth strategy, that includes: (a) expanding its product offerings, both within the health and wellness category and in new product categories, (b) expanding its direct-to-consumer geographic footprint and (c) re-vamping and re-launching its previously announced membership-based consumer travel products line worldwide. This growth strategy may also include the use of strategic acquisitions of businesses that augment the Company’s product and services portfolio, business competencies and geographic reach.

 

23
 

 

Results of Operations

 

The Three months ended September 30, 2024, Compared to the Three months ended September 30, 2023

 

Net Sales

 

For the three months ended September 30, 2024, our consolidated net sales decreased by $0.3 million, or 13.5%, to $2.1 million, compared to the three months ended September 30, 2023. The decrease in net sales mainly reflects: (a) the decline in orders from independent distributors; (b) the decline in the number of independent distributors, resulting, in part, from recent product reformulations and increased competition for independent distributors, and (c) the generally adverse impact on consumer buying trends resulting from the recent increase in consumer good prices in the U.S.

 

During the three months ended September 30, 2024, and 2023, the Company derived substantially all its consolidated net sales from the sale of its health and wellness products.

 

Gross Profit

 

For the three months ended September 30, 2024, our consolidated gross profit decreased by approximately $0.3 million, to $1.5 million, compared to the three months ended September 30, 2023; and our consolidated gross margin was 70.1% and 72.2%, respectively. The gross margin was about the same compared to the last year’s which is mainly due to efforts to reduce our cost of goods sold and our shipping expenses.

 

Selling and Marketing Expenses

 

For the three months ended September 30, 2024, our consolidated selling and marketing expenses decreased by $0.1 million, to $0.7 million, or 31.3% of consolidated net sales, compared to $0.7 million, or 30.9% of consolidated net sales, for the three months ended September 30, 2023. The $0.1 million decrease in consolidated selling and marketing expenses is primarily due to lower sales commissions (which reflects the decrease in consolidated sales discussed above).

 

General and Administrative Expenses

 

For the three months ended September 30, 2024, our consolidated general and administrative expenses (which include corporate employee compensation and benefits, stock-based compensation, professional fees, rent and other occupancy costs, certain consulting fees, telephone and information technology expenses, insurance premiums, and other administrative expenses) decreased by approximately $0.7 million, to $1.4 million. The $0.7 million decrease was primarily due to lower consulting expense of approximately $0.2 million, and lower employee compensation and compensation-related benefits of $0.3 million due to less headcount year over year.

 

Change in Fair Value of Embedded Derivatives

 

For the three months ended September 30, 2024, we recorded a non-cash income of approximately $364,000 in connection with the issuance of five convertible promissory notes to our related parties Alset Inc. and HWH International Inc., representing the change in fair value of embedded derivatives.

 

Interest Expense, Net

 

For the three months ended September 30, 2024, our consolidated interest expense was $161,908, excluding interest income of $113.

 

For the three months ended September 30, 2023, our consolidated interest expense was $453,480, excluding amortization of debt discount and amortization of deferred financing costs of $1,509,812, and interest income of $25.

 

24
 

 

Other Income

 

For the three months ended September 30, 2023, Sharing Services qualified and is eligible for a U.S. government ERTC (employee retention tax credit) for $1.8 million.

 


Loss on Extinguishment of Debt

 

For the three months ended September 30, 2024, no gain on extinguishment of debt was recognized.

 

In August 2023, Sharing Services and DSSI entered into an agreement pursuant to which DSSI agreed to cancel the promissory note dated June 15, 2022, including the aggregate principal amount of the Note and unpaid interest of $26.2 million in exchange for 26,000 shares of Sharing Services Series D Preferred Stock, par value $0.0001 per share. The Company recognized a loss on extinguishment of debt of $188,842 in connection therewith.

 

Other Non-operating Income (expense), net

 

For the three months ended September 30, 2024, there was a loss of foreign currency transactions of $33,370.

 

For the three months ended September 30, 2023, there was a gain of foreign currency transactions of $5,613.

 

Income Tax Expense

 

Income tax expenses include current and deferred income taxes for both our domestic and foreign operations. Income from our international operations is subject to taxation in the countries in which we operate.

 

For the three months ended September 30, 2024, no income tax benefit/expense was recognized. During the three months ended September 30, 2023, the Company recognized a current federal income tax expense of $3,176, and a state and local tax expense of $8,926.

 

Net Loss and Loss per Share

 

As a result of the foregoing, for the three months ended September 30, 2024, our consolidated net loss was $0.5 million, compared to $1.5 million for the three months ended September 30, 2023. For the three months ended September 30, 2024, our basic and diluted loss per share was $1.68. For the three months ended September 30, 2023, our basic and diluted loss per share was $5.40.

 

Six months ended September 30, 2024, as compared to the Six months ended September 30, 2023

 

Net Sales

 

For the six months ended September 30, 2024, our consolidated net sales decreased by $1.0 million, or 18.5%, to $4.3 million, compared to the six months ended September 30, 2023. The decrease in net sales mainly reflects: (a) the decline in orders from independent distributors; (b) the decline in the number of independent distributors, resulting, in part, from recent product reformulations and increased competition for independent distributors, and (c) the generally adverse impact on consumer buying trends resulting from the recent increase in consumer good prices in the U.S.

 

During the six months ended September 30, 2024, and 2023, the Company derived substantially all its consolidated net sales from the sale of its health and wellness products.

 

Gross Profit

 

For the six months ended September 30, 2024, our consolidated gross profit decreased by approximately $0.8 million, to $3.0 million, compared to the six months ended September 30, 2023; and our consolidated gross margin was 69.8% and 71.3%, respectively. The gross margin was about the same compared to the last year’s which is mainly due to efforts to reduce our cost of goods sold and our shipping expenses.

 

Selling and Marketing Expenses

 

For the six months ended September 30, 2024, our consolidated selling and marketing expenses decreased by $0.9 million, to $1.3 million, or 29.9% of consolidated net sales, compared to $2.2 million, or 40.9% of consolidated net sales, for the six months ended September 30, 2023. The $0.9 million decrease in consolidated selling and marketing expenses is primarily due to lower sales commissions of $0.7 million (which reflects the decrease in consolidated sales discussed above) and lower convention expenses of $0.2 million.

 

General and Administrative Expenses

 

For the six months ended September 30, 2024, our consolidated general and administrative expenses (which include corporate employee compensation and benefits, stock-based compensation, professional fees, rent and other occupancy costs, certain consulting fees, telephone and information technology expenses, insurance premiums, and other administrative expenses) decreased by approximately $1.4 million, to $3.0 million. The $1.4 million decrease was primarily due to lower consulting expense of approximately $0.4 million, and lower employee compensation and compensation-related benefits of $0.6 million due to less headcount year over year.

 

Change in Fair Value of Embedded Derivatives

 

For the six months ended September 30, 2024, we recorded a non-cash income of approximately $176,000 in connection with the issuance of five convertible promissory notes to our related parties Alset Inc. and HWH International Inc., representing the change in fair value of embedded derivatives.

 

Interest Expense, Net

 

For the six months ended September 30, 2024, our consolidated interest expense was $309,854, excluding interest income of $395.

 

For the six months ended September 30, 2023, our consolidated interest expense was $1.1 million, excluding amortization of debt discount and amortization of deferred financing costs of $2.0 million, and interest income of $290,024.

 


Loss on Extinguishment of Debt

 

For the six months ended September 30, 2024, no gain on extinguishment of debt was recognized.

 

Effective June 30, 2023, the Company, and DSSI, entered into three transactions whereby such transactions offset certain liabilities through the sale of assets. The Company recognized the transactions as extinguishment of debt of with a gain of $150,634, before income tax, in connection therewith. In August 2023, Sharing Services and DSSI entered into an agreement pursuant to which DSSI agreed to cancel the promissory note dated June 15, 2022, including the aggregate principal amount of the Note and unpaid interest of $26.2 million in exchange for 26,000 shares of Sharing Services Series D Preferred Stock, par value $0.0001 per share. The Company recognized a loss on extinguishment of debt of $188,842 in connection therewith.

 

Other Non-operating Income (expense), net

 

For the six months ended September 30, 2024, there was a loss of foreign currency transactions of $29,706.

 

For the six months ended September 30, 2023, our net consolidated non-operating income, includes litigation settlements and other non-operating income of $103,434.

 

Net Loss and Loss per Share

 

As a result of the foregoing, for the six months ended September 30, 2024, our consolidated net loss was $1.4 million, compared to $3.9 million for the six months ended September 30, 2023. For the six months ended September 30, 2024, and September 30, 2023, our basic and diluted loss per share was $5.26 and $14.51, respectively.

 

Liquidity and Capital Resources

 

We broadly define liquidity as our ability to generate sufficient cash, from internal and external sources, to meet our obligations and commitments. We believe that, for this purpose, liquidity cannot be considered separately from capital resources.

 

Working Capital

 

Working capital (total current assets minus total current liabilities). We had a deficiency in our working capital of approximately $5.1 million as of September 30, 2024, compared to $4.2 million as of March 31, 2024.

 

As of September 30, 2024, and March 31, 2024, our cash and cash equivalents were $0.7 million and $0.9 million, respectively. Based upon the current level of operations and anticipated investments necessary to grow our business, while we believe that existing cash balances and anticipated funds from operations may be sufficient to meet our working capital requirements over the next 12 months, we will need to obtain additional financing through the issuance of equity securities and convertible promissory notes. Please see NOTE 2 – GOING CONCERN.

 

25
 

 

Historical Cash Flows 

 

Historically, our primary sources of cash have been capital transactions involving the issuance of equity securities and secured and unsecured debt (See “Short-term Borrowings and Convertible Notes” below) and cash flows from operating activities; and our primary uses of cash have been for operating activities, capital expenditures, acquisitions, net cash advances to related parties, and debt repayments in the ordinary course of our business.

 

The following table summarizes our cash flow activities for the six months ended September 30, 2024, compared to the six months ended September 30, 2023:

 

   Six Months Ended September 30, 
   2024   2023 
Net cash used in operating activities  $(1,243,216)  $(2,970,305)
Net cash provided by financing activities   1,085,000    1,200,000 
Impact of currency rate changes in cash   (6,414)   160,759 
Decrease in cash and cash equivalents  $(164,630)  $(1,609,546)

 

Net Cash Used in Operating Activities

 

For the six months ended September 30, 2024, net cash used in operating activities was $1.2 million, compared to $3.0 million for the six months ended September 30, 2023. The $1.7 million decrease was primarily due to a decline in operating losses of $1.5 million (excluding non-cash items, such as depreciation and amortization, stock-based compensation expense, provision for obsolete inventory losses, amortization of debt discount, unrealized gain (loss) on investments, losses on impairment of investments in unconsolidated entities and notes receivable, and gains on extinguishment of debt).

 

Net Cash Provided by Financing Activities

 

For the six months ended September 30, 2024, net cash provided by financing activities was $1.1 million, compared to $1.2 million for the six months ended September 30, 2023. The $1.1 million represents proceeds from loans under convertible promissory notes and other borrowings.

 

Impact of currency rate changes in cash

 

For the six months ended September 30, 2024, the impact of currency rate changes in cash was negative $6,414, compared to $160,759, for the six months ended September 30, 2023.

 

26
 

 

Potential Future Acquisitions

 

The Company, directly and through its subsidiaries, may make strategic acquisitions and purchases of equity interests in businesses that complement its business competencies and growth strategy. Such acquisitions and purchases of equity interests are expected to be funded with cash and cash equivalents, cash provided by operations, if any, and issuance of equity securities and debt.

 

Capital Requirements

 

During the quarter ended September 30, 2024, there were no capital expenditures for property and equipment (consisting of furniture and fixtures, computer equipment and software, other office equipment and leasehold improvements) in the ordinary course of our business.

 

Contractual Obligations

 

There were no material changes to our contractual cash obligations during the six months ended September 30, 2024.

 

Off-Balance Sheet Financing Arrangements

 

As of September 30, 2024, we had no off-balance sheet financing arrangements.

 

Critical Accounting Estimates

 

There were no material changes to the Company’s critical accounting estimates or assumptions since March 31, 2024.

 

Accounting Changes and Recent Accounting Pronouncements

 

For discussion of accounting changes and recent accounting pronouncements, see Note 3 of the Notes to Condensed Consolidated Financial Statements contained elsewhere in this Quarterly Report.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

 

The Company is a Smaller Reporting Company, as defined in Rule 12b-2 of the Exchange Act, and, accordingly, is not required to provide the information called for by this Item.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, as of the end of the fiscal period covered by this Quarterly Report, and concluded that, as of September 30, 2024, due to material weaknesses in our internal control over financial reporting that have yet to be fully remediated, the Company’s disclosure controls and procedures were ineffective in providing reasonable assurance that information required to be disclosed in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management and its Board of Directors, as appropriate to allow timely decisions regarding required disclosure.

 

27
 

 

Limitations on the Company’s Controls and Procedures. We do not expect that our disclosure controls and procedures will prevent all errors and all fraud. Any system of controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the system will be met. Because of the limitations in all such systems, no evaluation can provide absolute assurance that all control issues and instances of fraud (if any) within the Company have been detected. Furthermore, the design of any system of disclosure controls and procedures is based in part upon assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how unlikely. Because of these inherent limitations in a cost-effective system of controls and procedures, misstatements and/or omissions due to error or fraud may occur undetected.

