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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 June 30, 2024

 

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

 

Commission file number: 000-55000

 


 

EARTH SCIENCE TECH, INC.

(Exact name of registrant as specified in its charter)

 

Florida   80-0931484

(State or other jurisdiction

of incorporation or organization)

  

(I.R.S. Employer

Identification No.)

 

8950 SW 74th CT

Suite 101

Miami, FL 33156

(Address of principal executive offices) (zip code)

 

(305) 724-5684

(Registrant’s telephone number, including area code)

 

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

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock $0.001 par value   ETST   Over the Counter Bulletin Board

 

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 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 an emerging growth company. See 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 July 29, 2024, there were 309,050,711 Common and 1,000,000 Preferred shares of the registrant’s stock outstanding.

 

 

 

 

 

 

TABLE OF CONTENTS

 

  Page
PART I. FINANCIAL INFORMATION  
     
ITEM 1. Financial Statements (Unaudited) F-1
  Consolidated Balance Sheets F-1
  Consolidated Statements of Operations F-2
  Consolidated Statements of Changes in Stockholders’ Equity F-3
  Consolidated Statements of Cash Flows F-4
  Notes to Consolidated Financial Statements F-5-F-13
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 3
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk 8
ITEM 4. Controls and Procedures 8
     
PART II. OTHER INFORMATION  
     
ITEM 1. Legal Proceedings 9
ITEM 1A. Risk Factors 9
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 9
ITEM 3. Defaults Upon Senior Securities 9
ITEM 4. Mine Safety Disclosures 9
ITEM 5. Other Information 9
ITEM 6. Exhibits 9
     
SIGNATURES 10

 

2

 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

EARTH SCIENCE TECH, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2024, AND MARCH 31, 2024

 

   As of June 30,
2024		   As of March 31,
2024		 
   Unaudited    
ASSETS          
Current Assets:          
Cash  $1,384,407   $697,721 
Accounts Receivable   317,687    

235,423

 
Deposits   14,451    

9,352

 
Inventory   239,174    

315,738

 
Prepaid   123,933    — 
Total current assets   2,079,652    1,258,234 
           
Non-Current Assets:          
Property and Equipment, net   216,578    135,352 
Right of use asset, net   138,992    156,517 
Goodwill   2,302,792    2,302,792 
Intangible Assets, net   34,233    28,441 
Total Assets  $4,772,247   $3,881,336 
           
LIABILITIES AND EQUITY          
Accounts payable  $221,030   $530,724 
Accrued expenses and other payable   1,161,270    854,719 
Current portion of operating lease obligations   70,487    70,487 
Current portion of loans and obligations   30,592    30,592 
Total Current Liabilities   1,483,379    1,486,522 
           
Long-Term Liabilities:          
Lease liability less current maturities   67,524    84,950 
Equipment loans and obligations non-current   54,258    60,559 
Total Liabilities   1,605,161    1,632,031 
Commitment and Contingencies (Note 12)   -    - 
Stockholders’ Equity:          
Preferred stock, par value $0.001 per share, 1,000,000 shares authorized; 1,000,000 and 0 shares issued and outstanding as of June 30, 2024, and March 31, 2024, respectively   1,000    1,000 
Common stock, par value $0.001 per share, 350,000,000 shares authorized; 309,067,711 and 309,981,819 shares issued and outstanding as of June 30, 2024, and March 31, 2024 respectively   309,068    309,982 
Additional paid-in capital   31,435,840    31,593,399 
Accumulated deficit   (28,578,822)   (29,655,076)
Stockholders’ Equity   3,167,086    2,249,305 
Total Liabilities and Equity  $4,772,247   $3,881,336 

 

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

 

F-1
 

 

EARTH SCIENCE TECH, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THREE MONTHS ENDED JUNE 30, 2024, AND 2023

(UNAUDITED)

 

   2024   2023 
       (As restated)

 
Revenue  $8,568,918   $219,934 
Cost of Goods Sold (exclusive of depreciation shown separately)   2,158,484    71,165 
Gross Profit  $6,410,434   $148,769 
           
Expenses:          
Labor Expense   3,335,130    5,654 
Legal and Professional Fees   1,336,560    18,420 
Bank Charges   288,845    — 
Marketing   211,446    11,376 
General and Administrative Expense   60,596    124,712 
Rent Expense   42,274    — 
Insurance Expense   35,805    — 
Depreciation and Amortization   30,232    11,585 
Utilities   4,528    — 
Total Expenses  $5,345,416   $171,747 
Net Operating Income(Loss)   1,065,018    (22,978)
           
Other Income/Expenses          
Other Income   13,200    — 
Interest expense   (1,964)   (12,618)
Net Income(Loss) before taxes   1,076,254    (35,596)
           
Income Taxes   —    — 
           
Net Income(Loss)  $1,076,254   $(35,596)
Profit/(Loss) per common share-Basic and Diluted  $0.003   $(0.000)
Weighted average number of common shares outstanding   309,941,192    314,939,647 

 

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

 

F-2
 

 

EARTH SCIENCE TECH, INC. AND SUDSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THREE MONTHS ENDED JUNE 30, 2024 AND 2023

 

Description  Shares   Amount   Shares   Amount   Capital   Deficit   Total 
   Common Stock   Preferred Stock   Additional
Paid-in		   Accumulated     
Description  Shares   Amount   Shares   Amount   Capital   Deficit   Total 
Balance at March 31, 2024   309,981,819   $309,982    1,000,000   $1,000   $31,593,399   $(29,655,076)  $2,249,305 
Common stock buyback   (914,108)   (914)   —    —    (157,559)   —   $(158,473)
Net Income        -         -    -    1,076,254   $1,076,254 
Balance at June 30, 2024   309,067,711   $309,068    1,000,000   $1,000   $31,435,840   $(28,578,822)  $3,167,086 

 

   Common Stock   Preferred Stock   Additional Paid-in   Accumulated     
Description  Shares   Amount   Shares   Amount   Capital   Deficit   Total 
Balance at March 31, 2023 (As restated- Note 3)   282,611,083   $282,612    1,000,000   $1,000   $31,303,138   $(30,364,672)  $1,222,078 
Common stock issued    18,533,334    18,534    —    —    91,467    —   $110,001 
Common stock issued for Conversion on Note   13,406,313    13,406    —    —    371,594    —   $385,000 
Net Income (Loss)   —    —    —    —    —    (35,596)  $(35,596)
Balance at June 30, 2023    314,550,730   $314,552    1,000,000   $1,000   $31,766,199   $(30,400,268)  $1,681,483 

 

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

 

F-3
 

 

EARTH SCIENCE TECH, INC. AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

FOR THREE MONTHS ENDED JUNE 30, 2024, AND 2023

(UNAUDITED)

 

   2024   2023 
         (As restated) 
Cash flows from operating activities:          
Net Income (loss)  $1,076,254   $(35,596)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:          
Depreciation and amortization   30,232    11,585 
           
Changes in operating assets and liabilities:          
Accounts Receivable   (82,264)   — 
Deposits   (5,099)   — 
Prepaid expenses and other current assets   (123,933)   — 
Inventory   76,564    (91,549)
Lease Liability, net   (17,426)   — 
Accounts payable and accrued expenses   (3,143)   61,792 
Net cash provided(used) in operating activities   951,185    (53,768)
           
Cash flows from investing activities:          
Purchases of intangibles   (7,500)     
Purchases of property and equipment   (92,225)   — 
Net cash used in investing activities   (99,725)   — 
           
Cash flows from financing activities:          
Proceeds from issuance of common stock   —    110,001 
Payments on debt obligations   (6,301)     
Repurchase of common stock   (158,473)   — 
Net Cash used (provided) in financing activities   (164,774)   110,001 
Net increase in cash and cash equivalents   686,686    56,233 
Cash and cash equivalents at beginning of the period   697,721    35,756 
Cash and cash equivalents at end of the period  $1,384,407   $91,989 
           
Supplemental Disclosure of Cash Flow Information:          
Cash paid for interest  $1,964   $— 
Non-cash Transactions:          
Common stock issued on conversion of notes payable  $—   $385,000 

 

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

 

F-4
 

 

EARTH SCIENCE TECH, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2024

(UNAUDITED)

 

Note 1 — Organization and Nature of Operations

 

Earth Science Tech, Inc. (“ETST” or the “Company”) was incorporated under the laws of the State of Nevada on April 23, 2010. The Company subsequently changed its domicile to the State of Florida on June 27, 2022. As of November 8, 2022, the Company is a holding entity set to acquire companies with its current focus in the health and wellness industry. The Company is presently in compounding pharmaceuticals and telemedicine through its wholly owned subsidiaries RxCompoundStore.com, LLC. (“RxCompound”), Peaks Curative, LLC. (“Peaks”), and Earth Science Foundation, Inc. (“ESF”).

 

RxCompound is a complete compounding pharmacy. RxCompound is currently licensed to fulfill prescriptions in 22 states: Delaware, Florida, Pennsylvania, New York, Arizona, New Jersey, Wisconsin, Minnesota, Rhode Island, Utah, Georgia, Nevada, Massachusetts, Missouri, Iowa, Maryland, Ohio, Colorado, North Carolina, Maine, Indiana and Illinois. RxCompound is in the application process to obtain licenses in the remaining states in which it is not yet licensed to fulfill prescriptions.

 

Peaks is a telemedicine referral site focused on overall health and wellness for men and women. Peaks’ orders are exclusively fulfilled by RxCompound. Patients who order Peaks via monthly subscription receive their refills automatically. The company intends to expand offerings to include over the counter (“OTC”) (non-prescription) products such as supplements and topicals.

 

ESF is a favored entity of ETST, effectively being a non-profit organization that was incorporated on February 11, 2019, and is structured to accept grants and donations to help those in need of assistance in paying for prescriptions.

 

Note 2 — Summary of Significant Accounting Policies

 

Basis of presentation

 

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

 

These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto which are included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2024 for a broader discussion of the Company’s business and the risks inherent in such business. The results of operations for the three months ended June 30, 2024, are not necessarily indicative of results to be expected for any other interim period or the fiscal year ending March 31, 2025.

 

Principles of consolidation

 

The accompanying consolidated financial statements include all the accounts of the Company and its wholly owned subsidiaries RxCompound, Peaks and ESF. All intercompany accounts have been eliminated during consolidation.

 

Use of estimates and assumptions

 

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The areas requiring significant estimates are impairment of goodwill, provision for taxation, accrued liabilities, liabilities for legal matters, the determination of useful lives of depreciable and intangible assets, contingencies, and going concern assessment. The estimates and underlying assumptions are reviewed on an ongoing basis. Actual results could differ from those estimates.

 

F-5
 

 

Carrying value, recoverability, and impairment of long-lived assets

 

The Company tests long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. As of June 30, 2024, and 2023 no such impairment was needed.

 

Cash and cash equivalents



Cash and cash equivalents include all highly liquid debt instruments with original maturities of three months or less which are not securing any corporate obligations. As of June 30, 2024, and March 31, 2024, the Company held a cash balance of $1,384,407 and $697,721, respectively, the organization’s balances exceeded federally insured limits by approximately $1,156,947 as of June 30, 2024 and $266,090 as of March 31, 2024

 

Accounts Receivable.

 

The Company has adopted the new standard ASC-326- CECL to account for current credit losses. The Company has analyzed its accounts receivable, based on historical and customer experience, economic trends, and future estimates. Accounts receivable are recorded for pharmaceuticals picked up or shipped as of June 30, 2024. Accounts receivable are expected to be collected within twelve months in its entirety, therefore no reserve was necessary.

 

         
  

As of

 
   June 30, 2024   March 31, 2024 
Accounts Receivable  $317,687   $235,423 

 

Revenue recognition

 

The Company has implemented ASC 606, Revenue from Contracts with Customers for revenue recognition by incorporating the necessary changes in systems and processes. These changes included the development of new policies based on the five-step model provided in the new revenue standard, ongoing contract review requirements, and gathering of information provided for disclosures. Revenue is recognized at this point in time.

 

The Company recognizes revenue from product sales or services rendered when control of the promised goods is transferred to our customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenue when or as the Company satisfies a performance obligation.

 

Disaggregated Revenue

 

The Company disaggregates revenue from contracts with customers by category — core and non-core, as it believes it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

 

F-6
 

 

The Company’s disaggregated revenue by category is as follows:

 

   2024   2023 
  

For the three months ended June 30,

 
   2024   2023 
Core:          
Sale of Pharmaceutical products – RxCompound and Peaks  $8,367,509   $219,934 
Total core revenue, net  $8,367,509   $219,934 
Non-Core:          
Shipping Income  $201,409   $— 
Total revenue, net  $8,568,918   $219,934 

 

As of June 30, 2024 the Company had 3 large customers, each representing 11%, 9% and 8% of revenue.