 

Changes in Internal Control over Financial Reporting. During our most recent fiscal quarter, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II—OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

The information contained in Note 14, COMMITMENTS AND CONTINGENCIES - Legal Proceedings, of the Notes to Unaudited Condensed Consolidated Financial Statements located elsewhere in this Quarterly Report is incorporated herein by reference.

 

Item 1A. Risk Factors.

 

The factors contained in ITEM 1A, — “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024, are incorporated herein by reference.

 

Item 2. Unregistered Sales of Securities and Use of Proceeds.

 

(a) Unregistered Sales of Securities

 

None

 

(b) Not applicable

 

(c) Purchases of Equity Securities by the Issuer and Affiliated Purchasers

 

None

 

Item 3. Defaults Upon Senior Securities.

 

(a) Not applicable

 

(b) Not applicable

 

Item 4. Mining Safety Disclosures.

 

Not applicable

 

Item 5. Other Information.

 

None

 

28
 

 

Item 6. Exhibits.

 

The following exhibits are filed as part of this Quarterly Report unless otherwise indicated:

 

3.1   Amended and Restated Certificate of Designation of Series D Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 16, 2023)
     
10.1†   Asset Purchase Agreement between Sharing Services Global Corporation and HWH World, Inc., dated November 3, 2023 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 21, 2023)
     
10.2   Bill of Sale and Assumption Agreement between Sharing Services Global Corporation and HWH World, Inc., dated November 3, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on November 21, 2023)
     
10.3   Exclusive Intellectual Property License Agreement between Sharing Services Global Corporation and HWH World, Inc., dated November 3, 2023 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on November 21, 2023)
     
10.4   Assignment and Assumption Agreement between Sharing Services Global Corporation, Decentralized Sharing Systems, Inc., and Ascend Management Pte. Ltd., dated November 3, 2023 (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on November 21, 2023)
     
31.1   Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
     
31.2   Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
     
32.1   Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **
     
32.2   Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **
     
101   Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

 

*Filed herewith

**Furnished herewith.

† Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K, and portions of this exhibit have been redacted in compliance with Item 601(b)(2) of Regulation S-K.

 

29
 

 

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.

 

  SHARING SERVICES GLOBAL CORPORATION
  (Registrant)
     
Date: November 13, 2024    
     
  By: /s/ John Thatch
    John Thatch
    President, Chief Executive Officer and Vice Chairman of the Board of Directors
    (Principal Executive Officer)
     
Date November 13, 2024    
     
  By: /s/ Anthony S. Chan
    Anthony S Chan
    Chief Financial Officer
    (Principal Financial Officer)

 

30

 

 

 

Exhibit 31.1

 

CERTIFICATION

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, John Thatch, certify that:

 

(1) I have reviewed this Quarterly Report on Form 10-Q of Sharing Services Global Corporation;

 

(2) Based on 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 on 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) The registrant’s other certifying officer and I are 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 our 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 our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

(5) The registrant’s other certifying officer and I have disclosed, based on our 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 13, 2024    
       
    By: /s/ John Thatch
      John Thatch
      Chief Executive Officer

 

 

 

Exhibit 31.2

 

CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Anthony S. Chan, certify that:

 

(1) I have reviewed this Quarterly Report on Form 10-Q of Sharing Services Global Corporation;

 

(2) Based on 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 on 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) The registrant’s other certifying officer and I are 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 our 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 our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

(5) The registrant’s other certifying officer and I have disclosed, based on our 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 13, 2024    
       
    By: /s/ Anthony S. Chan
      Anthony S. Chan
      Chief Financial Officer

 

 

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

 

In connection with the Quarterly Report of Sharing Services Global Corporation (the “Company”) on Form 10-Q for the three months ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Thatch, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §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 results of operations of the Company.

 

    By: /s/ John Thatch
      John Thatch
      Chief Executive Officer
       
Date: November 13, 2024    

 

 

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

 

In connection with the Quarterly Report of Sharing Services Global Corporation (the “Company”) on Form 10-Q for the three months ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anthony S. Chan, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §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 results of operations of the Company.

 

    By: /s/ Anthony S. Chan
      Anthony S. Chan
      Chief Financial Officer
       
Date: November 13, 2024    

 

 

 

v3.24.3
Cover - shares
 6 Months Ended
Sep. 30, 2024
Nov. 13, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Sep. 30, 2024  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2025  
Current Fiscal Year End Date --03-31  
Entity File Number 000-55997  
Entity Registrant Name SHARING SERVICES GLOBAL CORPORATION  
Entity Central Index Key 0001644488  
Entity Tax Identification Number 30-0869786  
Entity Incorporation, State or Country Code NV  
Entity Address, Address Line One 5200 Tennyson Parkway  
Entity Address, Address Line Two Suite 400  
Entity Address, City or Town Plano  
Entity Address, State or Province TX  
Entity Address, Postal Zip Code 75024  
City Area Code (469)  
Local Phone Number 304-9400  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   309,652
Entity Information, Former Legal or Registered Name None  
v3.24.3
Condensed Consolidated Balance Sheets - USD ($)
Sep. 30, 2024
Mar. 31, 2024
Current Assets    
Cash and cash equivalents $ 729,576 $ 894,206
Trade accounts receivable, net 295,232 280,793
Other receivable 1,800,000 1,800,000
Inventory, net 1,224,961 1,318,662
Other current assets, net 169,683 132,674
Total Current Assets 4,219,452 4,426,335
Property and equipment, net 164,470 239,943
Right-of-use assets, net 378,565 403,107
Intangible assets 330,568 402,144
Other assets 1,164,175 1,163,385
TOTAL ASSETS 6,257,230 6,634,914
Current Liabilities    
Accounts payable 1,227,288 1,304,046
Accrued and other current liabilities 2,945,056 2,611,951
Accrued sales commission payable 1,676,147 1,742,309
State and local taxes payable 1,565,017 1,545,463
Other borrowings 1,685,000 1,200,000
Total Current Liabilities 9,366,161 8,666,551
Lease liability, long-term 361,149 416,277
TOTAL LIABILITIES 10,470,791 9,407,349
Commitments and contingencies
STOCKHOLDERS’ DEFICIT    
Common stock, $0.0001 par value, 1,990,000,000 shares authorized; 309,652 shares and 269,214 shares issued and outstanding as of September 30, 2024 and March 31, 2024 [1] 31 27
Additional paid in capital 110,737,460 110,737,464
Shares to be issued 12,146 12,146
Accumulated deficit (114,602,627) (113,167,915)
Accumulated other comprehensive loss (361,206) (354,792)
TOTAL STOCKHOLDERS’ DEFICIT (4,213,561) (2,772,435)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT 6,257,230 6,634,914
Series A Preferred Stock [Member]    
STOCKHOLDERS’ DEFICIT    
Preferred stock value 310 310
Series C Preferred Stock [Member]    
STOCKHOLDERS’ DEFICIT    
Preferred stock value 322 322
Series D Preferred Stock [Member]    
STOCKHOLDERS’ DEFICIT    
Preferred stock value 3 3
Related Party [Member]    
Current Liabilities    
Convertible notes payable, related parties 267,653 262,782
Non-current convertible notes payable, related parties $ 743,481 $ 324,521
[1] Retrospectively restated for the 1,400-to-1 reverse stock split on September 13, 2024.
v3.24.3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Sep. 30, 2024
Mar. 31, 2024
Common Stock, Par or Stated Value Per Share   $ 0.0001
Common Stock, Shares Authorized   1,990,000,000
Common Stock, Shares, Outstanding 309,652 269,214
Series A Preferred Stock [Member]    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 100,000,000 100,000,000
Preferred stock, shares issued 3,100,000 3,100,000
Preferred stock, shares outstanding 3,100,000 3,100,000
Series C Preferred Stock [Member]    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 3,220,000 3,220,000
Preferred stock, shares outstanding 3,220,000 3,220,000
Series D Preferred Stock [Member]    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares issued 26,000 26,000
Preferred stock, shares outstanding 26,000 26,000
v3.24.3
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Income Statement [Abstract]        
Net sales $ 2,084,658 $ 2,408,704 $ 4,306,182 $ 5,286,825
Cost of goods sold 624,132 669,803 1,300,984 1,515,632
Gross profit 1,460,526 1,738,901 3,005,198 3,771,193
Operating expenses        
Selling and marketing expenses 651,538 743,057 1,287,782 2,164,545
General and administrative expenses 1,443,534 2,116,240 2,989,132 4,403,312
Total operating expenses 2,095,072 2,859,297 4,276,914 6,567,857
Operating loss (634,546) (1,120,396) (1,271,716) (2,796,664)
Other income (expense):        
Change in fair value of embedded derivatives 363,566 176,169
Interest expense, net (161,795) (1,963,267) (309,459) (2,869,077)
Other income 1,800,000 1,800,000
Loss on extinguishment of debt (188,842) (38,209)
Unrealized loss on investment (78,632)
Other non-operating income (expense), net (33,370) 5,613 (29,706) 103,434
Total other income (expense), net 168,401 (346,496) (162,996) (1,082,484)
Loss before income taxes (466,145) (1,466,892) (1,434,712) (3,879,148)
Income tax expense (12,102)
Net loss (466,145) (1,454,790) (1,434,712) (3,879,148)
Other comprehensive loss, net of tax:        
Currency translation adjustments (14,350) (22,435) (6,414) (27,604)
Total other comprehensive loss (14,350) (22,435) (6,414) (27,604)
Comprehensive loss $ (480,495) $ (1,477,225) $ (1,441,126) $ (3,906,752)
Loss per share:        
Basic [1] $ (1.68) $ (5.40) $ (5.26) [2] $ (14.51) [2]
Diluted [1] $ (1.68) $ (5.40) $ (5.26) [2] $ (14.51) [2]
Weighted average shares:        
Basic [1] 276,686 269,214 272,971 [2] 267,295 [2]
Diluted [1] 276,686 269,214 272,971 [2] 267,295 [2]
[1] Retrospectively restated for the 1,400-to-1 reverse stock split
[2] Retrospectively restated for the 1,400-to-1 reverse stock split on September 13, 2024.
v3.24.3
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parenthetical)
Sep. 13, 2024
Income Statement [Abstract]  
Stockholders' Equity, Reverse Stock Split 1,400-to-1 reverse stock split
v3.24.3
Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($)
 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (1,434,712) $ (3,879,148)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 147,010 307,499
Stock-based compensation (148,267)
Amortization of debt discount and other 2,015,542
Change in fair value of embedded derivatives (176,169)
Loss on extinguishment of debt 38,209
Bad debt expense 177,115
Provision for obsolete inventory 2,112
Non-cash other income (1,800,000)
Changes in operating assets and liabilities:    
Accounts receivable (14,439) (337,659)
Inventory 93,701 (784,928)
Other current assets (37,758) 742,337
Accounts payable (76,758) 57,396
Income taxes payable 19,554
Lease liability (30,587) 768
Accrued and other liabilities 266,942 638,719
Net Cash Used in Operating Activities (1,243,216) (2,970,305)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from loan payable 1,200,000
Proceeds from issuance of convertible notes, related parties 600,000
Net proceeds from issuance of promissory notes 485,000
Net Cash Provided by Financing Activities 1,085,000 1,200,000
IMPACT OF CURRENCY RATE CHANGES ON CASH (6,414) 160,759
Decrease in cash and cash equivalents (164,630) (1,609,546)
Cash and cash equivalents, beginning of period 894,206 2,994,885
Cash and cash equivalents, end of period 729,576 1,385,339
Supplemental cash flow information    
Cash paid for interest 148,538 24,279
Cash paid for income taxes $ 550
v3.24.3
Condensed Consolidated Statements of Changes in Stockholders' Deficit (Unaudited) - USD ($)
Previously Reported [Member]
Preferred Stock [Member]
Series A Preferred Stock [Member]
Previously Reported [Member]
Preferred Stock [Member]
Series C Preferred Stock [Member]
Previously Reported [Member]
Preferred Stock [Member]
Series D Preferred Stock [Member]
Previously Reported [Member]
Common Stock [Member]
 [1]
Previously Reported [Member]
Additional Paid-in Capital [Member]
Previously Reported [Member]
Shares To Be Issued [Member]
Previously Reported [Member]
Treasury Stock, Common [Member]
Previously Reported [Member]
Retained Earnings [Member]
Previously Reported [Member]
AOCI Attributable to Parent [Member]
Previously Reported [Member]
Preferred Stock [Member]
Series A Preferred Stock [Member]
Preferred Stock [Member]
Series C Preferred Stock [Member]
Preferred Stock [Member]
Series D Preferred Stock [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Shares To Be Issued [Member]
Treasury Stock, Common [Member]
Retained Earnings [Member]
AOCI Attributable to Parent [Member]
Total
Balance at Mar. 31, 2023                     $ 310 $ 322 $ 25 [1] $ 84,654,482 $ 12,146 $ (626,187) $ (106,456,378) $ (308,305) $ (22,723,585)
Balance, shares at Mar. 31, 2023                     3,100,000 3,220,000 248,556 [1]            
Currency translation adjustments                     [1] (27,604) (27,604)
Net loss                     [1] (3,879,148) (3,879,148)
Cancellation of treasury stock                     [1] (626,187) 626,187
Common stock issued for debt modification                     $ 3 [1] 26,169,365 26,169,368
Common stock issued for debt modification, shares                         26,000              
Common stock issued to settle accrued interest payable                     $ 2 [1] 539,804 539,806
Common stock issued to settle accrued interest payable, shares [1]                           20,658            
Balance at Sep. 30, 2023                     $ 310 $ 322 $ 3 $ 27 [1] 110,737,464 12,146 (110,335,526) (335,909) 78,837
Balance, shares at Sep. 30, 2023                     3,100,000 3,220,000 26,000 269,214 [1]            
Balance at Mar. 31, 2024 $ 310 $ 322 $ 3 $ 27 $ 110,737,460 $ 12,146 $ (113,167,915) $ (354,792) $ (2,772,439)                   (2,772,435)
Balance, shares at Mar. 31, 2024                     3,100,000 3,220,000 26,000 269,214 [1]            
Currency translation adjustments (6,414) (6,414)                   (6,414)
Net loss $ (1,434,712) $ (1,434,712)                   (1,434,712)
Balance at Sep. 30, 2024                     $ 310 $ 322 $ 3 $ 31 [1] $ 110,737,460 $ 12,146 $ (114,602,627) $ (361,206) $ (4,213,561)
Balance, shares at Sep. 30, 2024                     3,100,000 3,220,000 26,000 309,652 [1]            
[1] Retrospectively restated for the 1,400-to-1 reverse stock split on September 13, 2024.
v3.24.3
Condensed Consolidated Statements of Changes in Stockholders' Deficit (Unaudited) (Parenthetical)
Sep. 13, 2024
Statement of Stockholders' Equity [Abstract]  
Stockholders' Equity, Reverse Stock Split 1,400-to-1 reverse stock split
v3.24.3
ORGANIZATION AND BUSINESS
 6 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
ORGANIZATION AND BUSINESS

NOTE 1 – ORGANIZATION AND BUSINESS

 

Description of Operations

 

Sharing Services Global Corporation (“Sharing Services,” “SHRG”) and its subsidiaries (collectively, the “Company”) aim to build shareholder value by developing or investing in innovative emerging businesses and technologies that augment the Company’s products and services portfolio, business competencies, and geographic reach. Sharing Services was incorporated in the State of Nevada in April 2015. The Company’s main business activities include:

 

● Sale of Health and Wellness Products - The Company markets its health and wellness products primarily through an independent sales force, using a direct selling business model under the proprietary brand “HCo.” Currently, The Happy Co. TM markets and distributes its health and wellness products primarily in the United States (the “U.S.”) and Canada.
   
  The Company generates substantially all of its revenue from the sale of health and wellness products.
   
● Sale of Member-Based Travel Services - Through its subsidiary, Global Travel Destinations, the Company established a subscription-based travel services business under the proprietary brand MyTravelVentures (“MTV”) in May 2022. MTV provides entrepreneurial opportunities to its subscribers by capitalizing on both the direct selling model and the retail travel business model. The MTV services are designed to offer discount for travel relating to airfare, cruises, hotels, resorts, time shares and rental cars for destinations throughout the world for people of all ages, demographics, and economic backgrounds.
   
  The Company is in the process of revamping its travel services business and has temporarily suspended its MTV business operation to prepare for its re-launch in the first quarter of 2025.

 

In August 2021, Sharing Services and Hapi Café, Inc, a company affiliated with Heng Fai Ambrose Chan, a Director of the Company, entered into a Master Franchise Agreement (the “MFA”) pursuant to which Sharing Services acquired the exclusive franchise rights in North America to the brand “Hapi Café.” Under the terms of the MFA, Sharing Services, directly or through its subsidiaries, has the right to operate no less than five corporate-owned stores and can offer to the public sub-franchise rights to own and operate other stores, subject to the terms and conditions contained in the MFA. The Company plans to open up Hapi Café in Dallas and the New York City, and it is in the process of identifying and evaluating suitable locations.

 

Directly or through its subsidiaries, the Company from time to time will invest in emerging business in the direct selling industry, using a combination of debt and equity financing, in efforts to leverage the Company’s business competencies and to participate in the growth of these businesses. As part of the Company’s commitment to the success of these emerging businesses, the Company, directly or through its subsidiaries, also plans to offer non-traditional inventory financing, order fulfillment and logistic, CRM “Back Office” solutions, and other success-critical services to these businesses.

 
v3.24.3
GOING CONCERN
 6 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
GOING CONCERN

NOTE 2 – GOING CONCERN

 

The accompanying unaudited condensed consolidated financial statements have been prepared using generally accepted accounting principles in the United States of America (“GAAP”) applicable to a going concern, which contemplates the realization of assets and the liquidation of liabilities in the ordinary course of business. During the six months ended September 30, 2024 and 2023, the Company had a net loss was approximately $1.4 million and $3.9 million, respectively. In addition, as of September 30, 2024, the Company had accumulated deficit of $114.6 million and working capital deficiency of $5.1 million. These factors among other raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from significant shareholders sufficient to meet its minimal operating expenses and seeking third party equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

 
v3.24.3
SIGNIFICANT ACCOUNTING POLICIES
 6 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
SIGNIFICANT ACCOUNTING POLICIES

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The unaudited condensed consolidated interim financial statements included herein have been prepared in accordance with GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted as permitted pursuant to the rules and regulations of the SEC, although we believe that the disclosures made are adequate to make the information not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024. Unless so stated, the disclosures in the accompanying condensed consolidated financial statements do not repeal the disclosures in our consolidated financial statements for year ended March 31, 2024.

 

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. In connection with the Company reverse stock split that took place in September 2024, certain prior period financial information has been adjusted to conform with the current year’s presentation.

 

Use of Estimates and Assumptions

 

The preparation of financial statements in accordance with GAAP requires the use of judgment and requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosures about contingent assets and liabilities, if any. Matters that require the use of estimates and assumptions include, among others: the recoverability of trade accounts and notes receivable, the valuation of inventory, the useful lives of fixed assets, the assessment of long-lived assets for impairment, the nature and timing of satisfaction of multiple performance obligations resulting from contracts with customers, the allocation of the transaction price to multiple performance obligations in a sales transaction, the measurement and recognition of right-of-use assets and related lease liabilities, the valuation of share-based compensation awards, the provision for income taxes, the measurement and recognition of uncertain tax positions, the valuation of long-term debt, and the valuation of loss contingencies, if any. Actual results may differ from these estimates in amounts that may be material to our consolidated financial statements. Management of the Company believes that the estimates and assumptions used in the preparation of the unaudited condensed consolidated financial statements are reasonable.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents include recent customer remittances deposited with our merchant processors at the balance sheet date, which generally settle within 24 to 72 hours. As of September 30, 2024, and March 31, 2024, cash and cash equivalents included cash held by our merchant processors of approximately $50,000, respectively. In addition, as of September 30, 2024, and March 31, 2024, cash and cash equivalents held in bank accounts in foreign countries in the ordinary course of business were approximately $0.2 million and $0.4 million, respectively. Amounts held by our merchant processor or held in bank accounts located in foreign countries are generally not insured by any federal agency.

 

Trade Accounts Receivable and Allowance for Expected Credit Losses

 

The Company maintains an allowance for credit losses in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) ASC 326, and records the allowance for expected credit losses as an offset to assets such as accounts receivable. The expected credit losses are classified as general and administrative expenses in the consolidated statements of operations and comprehensive loss. The Company assesses collectability by reviewing receivables on a collective basis where similar characteristics exist, primarily based on the size and nature of specific receivables. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the receivable balances, credit quality of the counter party, and current and future economic conditions. On a quarterly basis, management determines if the allowance for credit losses is adequate, and adjusts the allowance, when necessary. Delinquent account balances are written-off against the allowance for credit losses after all means of collection have been exhausted and that the likelihood of collection is not probable. There was no change in the Company’s allowance for expected credit losses from March 31, 2024 to September 30, 2024.

 

Inventory

 

Inventory consists of finished goods and promotional materials and is stated at the lower of cost determined using the first-in, first-out (“FIFO”) method, or net realizable value. It includes direct product costs and certain shipping and handling costs, such as in-bound freight. When estimating the net realizable value of inventory, the Company considers several factors including estimates of future demand for the product, historical sales, the age and sales history of the inventory, and historic and anticipated changes in our product offerings.

 

The Company periodically assesses the realizability of its inventory based on evaluation of its inventory levels against historical and anticipated sales. Physical inventory counts are performed at all facilities on a quarterly basis. As of September 30, 2024 and March 31, 2024, the allowance for slowing moving or obsolete inventory were $1.6 million and $1.6 million, respectively, in connection with health and wellness products that were either damaged, expired, or slow-moving, based on the Company’s historical and anticipated sales

 

Cost of goods sold includes actual product costs, vendor rebates and allowances, if any, inventory shrinkage and certain shipping and handling costs, such as in-bound freight, associated with product sold. All other shipping and handling costs, including the cost to ship products to customers, are included in selling and marketing expenses in our consolidated statements of operations when incurred.

 

 

Other Receivable and Loan Payable

 

In July 2023, the Company, through its out-sourced payroll services provider (“Paychex”), submitted a claim to the Internal Revenue Services (“IRS”) for the Employee Retention Tax Credit (“ERTC”) based on its payroll records and other pertinent information. Refunds will be distributed based on IRS processing times and the total ERTC credit will be approximately $1.8 million. Since the likelihood of receiving the ERTC credit is probable and the amount is estimable, the Company has recorded its ERTC claim in Other Receivable. Despite the extended time delay in the processing of the ERTC claims by the IRS, the Company believes that its eligibility is reasonably assured and has not recorded any provision against the receivable.

 

Through the introduction of Paychex, the Company applied for an ERTC term loan (“Term Loan”) in August 2023 which objective is to serve as a bridge funding until the ERTC is collected. The Term Loan that was approved came to $1.2 million, and it was secured by the Company’s assets and all ERTC proceeds that the Company is entitled to receive from the IRS. Pursuant to the loan agreement with this lender (“Lender”), the first 12 months of the Term Loan is deemed the interest-only period. During such period, the Term Loan carried a 2% monthly interest, and the Company would make a monthly interest-only payment of $24,000 to the Lender. In September 2023, the Company received net proceeds of approximately $1.18 million which must be used solely and exclusively for working capital and other business purposes. In September 2024, on the 12th month anniversary of the Term Loan, the Term Loan was automatically extended to 36 months from the loan funding date. As a result, from September 2024 to August 2026 (the “loan amortization period”), the Company is required to pay $63,445.32 monthly over the 24-month period to pay down the principal and related interest which is calculated at 2% per month. The Term Loan was recorded as Other Borrowings.

 

In September 2024, the Company and the Lender entered into an agreement (the “Agreement”) whereby the Lender agreed to lend $500,000 to the Company in exchange for a repayment of interest and principal that could be as much as $635,000 using the Company’s assets as collateral (the “borrowing”). The Company has the option to paydown the borrowing early and recorded the $500,000 payment obligation as Other Borrowings. In accordance with the Agreement, and the Company would make 65 weekly payments of $9,769.23 each over a 15-month period to the Lender should the Company choose to repay the borrowing over the 15-month period. In September 2024, the Company received net proceeds of $489,000 ($500,000 less transaction fees of $11,000). During the month of September 2024, the Company made 2 weekly payments to the Lender totaled $19,538.46 of which $15,000 were recorded as a reduction of Other Borrowings and the balance as interest expenses.

 

Other Assets 

 

Other assets include a multi-user license and code of a back-office platform that was acquired for $1 million in 2022. This back-office platform is designed to facilitate the computation and processing of commission payments to distributors, and it requires customization in order for it to be operational. Costs associated with the customization and build out of the platform has been capitalized in accordance with ASC 350 - Capitalization on Internal-Use Software Costs.

 

Foreign Currency Translation 

 

The functional currency of each of our foreign operations is generally the respective local currency. Balance sheet accounts are translated into U.S. dollars (our reporting currency) at the rates of exchange in effect at the balance sheet date, while the results of operations and cash flows are generally translated using average exchange rates for the periods presented. Individual material transactions, if any, are translated using the actual rate of exchange on the transaction date. The resulting translation adjustments are reported in accumulated other comprehensive loss in our condensed consolidated balance sheets. In September 2021, the Company, through its wholly owned subsidiary, commenced operations in the Republic of Korea (South Korea).

 

   South Korean Won per 1 USD 
   2024   2023 
Exchange rate as of September 30th   1,312.45    1,352.92 
Average exchange rate for the six months ended   1,363.21    1,314.49 

 

 

Comprehensive Loss

 

For the six months ended September 30, 2024 and 2023, the Company’s comprehensive loss comprised of currency translation adjustments and net loss.

 

Revenue Recognition

 

The Company recognizes revenue in accordance with ASC Topic 606 when (or as) it transfers control of the promised goods and services to the customer in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services.

 

Revenue is recognized net of amounts due to taxing authorities (such as local and state sales tax). The Company’s customers place sales orders online and through the Company’s “back-office” operations, which creates a contract and establishes the transaction price. With respect to products sold, the Company’s performance obligation is satisfied upon receipt of the products by the customer. With respect to subscription-based revenue, including independent distributor membership fees, the Company’s performance obligation is satisfied over time (generally, up to one year). With respect to customer loyalty points awarded, the Company’s performance obligation is satisfied at the earliest of (a) the redemption or expiration date, or (b) when it is no longer probable the points will be redeemed. The Company assesses the probability an awards of customer loyalty points will be redeemed, based on its historic breakage rates. The timing of revenue recognition may differ from the time when the Company invoices the customer and/or collects payment. The Company has elected to treat shipping and handling costs as an activity to fulfill its performance obligations, rather than a separate performance obligation.