 

Inventory

 

The Company has its inventories stated at a lower cost (on first in, first out (FIFO) method) or market value basis. A reserve is established if necessary to reduce excess or obsolete inventories to their realizable value. The stated cost consists of finished products. Reserves, if necessary, are recorded to reduce inventory to market value based on assumptions about consumer demand, current inventory levels and product life cycles for the various inventory items. These assumptions are evaluated annually and are based on the Company’s business plan and on feedback from customers and the product development team. As of June 30, 2024, and March 30, 2024, the inventory reserves were not material. As of June 30, 2024 the Company had three main suppliers, each accounting 29%, 14% and 4% of the company’s vendor purchases.

 

Cost of Goods Sold

 

Components of cost of goods sold include product costs, consumables, shipping costs to customers and any inventory adjustments.

 

Shipping and Handling Costs

 

Costs incurred by the Company for shipping and handling are included in costs of revenues.

 

Related parties

 

The Company pays the employee compensation for Giorgio R. Saumat and Mario Tabraue to their respective, solely owned LLCs, Point96 Consulting, LLC and Tabraue Consulting, LLC.

 

Due to the company’s inability to open its own account to repurchase shares on the open market, the company solicited outside firms for its repurchase program. The outside firms proposed charging fees up to 10% of the repurchase price. Therefore, Giorgio R. Saumat, the controlling and majority shareholder, offered to provide the repurchase service through his privately owned and controlled company Avenvi, LLC.

 

Avenvi, LLC will purchase the stock for ETST, make no profit off the sale of the company stock back to ETST and that ETST will buy back the share from Avenvi,LLC at their purchased price. This is being done for the sake of the Company and the shareholders in saving the 10% fee that another third party would otherwise charge.

 

The Company follows ASC 850-10, Related Parties, for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20, the related parties include: (a) affiliates of the Company (“Affiliate”) means, with respect to any specified person, any other person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person, as such terms are used in and construed under Rule 405 under the Securities Act); (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

 

F-7
 

 

Income taxes

 

The Company accounts for income taxes under ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period, which includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of or all the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Net income per common share

 

The Company follows ASC 260 to account for earnings per share. Basic earnings per common share calculations are determined by dividing net results from operations by the weighted average number of shares of common stock outstanding during the year. Diluted loss per common share calculation is determined by dividing net results from operations by the weighted average number of common shares and diluted common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. For the three months ended June 30, 2024 and 2023, the Company did not have any antidilutive equity instruments.

 

Cash flows reporting

 

The Company follows ASC 230 to report cash flows. This standard classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by this standard to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports separately information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to this standard.

 

Goodwill

 

Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase business combination. Goodwill is reviewed for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying amount of goodwill may be impaired. In conducting its annual impairment test, the Company first reviews qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If factors indicate that the fair value of the reporting unit is less than its carrying amount, the Company performs a quantitative assessment, and the fair value of the reporting unit is determined by analyzing the expected present value of future cash flows. If the carrying value of the reporting unit continues to exceed its fair value, the fair value of the reporting unit’s goodwill is calculated and an impairment loss equal to the excess is recorded.

 

Stock based compensation

 

The Company applies the fair value method of ASC 718, Compensation-Stock Compensation, in accounting for its stock-based compensation. These standards state that compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period, if any. The Company uses the Black-Scholes option pricing model to determine the fair value of its stock, stock option and warrant issuance. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price, as well as assumptions regarding a few complex and subjective variables. These variables include the Company’s expected stock price, volatility over the term of the awards, actual employee exercise behaviors, risk-free interest rate and expected dividends. The company has no stock-based commitments outstanding as of June 30, 2024, and March 31, 2024.

 

F-8
 

 

Fair Value

 

FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:

 

Level 1 — Quoted market prices for identical assets or liabilities in active markets or observable inputs; and

 

Level 2 — Significant other observable inputs that can be corroborated by observable market data; and

 

Level 3 — Significant unobservable inputs that cannot be corroborated by observable market data.

 

The carrying amounts of cash, accounts payable and other liabilities, accrued expenses and settlement payable approximate fair value because of the short-term nature of these items.

 

The fair value of the Company’s debt approximated the carrying value of the Company’s debt as of June 30, 2024, and March 31, 2024. Factors that the Company considered when estimating the fair value of its debt included market conditions, liquidity levels in the private placement market, variability in pricing from multiple lenders and terms of debt.

 

Property and equipment

 

Property and equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. During the three months ended June 30, 2024, RxCompound added various equipment for its operations. Depreciation on equipment is charged using a straight-line method over the estimated useful life of 5 years.

 

Recently issued accounting pronouncements

 

We have considered the impact of the following pronouncements:

 

The FASB recently issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to reduce complexity in applying GAAP to certain financial instruments with characteristics of liabilities and equity. The guidance in ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, which requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC 470-20 applies to convertible instruments for which the embedded conversion features are not required to be bifurcated from the host contract and accounted for as derivatives. In addition, the amendments revise the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract. The amendments in ASU 2020-06 further revise the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. The amendments in ASU 2020-06 are effective for public entities for fiscal years beginning after December 15, 2021, with early adoption permitted (for an “emerging growth company,” beginning after December 15, 2023). The Company has assessed the impact this standard had on the Company’s consolidated financial statements. No material adjustments were required.

 

Intangible Assets

 

Intangible assets consist of Peaks telemedicine platform, and the Holding Company’s web domains. Intangible assets with finite lives are amortized over the estimated useful life of five years.

 

F-9
 

 

Note 3 – Restatement

 

During the three months ended June 30, 2023, Goodwill was incorrectly amortized, which requires the Company to restate its consolidated balance sheet, consolidated statement of operations and statement of stockholders’ equity, and statement of cash flows, in accordance with ASC 350-20. These changes had no material impact on previously reported earnings per share.

 

As of June 30, 2023, the Company’s subsidiary RXcompound carried a goodwill in the amount of $138,312, such amount was not included in the Consolidated Balance Sheet, and Consolidated Stockholders’ Equity, additionally, Goodwill was increased by the incorrectly amortized amount of $54,112, for a total asset adjustment of $192,424, the tables set forth shows the impact of this restatement.

 

The consolidated balance sheet as of June 30, 2023, the consolidated statement of operations, the statement of stockholders’ equity and statement of cash flows for the three months ended June 30, 2023, have been restated to reflect these adjustments to the presentation. The following tables present the effect of the changes of the previously reported consolidated statements.

 

 

Adjustments to Consolidated Balance Sheet as of June 30, 2023

Consolidated Balance Sheet

 

   June 30, 2023 before restatement   Restatement   June 30,2023 after restatement 
   As of June 30, 2023 
   June 30, 2023 before restatement   Restatement   June 30, 2023 after restatement 
Total Assets   2,752,719    192,424    2,945,143 
Total Stockholders’ Equity   1,489,059    192,424    1,681,483 

 

Adjustments to Consolidated Statement of Operations for the three months ended June 30, 2023

Consolidated Statement of Operations

 

   June 30, 2023 before restatement   Restatement   June 30,2023 after restatement 
   For the three months ended June 30, 2023 
   June 30, 2023 before restatement   Restatement   June 30, 2023 after restatement 
Net Income(Loss)   (89,708)   54,112    (35,596)

 

Adjustments to Consolidated Statement of Stockholders’ Equity for the three months ended June 30, 2023

Consolidated Statement of Stockholders’ Equity

 

   June 30, 2023 before restatement   Restatement   June 30,2023 after restatement 
   For the three months ended June 30, 2023 
   June 30, 2023 before restatement   Restatement   June 30, 2023 after restatement 
Accumulated Deficit   (30,592,692)   192,424    (30,400,268)
Stockholders’ Equity   1,489,059    192,424    1,681,483 

 

Adjustments to Statement of Cash Flows for the three months ended June 30, 2023

Statement of Cash Flows

 

   June 30, 2023 before restatement   Restatement   June 30,2023 after restatement 
   For the three months ended June 30, 2023 
   June 30, 2023 before restatement   Restatement   June 30, 2023 after restatement 
Net Income(Loss)   (89,708)   54,112    (35,596)
Depreciation and amortization   65,696    54,112    11,585 

 

Note 4 - Inventory

 

The Company has its inventories stated at a lower cost (on first in, first out (FIFO) method) or market value basis. A reserve is established if necessary to reduce excess or obsolete inventories to their realizable value. The stated cost consists of finished products. Reserves, if necessary, are recorded to reduce inventory to market value based on assumptions about consumer demand, current inventory levels and product life cycles for the various inventory items. These assumptions are evaluated annually and are based on the Company’s business plan and on feedback from customers and the product development team. As of June 30, 2024, and March 31, 2024, the inventory reserves were not material. The Company has three main suppliers, each accounting 29%, 14% and 4% of the company’s vendor purchases as of June 30, 2024.

 

   2024   2023 
  

As of

 
   June 30, 2024   March 31, 2024 
Raw materials  $193,731    266,776 
Finished goods   45,443    48,962 
Inventory  $239,174   $315,738 

 

Note 5 — Property and Equipment

 

   2024   2023 
  

As of

 
   June 30, 2024   March 31, 2024 
Equipment – cost  $268,855   $176,602 
Less: Accumulated depreciation   (52,277)   (41,250)
Property and Equipment, Net  $216,578   $135,352 

 

Depreciation expense for the three months ended June 30, 2024 was $10,999.

 

During the three months ended June 30, 2024, the Company’s subsidiary Peaks Curative LLC acquired equipment in the amount of $3,950, and RxCompound acquired $88,275 in property and equipment.

 

F-10
 

 

Note 6 — Leases

 

The Company treats a contract as a lease when the contract conveys the right to use a physically distinct asset for a period in exchange for consideration, or the Company directs the use of the asset and obtains substantially all the economic benefits of the asset. These leases are recorded as right-of-use (“ROU”) assets and lease obligation liabilities for leases with terms greater than 12 months. ROU assets represent the Company’s right to use an underlying asset for the entirety of the lease term. Lease liabilities represent the Company’s obligation to make payments over the life of the lease. A ROU asset and a lease liability are recognized at commencement of the lease based on the present value of the lease payments over the life of the lease. Initial direct costs are included as part of the ROU asset upon commencement of the lease. Since the interest rate implicit in a lease is generally not readily determinable for the operating leases, the Company uses an incremental borrowing rate to determine the present value of the lease payments. The incremental borrowing rate represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar lease term to obtain an asset of similar value.

 

The Company reviews the impairment of ROU assets consistent with the approach applied for the Company’s other long-lived assets. The Company reviews the recoverability of long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company elected the practical expedient to exclude short-term leases (leases with original terms of 12 months or less) from ROU asset and lease liability accounts.

 

Supplemental balance sheet information related to leases were as follows:

 

   2024   2023 
  

As of

 
   June 30, 2024   March 31, 2024 
Assets          
Right of use asset, net  $138,992   $156,517 
           
Operating lease liabilities          
Current   70,487    70,487 
Non-current   67,524    84,950 
Total Lease Liabilities  $138,011   $155,797 

 

The components of lease cost were as follows:

 

   2024   2023 
  

For three months ended June 30,

 
   2024   2023 
Depreciation  $17,525   $7,379 
Interest on lease obligation   1,719    12,618 
Total lease cost  $19,244   $19,997 

 

Lease term and discount rate were as follows:

 

  

For the three months ended June 30,

 
   2024   2023 
Weighted average remaining lease term - Operating leases   2 years    3 years 
           
Weighted average discount rate - Operating leases   3%   3%

 

Note 7 — Intangible Assets

 

Intangible assets, consisted of the following:

 

   2024   2023 
  

As of

 
   June 30, 2024   March 31, 2024 
Telemedicine Property  $17,806   $17,806 
Web Properties   7,433    — 
Domain   11,890    19,323 
Software   7,500    — 
Accumulated Amortization   (10,396)   (8,688)
Net Balance  $34,233   $28,441 

 

F-11
 

 

Amortization expense for the three months ended June 30, 2024, was $1,708 and $3,997 for the three months ended June 30, 2023.

 

NOTE 8 - GOODWILL

 

Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in the business combinations. On November 08, 2022, the Company acquired 100% of the outstanding equity shares of RxCompoundStore.com, LLC and Peaks Curative, LLC against the share exchange consideration and recognized Goodwill. Restated Financial Statements were issued for year ended March 31, 2023 10- K Form, to correct Goodwill amortization during the period.

 

  

As of

 
   June 30, 2024   March 31, 2024 
RxCompound and Peaks  $2,302,792   $2,302,792 
           
Total  $2,302,792   $2,302,792 

 

The Company conducted an impairment test as of June 30, 2024, and March 31, 2024, and no indication of impairment was identified

 

NOTE 9 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

Accounts payable and accrued expenses consisted of the following:

 

   2024   2024 
  

As of

 
   June 30, 2024   March 31, 2024 
Accounts Payable  $221,030   $530,724 
Accrued Expenses and other payable (A)  $1,161,270   $854,719 

 

(A) Accrued Expenses and other payable

 

As of June 30, 2024, accrued expenses included approximately; executive compensation of $842,000, income tax payable $13,000, insurance payable $108,000, payroll liability $66,000, merchant fees of $99,000, and credit card balance of $28,000.

 

NOTE 10 – DEBT

 

Loans and Notes Payable consisted of the following

 

Name  Total   Current   Non-Current 
As of June 30, 2024               
Equipment Finance  $84,850   $30,592   $54,258 
                
As of March 31, 2024               
Equipment Finance  $91,151   $30,592   $60,559 

 

Revolving Promissory Note in the amount of $250,000 and SBA Loan in the amount of $209,175 were paid off during the year ended March 31, 2024.

 

Convertible promissory Notes in the amount of $200,000 and $150,000 and corresponding accrued interest of $35,000 were converted to common stock as follows:

 

June 5, 2023- Total amount of principal and interest converted $165,000 at an applicable average closing price of $0.0378, discounted after 25% reduction from average $0.0283, the number of shares of common stock to be issued pursuant to the conversion of the note 5,820,106.

 

June 12, 2023- Total amount of principal and interest converted $220,000 at an applicable average 10 closing price of $0.04, discounted after 25% reduction from average $0.029, the number of shares of common stock issued pursuant to the conversion 7,586,207.

 

No additional debt was incurred during the period.

 

Note 11 - Related Party Balances and Transactions

 

Parties are considered to be related if one party has the ability to control or exercise significant influence over the other party in making financial and operating decisions. Transactions with related parties have been disclosed in debt, acquisition and officer’s compensation notes.

 

June 5, 2023 - Total amount of principal and interest converted $165,000 at an applicable avg closing price of $0.0378, discounted after 25% reduction from avg $0.0283, the number of shares of common stock to be issued pursuant to the conversion of the note 5,820,106

 

June 12, 2023 - Total amount of principal and interest converted $220,000 at an applicable avg 10 closing prices of $0.04, discounted after 25% reduction from average $0.029, the number of shares of common stock issued pursuant to the conversion 7,586,207.

 

Officer compensation totaling $2,672,604 was incurred during the three months ended June 30, 2024, paid to Point 96 Consultant owned by Giorgio R. Saumat and Tabraue Consulting, owned by Mario Tabraue.

 

Additionally, the Company reimbursed Point 96 Consultant for consulting services, marketing, and SG&A in the amount of $439,000.

 

Due to the company’s inability to open its own account to repurchase shares on the open market, the company solicited outside firms for its repurchase program. The outside firms proposed charging fees up to 10% of the repurchase price. Therefore, Giorgio R. Saumat, the controlling and majority shareholder, offered to provide the repurchase service through his privately owned and controlled company Avenvi, LLC.

 

Avenvi, LLC will purchase the stock for ETST, make no profit off the sale of the company stock back to ETST and that ETST will buy back the share from Avenvi,LLC at their purchased price. This is being done for the sake of the Company and the shareholders in saving the 10% fee that another third party would otherwise charge.

 

F-12
 

 

NOTE 12 – COMMITMENTS AND CONTINGENCIES

 

The Company follows ASC 450 to account for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. This may result in contingent liabilities that are required to be accrued or disclosed in the financial statements. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

 

Legal Matters:

 

From time to time and in the course of business, we may become involved in various legal proceedings seeking monetary damages and other relief. The amount of the ultimate liability, if any, from such claims cannot be determined. As of the date hereof, there are no legal claims currently pending or, to our knowledge, threatened against us or any of our officers or directors in their capacity as such or against any of our properties that, in the opinion of our management, would be likely to have a material adverse effect on our financial position, results of operations or cash flows.

 

Note 13 – Stockholders’ Equity

 

During the three months ended June 30, 2024, and 2023, the Company issued 0 shares and 18,533,334 shares of restricted common stock for cash of $0 and $110,000, respectively , for additional working capital.

 

During the three months ended June 30, 2024, and 2023, the Company issued 0 shares and 13,406,313 shares of common stock at fair value of $0 and $385,000, respectively

 

During the three months ended June 30, 2024, and 2023, the Company repurchased 914,108 shares and 0 shares of common stock at $0.17 per share for a total of $158,473 and $0, respectively, which these shares were cancelled.

 

F-13
 

 

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

 

The following section, Management’s Discussion and Analysis, should be read in conjunction with Earth Science Tech Inc.’s financial statements and the related notes thereto and contains forward-looking statements that involve risks and uncertainties, such as statements of the Company’s plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this Report on Form 10-Q. The Company’s actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of many factors. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Report filed on Form 10-Q.

 

The following discussion should be read in conjunction with the company’s unaudited consolidated financial statements and related notes and other financial data included elsewhere in this report. See also the notes to the Company’s consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Company’s Registration Statement filed on Form 10-12g and the Company’s Annual Report filed on Form 10-K for the fiscal year ended March 31, 2024, as well as the Company’s Quarterly report filed on Form 10-Q for the fiscal quarter ended June 30, 2024.

 

OVERVIEW

 

The Company is a holding entity set to acquire companies with its current focus in the health and wellness industry. The Company is presently in compounding pharmaceuticals and telemedicine through its wholly owned subsidiaries RxCompound, Peaks, and ESF.

 

RxCompound is a complete compounding pharmacy. RxCompound is currently licensed to fulfill prescriptions in 22 states: Delaware, Florida, Pennsylvania, New York, Arizona, New Jersey, Wisconsin, Minnesota, Rhode Island, Utah, Georgia, Nevada, Massachusetts, Missouri, Iowa, Maryland, Ohio, Colorado, North Carolina, Maine, Indiana and Illinois. RxCompound is in the application process to obtain licenses in the remaining states in which it is not yet licensed to fulfill prescriptions. Furthermore, RxCompound recently had its sterile compounding room approved to operate in late May 2023, to provide sterile products for injection.

 

Peaks is the telemedicine referral site facilitating asynchronous consultations for branded compound medications prepared at RxCompound. Peaks is currently positioned to prescribe to all 50 states utilizing third-party consultation services, but only able to fulfill prescriptions within RxCompound’s licensed states. Peaks will be able to fulfill more states as RxCompound becomes licensed in additional states.

 

ESF is a favored entity of ETST, effectively being a non-profit organization that was incorporated on February 11, 2019, and is structured to accept grants and donations to help those in need of assistance in paying for prescriptions.

 

3

 

 

Results of Operations



The following tables set forth summarized cost of revenue information for the three months ended June 30, 2024, and 2023:

 

  

For three months ended

June 30,

 
   2024   2023 
Revenue  $8,568,918   $219,934 
Cost of revenues   2,158,484    71,165 
Gross Profit  $6,410,434   $148,769 

 


We had product sales of $8,568,918 and a gross profit of $6,410,434 representing a gross margin of 75% in the fiscal quarter ended June 30, 2024, compared with product sales of $219,934 and a gross profit of $148,769 representing a gross margin of 68% in the fiscal quarter ended June 30, 2023. The revenue increase during the three months ended June 30, 2024, compared with the three months ended June 30, 2023, is primarily due to the acquisition of RxCompound and Peaks – see Item 2 Principal of Consolidation.

 

Operating Expenses

 

  

For three months ended

June 30,

 
   2024   2023   $ Change   % Change 
Labor Expense   3,335,130    5,654    3,329,476    58,887%
Legal and Professional Fees   1,336,560    18,420    1,318,140    7,156%
Bank Charges   288,845    —    288,845    100%
Marketing   211,446    11,376    200,070    1,759%
General and Administrative Expenses   60,596    124,712    (64,116)   (51)%
Rent Expense   42,274    —    42,274    100%
Insurance Expense   35,805    —    35,805    100%
Depreciation and Amortization   30,232    11,585    18,647    61%
Utilities   4,527    —    4,527    100%
Total Expenses  $5,345,416   $171,747    5,173,669    43,349%
                     
Net Operating Income (Loss)   1,065,018    (22,978)   1,087,996    47,349%
                     
Other Income/Expenses:                    
Other income   13,200    —    13,200    100%
Interest Expense   (1,964)   (12,618)   10,654    (84)%
Net Income (Loss) before taxes   1,076,254    (35,596)   1,165,962    32,755%
                     
Income taxes   —    —    —    —%
                     
Net Income (Loss)  $1,076,254   $(35,596)   1,165,962    32,755%


 

4

 

 

We are a smaller reporting company, as defined by 17 CFR § 229.10(f)(1). We do not consider the impact of inflation and changing prices as having a material effect on our net sales and revenues and on income from our operations for the previous two years or from continuing operations going forward.

 

Interest Expense

 

Interest expense for the quarter ended June 30, 2024, was $1,964 vs $12,618 in the quarter ended June 30, 2023. This 84% reduction of interest expense is attributable to the Company paying off a large portion of its long-term debt.

 

We use Adjusted EBITDA internally to evaluate our performance and make financial and operational decisions that are presented in a manner that adjusts from their equivalent GAAP measures or that supplements the information provided by our GAAP measures. Adjusted EBITDA is defined by us as EBITDA (net income (loss) plus depreciation expense, amortization expense, interest and income tax expense, minus income tax benefit), further adjusted to exclude certain non-cash expenses and other adjustments as set forth below. We use Adjusted EBITDA because we believe it more clearly highlights trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures, since Adjusted EBITDA eliminates from our results specific financial items that have less bearing on our core operating performance.

 

We use Adjusted EBITDA in communicating certain aspects of our results and performance, including in this Quarterly Report, and believe that Adjusted EBITDA, when viewed in conjunction with our GAAP results and the accompanying reconciliation, can provide investors with greater transparency and a greater understanding of factors affecting our financial condition and results of operations than GAAP measures alone. In addition, we believe the presentation of Adjusted EBITDA is useful to investors in making period-to-period comparison of results because the adjustments to GAAP are not reflective of our core business performance.

 

Adjusted EBITDA is not presented in accordance with, or as an alternative to, GAAP financial measures and may be different from non-GAAP measures used by other companies. We encourage investors to review the GAAP financial measures included in this Annual Report, including our consolidated financial statements, to aid in their analysis and understanding of our performance and in making comparisons.

 

5

 

 

Cash Flow & Assets

CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2024, AND 2023

(UNAUDITED)

 

  

As of June 30,

 
   2024   2023 
       (As restated) 
ASSETS          
Current Assets:          
Cash  $1,384,407   $91,989 
Accounts Receivable   317,687    — 
Deposits   14,451    — 
Inventory   239,174    101,807- 
Prepaid   123,933    — 
Total current assets   2,079,652    193,796 
           
Non-Current Assets:          
Property and Equipment, net   216,578    120,399 
Right of use asset, net   138,992    194,543 
Goodwill   2,302,792    2,302,792 
Intangible Assets, net   24,233    133,613 
Total Assets  $4,772,247   $2,945,143 
           
LIABILITIES AND EQUITY          
Accounts payable   221,030    519,361 
Accrued expenses and other payable   1,161,270    111,751 
Current portion of operating lease obligations   70,487    46,621 
Current portion of loans and obligations   30,592    284,776 
Total Current Liabilities   1,483,379    962,509 
           
Long-Term Liabilities:          
Lease liability less current maturities   67,524    96,743 
Equipment loans and obligations non-current   54,258    204,408 
Total Liabilities   1,605,161    1,263,660 
           
Stockholders’ Equity:          
Preferred stock, par value $0.001 per share, 1,000,000 shares authorized; 1,000,000 and 0 shares issued and outstanding as of June 30, 2024, and June 30, 2023, respectively   1,000    1,000 
Common stock, par value $0.001 per share, 350,000 shares authorized; 300,841,850 and 314,852,083 shares issued and outstanding as of June 30, 2024, and June 30, 2023 respectively   309,068    314,552 
Additional paid-in capital   31,435,840    31,766,199 
Accumulated deficit   (28,578,822)   (30,400,268)
Total stockholders’ Equity   3,167,086    1,681,483 
Total Liabilities and Equity  $4,772,247   $2,945,143 

 

6

 

 


STATEMENT OF CASH FLOWS

FOR THREE MONTHS ENDED JUNE 30, 2024 AND 2023

(UNAUDITED)

 

  

For the three months ended

June 30,

 
   2024   2023 
Net cash provided/used in operating activities  $951,185   $(53,768)
Net cash used in investing activities   (99,725)   - 
Net cash used/provided in financing activities   (164,774)   110,001 
Net increase in cash and cash equivalents   686,686    56.233 
Cash and cash equivalents at beginning of the period   697,721    35,756 
Cash and cash equivalents at end of the period  $1,384,407   $91,989 

 

The Company had $1,384,407 cash as of June 30, 2024, compared to $91,989 as of June 30, 2023.