 

As of September 30, 2024 and March 31, 2024, deferred revenue associated with

 

● product invoiced but not received by customers at the balance sheet date was $93,119 and $80,404, respectively;
● unfulfilled performance obligations for services offered on a subscription basis was $31,579 and $37,774, respectively;
● unfulfilled performance obligations for customers’ right of return was $24,783 and $24,703, respectively; and
● customer loyalty points outstanding was $19,326 and $19,326, respectively.

 

During the six months ended September 30, 2024 and 2023, substantially all the Company’s consolidated net sales were from its sale of health and wellness products.

 

Sales Commissions

 

The Company recognizes sales commission expenses, when incurred, in accordance with GAAP. During the six months ended September 30, 2024 and 2023, sales commission expense, which is included in selling and marketing expenses in our condensed consolidated statements of operations and comprehensive loss, was approximately $1.2 million and $1.8 million, respectively.

 

Segment Reporting

 

The Company follows ASC Topic 280, Segment Reporting. The Company’s management reviews the Company’s consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole and has determined that the Company’s reportable segments are: (a) the sale of health and wellness products, and (b) the sale of member-based travel services.

 

Reverse Stock Split

 

On September 12, 2024, the Company received notice from the Financial Industry Regulatory Authority (“FINRA”) that it had announced the effectiveness of our 1,400-to-1 reverse stock split of the issued and outstanding shares of common stock (the “Reverse Split”), on FINRA’s daily list. The Reverse Split became effective at the open of market on September 13, 2024. As a result of the Reverse Split, every one thousand four hundred (1,400) shares of the issued and outstanding common stock of the Company were converted into one (1) share of common stock. All fractional shares created by the Reverse Split have been rounded up to the nearest whole share. Each shareholder received at least one share.

 

The Reverse Split does not affect the total number of shares of capital stock, including the Common Stock, that the Company is authorized to issue, or the par value of the Common Stock, which shall remain as set forth in the Articles of Incorporation. Certain of the Company’s outstanding securities, pursuant to which shares of Common Stock are issuable, will be adjusted as a result of the Reverse Split, as required by the terms of such securities.

 

In connection with the Reverse Split, the Company’s CUSIP has also changed to 81953103. Immediately prior to the Reverse Split, the Company had 376,328,885 shares of Common Stock issued and outstanding. Immediately following the Market Effective Date of the Reverse Split, the Company has 309,652 (which includes 40,438 shares issued to address fractional shares related to the Reverse Split) shares of Common Stock issued and outstanding.

 

The Reverse Split was approved by the Company’s Board of Directors on September 26, 2023, and was approved by the Company’s majority stockholders holding approximately 53.5% of the issued and outstanding common stock on October 30, 2023. On September 5, 2024, the Company filed with the Secretary of State of the State of Nevada a Certificate of Amendment to our Articles of Incorporation to reflect the Reverse Split.

 

Recently Issued Accounting Standards

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. The Company does not believe the adoption of this standard would have a material impact on disclosures within its consolidated financial statements.

 

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on its unaudited condensed consolidated financial statements.

 

 
v3.24.3
LOSS PER SHARE
 6 Months Ended
Sep. 30, 2024
Loss per share:  
LOSS PER SHARE

NOTE 4 – LOSS PER SHARE

 

The Company calculates basic loss per share by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share is calculated similarly but reflects the potential impact of shares issuable upon the conversion or exercise of outstanding convertible preferred stock, convertible notes payable, if any, stock warrants and other commitments to issue common stock, except where the impact would be anti-dilutive.

 

The following table sets forth the computations of basic and diluted loss per share:

 

   2024   2023 
   Six Months Ended September 30, 
   2024   2023 
Net loss  $(1,434,712)  $(3,879,148)
Weighted average basic and diluted shares*   272,971    267,295 
Loss per share:*          
Basic and diluted  $(5.26)  $(14.51)

 

*Retrospectively restated for the 1,400-to-1 reverse stock split on September 13, 2024.

 

The following potentially dilutive securities and instruments were outstanding as of September 30, 2024, and 2023, but excluded from the table above:

 

   2024   2023 
   As of September 30, 
   2024   2023 
Convertible notes payable   363,646    - 
Stock warrants   149,035    - 
Convertible preferred stock   6,320,000    6,320,000 
Total potential incremental shares   6,832,681    6,320,000 

 

 
v3.24.3
INVENTORY, NET
 6 Months Ended
Sep. 30, 2024
Inventory Disclosure [Abstract]  
INVENTORY, NET

NOTE 5 – INVENTORY, NET 

 

Inventory consists of the following:

 

  

September 30,

2024

  

March 31,

2024

 
   As of 
  

September 30,

2024

  

March 31,

2024

 
Finished goods  $2,785,620   $2,878,569 
Promotional items   5,940    5,940 
Raw materials   77,902    77,902 
Allowance for obsolescence   (1,644,501)   (1,643,749)
Inventory, net  $1,224,961   $1,318,662 

 

The following table reflects the activity in the allowance for inventory obsolescence for the periods presented:

 

   2024   2023 
  

Six months ended

September 30,

 
   2024   2023 
Balance at beginning of period  $1,643,749   $880,926 
Provision for estimated obsolescence   (7,938)   2,112 
Write-offs   -    (1,170)
Currency translation adjustment   8,690    - 
Balance at end of period  $1,644,501   $881,868 

 
v3.24.3
OTHER CURRENT ASSETS, NET
 6 Months Ended
Sep. 30, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
OTHER CURRENT ASSETS, NET

NOTE 6 – OTHER CURRENT ASSETS, NET 

 

Other current assets consist of the following:

  

       
   As of 
  

September 30,

2024

  

March 31,

2024

 
Inventory-related deposits  $278,313   $252,867 
Prepaid insurance and other operational expenses   43,051    31,598 
Deposits for sales events   23,960    23,850 
Subtotal   345,324    308,315 
Allowance for losses   (175,641)   (175,641)
Other current assets  $169,683   $132,674 

 

As of September 30, 2024 and March 31, 2024, the allowance for losses in connection with certain inventory-related deposits for which recoverability is $175,641.

 

 
v3.24.3
PROPERTY AND EQUIPMENT, NET
 6 Months Ended
Sep. 30, 2024
Property, Plant and Equipment [Abstract]  
PROPERTY AND EQUIPMENT, NET

NOTE 7 – PROPERTY AND EQUIPMENT, NET 

 

Property and equipment consist of the following:

  

       
   As of 
  

September 30,

2024

  

March 31,

2024

 
Computer software  $1,024,274   $1,024,274 
Furniture and fixtures   285,632    285,732 
Computer equipment   220,364    220,264 
Leasehold improvements and other   399,306    399,306 
Total property and equipment   1,929,576    1,929,576 
Accumulated depreciation and amortization   (1,765,106)   (1,689,633)
Property and equipment, net  $164,470   $239,943 

 

Depreciation and amortization expense in connection with the Company’s property and equipment for the three months ended September 30, 2024 and 2023 was $42,696 and $88,823, respectively. For the six months ended September 30, 2024 and 2023 was $75,473 and $212,844, respectively.

 
v3.24.3
ACCRUED AND OTHER CURRENT LIABILITIES
 6 Months Ended
Sep. 30, 2024
Payables and Accruals [Abstract]  
ACCRUED AND OTHER CURRENT LIABILITIES

NOTE 8 – ACCRUED AND OTHER CURRENT LIABILITIES

 

Accrued and other current liabilities consist of the following:

   

       
   As of 
  

September 30,

2024

  

March 31,

2024

 
Deferred sales revenues  $168,806   $162,207 
Liability associated with uncertain tax positions   925,786    925,786 
Accrued interest payable   41,000    5,833 
Payroll and employee benefits   215,598    206,426 
Lease liability, current portion   52,392    21,909 
Other accruals   1,541,474    1,289,790 
Accrued and other current liabilities  $2,945,056   $2,611,951 

 

Lease liability, current portion, represents obligations due within one year under operating leases for office space, automobiles, and office equipment. Other accruals include primarily operational accruals.

 

 
v3.24.3
CONVERTIBLE NOTES PAYABLE, RELATED PARTIES
 6 Months Ended
Sep. 30, 2024
Convertible Notes Payable Related Parties  
CONVERTIBLE NOTES PAYABLE, RELATED PARTIES

NOTE 9 – CONVERTIBLE NOTES PAYABLE, RELATED PARTIES 

 

Convertible notes payable consists of the following:

  

Issuance Date  Maturity
Date		  Interest
Rate		   Price
(per share)		       
          Conversion   As of 
Issuance Date  Maturity
Date		  Interest
Rate		   Price
(per share)		  

September 30,

2024

  

March 31,
2024

 
January 2024  July 2024   10%   See below   $            250,000   $250,000 
March 2024  March 2027   6%  $0.0012    250,000    250,000 
May 2024  May 2027   8%   0.0020    250,000    

-

 
June 2024  June 2027   8%   0.0020    250,000    

-

 
August 2024  August 2027   8%   0.0020    100,000    

-

 
Total convertible notes payable                1,100,000    500,000 
Change in fair value of embedded derivatives                (88,866)   87,303 
Subtotal                1,011,134    587,303 
Less: current portion                267,653    262,782 
Long-term convertible notes payable               $743,481   $324,521 

 

 

On January 17, 2024, the Company executed a convertible promissory note for $250,000 with Alset Inc, a Texas corporation (“Alset”) and a shareholder of the Company. The convertible promissory note (“Alset Note”) bears a 10% interest per annum and had an origination fee of $25,000 which is payable in cash or convertible into common shares of the Company at the option of Alset. The note and related accrued interest shall be due and payable in full on the earliest of (i) six months from the date of issuance; (ii) the acceleration of the Alset Note upon an occurrence of an event of default (as defined in the Alset Note); (iii) the third business day after the holder has delivered the Company a written demand for payment of the Alset Note; or (iv) upon the Company’s successful listing on The Nasdaq Stock Market LLC. Alset may, at its option, at any time during the term of the Alset Note, redeem a portion or all amounts of outstanding principal amount, without incurring penalties, additional interest, or other fees or charges. The Alset Note was replaced by a new securities purchase agreement dated November 12, 2024 (See Note 16).

 

On March 18, 2024, the Company entered into a securities purchase agreement with HWH International Inc., a Delaware corporation (“HWH”) whereby the Company issued to HWH (i) a convertible promissory note in an aggregate principal amount of $250,000.00 which shall be convertible into 208,333,333 shares of the Company’s common stock at the option of HWH and (ii) a common stock purchase warrant agreement which shall be exercisable into up to 208,333,333 shares of the Company’s common stock for an aggregate purchase price of $250,000. The convertible promissory note (the “HWH Note”) bears a 6% interest per annum and had a commitment fee of $15,000. The note, together with any accrued interest reduced by any unamortized prepaid interest shall, at the discretion of HWH, either be repaid in cash and/or convert into shares of common stock of the Company at a conversion rate of $0.0012 per share; and it shall be due and payable in full on the earliest of: (i) the third anniversary of the note; (ii) the acceleration of the note upon the occurrence of an event of default (as defined in the note); or (iii) on the fifth business day after HWH has delivered to the Company a written demand for payment of this Note. The Company may, at its option, at any time during the term of the HWH Note, redeem a portion or all amounts of outstanding Principal Amount, without incurring penalties, additional interest, or other fees or charges. The purchase price of one share of common stock of the Company under this warrant shall be equal to $0.0012. The exercise period for each warrant will be five years from the date of this warrant.

 

On May 9, 2024, the Company entered into a securities purchase agreement (the “May HWH SPA”) with HWH whereby the Company issued to HWH a convertible promissory note (the “May HWH Note”) in an aggregate principal amount of $250,000, for a purchase price of $250,000. The May HWH Note bears interest at 8% per annum, contains a commitment fee of $20,000, and at the option of HWH, convertible into 125,000,000 shares of Common Stock. The May HWH Note, together with any accrued interest, reduced by any unamortized prepaid interest shall, at the discretion of HWH, either be repaid in cash and/or convert into shares of Common Stock of the Company at a conversion rate of $0.002 per share; due and payable in full on the earliest of: (i) the third anniversary of the May HWH Note; (ii) the acceleration of the May HWH Note upon the occurrence of an event of default (as defined in the May HWH Note); or (iii) on the fifth business day after HWH has delivered to the Company a written demand for payment of the May HWH Note. The Company may, at its option, at any time during the term of the May HWH Note, redeem a portion or all amounts of outstanding principal amount, without incurring penalties, additional interest, or other fees or charges.

 

On June 6, 2024, the Company entered into a securities purchase agreement (the “June HWH SPA”) with HWH whereby the Company issued to HWH a convertible promissory note (the “June HWH Note”) in an aggregate principal amount of $250,000, for a purchase price of $250,000. The June HWH Note bears interest at 8% per annum and contains a commitment fee of $20,000. The June HWH Note, together with any accrued interest, reduced by any unamortized prepaid interest shall, at the discretion of HWH, either be repaid in cash and/or converted into 2,500,000,000 shares of Common Stock at a conversion rate of $0.0001 per share; due and payable in full on the earliest of: (i) the third anniversary of the June HWH Note; (ii) the acceleration of the June HWH Note upon the occurrence of an event of default (as defined in the June HWH Note); or (iii) on the fifth business day after HWH has delivered to the Company a written demand for payment of the June HWH Note. The Company may, at its option, at any time during the term of the June HWH Note, redeem a portion or all amounts of outstanding principal amount, without incurring penalties, additional interest, or other fees or charges.