 

Accounts receivable as of June 30, 2024, were $317,687, and 100% is expected to be collected within term.

 

The Company has made a $14,451 lease security deposit, which is fully refundable at the end of the lease period.

 

The Company has prepaid its liability insurance for the year totaling $123,933.

 

The Company’s subsidiaries, Rxcompund and Peaks Curative have made additional capital expenditures as of June 30, 2024, and have a total net balance of $216,578 in property and equipment, versus $120,399 as of June 30, 2023.

 

As of June 30, 2024, the Company had $239,174 in inventory vs $101,807 as of June 30, 2023.

 

The Company had a balance of $221,030 in Accounts Payable as of June 30, 2024, compared to $519,361 as of June 30, 2023. 91% of the accounts payable balance on June 30, 2024, was inventory purchased on terms and 9% other payables.

 

Accrued expenses totaled $1,161,270 as of June 30, 2024, and $111,751 as of June 30, 2023. Most accrued expenses as of June 30, 2024, are attributable to officer compensation.

 

Long term debt was significantly reduced, as a large portion was paid off as of June 30, 2024.

 

The Stockholders’ Equity as of June 30, 2024 was $3,167,086, compared to $1,681,483 of Stockholders Equity as of June 30, 2023. This improvement is primarily attributable to the result of operations.

 

Cash Flow from Operating Activities

 

Net cash provided by operating activities for the three months ended June 30, 2024, was $951,185, compared to $(53,767) used by the operating activities for the prior year period. The increase in cash flows from the prior year period is primarily driven by the result of operations.

 

Net cash used in investing activities during the three months ended June 30, 2024, was $(99,725).

 

Cash Flows from Financing Activities

 

Net cash used in financing activities during the three months ended June 30, 2024, was $(164,774).

 

7

 

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

 

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable assurance of achieving the desired control objectives. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. The design of disclosure controls and procedures also is based partly on certain 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.

 

The Company’s management, including the Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of the Company’s design and operations of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that review and evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that as of the end of the period covered by this Quarterly Report, the Company’s disclosure controls and procedures were effective as of June 30, 2024.

 

Management’s Report on Internal Control Over Financial Reporting

 

Our disclosure controls and procedures contain components of our internal controls over financial reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the Company’s principal executive and financial officer and effected by the Company’s board of directors, management and other personnel, 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 and includes those policies and procedures that:

 

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company.

 

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

 

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

 

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of the Evaluation Date. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) Internal Control-Integrated Framework (2013). The COSO framework is based upon five integrated components of control: control environment, risk assessment, control activities, information and communications and ongoing monitoring.

 

Based on an evaluation under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, Company management has concluded that the Company’s internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act were reasonably effective as of the Evaluation Date, and will continue to improve its internal controls, to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

Changes in Internal Control and Financial Reporting

 

During the quarter ended June 30, 2024, the company has continued to make process improvement changes in the internal control over financial reporting which are reasonably likely to significantly improve the internal control over financial reporting. The impact of these changes made are still under evaluation as of the quarter ended June 30, 2024.

 

8

 

 

PART II — OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

From time to time and in the course of business, we may become involved in various legal proceedings seeking monetary damages and other relief. The amount of the ultimate liability, if any, from such claims cannot be determined. As of the date hereof, there are no legal claims currently pending or, to our knowledge, threatened against us or any of our officers or directors in their capacity as such or against any of our properties that, in the opinion of our management, would be likely to have a material adverse effect on our financial position, results of operations or cash flows.

 

ITEM 1A. RISK FACTORS

 

The Company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

During the three months ended June 30, 2024, the Company issued 0 shares of its common stock for $0, in transactions that were exempt from registration under the Securities Act of 1933, as amended pursuant to Section 4(2) and/or Rule 506 promulgate under Regulation D. No gain or loss was recognized on the issuances.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None

 

ITEM 4. MINE SAFETY DISCLOSURES

 

None

 

ITEM 5. OTHER INFORMATION

 

ISSUER REPURCHASES OF EQUITY SECURITIES

 

During the three months ended June 30, 2024, the Company repurchased 914,108 shares of its common stock for $158,473.39. On June 4, 2024, the Company repurchased 914,108 shares from an investor at $0.1734 per share in cash.

 

ITEM 6. EXHIBITS

 

31.1   Certifications of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
     
31.2   Certifications of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
     
32.1   Certifications of Chief Executive Officer pursuant to 18 U.S.C. SEC. 1350 (Section 906 of Sarbanes-Oxley Act of 2002) +
     
32.2   Certifications of Chief Financial Officer pursuant to 18 U.S.C. SEC. 1350 (Section 906 of Sarbanes-Oxley Act of 2002) +
     
101.INS   Inline XBRL Instance Document *
     
101.SCH   Inline XBRL Taxonomy Extension Schema Document *
     
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document *
     
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document *
     
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document *
     
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document *
     
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

9

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  EARTH SCIENCE TECH, INC.
     
Dated: July 29, 2024 By: /s/ Giorgio R. Saumat
    Giorgio R. Saumat
  Its: CEO and Chairman of the Board
     
Dated: July 29, 2024 By: /s/ Ernesto Flores
    Ernesto Flores,
  Its: Chief Financial Officer

 

10

 

 

Exhibit 31.1

 

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14

 

I, Giorgio R. Saumat, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Earth Science Tech, Inc.;

 

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(s) 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 my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under the Company’s 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 the Company’s 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(s) and I have disclosed, based on the Company’s 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.

 

  EARTH SCIENCE TECH, INC.
     
Dated: July 29, 2024 By: /s/ Giorgio R. Saumat
    Giorgio R. Saumat
  Its: CEO and Chairman of the Board

 

 

 

 

Exhibit 31.2

 

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14

 

I, Ernesto Flores, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Earth Science Tech, Inc.;

 

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(s) 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 my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under the Company’s 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 the company’s 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(s) and I have disclosed, based on the Company’s 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.

 

  EARTH SCIENCE TECH, INC.
     
Dated: July 29, 2024 By: /s/ Ernesto Flores
    Ernesto Flores,
  Its: Chief Financial Officer

 

 

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Earth Science Tech, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ending June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Giorgio R. Saumat, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

 

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

  EARTH SCIENCE TECH, INC.
     
Dated: July 29, 2024 By: /s/ Giorgio R. Saumat
    Giorgio R. Saumat
  Its: CEO and Chairman of the Board

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Earth Science Tech, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ending June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ernesto Flores, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

 

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

  EARTH SCIENCE TECH, INC.
     
Dated: July 29, 2024 By: /s/ Ernesto Flores
    Ernestor Flores
  Its: Chief Financial Officer

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

v3.24.2
Cover - shares
 3 Months Ended
Jun. 30, 2024
Jul. 29, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Jun. 30, 2024  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2025  
Current Fiscal Year End Date --03-31  
Entity File Number 000-55000  
Entity Registrant Name EARTH SCIENCE TECH, INC.  
Entity Central Index Key 0001538495  
Entity Tax Identification Number 80-0931484  
Entity Incorporation, State or Country Code FL  
Entity Address, Address Line One 8950 SW 74th CT  
Entity Address, Address Line Two Suite 101  
Entity Address, City or Town Miami  
Entity Address, State or Province FL  
Entity Address, Postal Zip Code 33156  
City Area Code (305)  
Local Phone Number 724-5684  
Title of 12(b) Security Common Stock $0.001 par value  
Trading Symbol ETST  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   309,050,711
v3.24.2
Consolidated Balance Sheets - USD ($)
Jun. 30, 2024
Mar. 31, 2024
Current Assets:    
Cash $ 1,384,407 $ 697,721
Accounts Receivable 317,687 235,423
Deposits 14,451 9,352
Inventory 239,174 315,738
Prepaid 123,933
Total current assets 2,079,652 1,258,234
Non-Current Assets:    
Property and Equipment, net 216,578 135,352
Right of use asset, net 138,992 156,517
Goodwill 2,302,792 2,302,792
Intangible Assets, net 34,233 28,441
Total Assets 4,772,247 3,881,336
LIABILITIES AND EQUITY    
Accounts payable 221,030 530,724
Accrued expenses and other payable 1,161,270 854,719
Current portion of operating lease obligations 70,487 70,487
Current portion of loans and obligations 30,592 30,592
Total Current Liabilities 1,483,379 1,486,522
Long-Term Liabilities:    
Lease liability less current maturities 67,524 84,950
Equipment loans and obligations non-current 54,258 60,559
Total Liabilities 1,605,161 1,632,031
Commitment and Contingencies (Note 12)
Stockholders’ Equity:    
Preferred stock, par value $0.001 per share, 1,000,000 shares authorized; 1,000,000 and 0 shares issued and outstanding as of June 30, 2024, and March 31, 2024, respectively 1,000 1,000
Common stock, par value $0.001 per share, 350,000,000 shares authorized; 309,067,711 and 309,981,819 shares issued and outstanding as of June 30, 2024, and March 31, 2024 respectively 309,068 309,982
Additional paid-in capital 31,435,840 31,593,399
Accumulated deficit (28,578,822) (29,655,076)
Stockholders’ Equity 3,167,086 2,249,305
Total Liabilities and Equity $ 4,772,247 $ 3,881,336
v3.24.2
Consolidated Balance Sheets (Parenthetical) - $ / shares
Jun. 30, 2024
Mar. 31, 2024
Statement of Financial Position [Abstract]    
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock, shares issued 1,000,000 0
Preferred stock, shares outstanding 1,000,000 0
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 350,000,000 350,000,000
Common stock, shares issued 309,067,711 309,981,819
Common stock, shares outstanding 309,067,711 309,981,819
v3.24.2
Consolidated Statements of Operations (Unaudited) - USD ($)
 3 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Income Statement [Abstract]    
Revenue $ 8,568,918 $ 219,934
Cost of Goods Sold (exclusive of depreciation shown separately) 2,158,484 71,165
Gross Profit 6,410,434 148,769
Expenses:    
Labor Expense 3,335,130 5,654
Legal and Professional Fees 1,336,560 18,420
Bank Charges 288,845
Marketing 211,446 11,376
General and Administrative Expense 60,596 124,712
Rent Expense 42,274
Insurance Expense 35,805
Depreciation and Amortization 30,232 11,585
Utilities 4,528
Total Expenses 5,345,416 171,747
Net Operating Income(Loss) 1,065,018 (22,978)
Other Income/Expenses    
Other Income 13,200
Interest expense (1,964) (12,618)
Net Income(Loss) before taxes 1,076,254 (35,596)
Income Taxes
Net Income(Loss) $ 1,076,254 $ (35,596)
Profit/(Loss) per common share - Basic $ 0.003 $ (0.000)
Profit/(Loss) per common share - Diluted $ 0.003 $ (0.000)
Weighted average number of common shares outstanding basic 309,941,192 314,939,647
Weighted average number of common shares outstanding diluted 309,941,192 314,939,647
v3.24.2
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
Common Stock [Member]
Preferred Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Balance at Mar. 31, 2023 $ 282,612 $ 1,000 $ 31,303,138 $ (30,364,672) $ 1,222,078
Balance, shares at Mar. 31, 2023 282,611,083 1,000,000      
Net Income (Loss) (35,596) (35,596)
Common stock issued $ 18,534 91,467 110,001
Common stock issued, shares 18,533,334        
Common stock issued for Conversion on Note $ 13,406 371,594 385,000
Common stock issued for Conversion on Note, shares 13,406,313        
Balance at Jun. 30, 2023 $ 314,552 $ 1,000 31,766,199 (30,400,268) 1,681,483
Balance, shares at Jun. 30, 2023 314,550,730 1,000,000      
Balance at Mar. 31, 2024 $ 309,982 $ 1,000 31,593,399 (29,655,076) 2,249,305
Balance, shares at Mar. 31, 2024 309,981,819 1,000,000      
Common stock buyback $ (914) (157,559) (158,473)
Common stock buyback, shares (914,108)        
Net Income (Loss) 1,076,254 1,076,254
Balance at Jun. 30, 2024 $ 309,068 $ 1,000 $ 31,435,840 $ (28,578,822) $ 3,167,086
Balance, shares at Jun. 30, 2024 309,067,711 1,000,000      
v3.24.2
Statements of Cash Flows (Unaudited) - USD ($)
 3 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Cash flows from operating activities:    
Net Income (loss) $ 1,076,254 $ (35,596)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:    
Depreciation and amortization 30,232 11,585
Changes in operating assets and liabilities:    
Accounts Receivable (82,264)
Deposits (5,099)
Prepaid expenses and other current assets (123,933)
Inventory 76,564 (91,549)
Lease Liability, net (17,426)
Accounts payable and accrued expenses (3,143) 61,792
Net cash provided(used) in operating activities 951,185 (53,768)
Cash flows from investing activities:    
Purchases of intangibles (7,500)  
Purchases of property and equipment (92,225)
Net cash used in investing activities (99,725)
Cash flows from financing activities:    
Proceeds from issuance of common stock 110,001
Payments on debt obligations (6,301)  
Repurchase of common stock (158,473)
Net Cash used (provided) in financing activities (164,774) 110,001
Net increase in cash and cash equivalents 686,686 56,233
Cash and cash equivalents at beginning of the period 697,721 35,756
Cash and cash equivalents at end of the period 1,384,407 91,989
Supplemental Disclosure of Cash Flow Information:    
Cash paid for interest 1,964
Non-cash Transactions:    
Common stock issued on conversion of notes payable $ 385,000
v3.24.2
Organization and Nature of Operations
 3 Months Ended
Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Nature of Operations

Note 1 — Organization and Nature of Operations

 

Earth Science Tech, Inc. (“ETST” or the “Company”) was incorporated under the laws of the State of Nevada on April 23, 2010. The Company subsequently changed its domicile to the State of Florida on June 27, 2022. As of November 8, 2022, the Company is a holding entity set to acquire companies with its current focus in the health and wellness industry. The Company is presently in compounding pharmaceuticals and telemedicine through its wholly owned subsidiaries RxCompoundStore.com, LLC. (“RxCompound”), Peaks Curative, LLC. (“Peaks”), and Earth Science Foundation, Inc. (“ESF”).

 

RxCompound is a complete compounding pharmacy. RxCompound is currently licensed to fulfill prescriptions in 22 states: Delaware, Florida, Pennsylvania, New York, Arizona, New Jersey, Wisconsin, Minnesota, Rhode Island, Utah, Georgia, Nevada, Massachusetts, Missouri, Iowa, Maryland, Ohio, Colorado, North Carolina, Maine, Indiana and Illinois. RxCompound is in the application process to obtain licenses in the remaining states in which it is not yet licensed to fulfill prescriptions.

 

Peaks is a telemedicine referral site focused on overall health and wellness for men and women. Peaks’ orders are exclusively fulfilled by RxCompound. Patients who order Peaks via monthly subscription receive their refills automatically. The company intends to expand offerings to include over the counter (“OTC”) (non-prescription) products such as supplements and topicals.

 

ESF is a favored entity of ETST, effectively being a non-profit organization that was incorporated on February 11, 2019, and is structured to accept grants and donations to help those in need of assistance in paying for prescriptions.

 
v3.24.2
Summary of Significant Accounting Policies
 3 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

Note 2 — Summary of Significant Accounting Policies

 

Basis of presentation

 

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

 

These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto which are included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2024 for a broader discussion of the Company’s business and the risks inherent in such business. The results of operations for the three months ended June 30, 2024, are not necessarily indicative of results to be expected for any other interim period or the fiscal year ending March 31, 2025.

 

Principles of consolidation

 

The accompanying consolidated financial statements include all the accounts of the Company and its wholly owned subsidiaries RxCompound, Peaks and ESF. All intercompany accounts have been eliminated during consolidation.

 

Use of estimates and assumptions

 

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The areas requiring significant estimates are impairment of goodwill, provision for taxation, accrued liabilities, liabilities for legal matters, the determination of useful lives of depreciable and intangible assets, contingencies, and going concern assessment. The estimates and underlying assumptions are reviewed on an ongoing basis. Actual results could differ from those estimates.

 

 

Carrying value, recoverability, and impairment of long-lived assets

 

The Company tests long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. As of June 30, 2024, and 2023 no such impairment was needed.

 

Cash and cash equivalents



Cash and cash equivalents include all highly liquid debt instruments with original maturities of three months or less which are not securing any corporate obligations. As of June 30, 2024, and March 31, 2024, the Company held a cash balance of $1,384,407 and $697,721, respectively, the organization’s balances exceeded federally insured limits by approximately $1,156,947 as of June 30, 2024 and $266,090 as of March 31, 2024

 

Accounts Receivable.

 

The Company has adopted the new standard ASC-326- CECL to account for current credit losses. The Company has analyzed its accounts receivable, based on historical and customer experience, economic trends, and future estimates. Accounts receivable are recorded for pharmaceuticals picked up or shipped as of June 30, 2024. Accounts receivable are expected to be collected within twelve months in its entirety, therefore no reserve was necessary.

 

         
  

As of

 
   June 30, 2024   March 31, 2024 
Accounts Receivable  $317,687   $235,423 

 

Revenue recognition

 

The Company has implemented ASC 606, Revenue from Contracts with Customers for revenue recognition by incorporating the necessary changes in systems and processes. These changes included the development of new policies based on the five-step model provided in the new revenue standard, ongoing contract review requirements, and gathering of information provided for disclosures. Revenue is recognized at this point in time.

 

The Company recognizes revenue from product sales or services rendered when control of the promised goods is transferred to our customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenue when or as the Company satisfies a performance obligation.

 

Disaggregated Revenue

 

The Company disaggregates revenue from contracts with customers by category — core and non-core, as it believes it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

 

 

The Company’s disaggregated revenue by category is as follows:

 

   2024   2023 
  

For the three months ended June 30,

 
   2024   2023 
Core:          
Sale of Pharmaceutical products – RxCompound and Peaks  $8,367,509   $219,934 
Total core revenue, net  $8,367,509   $219,934 
Non-Core:          
Shipping Income  $201,409   $— 
Total revenue, net  $8,568,918   $219,934 

 

As of June 30, 2024 the Company had 3 large customers, each representing 11%, 9% and 8% of revenue.

 

Inventory

 

The Company has its inventories stated at a lower cost (on first in, first out (FIFO) method) or market value basis. A reserve is established if necessary to reduce excess or obsolete inventories to their realizable value. The stated cost consists of finished products. Reserves, if necessary, are recorded to reduce inventory to market value based on assumptions about consumer demand, current inventory levels and product life cycles for the various inventory items. These assumptions are evaluated annually and are based on the Company’s business plan and on feedback from customers and the product development team. As of June 30, 2024, and March 30, 2024, the inventory reserves were not material. As of June 30, 2024 the Company had three main suppliers, each accounting 29%, 14% and 4% of the company’s vendor purchases.

 

Cost of Goods Sold

 

Components of cost of goods sold include product costs, consumables, shipping costs to customers and any inventory adjustments.

 

Shipping and Handling Costs

 

Costs incurred by the Company for shipping and handling are included in costs of revenues.

 

Related parties

 

The Company pays the employee compensation for Giorgio R. Saumat and Mario Tabraue to their respective, solely owned LLCs, Point96 Consulting, LLC and Tabraue Consulting, LLC.

 

Due to the company’s inability to open its own account to repurchase shares on the open market, the company solicited outside firms for its repurchase program. The outside firms proposed charging fees up to 10% of the repurchase price. Therefore, Giorgio R. Saumat, the controlling and majority shareholder, offered to provide the repurchase service through his privately owned and controlled company Avenvi, LLC.

 

Avenvi, LLC will purchase the stock for ETST, make no profit off the sale of the company stock back to ETST and that ETST will buy back the share from Avenvi,LLC at their purchased price. This is being done for the sake of the Company and the shareholders in saving the 10% fee that another third party would otherwise charge.

 

The Company follows ASC 850-10, Related Parties, for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20, the related parties include: (a) affiliates of the Company (“Affiliate”) means, with respect to any specified person, any other person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person, as such terms are used in and construed under Rule 405 under the Securities Act); (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

 

 

Income taxes

 

The Company accounts for income taxes under ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period, which includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of or all the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Net income per common share

 

The Company follows ASC 260 to account for earnings per share. Basic earnings per common share calculations are determined by dividing net results from operations by the weighted average number of shares of common stock outstanding during the year. Diluted loss per common share calculation is determined by dividing net results from operations by the weighted average number of common shares and diluted common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. For the three months ended June 30, 2024 and 2023, the Company did not have any antidilutive equity instruments.

 

Cash flows reporting

 

The Company follows ASC 230 to report cash flows. This standard classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by this standard to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports separately information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to this standard.

 

Goodwill

 

Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase business combination. Goodwill is reviewed for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying amount of goodwill may be impaired. In conducting its annual impairment test, the Company first reviews qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If factors indicate that the fair value of the reporting unit is less than its carrying amount, the Company performs a quantitative assessment, and the fair value of the reporting unit is determined by analyzing the expected present value of future cash flows. If the carrying value of the reporting unit continues to exceed its fair value, the fair value of the reporting unit’s goodwill is calculated and an impairment loss equal to the excess is recorded.

 

Stock based compensation

 

The Company applies the fair value method of ASC 718, Compensation-Stock Compensation, in accounting for its stock-based compensation. These standards state that compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period, if any. The Company uses the Black-Scholes option pricing model to determine the fair value of its stock, stock option and warrant issuance. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price, as well as assumptions regarding a few complex and subjective variables. These variables include the Company’s expected stock price, volatility over the term of the awards, actual employee exercise behaviors, risk-free interest rate and expected dividends. The company has no stock-based commitments outstanding as of June 30, 2024, and March 31, 2024.

 

 

Fair Value

 

FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:

 

Level 1 — Quoted market prices for identical assets or liabilities in active markets or observable inputs; and

 

Level 2 — Significant other observable inputs that can be corroborated by observable market data; and

 

Level 3 — Significant unobservable inputs that cannot be corroborated by observable market data.

 

The carrying amounts of cash, accounts payable and other liabilities, accrued expenses and settlement payable approximate fair value because of the short-term nature of these items.

 

The fair value of the Company’s debt approximated the carrying value of the Company’s debt as of June 30, 2024, and March 31, 2024. Factors that the Company considered when estimating the fair value of its debt included market conditions, liquidity levels in the private placement market, variability in pricing from multiple lenders and terms of debt.

 

Property and equipment

 

Property and equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. During the three months ended June 30, 2024, RxCompound added various equipment for its operations. Depreciation on equipment is charged using a straight-line method over the estimated useful life of 5 years.

 

Recently issued accounting pronouncements

 

We have considered the impact of the following pronouncements:

 

The FASB recently issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to reduce complexity in applying GAAP to certain financial instruments with characteristics of liabilities and equity. The guidance in ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, which requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC 470-20 applies to convertible instruments for which the embedded conversion features are not required to be bifurcated from the host contract and accounted for as derivatives. In addition, the amendments revise the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract. The amendments in ASU 2020-06 further revise the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. The amendments in ASU 2020-06 are effective for public entities for fiscal years beginning after December 15, 2021, with early adoption permitted (for an “emerging growth company,” beginning after December 15, 2023). The Company has assessed the impact this standard had on the Company’s consolidated financial statements. No material adjustments were required.

 

Intangible Assets

 

Intangible assets consist of Peaks telemedicine platform, and the Holding Company’s web domains. Intangible assets with finite lives are amortized over the estimated useful life of five years.

 

 
v3.24.2
Restatement
 3 Months Ended
Jun. 30, 2024
Accounting Changes and Error Corrections [Abstract]  
Restatement

Note 3 – Restatement

 

During the three months ended June 30, 2023, Goodwill was incorrectly amortized, which requires the Company to restate its consolidated balance sheet, consolidated statement of operations and statement of stockholders’ equity, and statement of cash flows, in accordance with ASC 350-20. These changes had no material impact on previously reported earnings per share.

 

As of June 30, 2023, the Company’s subsidiary RXcompound carried a goodwill in the amount of $138,312, such amount was not included in the Consolidated Balance Sheet, and Consolidated Stockholders’ Equity, additionally, Goodwill was increased by the incorrectly amortized amount of $54,112, for a total asset adjustment of $192,424, the tables set forth shows the impact of this restatement.

 

The consolidated balance sheet as of June 30, 2023, the consolidated statement of operations, the statement of stockholders’ equity and statement of cash flows for the three months ended June 30, 2023, have been restated to reflect these adjustments to the presentation. The following tables present the effect of the changes of the previously reported consolidated statements.