 

On June 19, 2024, the Company and HWH entered into an addendum to the June HWH SPA and June HWH Note to amend: (i) the number of shares of Common Stock convertible under the June HWH Note from 2,500,000,000 to 125,000,000; and (ii) the conversion rate from $0.0001 to $0.002.

 

On August 13, 2024, the Company entered into a securities purchase agreement (the “August HWH SPA”) with HWH whereby the Company issued to HWH a convertible promissory note (the “August HWH Note”) in an aggregate principal amount of $100,000, for a purchase price of $100,000. The August HWH Note bears interest at 8% per annum and contains a commitment fee of $8,000. The August HWH Note, together with any accrued interest, reduced by any unamortized prepaid interest shall, at the discretion of HWH, either be repaid in cash and/or converted into 50,000,000 shares of Common Stock at a conversion rate of $0.002 per share; due and payable in full on the earliest of: (i) the third anniversary of the August HWH Note; (ii) the acceleration of the August HWH Note upon the occurrence of an event of default (as defined in the August HWH Note); or (iii) on the fifth business day after HWH has delivered to the Company a written demand for payment of the August HWH Note. The Company may, at its option, at any time during the term of the August HWH Note, redeem a portion or all amounts of outstanding principal amount, without incurring penalties, additional interest, or other fees or charges.

 

In connection with the Reverse Split (see Note 3), the stock warrants issued to HWH in March 2024 could be exercised into 149,035 shares of the Company’s common stock; and if HWH were to convert the HWH Note, the March HWH Note, the May HWH Note, the June HWH Note and the August HWH Note into the Company’s common stock, the Company will be obligated to issue 363,646 shares of its common stock. During the six months ended September 30, 2024 and 2023, interest expense associated with the Company’s convertible notes was approximately $35,167 and $0.

 

 
v3.24.3
INCOME TAXES
 6 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 10 – INCOME TAXES  

 

The statutory rates for our domestic and our material foreign operations are as follows for the periods shown:

  

Country  2024   2023 
United States   21%   21%
Republic of Korea   21%   21%

 

Our consolidated effective income tax rate reconciliation is as follows:

  

   2024   2023 
   Six Months Ended
September 30,		 
   2024   2023 
Federal statutory rate   21.0%   21.0%
State and local income taxes        (0.3)
Permanent differences   0.8    0.8 
Change in valuation allowance for NOL carry-forwards   (21.0)   (21.0)
Stock warrant transactions and other items   -      
Effective income tax rate   0.8%   0.5%

 

Income taxes applicable to our foreign operations are not material in the periods presented.

 
v3.24.3
RELATED PARTY TRANSACTIONS
 6 Months Ended
Sep. 30, 2024
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 11 - RELATED PARTY TRANSACTIONS

 

Alset Inc.

 

On January 17, 2024, the Company executed a convertible promissory note for $250,000 with Alset Inc, a Texas corporation (“Alset”) and a shareholder of the Company. The convertible promissory note (“Alset Note”) bears a 10% interest per annum and had an origination fee of $25,000 which is payable in cash or convertible into common shares of the Company at the option of Alset. The note and related accrued interest shall be due and payable in full on the earliest of (i) six months from the date of issuance; (ii) the acceleration of the Alset Note upon an occurrence of an event of default (as defined in the Alset Note); (iii) the third business day after the holder has delivered the Company a written demand for payment of the Alset Note; or (iv) upon the Company’s successful listing on The Nasdaq Stock Market LLC. Alset may, at its option, at any time during the term of the Alset Note, redeem a portion or all amounts of outstanding principal amount, without incurring penalties, additional interest, or other fees or charges. The Alset Note was replaced by a new securities purchase agreement dated November 12, 2024 (See Note 16).

 

HWH International Inc.

 

On March 18, 2024, the Company entered into a securities purchase agreement with HWH International Inc., a Delaware corporation whereby the Company issued to HWH (i) a convertible promissory note in an aggregate principal amount of $250,000.00 which shall be convertible into 208,333,333 shares of the Company’s common stock at the option of HWH and (ii) a common stock purchase warrant agreement which shall be exercisable into up to 208,333,333 shares of the Company’s common stock for an aggregate purchase price of $250,000. The convertible promissory note (the “HWH Note”) bears a 6% interest per annum and had a commitment fee of $15,000. The note, together with any accrued interest reduced by any unamortized prepaid interest shall, at the discretion of HWH, either be repaid in cash and/or convert into shares of common stock of the Company at a conversion rate of $0.0012 per share; and it shall be due and payable in full on the earliest of: (i) the third anniversary of the note; (ii) the acceleration of the note upon the occurrence of an event of default (as defined in the note); or (iii) on the fifth business day after HWH has delivered to the Company a written demand for payment of this Note. The Company may, at its option, at any time during the term of the HWH Note, redeem a portion or all amounts of outstanding Principal Amount, without incurring penalties, additional interest, or other fees or charges. The purchase price of one share of common stock of the Company under this warrant shall be equal to $0.0012. The exercise period for each warrant will be five years from the date of this warrant. On June 19, 2024, the Company and HWH executed an amended to revise the conversion rate from $0.0001 to $0.002.

 

On May 9, 2024, the Company entered into a securities purchase agreement (the “May HWH SPA”) with HWH whereby the Company issued to HWH a convertible promissory note (the “May HWH Note”) in an aggregate principal amount of $250,000, for a purchase price of $250,000. The May HWH Note bears interest at 8% per annum, contains a commitment fee of $20,000, and at the option of HWH, convertible into 125,000,000 shares of Common Stock. The May HWH Note, together with any accrued interest, reduced by any unamortized prepaid interest shall, at the discretion of HWH, either be repaid in cash and/or convert into shares of Common Stock of the Company at a conversion rate of $0.002 per share; due and payable in full on the earliest of: (i) the third anniversary of the May HWH Note; (ii) the acceleration of the May HWH Note upon the occurrence of an event of default (as defined in the May HWH Note); or (iii) on the fifth business day after HWH has delivered to the Company a written demand for payment of the May HWH Note. The Company may, at its option, at any time during the term of the May HWH Note, redeem a portion or all amounts of outstanding principal amount, without incurring penalties, additional interest, or other fees or charges.

 

On June 6, 2024, the Company entered into a securities purchase agreement (the “June HWH SPA”) with HWH whereby the Company issued to HWH a convertible promissory note (the “June HWH Note”) in an aggregate principal amount of $250,000, for a purchase price of $250,000. The June HWH Note bears interest at 8% per annum and contains a commitment fee of $20,000. The June HWH Note, together with any accrued interest, reduced by any unamortized prepaid interest shall, at the discretion of HWH, either be repaid in cash and/or converted into 2,500,000,000 shares of Common Stock at a conversion rate of $0.0001 per share; due and payable in full on the earliest of: (i) the third anniversary of the June HWH Note; (ii) the acceleration of the June HWH Note upon the occurrence of an event of default (as defined in the June HWH Note); or (iii) on the fifth business day after HWH has delivered to the Company a written demand for payment of the June HWH Note. The Company may, at its option, at any time during the term of the June HWH Note, redeem a portion or all amounts of outstanding principal amount, without incurring penalties, additional interest, or other fees or charges.

 

On June 19, 2024, the Company and HWH entered into an addendum to the June HWH SPA and June HWH Note to amend: (i) the number of shares of Common Stock convertible under the June HWH Note from 2,500,000,000 to 125,000,000; and (ii) the conversion rate from $0.0001 to $0.002.

 

On August 13, 2024, the Company entered into a securities purchase agreement (the “August HWH SPA”) with HWH whereby the Company issued to HWH a convertible promissory note (the “August HWH Note”) in an aggregate principal amount of $100,000, for a purchase price of $100,000. The August HWH Note bears interest at 8% per annum and contains a commitment fee of $8,000. The August HWH Note, together with any accrued interest, reduced by any unamortized prepaid interest shall, at the discretion of HWH, either be repaid in cash and/or converted into 50,000,000 shares of Common Stock at a conversion rate of $0.002 per share; due and payable in full on the earliest of: (i) the third anniversary of the August HWH Note; (ii) the acceleration of the August HWH Note upon the occurrence of an event of default (as defined in the August HWH Note); or (iii) on the fifth business day after HWH has delivered to the Company a written demand for payment of the August HWH Note. The Company may, at its option, at any time during the term of the August HWH Note, redeem a portion or all amounts of outstanding principal amount, without incurring penalties, additional interest, or other fees or charges.

 

Mr. Chan, the Company’s chairman is the executive chairman and a director of HWH; Mr. Thatch, the Company’s chief executive officer (CEO) is the CEO of HWH.

 

 
v3.24.3
LEASES
 6 Months Ended
Sep. 30, 2024
Leases  
LEASES

NOTE 12 – LEASES

 

The Company leases space for its offices and warehouse space, under lease agreements classified as “operating leases” as defined in ASC Topic 842.

 

The Company leases space for its corporate headquarters, warehouse space, automobiles, and office and other equipment, under lease agreements classified as operating leases. The Company has remaining lease terms of approximately 1 to 10 years on the remaining Leases. Leases with an initial term in excess of 12 months are recognized on the consolidated balance sheet based on the present value of future lease payments over the defined lease term at the lease commencement date. Future lease payments were discounted using an implicit rate of 10% to 12% in connection with most leases.

 

The following information pertains to the Company’s leases as of the balance sheet dates indicated:

  

Assets  Classification      
      As of 
Assets  Classification  September 30, 2024   March 31, 2024 
Operating leases  Right-of-use assets, net  $378,565   $403,107 
Total lease assets     $378,565   $403,107 
              
Liabilities             
Operating leases  Accrued and other current liabilities  $52,392   $21,909 
Operating leases  Lease liability, long-term   361,149    416,277 
Total lease liabilities     $413,541   $438,186 

 

The following information pertains to the Company’s leases for the periods indicated:

  

Lease cost  Classification  2024   2023 
      Six Months Ended September 30, 
Lease cost  Classification  2024   2023 
Operating lease cost  General and administrative expenses  $52,273   $55,823 
Total lease cost     $52,273   $55,823 

 

The Company’s lease liabilities are payable as follows:

  

Twelve months ending September 30,  Amount 
2025  $25,016 
2026   102,842 
2027   105,621 
2028   108,400 
2029   111,180 
Thereafter   111,223 
Total remaining payments   564,282 
Less imputed interest   (150,741)
Total lease liability  $413,541 

 

 
v3.24.3
COMMITMENTS AND CONTINGENCIES
 6 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 13 – COMMITMENTS AND CONTINGENCIES

 

Legal Matters in General

 

The Company has incurred several claims in the normal course of business. The Company believes such claims can be resolved without any material adverse effect on our consolidated financial position, results of operations, or cash flows.

 

The Company maintains certain liability insurance. However, certain costs of defending lawsuits are not covered by or only partially covered by its insurance policies, including claims that are below insurance deductibles. Additionally, insurance carriers could refuse to cover certain claims, in whole or in part. The Company accrues costs to defend itself from litigation as they are incurred.

 

The outcome of litigation is uncertain, and despite management’s view of the merits of any litigation, or the reasonableness of the Company’s estimates and reserves, the Company’s financial statements could nonetheless be materially affected by an adverse judgment. The Company believes it has adequately reserved for the contingencies arising from current legal matters where an outcome was deemed to be probable, and the loss amount could be reasonably estimated. No provision for legal matters was deemed necessary as of September 30, 2024.

 

Legal Proceedings

 

The Company from time to time is involved in various claims and lawsuits incidental to the conduct of its business in the ordinary course. We do not believe that the ultimate resolution of these matters will have a material adverse impact on our consolidated financial position, results of operations or cash flows. Case No. 4:20-cv-00946; Dennis Burback, Ken Eddy and Mark Andersen v. Robert Oblon, Jordan Brock, Jeff Bollinger, Four Oceans Global, LLC, Four Oceans Holdings, Inc., Alchemist Holdings, LLC, Elepreneurs U.S., LLC, Elevacity U.S., LLC, Sharing Services Global Corporation, Custom Travel Holdings, Inc., and Does 1-5, pending in the United States District Court for the Eastern District of Texas (the “Burback Lawsuit”). On December 11, 2020, three investors in Four Oceans Global, LLC filed a lawsuit against the Company, its affiliated entities, and other persons and entities related to an investment made by the three Plaintiffs in 2015. The Company and its affiliated entities filed an answer denying the three investors’ claims. Plaintiffs filed a First Amended Complaint on October 14, 2021. The Company and its affiliated entities responded in November 2021 by filing a Motion to Dismiss the claims contained in the Amended Complaint. The Motion was granted on July 20, 2022, by Court Order dismissing with prejudice the Company and all affiliated entities from the lawsuit. In early August 2022, Plaintiffs on their own motion moved to dismiss all claims against the remaining parties in the case to enable the Order of Dismissal to become an appealable, final Order. On September 7, 2022, Plaintiffs filed a Notice of Appeal to the United States Court of Appeals for the Fifth Circuit. The Plaintiffs filed their Proposed Sufficient Brief of Appellants with the Fifth Circuit on January 2, 2023. The Company filed a Response Brief on February 22, 2023. This case is now dismissed, as the Appeals Court decided not to hear the Appeal.

 

The company was informed that Jordan Brock who was a party to this lawsuit has filed for Bankruptcy. On January 5, 2024, the Debtor filed a voluntary petition in this Court for relief under Chapter 13 of the Bankruptcy Code. On April 18, 2024, the Debtor’s Chapter 13 bankruptcy case was converted to a case under Chapter 7 of the Bankruptcy Code. The Trustee (Christopher J. Moser) was appointed as the Chapter 7 trustee of the Debtor’s bankruptcy estate, and he continues to serve in that capacity.

 

The Trustee has filed a lawsuit against the Company Case No. 24-40057; Christopher J. Moser, Trustee v. Sharing Services Global Corporation (the “Adversary Proceeding”) asserting that Jordan Brock’s legal fees in the amount of $252,587.79 in which he allegedly spent to defend himself against the lawsuit should be the Company’s responsibility.

 

The Company has been served with a Summons by the United States Bankruptcy Court; Eastern District of Texas; Christoper J. Moser (Trustee) in the Adversary Proceeding which the Company intends to challenge on several bases including the failure of Brock and related entities seeking indemnification to meet the standard of entitlement to the benefit of the mandatory indemnification provisions of the Nevada Revised Statutes , based in part on the provisions of the Amended Complaint in the Burback Lawsuit.

 

 
v3.24.3
FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS
 6 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

NOTE 14 - FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

 

The Company’s financial instruments consist of cash equivalents, if any, accounts receivable, notes receivable, accounts payable, and notes payable, including convertible notes. The carrying amounts of cash equivalents, if any, accounts receivable, notes receivable, and accounts payable approximate their respective fair values due to the short-term nature of these financial instruments.

 

The Company measures and discloses the fair value of its financial instruments under the provisions of ASC Topic 820 – Fair Value Measurement, as amended (“ASC 820”). The Company defines “fair value” as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level hierarchy for measuring fair value and requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There were no transfers between the levels of the fair value hierarchy during the periods covered by the accompanying consolidated financial statements.

 

Consistent with the valuation hierarchy contained in ASC Topic 820, we categorized certain of our financial assets and liabilities as follows:

 

                     
   As of September 30, 2024 
   Total   Level 1   Level 2   Level 3 
Liabilities                    
                     
Convertible notes payable  $1,011,134   $-   $1,011,134   $      - 
                     
Total liabilities  $1,011,134   $-   $1,011,134   $- 

 

                     
   As of March 31, 2024 
   Total   Level 1   Level 2   Level 3 
Liabilities                    
Convertible notes payable  $587,303   $-   $587,303   $     - 
Total liabilities  $587,303   $-   $587,303   $- 

 
v3.24.3
SUBSEQUENT EVENTS
 6 Months Ended
Sep. 30, 2024
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 15 – SUBSEQUENT EVENTS 

 

On November 12 2024, the Company and Alset executed a securities purchase agreement and a convertible promissory note for $250,000 (the “New AEI Note”) to replace the Alset Note that was executed in January 2024. Pursuant to the New Note, the Parties agreed to carry forward the principal amount of $250,000 from the Alset Note, and Alset agreed to waive all interests (including any default interest) accrued on the principal amount under the Alset Note. The New AEI Note bears an 8% interest per annum, had an origination fee of $25,000 which is payable in cash or convertible into common shares of the Company at the option of Alset, and it may be converted into 2,500,000 shares of the Company’s common stock (representing a conversion rate of US$0.10 per share based on the closing market price of the Company’s common stock on September 30, 2024) at Alset’s option, The principal amount of this New AEI Note, plus any unpaid interest and fees, shall be due and fully payable by the earliest of (i) the second (2nd) anniversary of the New Alset Note; (ii) upon the occurrence of an Event of Default; or (iii) fifth (5th) business day after Alset has delivered to the Company a written demand for payment.

 

The Company has evaluated all subsequent events and transactions through the date that the condensed consolidated financial statements were available to be issued and noted no other subsequent events requiring financial statement recognition or disclosure.
v3.24.3
SIGNIFICANT ACCOUNTING POLICIES (Policies)
 6 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

The unaudited condensed consolidated interim financial statements included herein have been prepared in accordance with GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted as permitted pursuant to the rules and regulations of the SEC, although we believe that the disclosures made are adequate to make the information not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024. Unless so stated, the disclosures in the accompanying condensed consolidated financial statements do not repeal the disclosures in our consolidated financial statements for year ended March 31, 2024.

 

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. In connection with the Company reverse stock split that took place in September 2024, certain prior period financial information has been adjusted to conform with the current year’s presentation.

 
Use of Estimates and Assumptions

Use of Estimates and Assumptions

 

The preparation of financial statements in accordance with GAAP requires the use of judgment and requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosures about contingent assets and liabilities, if any. Matters that require the use of estimates and assumptions include, among others: the recoverability of trade accounts and notes receivable, the valuation of inventory, the useful lives of fixed assets, the assessment of long-lived assets for impairment, the nature and timing of satisfaction of multiple performance obligations resulting from contracts with customers, the allocation of the transaction price to multiple performance obligations in a sales transaction, the measurement and recognition of right-of-use assets and related lease liabilities, the valuation of share-based compensation awards, the provision for income taxes, the measurement and recognition of uncertain tax positions, the valuation of long-term debt, and the valuation of loss contingencies, if any. Actual results may differ from these estimates in amounts that may be material to our consolidated financial statements. Management of the Company believes that the estimates and assumptions used in the preparation of the unaudited condensed consolidated financial statements are reasonable.

 
Cash and Cash Equivalents

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents include recent customer remittances deposited with our merchant processors at the balance sheet date, which generally settle within 24 to 72 hours. As of September 30, 2024, and March 31, 2024, cash and cash equivalents included cash held by our merchant processors of approximately $50,000, respectively. In addition, as of September 30, 2024, and March 31, 2024, cash and cash equivalents held in bank accounts in foreign countries in the ordinary course of business were approximately $0.2 million and $0.4 million, respectively. Amounts held by our merchant processor or held in bank accounts located in foreign countries are generally not insured by any federal agency.

 
Trade Accounts Receivable and Allowance for Expected Credit Losses

Trade Accounts Receivable and Allowance for Expected Credit Losses

 

The Company maintains an allowance for credit losses in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) ASC 326, and records the allowance for expected credit losses as an offset to assets such as accounts receivable. The expected credit losses are classified as general and administrative expenses in the consolidated statements of operations and comprehensive loss. The Company assesses collectability by reviewing receivables on a collective basis where similar characteristics exist, primarily based on the size and nature of specific receivables. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the receivable balances, credit quality of the counter party, and current and future economic conditions. On a quarterly basis, management determines if the allowance for credit losses is adequate, and adjusts the allowance, when necessary. Delinquent account balances are written-off against the allowance for credit losses after all means of collection have been exhausted and that the likelihood of collection is not probable. There was no change in the Company’s allowance for expected credit losses from March 31, 2024 to September 30, 2024.

 
Inventory

Inventory

 

Inventory consists of finished goods and promotional materials and is stated at the lower of cost determined using the first-in, first-out (“FIFO”) method, or net realizable value. It includes direct product costs and certain shipping and handling costs, such as in-bound freight. When estimating the net realizable value of inventory, the Company considers several factors including estimates of future demand for the product, historical sales, the age and sales history of the inventory, and historic and anticipated changes in our product offerings.

 

The Company periodically assesses the realizability of its inventory based on evaluation of its inventory levels against historical and anticipated sales. Physical inventory counts are performed at all facilities on a quarterly basis. As of September 30, 2024 and March 31, 2024, the allowance for slowing moving or obsolete inventory were $1.6 million and $1.6 million, respectively, in connection with health and wellness products that were either damaged, expired, or slow-moving, based on the Company’s historical and anticipated sales

 

Cost of goods sold includes actual product costs, vendor rebates and allowances, if any, inventory shrinkage and certain shipping and handling costs, such as in-bound freight, associated with product sold. All other shipping and handling costs, including the cost to ship products to customers, are included in selling and marketing expenses in our consolidated statements of operations when incurred.

 

 
Other Receivable and Loan Payable

Other Receivable and Loan Payable

 

In July 2023, the Company, through its out-sourced payroll services provider (“Paychex”), submitted a claim to the Internal Revenue Services (“IRS”) for the Employee Retention Tax Credit (“ERTC”) based on its payroll records and other pertinent information. Refunds will be distributed based on IRS processing times and the total ERTC credit will be approximately $1.8 million. Since the likelihood of receiving the ERTC credit is probable and the amount is estimable, the Company has recorded its ERTC claim in Other Receivable. Despite the extended time delay in the processing of the ERTC claims by the IRS, the Company believes that its eligibility is reasonably assured and has not recorded any provision against the receivable.

 

Through the introduction of Paychex, the Company applied for an ERTC term loan (“Term Loan”) in August 2023 which objective is to serve as a bridge funding until the ERTC is collected. The Term Loan that was approved came to $1.2 million, and it was secured by the Company’s assets and all ERTC proceeds that the Company is entitled to receive from the IRS. Pursuant to the loan agreement with this lender (“Lender”), the first 12 months of the Term Loan is deemed the interest-only period. During such period, the Term Loan carried a 2% monthly interest, and the Company would make a monthly interest-only payment of $24,000 to the Lender. In September 2023, the Company received net proceeds of approximately $1.18 million which must be used solely and exclusively for working capital and other business purposes. In September 2024, on the 12th month anniversary of the Term Loan, the Term Loan was automatically extended to 36 months from the loan funding date. As a result, from September 2024 to August 2026 (the “loan amortization period”), the Company is required to pay $63,445.32 monthly over the 24-month period to pay down the principal and related interest which is calculated at 2% per month. The Term Loan was recorded as Other Borrowings.

 

In September 2024, the Company and the Lender entered into an agreement (the “Agreement”) whereby the Lender agreed to lend $500,000 to the Company in exchange for a repayment of interest and principal that could be as much as $635,000 using the Company’s assets as collateral (the “borrowing”). The Company has the option to paydown the borrowing early and recorded the $500,000 payment obligation as Other Borrowings. In accordance with the Agreement, and the Company would make 65 weekly payments of $9,769.23 each over a 15-month period to the Lender should the Company choose to repay the borrowing over the 15-month period. In September 2024, the Company received net proceeds of $489,000 ($500,000 less transaction fees of $11,000). During the month of September 2024, the Company made 2 weekly payments to the Lender totaled $19,538.46 of which $15,000 were recorded as a reduction of Other Borrowings and the balance as interest expenses.

 
Other Assets

Other Assets 

 

Other assets include a multi-user license and code of a back-office platform that was acquired for $1 million in 2022. This back-office platform is designed to facilitate the computation and processing of commission payments to distributors, and it requires customization in order for it to be operational. Costs associated with the customization and build out of the platform has been capitalized in accordance with ASC 350 - Capitalization on Internal-Use Software Costs.

 
Foreign Currency Translation

Foreign Currency Translation 

 

The functional currency of each of our foreign operations is generally the respective local currency. Balance sheet accounts are translated into U.S. dollars (our reporting currency) at the rates of exchange in effect at the balance sheet date, while the results of operations and cash flows are generally translated using average exchange rates for the periods presented. Individual material transactions, if any, are translated using the actual rate of exchange on the transaction date. The resulting translation adjustments are reported in accumulated other comprehensive loss in our condensed consolidated balance sheets. In September 2021, the Company, through its wholly owned subsidiary, commenced operations in the Republic of Korea (South Korea).

 

   South Korean Won per 1 USD 
   2024   2023 
Exchange rate as of September 30th   1,312.45    1,352.92 
Average exchange rate for the six months ended   1,363.21    1,314.49 

 

 
Comprehensive Loss

Comprehensive Loss

 

For the six months ended September 30, 2024 and 2023, the Company’s comprehensive loss comprised of currency translation adjustments and net loss.

 
Revenue Recognition

Revenue Recognition

 

The Company recognizes revenue in accordance with ASC Topic 606 when (or as) it transfers control of the promised goods and services to the customer in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services.

 

Revenue is recognized net of amounts due to taxing authorities (such as local and state sales tax). The Company’s customers place sales orders online and through the Company’s “back-office” operations, which creates a contract and establishes the transaction price. With respect to products sold, the Company’s performance obligation is satisfied upon receipt of the products by the customer. With respect to subscription-based revenue, including independent distributor membership fees, the Company’s performance obligation is satisfied over time (generally, up to one year). With respect to customer loyalty points awarded, the Company’s performance obligation is satisfied at the earliest of (a) the redemption or expiration date, or (b) when it is no longer probable the points will be redeemed. The Company assesses the probability an awards of customer loyalty points will be redeemed, based on its historic breakage rates. The timing of revenue recognition may differ from the time when the Company invoices the customer and/or collects payment. The Company has elected to treat shipping and handling costs as an activity to fulfill its performance obligations, rather than a separate performance obligation.

 

As of September 30, 2024 and March 31, 2024, deferred revenue associated with

 

● product invoiced but not received by customers at the balance sheet date was $93,119 and $80,404, respectively;
● unfulfilled performance obligations for services offered on a subscription basis was $31,579 and $37,774, respectively;
● unfulfilled performance obligations for customers’ right of return was $24,783 and $24,703, respectively; and
● customer loyalty points outstanding was $19,326 and $19,326, respectively.

 

During the six months ended September 30, 2024 and 2023, substantially all the Company’s consolidated net sales were from its sale of health and wellness products.