 

 

Adjustments to Consolidated Balance Sheet as of June 30, 2023

Consolidated Balance Sheet

 

   June 30, 2023 before restatement   Restatement   June 30,2023 after restatement 
   As of June 30, 2023 
   June 30, 2023 before restatement   Restatement   June 30, 2023 after restatement 
Total Assets   2,752,719    192,424    2,945,143 
Total Stockholders’ Equity   1,489,059    192,424    1,681,483 

 

Adjustments to Consolidated Statement of Operations for the three months ended June 30, 2023

Consolidated Statement of Operations

 

   June 30, 2023 before restatement   Restatement   June 30,2023 after restatement 
   For the three months ended June 30, 2023 
   June 30, 2023 before restatement   Restatement   June 30, 2023 after restatement 
Net Income(Loss)   (89,708)   54,112    (35,596)

 

Adjustments to Consolidated Statement of Stockholders’ Equity for the three months ended June 30, 2023

Consolidated Statement of Stockholders’ Equity

 

   June 30, 2023 before restatement   Restatement   June 30,2023 after restatement 
   For the three months ended June 30, 2023 
   June 30, 2023 before restatement   Restatement   June 30, 2023 after restatement 
Accumulated Deficit   (30,592,692)   192,424    (30,400,268)
Stockholders’ Equity   1,489,059    192,424    1,681,483 

 

Adjustments to Statement of Cash Flows for the three months ended June 30, 2023

Statement of Cash Flows

 

   June 30, 2023 before restatement   Restatement   June 30,2023 after restatement 
   For the three months ended June 30, 2023 
   June 30, 2023 before restatement   Restatement   June 30, 2023 after restatement 
Net Income(Loss)   (89,708)   54,112    (35,596)
Depreciation and amortization   65,696    54,112    11,585 

 
v3.24.2
Inventory
 3 Months Ended
Jun. 30, 2024
Inventory Disclosure [Abstract]  
Inventory

Note 4 - Inventory

 

The Company has its inventories stated at a lower cost (on first in, first out (FIFO) method) or market value basis. A reserve is established if necessary to reduce excess or obsolete inventories to their realizable value. The stated cost consists of finished products. Reserves, if necessary, are recorded to reduce inventory to market value based on assumptions about consumer demand, current inventory levels and product life cycles for the various inventory items. These assumptions are evaluated annually and are based on the Company’s business plan and on feedback from customers and the product development team. As of June 30, 2024, and March 31, 2024, the inventory reserves were not material. The Company has three main suppliers, each accounting 29%, 14% and 4% of the company’s vendor purchases as of June 30, 2024.

 

   2024   2023 
  

As of

 
   June 30, 2024   March 31, 2024 
Raw materials  $193,731    266,776 
Finished goods   45,443    48,962 
Inventory  $239,174   $315,738 

 
v3.24.2
Property and Equipment
 3 Months Ended
Jun. 30, 2024
Property, Plant and Equipment [Abstract]  
Property and Equipment

Note 5 — Property and Equipment

 

   2024   2023 
  

As of

 
   June 30, 2024   March 31, 2024 
Equipment – cost  $268,855   $176,602 
Less: Accumulated depreciation   (52,277)   (41,250)
Property and Equipment, Net  $216,578   $135,352 

 

Depreciation expense for the three months ended June 30, 2024 was $10,999.

 

During the three months ended June 30, 2024, the Company’s subsidiary Peaks Curative LLC acquired equipment in the amount of $3,950, and RxCompound acquired $88,275 in property and equipment.

 

 
v3.24.2
Leases
 3 Months Ended
Jun. 30, 2024
Leases  
Leases

Note 6 — Leases

 

The Company treats a contract as a lease when the contract conveys the right to use a physically distinct asset for a period in exchange for consideration, or the Company directs the use of the asset and obtains substantially all the economic benefits of the asset. These leases are recorded as right-of-use (“ROU”) assets and lease obligation liabilities for leases with terms greater than 12 months. ROU assets represent the Company’s right to use an underlying asset for the entirety of the lease term. Lease liabilities represent the Company’s obligation to make payments over the life of the lease. A ROU asset and a lease liability are recognized at commencement of the lease based on the present value of the lease payments over the life of the lease. Initial direct costs are included as part of the ROU asset upon commencement of the lease. Since the interest rate implicit in a lease is generally not readily determinable for the operating leases, the Company uses an incremental borrowing rate to determine the present value of the lease payments. The incremental borrowing rate represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar lease term to obtain an asset of similar value.

 

The Company reviews the impairment of ROU assets consistent with the approach applied for the Company’s other long-lived assets. The Company reviews the recoverability of long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company elected the practical expedient to exclude short-term leases (leases with original terms of 12 months or less) from ROU asset and lease liability accounts.

 

Supplemental balance sheet information related to leases were as follows:

 

   2024   2023 
  

As of

 
   June 30, 2024   March 31, 2024 
Assets          
Right of use asset, net  $138,992   $156,517 
           
Operating lease liabilities          
Current   70,487    70,487 
Non-current   67,524    84,950 
Total Lease Liabilities  $138,011   $155,797 

 

The components of lease cost were as follows:

 

   2024   2023 
  

For three months ended June 30,

 
   2024   2023 
Depreciation  $17,525   $7,379 
Interest on lease obligation   1,719    12,618 
Total lease cost  $19,244   $19,997 

 

Lease term and discount rate were as follows:

 

  

For the three months ended June 30,

 
   2024   2023 
Weighted average remaining lease term - Operating leases   2 years    3 years 
           
Weighted average discount rate - Operating leases   3%   3%

 
v3.24.2
Intangible Assets
 3 Months Ended
Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets

Note 7 — Intangible Assets

 

Intangible assets, consisted of the following:

 

   2024   2023 
  

As of

 
   June 30, 2024   March 31, 2024 
Telemedicine Property  $17,806   $17,806 
Web Properties   7,433    — 
Domain   11,890    19,323 
Software   7,500    — 
Accumulated Amortization   (10,396)   (8,688)
Net Balance  $34,233   $28,441 

 

 

Amortization expense for the three months ended June 30, 2024, was $1,708 and $3,997 for the three months ended June 30, 2023.

 
v3.24.2
GOODWILL
 3 Months Ended
Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL

NOTE 8 - GOODWILL

 

Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in the business combinations. On November 08, 2022, the Company acquired 100% of the outstanding equity shares of RxCompoundStore.com, LLC and Peaks Curative, LLC against the share exchange consideration and recognized Goodwill. Restated Financial Statements were issued for year ended March 31, 2023 10- K Form, to correct Goodwill amortization during the period.

 

  

As of

 
   June 30, 2024   March 31, 2024 
RxCompound and Peaks  $2,302,792   $2,302,792 
           
Total  $2,302,792   $2,302,792 

 

The Company conducted an impairment test as of June 30, 2024, and March 31, 2024, and no indication of impairment was identified

 
v3.24.2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
 3 Months Ended
Jun. 30, 2024
Payables and Accruals [Abstract]  
ACCOUNTS PAYABLE AND ACCRUED EXPENSES

NOTE 9 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

Accounts payable and accrued expenses consisted of the following:

 

   2024   2024 
  

As of

 
   June 30, 2024   March 31, 2024 
Accounts Payable  $221,030   $530,724 
Accrued Expenses and other payable (A)  $1,161,270   $854,719 

 

(A) Accrued Expenses and other payable

 

As of June 30, 2024, accrued expenses included approximately; executive compensation of $842,000, income tax payable $13,000, insurance payable $108,000, payroll liability $66,000, merchant fees of $99,000, and credit card balance of $28,000.

 
v3.24.2
DEBT
 3 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
DEBT

NOTE 10 – DEBT

 

Loans and Notes Payable consisted of the following

 

Name  Total   Current   Non-Current 
As of June 30, 2024               
Equipment Finance  $84,850   $30,592   $54,258 
                
As of March 31, 2024               
Equipment Finance  $91,151   $30,592   $60,559 

 

Revolving Promissory Note in the amount of $250,000 and SBA Loan in the amount of $209,175 were paid off during the year ended March 31, 2024.

 

Convertible promissory Notes in the amount of $200,000 and $150,000 and corresponding accrued interest of $35,000 were converted to common stock as follows:

 

June 5, 2023- Total amount of principal and interest converted $165,000 at an applicable average closing price of $0.0378, discounted after 25% reduction from average $0.0283, the number of shares of common stock to be issued pursuant to the conversion of the note 5,820,106.

 

June 12, 2023- Total amount of principal and interest converted $220,000 at an applicable average 10 closing price of $0.04, discounted after 25% reduction from average $0.029, the number of shares of common stock issued pursuant to the conversion 7,586,207.

 

No additional debt was incurred during the period.

 
v3.24.2
Related Party Balances and Transactions
 3 Months Ended
Jun. 30, 2024
Related Party Transactions [Abstract]  
Related Party Balances and Transactions

Note 11 - Related Party Balances and Transactions

 

Parties are considered to be related if one party has the ability to control or exercise significant influence over the other party in making financial and operating decisions. Transactions with related parties have been disclosed in debt, acquisition and officer’s compensation notes.

 

June 5, 2023 - Total amount of principal and interest converted $165,000 at an applicable avg closing price of $0.0378, discounted after 25% reduction from avg $0.0283, the number of shares of common stock to be issued pursuant to the conversion of the note 5,820,106

 

June 12, 2023 - Total amount of principal and interest converted $220,000 at an applicable avg 10 closing prices of $0.04, discounted after 25% reduction from average $0.029, the number of shares of common stock issued pursuant to the conversion 7,586,207.

 

Officer compensation totaling $2,672,604 was incurred during the three months ended June 30, 2024, paid to Point 96 Consultant owned by Giorgio R. Saumat and Tabraue Consulting, owned by Mario Tabraue.

 

Additionally, the Company reimbursed Point 96 Consultant for consulting services, marketing, and SG&A in the amount of $439,000.

 

Due to the company’s inability to open its own account to repurchase shares on the open market, the company solicited outside firms for its repurchase program. The outside firms proposed charging fees up to 10% of the repurchase price. Therefore, Giorgio R. Saumat, the controlling and majority shareholder, offered to provide the repurchase service through his privately owned and controlled company Avenvi, LLC.

 

Avenvi, LLC will purchase the stock for ETST, make no profit off the sale of the company stock back to ETST and that ETST will buy back the share from Avenvi,LLC at their purchased price. This is being done for the sake of the Company and the shareholders in saving the 10% fee that another third party would otherwise charge.

 

 
v3.24.2
COMMITMENTS AND CONTINGENCIES
 3 Months Ended
Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 12 – COMMITMENTS AND CONTINGENCIES

 

The Company follows ASC 450 to account for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. This may result in contingent liabilities that are required to be accrued or disclosed in the financial statements. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

 

Legal Matters:

 

From time to time and in the course of business, we may become involved in various legal proceedings seeking monetary damages and other relief. The amount of the ultimate liability, if any, from such claims cannot be determined. As of the date hereof, there are no legal claims currently pending or, to our knowledge, threatened against us or any of our officers or directors in their capacity as such or against any of our properties that, in the opinion of our management, would be likely to have a material adverse effect on our financial position, results of operations or cash flows.

 
v3.24.2
Stockholders’ Equity
 3 Months Ended
Jun. 30, 2024
Equity [Abstract]  
Stockholders’ Equity

Note 13 – Stockholders’ Equity

 

During the three months ended June 30, 2024, and 2023, the Company issued 0 shares and 18,533,334 shares of restricted common stock for cash of $0 and $110,000, respectively , for additional working capital.

 

During the three months ended June 30, 2024, and 2023, the Company issued 0 shares and 13,406,313 shares of common stock at fair value of $0 and $385,000, respectively

 

During the three months ended June 30, 2024, and 2023, the Company repurchased 914,108 shares and 0 shares of common stock at $0.17 per share for a total of $158,473 and $0, respectively, which these shares were cancelled.
v3.24.2
Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Basis of presentation

Basis of presentation

 

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

 

These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto which are included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2024 for a broader discussion of the Company’s business and the risks inherent in such business. The results of operations for the three months ended June 30, 2024, are not necessarily indicative of results to be expected for any other interim period or the fiscal year ending March 31, 2025.

 
Principles of consolidation

Principles of consolidation

 

The accompanying consolidated financial statements include all the accounts of the Company and its wholly owned subsidiaries RxCompound, Peaks and ESF. All intercompany accounts have been eliminated during consolidation.

 
Use of estimates and assumptions

Use of estimates and assumptions

 

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The areas requiring significant estimates are impairment of goodwill, provision for taxation, accrued liabilities, liabilities for legal matters, the determination of useful lives of depreciable and intangible assets, contingencies, and going concern assessment. The estimates and underlying assumptions are reviewed on an ongoing basis. Actual results could differ from those estimates.