 
Sales Commissions

Sales Commissions

 

The Company recognizes sales commission expenses, when incurred, in accordance with GAAP. During the six months ended September 30, 2024 and 2023, sales commission expense, which is included in selling and marketing expenses in our condensed consolidated statements of operations and comprehensive loss, was approximately $1.2 million and $1.8 million, respectively.

 
Segment Reporting

Segment Reporting

 

The Company follows ASC Topic 280, Segment Reporting. The Company’s management reviews the Company’s consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole and has determined that the Company’s reportable segments are: (a) the sale of health and wellness products, and (b) the sale of member-based travel services.

 
Reverse Stock Split

Reverse Stock Split

 

On September 12, 2024, the Company received notice from the Financial Industry Regulatory Authority (“FINRA”) that it had announced the effectiveness of our 1,400-to-1 reverse stock split of the issued and outstanding shares of common stock (the “Reverse Split”), on FINRA’s daily list. The Reverse Split became effective at the open of market on September 13, 2024. As a result of the Reverse Split, every one thousand four hundred (1,400) shares of the issued and outstanding common stock of the Company were converted into one (1) share of common stock. All fractional shares created by the Reverse Split have been rounded up to the nearest whole share. Each shareholder received at least one share.

 

The Reverse Split does not affect the total number of shares of capital stock, including the Common Stock, that the Company is authorized to issue, or the par value of the Common Stock, which shall remain as set forth in the Articles of Incorporation. Certain of the Company’s outstanding securities, pursuant to which shares of Common Stock are issuable, will be adjusted as a result of the Reverse Split, as required by the terms of such securities.

 

In connection with the Reverse Split, the Company’s CUSIP has also changed to 81953103. Immediately prior to the Reverse Split, the Company had 376,328,885 shares of Common Stock issued and outstanding. Immediately following the Market Effective Date of the Reverse Split, the Company has 309,652 (which includes 40,438 shares issued to address fractional shares related to the Reverse Split) shares of Common Stock issued and outstanding.

 

The Reverse Split was approved by the Company’s Board of Directors on September 26, 2023, and was approved by the Company’s majority stockholders holding approximately 53.5% of the issued and outstanding common stock on October 30, 2023. On September 5, 2024, the Company filed with the Secretary of State of the State of Nevada a Certificate of Amendment to our Articles of Incorporation to reflect the Reverse Split.

 
Recently Issued Accounting Standards

Recently Issued Accounting Standards

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. The Company does not believe the adoption of this standard would have a material impact on disclosures within its consolidated financial statements.

 

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on its unaudited condensed consolidated financial statements.
v3.24.3
SIGNIFICANT ACCOUNTING POLICIES (Tables)
 6 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
SCHEDULE OF FOREIGN EXCHANGE CURRENCY TRANSLATION

 

   South Korean Won per 1 USD 
   2024   2023 
Exchange rate as of September 30th   1,312.45    1,352.92 
Average exchange rate for the six months ended   1,363.21    1,314.49 
v3.24.3
LOSS PER SHARE (Tables)
 6 Months Ended
Sep. 30, 2024
Loss per share:  
SCHEDULE OF COMPUTATIONS OF BASIC AND DILUTED EARNINGS LOSS PER SHARE

The following table sets forth the computations of basic and diluted loss per share:

 

   2024   2023 
   Six Months Ended September 30, 
   2024   2023 
Net loss  $(1,434,712)  $(3,879,148)
Weighted average basic and diluted shares*   272,971    267,295 
Loss per share:*          
Basic and diluted  $(5.26)  $(14.51)

 

*Retrospectively restated for the 1,400-to-1 reverse stock split on September 13, 2024.
SCHEDULE OF POTENTIALLY DILUTIVE INSTRUMENTS OUTSTANDING

The following potentially dilutive securities and instruments were outstanding as of September 30, 2024, and 2023, but excluded from the table above:

 

   2024   2023 
   As of September 30, 
   2024   2023 
Convertible notes payable   363,646    - 
Stock warrants   149,035    - 
Convertible preferred stock   6,320,000    6,320,000 
Total potential incremental shares   6,832,681    6,320,000 
v3.24.3
INVENTORY, NET (Tables)
 6 Months Ended
Sep. 30, 2024
Inventory Disclosure [Abstract]  
SCHEDULE OF INVENTORY

Inventory consists of the following:

 

  

September 30,

2024

  

March 31,

2024

 
   As of 
  

September 30,

2024

  

March 31,

2024

 
Finished goods  $2,785,620   $2,878,569 
Promotional items   5,940    5,940 
Raw materials   77,902    77,902 
Allowance for obsolescence   (1,644,501)   (1,643,749)
Inventory, net  $1,224,961   $1,318,662 
SCHEDULE OF ALLOWANCE FOR INVENTORY OBSOLESCENCE

The following table reflects the activity in the allowance for inventory obsolescence for the periods presented:

 

   2024   2023 
  

Six months ended

September 30,

 
   2024   2023 
Balance at beginning of period  $1,643,749   $880,926 
Provision for estimated obsolescence   (7,938)   2,112 
Write-offs   -    (1,170)
Currency translation adjustment   8,690    - 
Balance at end of period  $1,644,501   $881,868 
v3.24.3
OTHER CURRENT ASSETS, NET (Tables)
 6 Months Ended
Sep. 30, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
SCHEDULE OF OTHER CURRENT ASSETS

Other current assets consist of the following:

  

       
   As of 
  

September 30,

2024

  

March 31,

2024

 
Inventory-related deposits  $278,313   $252,867 
Prepaid insurance and other operational expenses   43,051    31,598 
Deposits for sales events   23,960    23,850 
Subtotal   345,324    308,315 
Allowance for losses   (175,641)   (175,641)
Other current assets  $169,683   $132,674 
v3.24.3
PROPERTY AND EQUIPMENT, NET (Tables)
 6 Months Ended
Sep. 30, 2024
Property, Plant and Equipment [Abstract]  
SCHEDULE OF PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

  

       
   As of 
  

September 30,

2024

  

March 31,

2024

 
Computer software  $1,024,274   $1,024,274 
Furniture and fixtures   285,632    285,732 
Computer equipment   220,364    220,264 
Leasehold improvements and other   399,306    399,306 
Total property and equipment   1,929,576    1,929,576 
Accumulated depreciation and amortization   (1,765,106)   (1,689,633)
Property and equipment, net  $164,470   $239,943 
v3.24.3
ACCRUED AND OTHER CURRENT LIABILITIES (Tables)
 6 Months Ended
Sep. 30, 2024
Payables and Accruals [Abstract]  
SCHEDULE OF ACCRUED AND OTHER CURRENT LIABILITIES

Accrued and other current liabilities consist of the following:

   

       
   As of 
  

September 30,

2024

  

March 31,

2024

 
Deferred sales revenues  $168,806   $162,207 
Liability associated with uncertain tax positions   925,786    925,786 
Accrued interest payable   41,000    5,833 
Payroll and employee benefits   215,598    206,426 
Lease liability, current portion   52,392    21,909 
Other accruals   1,541,474    1,289,790 
Accrued and other current liabilities  $2,945,056   $2,611,951 
v3.24.3
CONVERTIBLE NOTES PAYABLE, RELATED PARTIES (Tables)
 6 Months Ended
Sep. 30, 2024
Convertible Notes Payable Related Parties  
SCHEDULE OF CONVERTIBLE NOTES PAYABLE

Convertible notes payable consists of the following:

  

Issuance Date  Maturity
Date		  Interest
Rate		   Price
(per share)		       
          Conversion   As of 
Issuance Date  Maturity
Date		  Interest
Rate		   Price
(per share)		  

September 30,

2024

  

March 31,
2024

 
January 2024  July 2024   10%   See below   $            250,000   $250,000 
March 2024  March 2027   6%  $0.0012    250,000    250,000 
May 2024  May 2027   8%   0.0020    250,000    

-

 
June 2024  June 2027   8%   0.0020    250,000    

-

 
August 2024  August 2027   8%   0.0020    100,000    

-

 
Total convertible notes payable                1,100,000    500,000 
Change in fair value of embedded derivatives                (88,866)   87,303 
Subtotal                1,011,134    587,303 
Less: current portion                267,653    262,782 
Long-term convertible notes payable               $743,481   $324,521 
v3.24.3
INCOME TAXES (Tables)
 6 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
SCHEDULE OF STATUTORY RATES FOR OUR DOMESTIC AND FOREIGN OPERATIONS

The statutory rates for our domestic and our material foreign operations are as follows for the periods shown:

  

Country  2024   2023 
United States   21%   21%
Republic of Korea   21%   21%
SCHEDULE OF INCOME TAX RATE RECONCILIATION RATE

Our consolidated effective income tax rate reconciliation is as follows:

  

   2024   2023 
   Six Months Ended
September 30,		 
   2024   2023 
Federal statutory rate   21.0%   21.0%
State and local income taxes        (0.3)
Permanent differences   0.8    0.8 
Change in valuation allowance for NOL carry-forwards   (21.0)   (21.0)
Stock warrant transactions and other items   -      
Effective income tax rate   0.8%   0.5%
v3.24.3
LEASES (Tables)
 6 Months Ended
Sep. 30, 2024
Leases  
SCHEDULE OF OPERATING LEASE ASSETS AND LIABILITIES

The following information pertains to the Company’s leases as of the balance sheet dates indicated:

  

Assets  Classification      
      As of 
Assets  Classification  September 30, 2024   March 31, 2024 
Operating leases  Right-of-use assets, net  $378,565   $403,107 
Total lease assets     $378,565   $403,107 
              
Liabilities             
Operating leases  Accrued and other current liabilities  $52,392   $21,909 
Operating leases  Lease liability, long-term   361,149    416,277 
Total lease liabilities     $413,541   $438,186 
SCHEDULE OF OPERATING LEASE COSTS

The following information pertains to the Company’s leases for the periods indicated:

  

Lease cost  Classification  2024   2023 
      Six Months Ended September 30, 
Lease cost  Classification  2024   2023 
Operating lease cost  General and administrative expenses  $52,273   $55,823 
Total lease cost     $52,273   $55,823 
SCHEDULE OF OPERATING LEASE LIABILITY PAYABLE

The Company’s lease liabilities are payable as follows:

  

Twelve months ending September 30,  Amount 
2025  $25,016 
2026   102,842 
2027   105,621 
2028   108,400 
2029   111,180 
Thereafter   111,223 
Total remaining payments   564,282 
Less imputed interest   (150,741)
Total lease liability  $413,541 
v3.24.3
FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (Tables)
 6 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
SCHEDULE OF VALUATION HIERARCHY FINANCIAL ASSETS AND LIABILITIES

Consistent with the valuation hierarchy contained in ASC Topic 820, we categorized certain of our financial assets and liabilities as follows:

 

                     
   As of September 30, 2024 
   Total   Level 1   Level 2   Level 3 
Liabilities                    
                     
Convertible notes payable  $1,011,134   $-   $1,011,134   $      - 
                     
Total liabilities  $1,011,134   $-   $1,011,134   $- 

 