 

 
Carrying value, recoverability, and impairment of long-lived assets

Carrying value, recoverability, and impairment of long-lived assets

 

The Company tests long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. As of June 30, 2024, and 2023 no such impairment was needed.

 
Cash and cash equivalents

Cash and cash equivalents



Cash and cash equivalents include all highly liquid debt instruments with original maturities of three months or less which are not securing any corporate obligations. As of June 30, 2024, and March 31, 2024, the Company held a cash balance of $1,384,407 and $697,721, respectively, the organization’s balances exceeded federally insured limits by approximately $1,156,947 as of June 30, 2024 and $266,090 as of March 31, 2024

 
Accounts Receivable.

Accounts Receivable.

 

The Company has adopted the new standard ASC-326- CECL to account for current credit losses. The Company has analyzed its accounts receivable, based on historical and customer experience, economic trends, and future estimates. Accounts receivable are recorded for pharmaceuticals picked up or shipped as of June 30, 2024. Accounts receivable are expected to be collected within twelve months in its entirety, therefore no reserve was necessary.

 

         
  

As of

 
   June 30, 2024   March 31, 2024 
Accounts Receivable  $317,687   $235,423 

 
Revenue recognition

Revenue recognition

 

The Company has implemented ASC 606, Revenue from Contracts with Customers for revenue recognition by incorporating the necessary changes in systems and processes. These changes included the development of new policies based on the five-step model provided in the new revenue standard, ongoing contract review requirements, and gathering of information provided for disclosures. Revenue is recognized at this point in time.

 

The Company recognizes revenue from product sales or services rendered when control of the promised goods is transferred to our customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenue when or as the Company satisfies a performance obligation.

 
Disaggregated Revenue

Disaggregated Revenue

 

The Company disaggregates revenue from contracts with customers by category — core and non-core, as it believes it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

 

 

The Company’s disaggregated revenue by category is as follows:

 

   2024   2023 
  

For the three months ended June 30,

 
   2024   2023 
Core:          
Sale of Pharmaceutical products – RxCompound and Peaks  $8,367,509   $219,934 
Total core revenue, net  $8,367,509   $219,934 
Non-Core:          
Shipping Income  $201,409   $— 
Total revenue, net  $8,568,918   $219,934 

 

As of June 30, 2024 the Company had 3 large customers, each representing 11%, 9% and 8% of revenue.

 
Inventory

Inventory

 

The Company has its inventories stated at a lower cost (on first in, first out (FIFO) method) or market value basis. A reserve is established if necessary to reduce excess or obsolete inventories to their realizable value. The stated cost consists of finished products. Reserves, if necessary, are recorded to reduce inventory to market value based on assumptions about consumer demand, current inventory levels and product life cycles for the various inventory items. These assumptions are evaluated annually and are based on the Company’s business plan and on feedback from customers and the product development team. As of June 30, 2024, and March 30, 2024, the inventory reserves were not material. As of June 30, 2024 the Company had three main suppliers, each accounting 29%, 14% and 4% of the company’s vendor purchases.

 
Cost of Goods Sold

Cost of Goods Sold

 

Components of cost of goods sold include product costs, consumables, shipping costs to customers and any inventory adjustments.

 
Shipping and Handling Costs

Shipping and Handling Costs

 

Costs incurred by the Company for shipping and handling are included in costs of revenues.

 
Related parties

Related parties

 

The Company pays the employee compensation for Giorgio R. Saumat and Mario Tabraue to their respective, solely owned LLCs, Point96 Consulting, LLC and Tabraue Consulting, LLC.

 

Due to the company’s inability to open its own account to repurchase shares on the open market, the company solicited outside firms for its repurchase program. The outside firms proposed charging fees up to 10% of the repurchase price. Therefore, Giorgio R. Saumat, the controlling and majority shareholder, offered to provide the repurchase service through his privately owned and controlled company Avenvi, LLC.

 

Avenvi, LLC will purchase the stock for ETST, make no profit off the sale of the company stock back to ETST and that ETST will buy back the share from Avenvi,LLC at their purchased price. This is being done for the sake of the Company and the shareholders in saving the 10% fee that another third party would otherwise charge.

 

The Company follows ASC 850-10, Related Parties, for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20, the related parties include: (a) affiliates of the Company (“Affiliate”) means, with respect to any specified person, any other person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person, as such terms are used in and construed under Rule 405 under the Securities Act); (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

 

 
Income taxes

Income taxes

 

The Company accounts for income taxes under ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period, which includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of or all the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 
Net income per common share

Net income per common share

 

The Company follows ASC 260 to account for earnings per share. Basic earnings per common share calculations are determined by dividing net results from operations by the weighted average number of shares of common stock outstanding during the year. Diluted loss per common share calculation is determined by dividing net results from operations by the weighted average number of common shares and diluted common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. For the three months ended June 30, 2024 and 2023, the Company did not have any antidilutive equity instruments.

 
Cash flows reporting

Cash flows reporting

 

The Company follows ASC 230 to report cash flows. This standard classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by this standard to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports separately information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to this standard.

 
Goodwill

Goodwill

 

Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase business combination. Goodwill is reviewed for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying amount of goodwill may be impaired. In conducting its annual impairment test, the Company first reviews qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If factors indicate that the fair value of the reporting unit is less than its carrying amount, the Company performs a quantitative assessment, and the fair value of the reporting unit is determined by analyzing the expected present value of future cash flows. If the carrying value of the reporting unit continues to exceed its fair value, the fair value of the reporting unit’s goodwill is calculated and an impairment loss equal to the excess is recorded.

 
Stock based compensation

Stock based compensation

 

The Company applies the fair value method of ASC 718, Compensation-Stock Compensation, in accounting for its stock-based compensation. These standards state that compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period, if any. The Company uses the Black-Scholes option pricing model to determine the fair value of its stock, stock option and warrant issuance. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price, as well as assumptions regarding a few complex and subjective variables. These variables include the Company’s expected stock price, volatility over the term of the awards, actual employee exercise behaviors, risk-free interest rate and expected dividends. The company has no stock-based commitments outstanding as of June 30, 2024, and March 31, 2024.

 

 
Fair Value

Fair Value

 

FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:

 

Level 1 — Quoted market prices for identical assets or liabilities in active markets or observable inputs; and

 

Level 2 — Significant other observable inputs that can be corroborated by observable market data; and

 

Level 3 — Significant unobservable inputs that cannot be corroborated by observable market data.

 

The carrying amounts of cash, accounts payable and other liabilities, accrued expenses and settlement payable approximate fair value because of the short-term nature of these items.

 

The fair value of the Company’s debt approximated the carrying value of the Company’s debt as of June 30, 2024, and March 31, 2024. Factors that the Company considered when estimating the fair value of its debt included market conditions, liquidity levels in the private placement market, variability in pricing from multiple lenders and terms of debt.

 
Property and equipment

Property and equipment

 

Property and equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. During the three months ended June 30, 2024, RxCompound added various equipment for its operations. Depreciation on equipment is charged using a straight-line method over the estimated useful life of 5 years.

 
Recently issued accounting pronouncements

Recently issued accounting pronouncements

 

We have considered the impact of the following pronouncements:

 

The FASB recently issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to reduce complexity in applying GAAP to certain financial instruments with characteristics of liabilities and equity. The guidance in ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, which requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC 470-20 applies to convertible instruments for which the embedded conversion features are not required to be bifurcated from the host contract and accounted for as derivatives. In addition, the amendments revise the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract. The amendments in ASU 2020-06 further revise the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. The amendments in ASU 2020-06 are effective for public entities for fiscal years beginning after December 15, 2021, with early adoption permitted (for an “emerging growth company,” beginning after December 15, 2023). The Company has assessed the impact this standard had on the Company’s consolidated financial statements. No material adjustments were required.

 
Intangible Assets

Intangible Assets

 

Intangible assets consist of Peaks telemedicine platform, and the Holding Company’s web domains. Intangible assets with finite lives are amortized over the estimated useful life of five years.

 

 
v3.24.2
Summary of Significant Accounting Policies (Tables)
 3 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Schedule of Accounts Receivable

 

         
  

As of

 
   June 30, 2024   March 31, 2024 
Accounts Receivable  $317,687   $235,423 
Schedule of Disaggregated Revenue

The Company’s disaggregated revenue by category is as follows:

 

   2024   2023 
  

For the three months ended June 30,

 
   2024   2023 
Core:          
Sale of Pharmaceutical products – RxCompound and Peaks  $8,367,509   $219,934 
Total core revenue, net  $8,367,509   $219,934 
Non-Core:          
Shipping Income  $201,409   $— 
Total revenue, net  $8,568,918   $219,934 
v3.24.2
Restatement (Tables)
 3 Months Ended
Jun. 30, 2024
Accounting Changes and Error Corrections [Abstract]  
Schedule of Effect of Restatement

 

Adjustments to Consolidated Balance Sheet as of June 30, 2023

Consolidated Balance Sheet

 

   June 30, 2023 before restatement   Restatement   June 30,2023 after restatement 
   As of June 30, 2023 
   June 30, 2023 before restatement   Restatement   June 30, 2023 after restatement 
Total Assets   2,752,719    192,424    2,945,143 
Total Stockholders’ Equity   1,489,059    192,424    1,681,483 

 

Adjustments to Consolidated Statement of Operations for the three months ended June 30, 2023

Consolidated Statement of Operations

 

   June 30, 2023 before restatement   Restatement   June 30,2023 after restatement 
   For the three months ended June 30, 2023 
   June 30, 2023 before restatement   Restatement   June 30, 2023 after restatement 
Net Income(Loss)   (89,708)   54,112    (35,596)

 

Adjustments to Consolidated Statement of Stockholders’ Equity for the three months ended June 30, 2023

Consolidated Statement of Stockholders’ Equity

 

   June 30, 2023 before restatement   Restatement   June 30,2023 after restatement 
   For the three months ended June 30, 2023 
   June 30, 2023 before restatement   Restatement   June 30, 2023 after restatement 
Accumulated Deficit   (30,592,692)   192,424    (30,400,268)
Stockholders’ Equity   1,489,059    192,424    1,681,483 

 

Adjustments to Statement of Cash Flows for the three months ended June 30, 2023

Statement of Cash Flows

 

   June 30, 2023 before restatement   Restatement   June 30,2023 after restatement 
   For the three months ended June 30, 2023 
   June 30, 2023 before restatement   Restatement   June 30, 2023 after restatement 
Net Income(Loss)   (89,708)   54,112    (35,596)
Depreciation and amortization   65,696    54,112    11,585 
v3.24.2
Inventory (Tables)
 3 Months Ended
Jun. 30, 2024
Inventory Disclosure [Abstract]  
Schedule of Inventory

 

   2024   2023 
  

As of

 
   June 30, 2024   March 31, 2024 
Raw materials  $193,731    266,776 
Finished goods   45,443    48,962 
Inventory  $239,174   $315,738 
v3.24.2
Property and Equipment (Tables)
 3 Months Ended
Jun. 30, 2024
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment

 

   2024   2023 
  

As of

 
   June 30, 2024   March 31, 2024 
Equipment – cost  $268,855   $176,602 
Less: Accumulated depreciation   (52,277)   (41,250)
Property and Equipment, Net  $216,578   $135,352 
v3.24.2
Leases (Tables)
 3 Months Ended
Jun. 30, 2024
Leases  
Schedule of Supplemental Balance Sheet Related To Leases

Supplemental balance sheet information related to leases were as follows:

 

   2024   2023 
  

As of

 
   June 30, 2024   March 31, 2024 
Assets          
Right of use asset, net  $138,992   $156,517 
           
Operating lease liabilities          
Current   70,487    70,487 
Non-current   67,524    84,950 
Total Lease Liabilities  $138,011   $155,797 
Schedule of Lease Cost

The components of lease cost were as follows:

 

   2024   2023 
  

For three months ended June 30,

 
   2024   2023 
Depreciation  $17,525   $7,379 
Interest on lease obligation   1,719    12,618 
Total lease cost  $19,244   $19,997 
Schedule Lease Term and Discount Rate

Lease term and discount rate were as follows:

 

  

For the three months ended June 30,

 
   2024   2023 
Weighted average remaining lease term - Operating leases   2 years    3 years 
           
Weighted average discount rate - Operating leases   3%   3%
v3.24.2
Intangible Assets (Tables)
 3 Months Ended
Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Intangible Assets

Intangible assets, consisted of the following:

 

   2024   2023 
  

As of

 
   June 30, 2024   March 31, 2024 
Telemedicine Property  $17,806   $17,806 
Web Properties   7,433    — 
Domain   11,890    19,323 
Software   7,500    — 
Accumulated Amortization   (10,396)   (8,688)
Net Balance  $34,233   $28,441 
v3.24.2
GOODWILL (Tables)
 3 Months Ended
Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
SCHEDULE OF GOODWILL

 

  

As of

 
   June 30, 2024   March 31, 2024 
RxCompound and Peaks  $2,302,792   $2,302,792 
           
Total  $2,302,792   $2,302,792 
v3.24.2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)
 3 Months Ended
Jun. 30, 2024
Payables and Accruals [Abstract]  
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:

 

   2024   2024 
  

As of

 
   June 30, 2024   March 31, 2024 
Accounts Payable  $221,030   $530,724 
Accrued Expenses and other payable (A)  $1,161,270   $854,719 
v3.24.2
DEBT (Tables)
 3 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
SCHEDULE OF NOTES AND LOANS PAYABLE

Loans and Notes Payable consisted of the following

 

Name  Total   Current   Non-Current 
As of June 30, 2024               
Equipment Finance  $84,850   $30,592   $54,258 
                
As of March 31, 2024               
Equipment Finance  $91,151   $30,592   $60,559 
v3.24.2
Schedule of Accounts Receivable (Details) - USD ($)
Jun. 30, 2024
Mar. 31, 2024
Accounting Policies [Abstract]    
Accounts Receivable $ 317,687 $ 235,423
v3.24.2
Schedule of Disaggregated Revenue (Details) - USD ($)
 3 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Product Information [Line Items]    
Total revenue, net $ 8,568,918 $ 219,934
Core [Member]    
Product Information [Line Items]    
Total revenue, net 8,367,509 219,934
Noncore [Member]    
Product Information [Line Items]    
Total revenue, net 8,568,918 219,934
Sale Of Pharmaceutical Products Rx Compound [Member] | Core [Member]    
Product Information [Line Items]    
Total revenue, net 8,367,509 219,934
Shipping Income [Member] | Noncore [Member]    
Product Information [Line Items]    
Total revenue, net $ 201,409
v3.24.2
Summary of Significant Accounting Policies (Details Narrative) - USD ($)
 3 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Product Information [Line Items]    
Cash $ 1,384,407 $ 697,721
Federally insured limits $ 1,156,947 $ 266,090
Property plant and equipment useful life 5 years  
Useful life 5 years  
Related Party [Member]    
Product Information [Line Items]    
Proposed charging fees 10.00%  
Customers One [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]    
Product Information [Line Items]    
Concentration Risk, Percentage 11.00%  
Customers Two [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]    
Product Information [Line Items]    
Concentration Risk, Percentage 9.00%  
Customers Three [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]    
Product Information [Line Items]    
Concentration Risk, Percentage 8.00%  
Suppliers One [Member] | Revenue Benchmark [Member] | Suppliers Concentration Risk [Member]    
Product Information [Line Items]    
Concentration Risk, Percentage 29.00%  
Suppliers Two [Member] | Revenue Benchmark [Member] | Suppliers Concentration Risk [Member]    
Product Information [Line Items]    
Concentration Risk, Percentage 14.00%  
Suppliers Three [Member] | Revenue Benchmark [Member] | Suppliers Concentration Risk [Member]    
Product Information [Line Items]    
Concentration Risk, Percentage 4.00%  
v3.24.2
Schedule of Effect of Restatement (Details) - USD ($)
 3 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Mar. 31, 2024
Mar. 31, 2023
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Total Assets $ 4,772,247 $ 2,945,143 $ 3,881,336  
Stockholders’ Equity 3,167,086 1,681,483 2,249,305 $ 1,222,078
Net Income(Loss)   (35,596)    
Accumulated Deficit (28,578,822) (30,400,268) $ (29,655,076)  
Net Income(Loss) 1,076,254 (35,596)    
Depreciation and amortization $ 30,232 11,585    
Previously Reported [Member]        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Total Assets   2,752,719    
Stockholders’ Equity   1,489,059    
Net Income(Loss)   (89,708)    
Accumulated Deficit   (30,592,692)    
Net Income(Loss)   (89,708)    
Depreciation and amortization   65,696    
Revision of Prior Period, Reclassification, Adjustment [Member]        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Total Assets   192,424    
Stockholders’ Equity   192,424    
Net Income(Loss)   54,112    
Accumulated Deficit   192,424    
Net Income(Loss)   54,112    
Depreciation and amortization   $ 54,112    
v3.24.2
Restatement (Details Narrative) - USD ($)
 1 Months Ended
Jun. 30, 2023
Jun. 30, 2024
Mar. 31, 2024
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Goodwill $ 138,312    
Goodwill, Period Increase (Decrease) 54,112    
Assets 2,945,143 $ 4,772,247 $ 3,881,336
Revision of Prior Period, Reclassification, Adjustment [Member]      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Assets $ 192,424    
v3.24.2
Schedule of Inventory (Details) - USD ($)
Jun. 30, 2024
Mar. 31, 2024
Inventory Disclosure [Abstract]    
Raw materials $ 193,731 $ 266,776
Finished goods 45,443 48,962
Inventory $ 239,174 $ 315,738
v3.24.2
Inventory (Details Narrative) - Revenue Benchmark [Member] - Suppliers Concentration Risk [Member]
 3 Months Ended
Jun. 30, 2024
Suppliers One [Member]  
Product Information [Line Items]  
Concentration risk percentage 29.00%
Suppliers Two [Member]  
Product Information [Line Items]  
Concentration risk percentage 14.00%
Suppliers Three [Member]  
Product Information [Line Items]  
Concentration risk percentage 4.00%
v3.24.2
Schedule of Property and Equipment (Details) - USD ($)
Jun. 30, 2024
Mar. 31, 2024
Property, Plant and Equipment [Abstract]    
Equipment – cost $ 268,855 $ 176,602
Less: Accumulated depreciation (52,277) (41,250)
Property and Equipment, Net $ 216,578 $ 135,352
v3.24.2
Property and Equipment (Details Narrative)
 3 Months Ended
Jun. 30, 2024
USD ($)
Defined Benefit Plan Disclosure [Line Items]  
Depreciation expense $ 10,999
Peaks Curative LLC [Member]  
Defined Benefit Plan Disclosure [Line Items]  
Acquired property and equipment 3,950
RxCompound [Member]  
Defined Benefit Plan Disclosure [Line Items]  
Acquired property and equipment $ 88,275
v3.24.2
Schedule of Supplemental Balance Sheet Related To Leases (Details) - USD ($)
Jun. 30, 2024
Mar. 31, 2024
Leases    
Right of use asset, net $ 138,992 $ 156,517
Current 70,487 70,487
Non-current 67,524 84,950
Total Lease Liabilities $ 138,011 $ 155,797
v3.24.2
Schedule of Lease Cost (Details) - USD ($)
 3 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Leases    
Depreciation $ 17,525 $ 7,379
Interest on lease obligation 1,719 12,618
Total lease cost $ 19,244 $ 19,997
v3.24.2
Schedule Lease Term and Discount Rate (Details)
Jun. 30, 2024
Jun. 30, 2023
Leases    
Weighted average remaining lease term Operating leases 2 years 3 years
Weighted average discount rate operating leases 3.00% 3.00%
v3.24.2
Schedule of Intangible Assets (Details) - USD ($)
Jun. 30, 2024
Mar. 31, 2024
Finite-Lived Intangible Assets [Line Items]    
Accumulated Amortization $ (10,396) $ (8,688)
Net Balance 34,233 28,441
Telemedicine Property [Member]    
Finite-Lived Intangible Assets [Line Items]    
Intangible assets, gross 17,806 17,806
Web Properties [Member]    
Finite-Lived Intangible Assets [Line Items]    
Intangible assets, gross 7,433
Domain [Member]    
Finite-Lived Intangible Assets [Line Items]    
Intangible assets, gross 11,890 19,323
Software [Member]    
Finite-Lived Intangible Assets [Line Items]    
Intangible assets, gross $ 7,500
v3.24.2
Intangible Assets (Details Narrative) - USD ($)
 3 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]    
Amortization expense $ 1,708 $ 3,997
v3.24.2
SCHEDULE OF GOODWILL (Details) - USD ($)
Jun. 30, 2024
Mar. 31, 2024
Goodwill $ 2,302,792 $ 2,302,792
Rx Compound Storecom LLC and Peaks Curative LLC [Member]    
Goodwill $ 2,302,792 $ 2,302,792
v3.24.2
GOODWILL (Details Narrative)
Nov. 08, 2022
Rx Compound Store. com LLC And Peaks Curative LLC [Member]  
Restructuring Cost and Reserve [Line Items]  
Acquired percentage 100.00%
v3.24.2
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)
Jun. 30, 2024
Mar. 31, 2024
Payables and Accruals [Abstract]    
Accounts Payable $ 221,030 $ 530,724
Accrued Expenses and other payable (A) $ 1,161,270 $ 854,719
v3.24.2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details Narrative)
 3 Months Ended
Jun. 30, 2024
USD ($)
Payables and Accruals [Abstract]  
Deferred Compensation Liability, Current $ 842,000
Income tax payable 13,000
Insurance payable 108,000
Payroll liability 66,000
Merchant fees 99,000
Credit card balance $ 28,000
v3.24.2
SCHEDULE OF NOTES AND LOANS PAYABLE (Details) - Equipment Finance [Member] - USD ($)
Jun. 30, 2024
Mar. 31, 2024
Short-Term Debt [Line Items]    
Total debt $ 84,850 $ 91,151
Current 30,592 30,592
Non- current $ 54,258 $ 60,559
v3.24.2
DEBT (Details Narrative) - USD ($)
 3 Months Ended 12 Months Ended
Jun. 12, 2023
Jun. 05, 2023
Jun. 30, 2024
Jun. 30, 2023
Mar. 31, 2024
Short-Term Debt [Line Items]          
Conversion of debt       $ 385,000  
Debt instrument description Total amount of principal and interest converted $220,000 at an applicable average 10 closing price of $0.04, discounted after 25% reduction from average $0.029, the number of shares of common stock issued pursuant to the conversion 7,586,207. Total amount of principal and interest converted $165,000 at an applicable average closing price of $0.0378, discounted after 25% reduction from average $0.0283, the number of shares of common stock to be issued pursuant to the conversion of the note 5,820,106.      
Revolving Promissory Note Payable [Member]          
Short-Term Debt [Line Items]          
Repayment of debt         $ 250,000
SBA Loan Payable [Member]          
Short-Term Debt [Line Items]          
Repayment of debt         $ 209,175
Convertible Promissory Notes [Member]          
Short-Term Debt [Line Items]          
Convertable debt     $ 200,000    
Conversion of debt     150,000    
Accrued interest     $ 35,000    
v3.24.2
Related Party Balances and Transactions (Details Narrative) - USD ($)
 3 Months Ended
Jun. 12, 2023
Jun. 05, 2023
Jun. 30, 2024
Related Party Transaction [Line Items]      
Debt instrument description Total amount of principal and interest converted $220,000 at an applicable average 10 closing price of $0.04, discounted after 25% reduction from average $0.029, the number of shares of common stock issued pursuant to the conversion 7,586,207. Total amount of principal and interest converted $165,000 at an applicable average closing price of $0.0378, discounted after 25% reduction from average $0.0283, the number of shares of common stock to be issued pursuant to the conversion of the note 5,820,106.  
Officers compensation     $ 2,672,604
Repayment cost     $ 439,000
Related Party [Member]      
Related Party Transaction [Line Items]      
Proposed charging fees     10.00%
Related Party [Member]      
Related Party Transaction [Line Items]      
Debt instrument description Total amount of principal and interest converted $220,000 at an applicable avg 10 closing prices of $0.04, discounted after 25% reduction from average $0.029, the number of shares of common stock issued pursuant to the conversion 7,586,207. Total amount of principal and interest converted $165,000 at an applicable avg closing price of $0.0378, discounted after 25% reduction from avg $0.0283, the number of shares of common stock to be issued pursuant to the conversion of the note 5,820,106  
v3.24.2
Stockholders’ Equity (Details Narrative) - USD ($)
 3 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Equity [Abstract]    
Number of shares issued 0 18,533,334
Value of stock issued $ 0 $ 110,000
Number of shares issued for debt settlements 0 13,406,313
Value of stock issued for debt settlements $ 0 $ 385,000
Stock repurchased during period shares 914,108 0
Share price $ 0.17 $ 0.17
Stock repurchased during period value $ 158,473 $ 0
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