                     
   As of March 31, 2024 
   Total   Level 1   Level 2   Level 3 
Liabilities                    
Convertible notes payable  $587,303   $-   $587,303   $     - 
Total liabilities  $587,303   $-   $587,303   $- 
v3.24.3
GOING CONCERN (Details Narrative) - USD ($)
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]          
Net loss $ 466,145 $ 1,454,790 $ 1,434,712 $ 3,879,148  
Retained Earnings (Accumulated Deficit) 114,602,627   114,602,627   $ 113,167,915
Working capital $ 5,100,000   $ 5,100,000    
v3.24.3
SCHEDULE OF FOREIGN EXCHANGE CURRENCY TRANSLATION (Details) - South Korean [Member]
 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Exchange rate 1,312.45 1,352.92
Average exchange rate 1,363.21 1,314.49
v3.24.3
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)
 1 Months Ended 6 Months Ended
Sep. 18, 2024
Aug. 31, 2023
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Sep. 13, 2024
Mar. 31, 2024
Jul. 31, 2023
Dec. 31, 2022
Property, Plant and Equipment [Line Items]                    
Credit card receivables     $ 50,000   $ 50,000     $ 50,000    
Cash equivalents held in bank accounts     200,000   200,000     400,000    
Provisions for obsolete inventory     1,600,000   1,600,000     1,600,000    
Tax credit                 $ 1,800,000  
origination fee   $ 24,000                
Net proceeds         $ 1,200,000        
Monthly payment     63,445.32              
Other Borrowings     1,685,000   1,685,000     1,200,000    
Other asset                   $ 1,000,000
Deferred revenue     $ 168,806   168,806     $ 162,207    
Sales commission expense         $ 1,200,000 $ 1,800,000        
Common stock, shares outstanding     309,652   309,652     269,214    
Reverse splits 40,438                  
Reverse Stock Split [Member]                    
Property, Plant and Equipment [Line Items]                    
Common stock, shares issued     376,328,885   376,328,885   309,652      
Common stock, shares outstanding     376,328,885   376,328,885   309,652      
Customers [Member]                    
Property, Plant and Equipment [Line Items]                    
Deferred revenue     $ 93,119   $ 93,119     $ 80,404    
Services Offered on Subscription Basis [Member]                    
Property, Plant and Equipment [Line Items]                    
Deferred revenue     31,579   31,579     37,774    
Customers Right of Return [Member]                    
Property, Plant and Equipment [Line Items]                    
Deferred revenue     24,783   24,783     24,703    
Customer Loyalty Points [Member]                    
Property, Plant and Equipment [Line Items]                    
Deferred revenue     19,326   19,326     $ 19,326    
Receivables Sale Agreement [Member]                    
Property, Plant and Equipment [Line Items]                    
Other receivable     500,000   500,000          
Other Receivables     635,000   635,000          
Payment borrowings     500,000   500,000          
Payments for Loans     9,769.23              
Other Borrowings     19,538.46   $ 19,538.46          
Interest Expense, Operating and Nonoperating     $ 15,000              
Bridge Loan [Member]                    
Property, Plant and Equipment [Line Items]                    
Loans payable   $ 1,200,000                
Loan term   12 months                
Interest rate   2.00% 2.00%   2.00%          
Net proceeds     $ 489,000 $ 1,180,000            
Transaction fees     500,000              
Bridge Loan [Member] | Minimum [Member]                    
Property, Plant and Equipment [Line Items]                    
Transaction fees     $ 11,000              
v3.24.3
SCHEDULE OF COMPUTATIONS OF BASIC AND DILUTED EARNINGS LOSS PER SHARE (Details) - USD ($)
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Loss per share:        
Net loss $ (466,145) $ (1,454,790) $ (1,434,712) $ (3,879,148)
Weighted average basic shares [1] 276,686 269,214 272,971 [2] 267,295 [2]
Weighted average diluted shares [1] 276,686 269,214 272,971 [2] 267,295 [2]
Loss per share basic [1] $ (1.68) $ (5.40) $ (5.26) [2] $ (14.51) [2]
Loss per share diluted [1] $ (1.68) $ (5.40) $ (5.26) [2] $ (14.51) [2]
[1] Retrospectively restated for the 1,400-to-1 reverse stock split
[2] Retrospectively restated for the 1,400-to-1 reverse stock split on September 13, 2024.
v3.24.3
SCHEDULE OF COMPUTATIONS OF BASIC AND DILUTED EARNINGS LOSS PER SHARE (Details) (Parenthetical)
Sep. 13, 2024
Loss per share:  
Reverse stock split 1,400-to-1 reverse stock split
v3.24.3
SCHEDULE OF POTENTIALLY DILUTIVE INSTRUMENTS OUTSTANDING (Details) - shares
 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total potential incremental shares 6,832,681 6,320,000
Convertible Notes [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total potential incremental shares 363,646
Stock Warrants [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total potential incremental shares 149,035
Convertible Preferred Stock [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total potential incremental shares 6,320,000 6,320,000
v3.24.3
SCHEDULE OF INVENTORY (Details) - USD ($)
Sep. 30, 2024
Mar. 31, 2024
Inventory Disclosure [Abstract]    
Finished goods $ 2,785,620 $ 2,878,569
Promotional items 5,940 5,940
Raw materials 77,902 77,902
Allowance for obsolescence (1,644,501) (1,643,749)
Inventory, net $ 1,224,961 $ 1,318,662
v3.24.3
SCHEDULE OF ALLOWANCE FOR INVENTORY OBSOLESCENCE (Details) - USD ($)
 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Inventory Disclosure [Abstract]    
Balance at beginning of period $ 1,643,749 $ 880,926
Provision for estimated obsolescence (7,938) 2,112
Write-offs (1,170)
Currency translation adjustment 8,690
Balance at end of period $ 1,644,501 $ 881,868
v3.24.3
SCHEDULE OF OTHER CURRENT ASSETS (Details) - USD ($)
Sep. 30, 2024
Mar. 31, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Inventory-related deposits $ 278,313 $ 252,867
Prepaid insurance and other operational expenses 43,051 31,598
Deposits for sales events 23,960 23,850
Subtotal 345,324 308,315
Allowance for losses (175,641) (175,641)
Other current assets $ 169,683 $ 132,674
v3.24.3
OTHER CURRENT ASSETS, NET (Details Narrative) - USD ($)
Sep. 30, 2024
Mar. 31, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Allowance for losses $ 175,641 $ 175,641
v3.24.3
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($)
Sep. 30, 2024
Mar. 31, 2024
Property, Plant and Equipment [Abstract]    
Computer software $ 1,024,274 $ 1,024,274
Furniture and fixtures 285,632 285,732
Computer equipment 220,364 220,264
Leasehold improvements and other 399,306 399,306
Total property and equipment 1,929,576 1,929,576
Accumulated depreciation and amortization (1,765,106) (1,689,633)
Property and equipment, net $ 164,470 $ 239,943
v3.24.3
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($)
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Property, Plant and Equipment [Abstract]        
Depreciation and amortization expense $ 42,696 $ 88,823 $ 75,473 $ 212,844
v3.24.3
SCHEDULE OF ACCRUED AND OTHER CURRENT LIABILITIES (Details) - USD ($)
Sep. 30, 2024
Mar. 31, 2024
Payables and Accruals [Abstract]    
Deferred sales revenues $ 168,806 $ 162,207
Liability associated with uncertain tax positions 925,786 925,786
Accrued interest payable 41,000 5,833
Payroll and employee benefits 215,598 206,426
Lease liability, current portion 52,392 21,909
Other accruals 1,541,474 1,289,790
Accrued and other current liabilities $ 2,945,056 $ 2,611,951
v3.24.3
SCHEDULE OF CONVERTIBLE NOTES PAYABLE (Details) - USD ($)
 6 Months Ended
Sep. 30, 2024
Mar. 31, 2024
Short-Term Debt [Line Items]    
Total convertible notes payable $ 1,100,000 $ 500,000
Change in fair value of embedded derivatives (88,866) 87,303
Subtotal 1,011,134 587,303
Less: current portion 267,653 262,782
Long-term convertible notes payable $ 743,481 324,521
January 2024 [Member]    
Short-Term Debt [Line Items]    
Convertible notes payable issuance date January 2024  
Convertible notes payable maturity date July 2024  
Convertible notes payable interest rate 10.00%  
Total convertible notes payable $ 250,000 250,000
March 2024 [Member]    
Short-Term Debt [Line Items]    
Convertible notes payable issuance date March 2024  
Convertible notes payable maturity date March 2027  
Convertible notes payable interest rate 6.00%  
Total convertible notes payable $ 250,000 $ 250,000
Convertible notes payable conversion price per share $ 0.0012  
May 2024 [Member]    
Short-Term Debt [Line Items]    
Convertible notes payable issuance date May 2024  
Convertible notes payable maturity date May 2027  
Convertible notes payable interest rate 8.00%  
Total convertible notes payable $ 250,000  
Convertible notes payable conversion price per share $ 0.0020  
June 2024 [Member]    
Short-Term Debt [Line Items]    
Convertible notes payable issuance date June 2024  
Convertible notes payable maturity date June 2027  
Convertible notes payable interest rate 8.00%  
Total convertible notes payable $ 250,000  
Convertible notes payable conversion price per share $ 0.0020  
August 2024 [Member]    
Short-Term Debt [Line Items]    
Convertible notes payable issuance date August 2024  
Convertible notes payable maturity date August 2027  
Convertible notes payable interest rate 8.00%  
Total convertible notes payable $ 100,000  
Convertible notes payable conversion price per share $ 0.0020  
v3.24.3
CONVERTIBLE NOTES PAYABLE, RELATED PARTIES (Details Narrative) - USD ($)
 6 Months Ended
Aug. 13, 2024
Jun. 19, 2024
Jun. 18, 2024
Jun. 06, 2024
May 09, 2024
Mar. 18, 2024
Sep. 30, 2024
Sep. 30, 2023
Mar. 31, 2024
Jan. 17, 2024
Convertible notes payable             $ 743,481   $ 324,521  
Stock warrants issued             6,832,681 6,320,000    
Convertible Notes [Member]                    
Interest expense             $ 35,167 $ 0    
Alset Inc [Member]                    
Convertible notes payable                   $ 250,000
Interest rate                   10.00%
Convertible notes payable origination fee                   $ 25,000
HWH International, Inc. [Member] | Convertible Promissory Note [Member]                    
Interest rate 8.00%     8.00% 8.00% 6.00%        
Principal amount $ 100,000     $ 250,000 $ 250,000 $ 250,000.00        
Debt conversion shares 50,000,000 125,000,000 2,500,000,000 2,500,000,000 125,000,000 208,333,333        
Number of warrant exercisable           208,333,333        
Commitment fee $ 8,000     $ 20,000 $ 20,000 $ 15,000        
Debt instrument convertible conversion price $ 0.002 $ 0.002 $ 0.0001 $ 0.0001 $ 0.002 $ 0.0012        
Share price           $ 0.0012        
Stock warrants issued 149,035                  
Number of shares issued 363,646                  
v3.24.3
SCHEDULE OF STATUTORY RATES FOR OUR DOMESTIC AND FOREIGN OPERATIONS (Details)
 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Effective income tax rate 21.00% 21.00%
UNITED STATES    
Effective income tax rate 21.00% 21.00%
KOREA, REPUBLIC OF    
Effective income tax rate 21.00% 21.00%
v3.24.3
SCHEDULE OF INCOME TAX RATE RECONCILIATION RATE (Details)
 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Income Tax Disclosure [Abstract]    
Federal statutory rate 21.00% 21.00%
State and local income taxes   (0.30%)
Permanent differences 0.80% 0.80%
Change in valuation allowance for NOL carry-forwards (21.00%) (21.00%)
Stock warrant transactions and other items  
Effective income tax rate 0.80% 0.50%
v3.24.3
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)
Aug. 13, 2024
Jun. 19, 2024
Jun. 18, 2024
Jun. 06, 2024
May 09, 2024
Mar. 18, 2024
Sep. 30, 2024
Mar. 31, 2024
Jan. 17, 2024
Convertible notes payable             $ 743,481 $ 324,521  
Alset Inc [Member]                  
Convertible notes payable                 $ 250,000
Interest rate                 10.00%
Convertible notes payable origination fee                 $ 25,000
HWH International, Inc. [Member] | Convertible Promissory Note [Member]                  
Interest rate 8.00%     8.00% 8.00% 6.00%      
Principal amount $ 100,000     $ 250,000 $ 250,000 $ 250,000.00      
Debt conversion shares 50,000,000 125,000,000 2,500,000,000 2,500,000,000 125,000,000 208,333,333      
Number of warrant exercisable           208,333,333      
Commitment fee $ 8,000     $ 20,000 $ 20,000 $ 15,000      
Debt instrument convertible conversion price $ 0.002 $ 0.002 $ 0.0001 $ 0.0001 $ 0.002 $ 0.0012      
Share price           $ 0.0012      
v3.24.3
SCHEDULE OF OPERATING LEASE ASSETS AND LIABILITIES (Details) - USD ($)
Sep. 30, 2024
Mar. 31, 2024
Leases    
Operating leases $ 378,565 $ 403,107
Total lease assets 378,565 403,107
Operating leases 52,392 21,909
Operating leases 361,149 416,277
Total lease liabilities $ 413,541 $ 438,186
v3.24.3
SCHEDULE OF OPERATING LEASE COSTS (Details) - USD ($)
 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Total lease cost $ 52,273 $ 55,823
General and Administrative Expense [Member]    
Operating lease cost $ 52,273 $ 55,823
v3.24.3
SCHEDULE OF OPERATING LEASE LIABILITY PAYABLE (Details) - USD ($)
Sep. 30, 2024
Mar. 31, 2024
Leases    
2025 $ 25,016  
2026 102,842  
2027 105,621  
2028 108,400  
2029 111,180  
Thereafter 111,223  
Total remaining payments 564,282  
Less imputed interest (150,741)  
Total lease liability $ 413,541 $ 438,186
v3.24.3
LEASES (Details Narrative)
Sep. 30, 2024
Minimum [Member]  
Leease term 1 year
Lease, discount rate 10.00%
Maximum [Member]  
Leease term 10 years
Lease, discount rate 12.00%
v3.24.3
COMMITMENTS AND CONTINGENCIES (Details Narrative)
 6 Months Ended
Sep. 30, 2024
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
Legal fees $ 252,587.79
v3.24.3
SCHEDULE OF VALUATION HIERARCHY FINANCIAL ASSETS AND LIABILITIES (Details) - USD ($)
Sep. 30, 2024
Mar. 31, 2024
Liabilities    
Convertible notes payable $ 1,011,134 $ 587,303
Total liabilities 1,011,134 587,303
Fair Value, Inputs, Level 1 [Member]    
Liabilities    
Convertible notes payable
Total liabilities
Fair Value, Inputs, Level 2 [Member]    
Liabilities    
Convertible notes payable 1,011,134 587,303
Total liabilities 1,011,134 587,303
Fair Value, Inputs, Level 3 [Member]    
Liabilities    
Convertible notes payable
Total liabilities
v3.24.3
SUBSEQUENT EVENTS (Details Narrative) - USD ($)
Nov. 12, 2024
Nov. 05, 2024
Sep. 30, 2024
Mar. 31, 2024
Subsequent Event [Line Items]        
Convertible promissory note     $ 743,481 $ 324,521
Securities Purchase Agreement [Member] | Subsequent Event [Member]        
Subsequent Event [Line Items]        
Convertible promissory note $ 250,000      
Principal amount 250,000      
Debt interest rate   8.00%    
Origination fees $ 25,000      
Converted shares 2,500,000      
Conversion rate per share $ 0.10      
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